Bank of Ireland’s art of burying bad news

Cantillon: Charges via negative interest rates hidden behind BoI new service information

Bank of Ireland: plans to charge its high-net worth customers interest on their savings.

Bank of Ireland: plans to charge its high-net worth customers interest on their savings.

 

Corporate obfuscation and the art of burying bad news are skills as old as the pyramids.

Some companies release bad earnings on a Friday in the belief that investors are switched off for the weekend. A study found that Friday announcements are about 50 per cent more likely to miss analyst expectations. Perhaps the most galling example was UK government adviser Jo Moore’s now infamous exhortation to colleagues – on the day of the 9/11 attacks in 2001 – that now would be a good time to release bad news.

Bank of Ireland produced a more benign example last month in an email to customers under the headline: “We’re introducing new ways to bank with us and making some changes.”

Digital wellbeing

The email informs customers that they’ll soon be able to carry out their banking transactions at the post office; and provides information about other small changes to the terms and conditions of current accounts and a new digital financial wellbeing service.

However, down the page, the real meat in the sandwich is revealed when the bank informs customers that it is changing the terms and conditions on some personal current accounts and personal deposit accounts so it “can apply negative rates as well as positive and zero interest rates to these accounts”.

High net worth

“Later this year, we intend to apply negative interest to personal customers with – on average – more than €1 million on deposit across your Bank of Ireland current and deposit accounts,” the email said.

Banks here have already been criticised for charging customers higher interest rates on basic financial products, such as mortgages, than their European counterparts.

Now both AIB and Bank of Ireland plan to charge their high-net worth customers interest on their savings, a reflection of the ultra-low rate environment. Bank of Ireland’s email was a not-so-deft attempt to bury the announcement of another uncompetitive charge. One of several.

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