TSB is handing most of its employees £1,500 each by Christmas to reward them for handling the fallout from its IT meltdown earlier this year.

The payout will cost the bank £11m and temporarily replace the company’s March bonus, which is linked to annual profits and customer service metrics and will not pay out this year because TSB will miss its targets.

The bank is expected to report a loss this year and has yet to to resolve 66,000 out of 184,000 customer complaints lodged in the wake of a botched IT platform migration in April that left some bank customers shut out of their accounts for weeks.

The December payment will represent a 7% bonus for frontline staff, who earn around £21,000 on average. Part-time staff and new joiners will receive a smaller amount.

TSB senior executives will not share in the pre-Christmas payout and are not expected to receive any full-year bonus.

A TSB spokesperson said the payout was to thank staff and reflect “the exceptional team effort across the business to put things right for our customers”.

The award will be paid out on 20 December and all staff will get the same sum. Staff usually benefit from a profit-sharing scheme paid as a percentage of salary.

The Accord union said the award recognised employees’ hard work, but was unlikely to be popular with all staff. “News that there’ll be no TSB award paid in 2019 is unwelcome and disappointing even if it was expected,” said Linda Crouch, the trade union’s head of membership and services at TSB.

TSB ran into trouble earlier this year after it tried to move accounts from an IT system inherited from its previous owner, Lloyds Banking Group, to one owned and created by its new Spanish owner, Sabadell. But technical issues left nearly 1.9 million customers locked out of their accounts and resulted in months of further glitches for account holders.

The meltdown has already cost the bank £250m, partly because it was forced to hire nearly 600 extra staff to handle thousands of complaints. The chief executive, Paul Pester, stepped down following the debacle. A new chief executive, Debbie Crosbie, has been hired from Clydesdale and Yorkshire Bank owner CYBG and will start next year.