Almost 192,000 “primary” current accounts in departing banks KBC and Ulster Bank remain open, the Central Bank said on Tuesday, despite a 50 per cent fall in the number of such accounts at the two banks since July.
Ulster Bank started to freeze inactive or low-use current and deposit accounts in early November and KBC began to close similar types of accounts at the start of this month after the initial wave of customers to be given six months’ notice to find alternative homes for their banking activities passed that deadline. Ulster started to issue such notices in April, while KBC commenced in June.
The latest data suggest that the pace of customers making the big switch slowed in November from October.
The total number of current and deposit accounts closed in Ulster Bank and KBC banks equated to 93,638 in November or 18,728 a week.
Tourism enjoys rebound, MABS and banks join forces, and what to do if separated spouse wants to sell family home?
This represents a decline of 11 per cent compared to the weekly closure rate in October and brings the total number of accounts closed in the first 11 months of the year to 558,636. Of these, 288,994 were current accounts, and 269,642 were deposit accounts, the regulator said.
At the end of last month, 674,780 accounts remained open in Ulster Bank and KBC Bank – a reduction of 12 per cent compared to end-October, and a decrease of 45 per cent since the beginning of the year, it said.
Of the 392,812 current accounts that remain open, 280,744 were deemed by the banks to be active accounts, and 191,890 were deemed by the banks as customers’ “primary” account.
Account closures are lagging behind new openings, as many customers of the exiting banks leave money in their original accounts to cover initial direct debit and standing order payments after they move their banking elsewhere.
It is understood that both Ulster Bank and KBC are still focusing on freezing and closing accounts with five or fewer transactions a month as notice periods come to an end.
Both exiting lenders have been contacting customers with higher reliance on their accounts to urge them to press ahead with finding a new banking provider.
The Central Bank moved in September to ease rules on the recording of missed loan payments with its credit register, amid concerns that Ulster Bank and KBC current account customers may inadvertently fall behind on instalments as they move their banking elsewhere.
Lenders operating in the State – spanning those providing everything from hire purchase agreements to mortgages – must submit payment information every month on loans of €500 or more to the central credit register.
While the regulator has allowed for a single missed monthly payment on a loan not to be recorded on a borrower’s credit report since the register started collecting information five years ago, it told lenders three months ago that more than one missed instalment can escape being recorded if they are the result of “operational issues” amid the big switch.
This means that, if a consumer misses loan repayments through no fault of their own as a result of switching bank accounts, it will not show up adversely on their credit report, as long as payments are brought up to date.