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First Ulster Bank accounts to be frozen from today as part of withdrawal
Ulster Bank will today begin freezing the first tranche of customer accounts, as part of its phased withdrawal from the country.
The customers were among the first to be given six months notice to close their accounts last April, but have not yet done so.
The development comes as the Central Bank said just 38% of the current and deposit accounts in the departing Ulster Bank and KBC Bank Ireland that were open at the start of this year have so far been closed, leaving around 770,000 still open.
This is despite more than 800,000 new accounts being opened in the three main retail banks that are remaining in the market between January and the end of October.
It is expected that around 3,600 accounts will be frozen by Ulster Bank today or in the coming days, with the accounts then to be closed 30 days later.
The bank says it believes the customers who own these particular accounts have low reliance on them or may have accounts elsewhere.
More than 70% of those who received their official account closure notification in April and May have already shut them, materially wound them down or left them inactive, Ulster Bank claims.
It says those customers in the first tranche who still have higher reliance on their accounts will not see them closed yet and it will contact them to offer assistance.
The process will be done in a careful and controlled way, it says.
But despite today’s milestone, the latest data from the Central Bank shows there is a large volume of work still to be done before the banks have all their accounts closed and can countenance leaving the market.
They show that the pace of customer-led account closures slowed in the second half of last month.
Despite this, there was still an increase of 15% in account closing activity when compared to the four weeks to the end of September, with 84,494 accounts wound down.
In total, 464,998 accounts across the two banks have now been closed, roughly evenly split between current and deposit.
That leaves 447,733 accounts that remain active with 341,184 of these deemed to be active and 247,116 considered to be a customer’s primary account.
The rate of account openings in the three remaining banks also slowed during October, coming in 14% lower than during September.
“The continued progress shown in the data we are publishing today is encouraging as we enter the next part of the exercise with the departing banks commencing their process of closing accounts on a phased basis,” said the Central Bank’s Director of Consumer Protection, Colm Kincaid.
“This account closing exercise is one we have and will continue to scrutinise very closely, as we have scrutinised each phase of the withdrawal, to ensure the clear expectations that we have set are being met.”
“This includes in particular ensuring that no customer account is closed until all and every reasonable measure has been taken to ensure that the customer has been enabled to switch.”
But the Labour Party has called on the Central Bank to clarify whether Ulster Bank has actually met the criteria needed to allow to shut active accounts.
“The Consumer Protection Code which sets out the threshold that Ulster bank must meet is very clear,” said finance spokesman, Ged Nash.
“Ulster Bank must ensure all outstanding business is properly completed prior to the … cessation of operations”.
“The Central Bank needs to state clearly how they comprehended that this threshold has been met. If Ulster Bank are breaching the Consumer Code, the Regulator has an obligation to immediate prevent Ulster Bank from forcibly rebanking their customers.”
He added that the Labour Party has consistently expressed concern about the arbitrary timelines set down by Ulster Bank for closure and it feels six months is not enough time to close the bank.
This sentiment was echoed earlier this week by the Financial Services Union which called on the Central Bank to intervene to ensure that no customer goes unbanked.
7:51 am 11 November, 2022
Written by: NOW Radio News
CALVIN HARRIS/ELLIE GOULDING
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