RBS computer problem costs £125m

Royal Bank of Scotland (RBS) will pay £125m in costs related to computer problems in June that meant customers could not access any funds credited to their account. The glitch in the CA Technologies (CA7) batch process scheduler ended with 12 million customer accounts being frozen, leaving them unable to access funds for at least a week while RBS, NatWest and the Ulster Bank manually updated all the account balances.

RBS said in its financial statement for the first  six months of 2012 that in was making a “£125mn provision for costs arising from the technology incident in June 2012.”

The bank announced losses of £1.5bn compared to a loss of £794m in the same period a year ago. Its sales during the period were worth £13.3bn, down from £14.5bn in the year ago period.

The IT problems lasted for several days, causing a backlog of transactions that had to be processed sequentially. There was speculation at the time that RBS was considering legal action against CA Technologies, supplier of the CA7 software. In a letter to Andrew Tyrie MP, chairman of the Treasury Select Committee, RBS CEO Stephen Hester attributed blame to “maintenance on systems, which are managed and operated by our team in Edinburgh, [which] caused an error in our batch scheduler.”

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