Ulster Bank signals jobs of 200 staff resolving tracker scandal at risk

Ulster Bank has signalled that 200 staff working on resolving the tracker-mortgage scandal are at risk of losing their jobs once a line is drawn under the matter.

Addressing the Oireachtas finance committee on Thursday, Ulster Bank chief financial officer Paul Stanley said "a number of those staff were at risk already of redundancy" but had been retained to help deal with the overcharging controversy, which boosted the bank's income by up to €120 million over a decade. Some of the employees face redundancy at the end of the process, while others may work on "other issues" in the group, he said.

However, Mr Stanley said that when the mortgage examination is complete and there “is nothing else happening, those numbers will be surplus numbers”. Ulster Bank’s employee total fell from 3,472 in 2008 to 2,451 in 2016, excluding temporary staff, according to company reports.

Mr Stanley also confirmed the bank expects the number of customers caught up in the tracker-mortgage scandal to rise within the next few weeks as it continues to engage with regulators on the matter.

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‘Additional evidence’

The Irish Times reported in December that Ulster Bank was behind Ireland's four other main lenders coming to a final figure and that its current number of 3,500 affected cases may rise by as much as 2,000 to 3,000.

The Central Bank has "asked us for additional evidence on some matters and some policy review on other matters", Mr Stanley said, adding that he "wouldn't accept" that Ulster Bank is in dispute with the regulator on its figures.

Mr Stanley said that about 15 owner-occupier borrowers and one buy-to-let customer are estimated to have lost their homes as a result of the controversy. However, the number of buy-to-let cases may increase as the bank is only reviewing property losses among this group now, the chief financial officer said.

Of the 3,500 overcharging cases currently acknowledged, the bank has commenced refunds and compensation in relation to 1,200, with that figure on track to rise to 2,500 by the end of March, with the final 1,000 borrowers dealt with by the end of June.

As of December, some 33,700 borrowers across the industry – mainly comprising the country's five banks – had been caught up in the industry-wide scandal spanning the past decade where they were either denied their contractual right to a low-cost loan linked to the European Central Bank rate or put on the wrong rate.

Enforcement investigation

A number of Oireachtas finance committee members, including Fianna Fáil TD Michael McGrath and Sinn Fein’s Pearse Doherty, criticised Ulster Bank’s outgoing chief executive, Gerry Mallon, for not attending the meeting. Mr Mallon handed in his notice last week and is set to join Tesco Bank in the UK later this year.

Mr Stanley said that Ulster Bank is paying out a maximum 20 per cent compensation rate on top of refunds to customers affected by the tracker controversy. This compares to average rates of about 20 per cent for Bank of Ireland and AIB.

“We get more letters on Ulster Bank than all the other banks combined,” said Senator Rose Conway Walsh, an Oireachtas finance committee member, referring to correspondence the committee has received from borrowers affected by the issue.

While Ulster Bank is subject to an enforcement investigation by the Central Bank, Mr Stanley said that the lender is also carrying out its own “accountability review”, which may lead to “appropriate sanctions against individuals concerned” if relevant.