Ulster Bank details pain of tracker loan scandal

Ulster Bank has said it is hoping to reinstate as many customers as possible to tracker mortgages by Christmas or early in the New Year; as part of its ongoing mortgage redress programme.

It has also said it would consider paying compensation to SMEs who entered its controversial Global Restructuring Group (GRG) vehicle, “if necessary”.

All of the major lenders are currently undertaking redress programmes after customers were wrongly moved from low interest rate products when seeking to switch to a tracker mortgage. Ulster is at an earlier stage in the process than the other banks, but has set aside €118m in compensation provisions.

Addressing the Joint Oireachtas Finance Committee, yesterday, Ulster Bank chief executive Gerry Mallon said the bank still does not have a final number of affected customers, but said that around 2,000 have been identified to date.

“We are very deep into the review and are still looking to identify customers. It’s a very complicated process and it’s important to get it right to meet the standards that both we and the regulator expect,” Mr Mallon said.

He added that the bank will be writing to the “first cohort” — and the substantial portion — of affected customers this month, but it will be into 2017 before the review fully concludes.

“We’re moving as fast as we can on this,” he added, before apologising to people impacted by both the issue and by the delay in solving it.

While he said he doesn’t know how many customers lost their homes due to being denied lower rates, he later suggested around 14 or 15, although not all of these were due to the tracker scandal.

Ulster’s chief finance officer, Paul Stanley, and head of problem debt management, Andrew Blair also addressed the meeting. Mr Stanley said the bank hoped to have as many affected customers as possible back on trackers by Christmas or the New Year.

Meanwhile, regarding the GRG, Mr Blair dismissed some committee members’ call for a fresh Central Bank probe into its workings by saying he didn’t perceive it to be necessary. He added that no compensation provisions have been made for affected SMEs but said the bank will provide compensation if required.

Two years ago an investigation, by law firm Mason, Hayes & Curran, cleared Ulster Bank of effectively putting viable companies out of business in order to seize their assets; by artificially distressing them via the charging of complex fees. Yesterday’s Committee heard that less than 100 of the 2,141 Irish SMEs which entered the GRG survived the process and 90% of the loans inherited by the bank were sold to vulture funds.

New mortgage lending at Ulster Bank reportedly, grew by 49% in the third quarter, upping the bank’s market share from 18% to 19%. Mr Mallon also touched on the changed Central Bank mortgage rules, calling it a helpful development, but not a dramatic one.

Latest combined mortgage data, which were published yesterday, show that 3,310 mortgages were approved in the three months to the end of October this year ; up 29% year-on-year in volume terms and ahead by 41% in value terms.

Elsewhere, Bank of Ireland has said that its 2017 supervisory review and evaluation process (SREP) capital requirement target has been set at 8%. This is down from 10.25%.

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