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Delayed IT rollout to impact TSB Banking Group's 2018 results

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Delayed IT rollout to impact TSB Banking Group's 2018 results

TSB Banking Group Plc warned that costs stemming from its continued use of former parent Lloyds Banking Group Plc's banking platform will impact its 2018 results, as it reported a year-over-year dip in full-year 2017 profit.

The bank, which was taken over by Spain's Banco de Sabadell SA in 2015, is still using Lloyds' IT infrastructure after it was forced to delay the final phase of the rollout of its new banking platform, dubbed Proteo4UK, until the first quarter of 2018 from early November 2017.

"Until this final phase of the migration is completed, and as we've seen this year, the contractual increase in outsourcing fees paid to [Lloyds] will continue into 2018," the bank said.

The impact of the fees payable to Lloyds, along with low interest rate levels and other factors, will lead to a reduction in TSB Bank's statutory profit before tax in 2018, it added.

For full year 2017, the bank reported profit attributable to shareholders of £115.1 million, down from the year-ago £128.1 million. The result was mainly driven by a £122.0 million increase in outsourcing fees paid to Lloyds in 2017.

Separately, TSB Bank said it appointed Richard Meddings as chairman, effective Feb. 2. Meddings succeeds Will Samuel, who steps down after four years in the role.