In mid-June, a glitch at Ulster Bank’s parent company, Royal Bank of Scotland, caused havoc when it reached this country. More than 450,000 customers in the Republic and 300,000 in the North were affected as payment services and other key banking functions were severely hampered over a five-week period.
“This [€103m] provision covers all operational costs associated with the incident, as well as redress of £41m [€52m] to 750,000 customers across the island of Ireland. As we continue to deal with customer claims and costs associated with the incident, we expect that there will be some additional costs to the bank over the coming months.”
The average payment to Irish customers works out at €70 each. A spokesperson for the bank said it didn’t put a deadline on customers lodging complaints, which means further compensation claims could be made. “But we think the vast majority of complaints have been made at this stage.”
Extending branch opening hours and other related costs added €50m to the bill. However, businessman George Mordaunt has so far not received any compensation from Ulster Bank for a claim of €1,700. He says he has been “inundated with more requests for information” over the past eight weeks and pleas from the bank asking for patience, but no payment. He is aware of other businesses who are in the same predicament. “It seems to me Ulster Bank is prioritising consumers over business customers.”
An Ulster Bank spokes-person said there was no such policy and more complex compensation cases were taking long. The spokesperson added that it would not be appropriate to comment on whether the bank could be struck by further technology disruptions while there were independent investigations ongoing.
The UK Financial Services Authority is conducting a probe into the technology breakdown at Royal Bank of Scotland, which has so far cost the company £175m (€218m).
RBS has retained a number of external firms to carry out separate inquiries into what went wrong. There is no deadline on when these investigations will be finalised.
Technology problems at Ulster Bank persisted much longer than at RBS or NatWest, which prompted speculation at the time that sorting out the Irish operations was third on the list of priorities.
RBS chief executive Stephen Hester met with Irish financial regulator Matthew Elderfield on Jul 2 to apologise for the difficulties at Ulster Bank and to assure the Central Bank that everything was being done to resolve the problem.