Ulster Bank to sell 6,500 loans, committee will hear

Some 6,500 non-performing mortgage loans at Ulster Bank, with a face value of €1.6bn, are to be sold off, the bank will say today.

Of that, 3,600 of the non-performing loans relate to private dwelling homes as opposed to buy-to-let properties.

The bank’s senior management team, led by interim CEO Paul Stanley, will appear before the Oireachtas Finance Committee today to face questions about its intended sale of mortgages as well as its mishandling of its tracker mortgage customers.

Mr Stanley will say the difficult decision to sell comes a decade after the financial crisis began and the continued extension of forbearance cannot be maintained.

Not all mortgages are sustainable, and we are obliged to reduce the level of non-performing loans on our balance sheet,” he will say. “For mortgages that are not sustainable, additional forbearance will not bring them back to a performing position.

In relation to the tracker mortgage scandal, Ulster Bank has often been singled out as the worst bank in terms of offering redress and compensation to customers.

The committee, led by Fianna Fail TD John McGuinness, will be told that, of the 3,490 customers identified in a Phase 2 report, the bank had “remediated” or resolved fully 2,500 by the end of March.

“We will meet the deadline for remediation for the vast majority of the remaining customers in this group by the end of June with a small number completed in July,” Mr Stanley will say. “There will be an exception for additional customers [circa 100] for whom we have as of yet, not been able to locate.”

Mr Stanley will also say that, following a further file review, “we confirmed in April 2018 that up to 2,000 additional customers are impacted by the examination”.

The exact number is subject to completion of the Bank’s internal file review process and then assurance by the external, independent third party, KPMG.

“We are currently working to correct the rates on these newly identified customers and this will be complete by the end of Q3 2018,” TDs will be told. “We expect to substantially progress the redress and compensation payments to these customers by the end of Q3, with all of these customers to be completed in Q4.”

While Mr Stanley will say the bank is working to conclude the remediation phase of the examination by year-end, the appeals process will be available beyond that point and for 12 months following remediation.

“We fully acknowledge the time it has taken to put this right for customers and apologise unreservedly for it,” he will say.

He will also tell TDs that on April 24, bank customers reported that debit and credit transactions (with a date of April 23) were no longer showing in their account. These had been previously been visible from 6pm on April 20. This occurred as a result of human error and was not related to an IT systems’ failure.

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