Ulster Bank in fresh redress probe

Ulster Bank has set aside a further €39m in redress cost provisions to cover what it calls “errors” concerning its personal and commercial loan books.

Chief executive Gerry Mallon said it is “too early to say” how many customers might be affected, and refused to elaborate on the exact nature of the problem.

The latest loan ‘error’ follows on from Ulster Bank setting aside €211m in compensation for customers wrongly denied tracker mortgages and was actually discovered when the bank was investigating the scale of its role in the industry-wide tracker redress programme.

The two issues are separate but are likely to spread well into 2018 before being fully rectified.

Updating on the tracker compensation issue, which affected around 3,500 Ulster Bank customers, Mr Mallon said all cases have been identified and all customers who stayed with the bank have been returned to tracker mortgages.

Regarding affected customers no longer with the bank, Ulster will begin contacting them and working towards redress in the next few weeks.

It is not envisaged the total compensation cost will be any higher than €211m, but it is also unlikely to be any lower.

Mr Mallon was speaking on the back of a mixed set of half-year results for Ulster Bank, which showed good underlying business performance but also a €51m annualised fall in adjusted operating profit to €104m and a drop from €377m to €341m in total income.

However, new lending levels rose 11% to €1.3bn; customer deposit balances were up by over 10% and net interest margin grew — a key barometer of profitability.

The bank lowered the risk attached to its loan book and expects to lend €1bn in mortgages for 2017 as a whole. Non-performing loans fell by 23% to around €4bn of Ulster’s total loan book.

However, efforts to reduce that further will be hampered by the bank’s diminishing scope to sell further individual loan assets.

Meanwhile, Royal Bank of Scotland (RBS) which recently reaffirmed its commitment to Ireland through its ownership of Ulster Bank, reported a pre-tax profit of £939m (€1,040bn) for the six months to the end of June; its first interim profit for three years. The group hasn’t made a full-year profit since 2007.

RBS also said it may move around 150 jobs to Amsterdam after the UK leaves the EU. RBS said it has opened talks with the Dutch central bank to use a banking licence it already has in the Netherlands to conduct some EU business post-Brexit.

RBS was hit with an additional £396m in charges in the first half for resolving past misconduct, it said.


Want to be cultured this Christmas? From TV to podcasts to books, Ed Power has the definite list of everything you missed this year - so you can curl up on the couch and catch upThe definite list of everything you missed this year

Artist Ciara Rodgers teaches older people how to rediscover their creativity and regain confidence, says Rowena WalshBrush with art: Discovering your creative side in later life

Furniture, paintings, jewellery and silver are on offer at James Adam in Dublin, writes Des O’SullivanAll set for home run: See what's on offer at the James Adam sale in Dublin

It’s not too late to hunt out a unique gift. Des O’Sullivan previews sales in the lead-up to the festive seasonA flurry of auctions in Munster sets the scene for Christmas

More From The Irish Examiner