£125m Set Aside for RBS IT Failure
Contingency fund revealed in RBS half-yearly results
RBS has set aside £125 million to cover the cost of the IT systems glitch that saw millions of its customers unable to make or receive payments in June.
Customers of RBS, NatWest and Ulster Bank were affected for up to two weeks, with many unable to receive wages or pay bills. RBS promised it would ensure credit ratings were not affected and waived any overdraft fees incurred by affected account holders.
The contingency fund was revealed in RBS’ first half results, in which it revealed losses of £1.5 billion in the six months leading up to 30 June.
RBS IT Failure
“In late June, a number of our customers were impacted by a technology incident affecting our transaction batch processing,” said RBS. “A full and detailed investigation is under way into the causes of the problem, overseen by independent experts and reporting to the Group Board Risk Committee. It will consider both the Group’s own operations and the role of third parties in the context of the incident. It will establish a full account of what happened, an assessment of how the Group responded and a thorough review of the root cause.”
“A charge of £125 million has been accrued in Q2 2012 in relation to the costs of this incident, principally covering redress to the Group’s customers,” it added. “Additional costs may arise once all redress and business disruption items are clear and a further update will be given in Q3.”
RBS has blamed the incident on human error, believed to have started with a mistake during a software update of the CA-7 batch processing software that it uses.
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