Ulster Bank ordered to compensate customers

Ulster Bank has been ordered to compensate any customers affected by its IT systems crash — which could last into the second half of this month.

On the 16th day of the chaos, which the firm with 1.9m customers now admits has affected “significantly more” than the 100,000 repeatedly suggested, Central Bank officials told the bank it must compensate customers. However, Ulster has yet to provide new details on what this “compensation” means.

Chief executive Jim Brown said the customer apology measure would include covering charges and any credit issues which might arise. Both of these issues have previously been put forward by the firm, and dismissed by customers as just covering costs not of their own making — meaning it is not real compensation.

Mr Brown — who has again refused to be drawn on whether he will forego his bonus this year, unlike his RBS Group boss Stephen Hester — said a further measure may be finalised “in the next two or three days”, but declined to give details.

Meanwhile, he confirmed the bank’s crisis was likely to last until at least July 16.

He suggested that this was a safety date but that due to “significant progress” on the transactions backlog the problems could be solved before then. However, this still means that even in a best-case scenario, customers will have been forced to put up with at least a month of difficulties.

Meanwhile. the state watchdog overseeing the crisis admitted it did not have the expertise to properly examine IT systems.

During a two-and-a-half-hour Dáil finance committee grilling, senior Central Bank officials confirmed the “glaring” gap — but defended the situation by saying other countries were in the same position.

Under questioning from Fine Gael Cork North West TD Michael Creed and Sinn Féin finance spokesman Pearse Doherty, Central Bank director of consumer protection Bernard Sheridan said the watchdog “does not have the capacity” to oversee IT issues.

Fine Gael TD and former high-ranking banker Peter Matthews said the situation was unacceptable.

Further questions from Mr Doherty over whether the Central Bank had signed off on Ulster Bank’s contingency plans in the event of such a crisis went unanswered.

The Central Bank — which described the ongoing crisis contingency plans at Ulster Bank as “self-evidently appalling” — has committed to publishing a report on the issue over the coming months.

In light of the difficulties, Ulster Bank has postponed plans to make 950 staff on both sides of the border redundant.

Ulster Bank officials will be before the Oireachtas finance committee to explain the situation today.