TSB boss adds voice to concerns over Santander inclusion on RBS competition fund

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Chief executive Paul Pester joined TSB in 2014 (Source: Getty)

The boss of high street bank TSB today criticised the possible inclusion of banking giant Santander in a scheme to boost competition in the small business lending market.

Paul Pester publicly added his voice to concerns surrounding the use of funds which Royal Bank of Scotland (RBS) has been forced to set aside to spur competition.

Pester said TSB would be “front of the queue” for the remedies, which range in size from £60m to £120m, but he told City A.M. of his “surprise that some of the very large banks are being allowed to bid.”

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The so-called RBS remedies, established after the failed sale of business lender Williams and Glyn, have been criticised previously by Conservative MP Nicky Morgan, chair of the influential Treasury Select Committee, for allowing Santander to bid.

TSB will “be putting our best foot forward” for the remedies, said Pester, himself a former Santander UK employee. He declined to detail the bank’s plans for the money if it is successful, citing commercial confidentiality.

The bank, which was revived as a challenger bank after being spun off from Lloyds in 2013, is now owned by Banco Sabadell, itself a large Spanish lender.

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TSB is currently extricating itself from the Lloyds computer system, a relationship which has been “challenging, to put it mildly”, Pester said. It is currently in the process of moving all of its systems onto a new, purpose-built platform which it hopes will allow it to cut as much as £100m every year from its £220m costs.

The new platform will allow the bank to integrate much more easily with other firms offering different financial services, pre-empting the major change to the UK banking sector set to come in next year with the advent of open banking.

Some analysts have raised concerns that banks could be boxed into a role of utilities if they integrate too readily with major tech firms such as Facebook or Apple.

However, Pester said he was confident the bank could continue to keep hold of valuable customer relationships.

The bank is ready to “embrace the new open banking revolution,” he said.

Read more: TSB has its eyes on £835m RBS fund as it seeks to enter business banking

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