RBS considers legal action over computer system failure -FT

LONDON, June 27 (Reuters) - Royal Bank of Scotland (RBS) may pursue litigation against U.S. software maker CA Technologies after a software upgrade caused massive disruption for millions of customers, the Financial Times said on Wednesday.

NatWest, owned by part-nationalised RBS, suffered a huge backlog of failed payments after the upgrade went wrong, leaving the bank unable to process payments for its personal and business customers.

The glitch could now cost RBS around 100 million pounds ($156 million) in staff overtime costs and expected compensation claims.

An RBS spokesman would not comment on reported potential legal action against CA Technologies.

CA Technologies could not be reached for immediate comment.

The board of the bank, 82 percent owned by the government, spent much of Tuesday debating the software failure, after which it was decided to launch a full internal review, the FT cited several people familiar with events at the meeting as saying.

"It was certainly an issue with this software. We will still have to establish if this was their fault or if it was our handling of the software," one was quoted as saying.

RBS operated extended hours at 1,200 of its NatWest branches for the rest of the week, having opened for business for the first time on a Sunday in its 44-year history as staff struggled to help customers.