TSB plans to close 86 branches, cutting up to 400 jobs over the course of next year, as the new chief executive, Debbie Crosbie, seeks to slash costs and move on from the computer meltdown that has dented the high street lender’s reputation.

The bank aims to save £100m by 2022 from the cuts, which would reduce its high-street branch network to 454, it announced on Monday. The bank will seek to offer affected employees jobs in other parts of the business.

Crosbie, announcing her strategy up to 2022, refused to rule out the prospect of further branch closures or job cuts over that period and said the future of those branches would be under continual review. “I’m not ruling anything in and I’m not ruling anything out,” she said.

The costs of redundancy and other restructuring expenses would amount to £180m by 2022, TSB said. It also announced £120m of new investment in its digital channels over the next three years, as it seeks to increase the amount of money it lends to customers by 5% a year.

Unions said wanted to ensure the bank limited the number of compulsory redundancies. “What we don’t want is death by a thousand cuts,” said Ged Nichols, general secretary of Accord, a union representing TSB employees. “We want to see a compelling vision of TSB as a successful bank, and that it’s a bank worth working for.”

Crosbie was appointed to take over the top job at TSB last year, after her predecessor, Paul Pester, resigned amid intense criticism over his handling of the breakdown of the bank’s computer systems. She was previously chief operating officer at CYBG, the owner of the Clydesdale and Yorkshire brands that merged with Virgin Money.

Thousands of customers were locked out of their accounts when the bank tried to switch to a new core computer platform in April 2018.

Compensation and other costs incurred while trying to bring the bank back online mounted to £366m. A report commissioned by TSB from law firm Slaughter and May found that executives had lacked common sense and shifted customers to a new IT platform before it had been fully tested. The report itself cost £21m.

The move to upgrade the system had been seen as a key step in making TSB better able to offer combined digital and branch-based services.

The bank’s customers last week were hit by new computer problems, with some payments not going through on Friday morning.

TSB, which has about 5 million UK customers, was spun out of Lloyds Banking Group to address competition concerns in the aftermath of a government bailout during the financial crisis.

TSB’s struggles had prompted speculation of a sale by Sabadell, the Spanish bank that bought it in 2015. However, Sabadell’s chief executive, Jaime Guardiola, said on Monday TSB was a “key lever to improve our profitability going forward”.

Crosbie said she had received assurances from Sabadell that TSB would remain part of the business.

TSB’s latest closures come amid a fundamental reorientation of the British banking industry, as the rise of online and app-based banking leads to a marked decline in footfall in branches. At the same time profits have been weighed down by low interest rates and economic uncertainty over Brexit.

High street lenders have closed a third of their branches since 2015, according to figures from Which?, the consumer association. TSB has cut about 28% of its outlets since January 2015.

Crosbie said she had made “difficult decisions” amid “a challenging external environment”. She highlighted the fact that TSB’s branch network was comparable in size to that of HSBC, a bank with a much larger loan book, and added that many of the branches earmarked for closure were not “fit for purpose for a modern bank”.

“It’s clear that we need to make changes,” she said. “Right now the footprint we have is unsustainable.”

Gareth Shaw, the head of money at Which?, said: “TSB’s plan to close almost 100 branches will be a huge blow to many customers and goes against what millions of consumers say they want from their bank.

“Our research has found two-thirds of people would find life difficult without convenient access to a branch, while 11 million people lack the confidence to carry out basic banking tasks online.”