Ulster Bank to delay freeze on busier accounts as initial deadline looms

Ulster Bank executives said on Wednesday that they would temporarily hold off on freezing high-use accounts among the first wave of customers coming to the end of notice periods to find alternative homes for their banking. The NatWest-owned lender is exiting the market in the Republic.

However, holders of 3,600 of the almost 17,300 accounts that were subject to the first round of six-month notice periods, which it started to issue in batches from April, are on track to have their accounts frozen from November 11th, before being closed 30 days later. Some 1,000 of these are accounts with low levels of transactions, while a further 2,600 have no money in them and are inactive.

While the bank moved earlier this month to extend the first deadline by a month to November 4th, executives told the Oireachtas finance committee on Wednesday that it would now start doing this on November 11th.

Ulster Bank chief executive Jane Howard told the committee that 51 per cent of the initial 17,300 accounts had been closed. A further 24 per cent either had no money in them or transactions going through them, or were holding small sums and being used for fewer than five transactions a month, she said.

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Elizabeth Arnett, director of corporate affairs at Ulster Bank, said customers with fewer than five transactions going through their accounts per month were “very, very unlikely” to be using these as their main bank accounts. The Ulster Bank executives said accounts where salaries or social welfare payments were lodged would also be given a temporary reprieve. They did not say how long it would last.

Ms Arnett estimated that the rate at which customers were moving accounts had led the bank to estimate that 1,000 of the initial 17,300 accounts would be frozen in the middle of next month.

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If Ulster Bank freezes an account that a customer is still reliant on, it can temporarily reverse the freezing of the account “for a short time” once the customer contacts the bank. The bank will use that conversation to try to find out what the customer’s plans are for moving their accounts.

Ulster Bank and KBC Bank Ireland, which each decided last year to quit the Irish market, began writing earlier this year to holders of a total of about one million current and deposit accounts – covering millions of direct debits, standing orders and card payments a month – to give them six months’ notice to find alternative providers for their day-to-day banking.

KBC started issuing letters in June to customers behind 130,000 current accounts. It has agreed to sell its deposit book along with its €9 billion of performing loans to Bank of Ireland.

Most of Ulster Bank’s loans are on track to be sold to Permanent TSB and AIB.

Some 434,000 personal current accounts have been opened across the remaining banks, An Post and credit unions during the first eight months of the year, according to the latest figures from Banking & Payments Federation Ireland (BPFI). The rate of weekly openings doubled to about 70,000 between mid-April and the end of August.

KBC Bank Ireland chief executive Frank Jansen estimated in May that 52,000 of the lender’s 130,000 current account holders would likely need to open accounts elsewhere. That has now fallen to 39,000, as thousands of customers moved in the meantime.

Some 55 per cent of the 130,000 have now received notices giving them six months to find an alternative provider.

Ms Howard said that “almost every customer” of her bank had now received such a notification.