Ulster Bank is accused of ‘pulling the trigger’ on the exit plan before it was ready

ULSTER Bank has been accused of “pulling the trigger” on its plans to exit that market, although regulators said it was unwilling to go through with the shutdown.

The charges came as the five retail banks and their lobby group appeared before the Oireachtas Finance Committee.

They were appointed to the committee to discuss how they are dealing with the tsunami of bank accounts being relocated due to the planned closure of Ulster Bank and KBC Bank Ireland.

Around a million deposit and checking accounts have to be moved.

Sinn Féin finance spokesman Pearse Doherty accused Ulster Bank boss Jane Howard of starting the process of pulling out of that market, even though the central bank said banks were not ready for the massive account closure and switching process.

Ms Howard told the committee her bank set milestones for itself when it announced 15 months ago that it was pulling out of that market.

This included keeping customers informed of developments, minimizing job losses, helping customers switch to new account providers, and delaying the processing of bad loans to give those customers time to pay their arrears when they can.

She said the bank is asking its giro and deposit customers to look for new providers.

However, customers do not have to take any action until they receive a formal letter from the bank, Ms Howard said.

“After customers receive their first letter, they will be prompted to do so at various times during their six-month notice period through reminder text messages, prompts on our mobile app and internet banking, as well as follow-up letters, emails and calls,” she said.

Ms Howard stressed Ulster Bank is determined to do the right thing by its customers.

So far, 120,000 letters have been sent asking customers to close their accounts.

Around 30,000 customers have opted for new accounts, she said.

The bank said it has 70,000 customers with overdrafts and urged them to get in touch to discuss their options.

Labour’s Ged Nash accused KBC Bank Ireland of accusing the bank of “being in a hurry to get out of this market”.

The bank originally said customers only had three months to close their KBC accounts and find new ones.

Mr Nash said he understood the central bank had forced KBC to give customers six months to close their accounts.

He was told by KBC that it has 14,000 tracker mortgage accounts which are moving to Bank of Ireland subject to regulatory approval.

KBC Bank Ireland Chief Executive Frank Jansen said the bank is fully aware of concerns about the number of customers who will try to open new current accounts and the challenge to the market that this poses.

KBC has 130,000 current accounts, but 52,000 of them have to find a new provider.

It says that of those 52,000, 97 percent are digitally active.

“Also based on available data, we estimate that the remaining 78,000 already have an account with another provider,” he said.

KBC will not charge any account maintenance fees from the time it starts issuing closure notices in June.