Ulster Bank comes under fire in Oireachtas meeting as they prepare to leave Irish market

Heated exchange at an Oireachtas Committee meeting with Sinn Féin's Pearse Doherty saying it was Ulster's agenda to 'get out of town as quickly as possible'
Ulster Bank comes under fire in Oireachtas meeting as they prepare to leave Irish market

Customers were told by Ulster Bank that they do not need to take any action until they receive their formal letter.

An Oireachtas committee has raised concerns about the problems facing customers with overdrafts who have to switch banks as Ulster and KBC prepare to close their doors in the Republic.  

John McGuinness, the Fianna Fáil chair of the Finance Committee, raised concerns that customers were not getting appointments with other banks to set up new accounts. 

He said the impending withdrawals of Ulster Bank and KBC were leading to "considerable stress to customers of both banks as they look to move their accounts and business to the other banks”. 

And customers are not confident that millions of direct debits will be transferred in time, Mr McGuinness told the chiefs of Ulster and KBC at the hearing. 

Jane Howard, who heads up Ulster Bank in the Republic, said there were cases of delays in rival banks scheduling appointments for customers to open their new accounts.                      

“There’s no doubt there have been some hotspots where we’ve seen long times for customers to actually get an interview with a bank,” Ms Howard told the committee. 

Representatives from other banks will be present in Ulster Bank branches to help customers switch to their new financial services providers, she said.

Ms Howard said some customers have already started to leave Ulster Bank on their own accord and that the bank will contact all customers on an individual basis. 

They will have six months to switch banks after receiving the notice.

“At the end of six months, which we believe is plenty of time and well beyond the requirements, we will be putting a 'no transactions marker' on,” said Ms Howard.

The committee was told that additional time may be given to people who need to get their financial affairs in order, for example customers with overdrafts. 

However, if no action is taken on these accounts by the deadline they will be frozen and may in time be passed on to other lenders.  

“A time will come when we have to sell our non-performing loans and that may well include the overdrafts but the priority right now is helping customers to get their finances in order and in the right shape,” Ms Howard said.

“The priority has been the other asset sales,” she said.

Committee members raised concerns that the overdrafts would be sold to debt collectors. 

Selling non-performing loans will not happen until next year, Ms Howard said. 

Ulster Bank plans on ending all transactions with its customers in the Republic by March next year. KBC is aiming for August 2023.

Ulster Bank has already started the process of contacting people. 

“We are fully aware of the volume of customers that seek to open new current accounts and the challenge that that presents to the market,” said Frank Janson, KBC Ireland CEO.

KBC estimates that out of the 130,000 current account holders with the bank, 78,000 have switched while 52,000 have yet to do so.

Industry group, the Banking Payments Federation Ireland has also warned about the potential for fraud as customer switch banks. 

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