Ulster Bank CEO absence blasted at hearing

Ulster Bank has come under a barrage of criticism after the “unprecedented” decision of outgoing chief executive Gerry Mallon not to turn up at an Oireachtas Finance Committee investigating the lender’s part in the €1bn tracker mortgage scandal, writes Eamon Quinn.

And the Irish lender now also faces a potential new investigation into its treatment of business customers during the financial crisis after its parent RBS in the UK this week apologised for the behaviour of RBS’s former Global Restructuring Group. 

Ulster has so far identified around 3,500 customers misled, overcharged or switched to the wrong home loan, and said at least 15 people have lost their houses as a result.

After Bank of Ireland, AIB and KBC, it has the fourth largest number of wronged customers of five banking groups under investigation in the continuing probe by the Central Bank. 

At €211m, it has set aside the largest amount of provisions, which include Permanent TSB, to meet the costs of its redress and compensation programme.

Ulster told the hearing it “stopped the harm as quickly as we could” but revealed it still has to contact 500 wronged customers who are no longer customers. 

The bank is the latest of the lenders to appear at the hearings and to offer apologies for its failings in the two-and-half-year investigation.

However, the absence of Mr Mallon overshadowed the hearing and was heavily criticised. Ulster said last week he will leave the bank in a few months to join Tesco Bank in the UK as its new CEO.

Standing in was chief finance officer Paul Stanley and Elizabeth Arnett, its head of corporate affairs.

Chair John McGuinness accused Ulster Bank of “nothing short of obstruction” in the way it had communicated with the committee in advance of the hearing but left it open to Ulster “to accommodate” Mr Mallon for a right of reply.

Mr McGuinness said he did not accept most of the assurances for the way the bank was dealing with its customers.

“Your bank has a brass neck like no other,” he told the hearing. “All you are doing is playing with words and I do not believe half of what you are saying,” he said.

Speaking later to the Irish Examiner, Mr McGuinness said Mr Mallon’s absence was a poor reflection on the bank, saying there was “no precedence for a CEO of a bank” not to attend.

Ms Arnett told the hearing Mr Mallon’s resignation had happened unexpectedly and the bank had sought a deferment. With Sinn Féin finance spokesperson Pearse Doherty and Fianna Fáil’s Michael McGrath also questioning Mr Mallon’s absence, Mr Stanley denied Ulster was in dispute with the Central Bank regarding the final number of wronged customers.

Mr Doherty said the bank was making “pathetic” progress and questioned it making a €1.5bn dividend to RBS at a time when its role in the tracker scandal had yet to be resolved. 

Earlier this week, RBS chief executive Ross McEwan and its chairman Howard Davies apologised to MPs for the behaviour of the RBS’s former Global Restructuring Group unit. 

Earlier, Mr McGuinness told EU Financial Services Commissioner Valdis Dombrovskis banks here were ignoring the commission’s direction to writedown household and business debt, and were selling troubled loans to vulture funds instead.

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