Spain's Banco Sabadell ran up a €138.7m loss in the second quarter as costs related to an IT outage at its TSB business in the UK were more than double what it had estimated last month.
A botched migration of TSB computer systems in April saw thousands of users locked out of their accounts and a surge in attacks by fraudsters, prompting a regulatory investigation and criticism of its chief executive.
Sabadell, which bought TSB in 2015, said it booked an extraordinary charge of €203m for the outage.
This included costs related to commercial actions, compensation for cases of alleged fraud during the migration and €92.4m for future customer claims.
The bank's handling of the crisis has tarnished its reputation just as it tried to win more market share in Britain and offset a squeeze in margins in its Spanish home market as a result of ultra low interest rates in the euro zone.
TSB CEO Paul Pester, whose position was called into question by lawmakers following the migration failure, said the outage was not acceptable and below the level of service the bank prides itself on.
"We're making progress in resolving the service problems customers experienced following our IT migration, and we will continue to work tirelessly until we have put things right," he said.
Sabadell's net interest income, or profit from loans minus funding costs, fell 7.8% in the quarter from the same period last year to €899m, also hit by TSB.
TSB reported a pre-tax loss of £107.4m.
At group level, earnings were also impacted by several one-offs linked to the disposal of Italian bonds, a debt impairment at Spain's bad bank and charges linked to the sale of bad property assets.
Sabadell sold a real estate portfolio with a face value of €9.1 billion to Cerberus this month and was finalising the sale of another two portfolios with a gross value of €3.3 billion to Deutsche Bank.
