Ulster Bank briefs rivals on account closure plans ahead of exit

Close to a million personal accounts affected by withdrawal

The market is bracing itself for a deluge of hundreds of thousands of personal and business account-holders searching for new homes for their money. Photograph: Alan Betson

The market is bracing itself for a deluge of hundreds of thousands of personal and business account-holders searching for new homes for their money. Photograph: Alan Betson

 

Ulster Bank hosted a virtual meeting for banks, credit unions and other deposit-takers on its planned withdrawal from the State. The market is bracing itself for a deluge of hundreds of thousands of personal and business account-holders searching for new homes for their money.

Participants in the meeting, to which representatives for An Post and fintechs such as Revolut and N26 were invited, were told that about 916,000 personal current and deposit accounts and 70,000 commercial accounts were affected, according to sources.

However, many of the accounts are held by households and businesses that have accounts elsewhere, they said. A portion are also categorised as dormant accounts. Ulster Bank had a total of €21.6 billion of deposits at the end of June.

Ulster Bank committed publicly at the end of October to providing customers with six months’ notice to close their accounts from early next year, as it urged them to start getting ready for changes in 2022 as part of its withdrawal from the Irish market. It is expected that this will start in February on a phased basis.

“As part of Ulster Bank’s withdrawal and closure programme, today we invited financial service providers in the Republic of Ireland to a meeting to outline our plans for communicating current account and deposit account move and close activity to customers, beginning in early 2022,” a spokeswoman said on Thursday. “The aim of this engagement is to give receiving financial service providers as much information as possible at this point in time, given the expected increased activity across the industry.”

The spokeswoman said the bank strongly encourages customers “not to leave it until the last minute to avoid possible bottlenecks of account opening activity in the second half of 2022”.

“We also encourage customers who require additional assistance to contact us for help now or in the new year, to get ready for these changes. In tandem with this, we are also writing to the main companies who hold direct debits with our customers to outline the changes coming in 2022, to help them to be ready for impacts on customers who move accounts,” she said.

Pulling out

Ulster Bank’s UK parent, NatWest Group, confirmed in February that it was pulling out of the Irish market on a phased basis, as the unit had little prospect of delivering profit returns over the medium term that would justify ongoing investment. The returns have been depressed by an ongoing ultra-low interest rate environment, high fixed costs, muted loan demand, and the relatively high levels of capital Irish banks must hold in reserve against mortgages compared to most European peers, as a legacy of the scale of the financial crisis.

AIB and Permanent TSB (PTSB) are planning to take over much of Ulster Bank’s loan book.

Ulster Bank has previously said it will not close any of its 88 branches in 2021, and that it does “not anticipate” closing any branches in the first six months of 2022. It said there would be “in-person support” available for people in branches.

However, it has said it would begin to phase out traditional counter and cash services to concentrate on in-person support for customers to move bank and/or close accounts in the first half of next year. PTSB plans to take over 25 of Ulster Bank’s branches.