Lloyds share price: IT glitch hits debit card customers

on Jan 27, 2014
Updated: Jun 1, 2022

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iNVEZZ.com, Monday, January 27: Customers of Lloyds Banking Group Plc (LON:LLOY) were unable to withdraw cash from the group’s ATMs or use their debit cards in shops for several hours yesterday due to an IT glitch.

The problem was fixed later the same day and a spokeswoman for Lloyds apologized to customers for the inconvenience. The group, which comprises Lloyds, Bank of Scotland, Halifax and TSB, has 30 million UK account holders across the UK.
The bank blamed the problem on a server failure which affected debit card transactions, while credit card operations, telephone and online banking operated normally, and customers were still able to withdraw cash from other ATMs.

The IT system glitch at Lloyds, the largest retail bank in the UK, is the latest in a string of computer-related issues at the country’s high street banks. Last month, an IT system failure left hundreds of thousands of customers of RBS and Natwest unable to use their debit and credit cards on one of the busiest shopping days of the year. (RBS share price: IT glitch hits card holders at RBS and NatWest).

Furious customers last night took to Twitter to vent their frustration, forcing TSB chief executive, Paul Pester, to post an apology.
Paul Pester told the BBC that two of the seven servers which process TSB debit card payments had suffered problems, which meant that about one in four of TSB card transactions were affected.
The Lloyds spokeswoman said some customers encountered problems at approximately half of the group’s 7,000 ATMs and added the issue was resolved by 7.30pm, and all of the group’s ATMs were working normally by that time. She added, however, that some customers ‘may still experience a short delay making payments’ while the backlog of payments was processed.

The Financial Conduct Authority has been looking into the resilience of all banks’ IT networks to address concerns that outdated systems and a lack of investment could cause more disruptions. RBS had to pay £175 million in compensation for customers and overtime payments to staff after a software upgrade failed in June and the bank had to keep branches open for longer in response.

**Lloyds expected to report rebuilding of gilt portfolio**
Lloyds is expected to announce next month that it has rebuilt a £50 billion portfolio of UK government bonds, locking in hundreds of millions of pounds in income that could see it beat analysts’ forecasts. According to The Telegraph, better-than expected results are likely to increase the likelihood of the banking group receiving permission to resume dividend payments.

Higher-than-expected earnings would also add momentum to the government’s plan to sell a second tranche of Lloyds’ shares and put the government on course to complete the return of the 33 percent taxpayer-owned bank to full private ownership this year (Lloyds share price: Second sale of taxpayer stake could come next month). Lloyds is scheduled to report 2013 full-year results on February 13.
In the first half of last year, Lloyds reported a profit of £780 million from its sales of UK government bonds following a £3.2 billion profit in the whole of 2012. The 2012 gilt profits helped offset the cost of compensation payments for mis-selling payment protection insurance. Without the profit from gilt sales, Lloyds would have reported a 2012 loss of £3.7 billon instead of £570 million. Lloyds owned £29.3 billion of government bonds as at end-June, but according to The Telegraph, aggressive buying is expected to see its holdings rise to £50 billion or higher when the banking group reports full-year results next month.
**As of 10:30 UTC buy Lloyds shares at 80.53p**
**As of 10:30 UTC sell Lloyds shares at 80.48p**
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