The independent review by Sir Christopher Kelly was commissioned by the bank in an attempt to learn the lessons from a catastrophic series of management blunders and poor decision-making that left the bank with a £1.5 billion hole in its balance sheet.

The review offers an analysis of strategic decision making, management structures, culture, governance and accounting practices and aspects of the role of the bank auditors. It also includes an eye-opening thirteen-page passage on a calamitous IT re-platforming project that contributed to a £300 million write-off and left the bank on the brink of collapse.

Says Kelly: "The litany of deficiencies in the way the re-platforming programme was implemented after the completion of the merger (with Britannia Building Society) makes sorry reading. A number of individuals made attempts to improve things at different stages, including a major re-organisation in mid-2011. But it is difficult to avoid concluding that in many important respects the programme was set up and implemented in a way which was almost bound to lead to failure."

Some key highlights:

• In early 2007 the Bank issued a 'Request for Information' (RFI) to seven potential core banking system providers, as it looked to replace a 30-year old patched-up legacy infrastructure.
• In 2008, the bank selected Finacle from Infosys, a system that had not previously been tested in UK banks and required significant re-configuration to make it compliant with UK regulatory requirements and banking practices.
• The bank's management seems to have underestimated the amount of work re-configuration would entail both for Infosys and for its own staff. The project would also require significant effort to migrate data from the legacy systems, to build interfaces with other bank applications, to train staff to use the new systems, and so on. Internal presentations and communication, including papers prepared for the Bank Board, described Finacle as a 'bank in a box'. "This description may have given a misleading impression."
• The driving force behind the project, bank CIO Gerry Pennel, quits for a new job on the London Organising Committee of the Olympic and Paralympic Games.
• The merger with Britannia increased the scope of the re-platforming programme, and hence its risks.
• The project enjoyed neither stable executive sponsorship nor consistent day-to-day programme leadership. Between 2007 and 2012 three different executives were responsible for the programme. There was similar turnover below sponsor level in responsibility for programme delivery.
• The programme team failed to push back hard enough against the business demand for amendments to the Finacle product. It gathered 18,000 requirements, many of which appeared non-essential.
• As the work progressed, the scheduling and sequencing of releases changed frequently. Between 2007 and 2012 there were at least five different roadmaps.
• The programme's expected costs consistently escalated. Expected costs end-to-end were initially estimated in 2008 pre-merger to be £184 million. By 2012, the costs had ballooned to £948 million.