Competition in the market for current accounts is set to increase, with Permanent TSB to unveil a new offer in a bid to win switcher business from other banks.

Already one of the more competitive in the market for current accounts, PTSB is expected to offer customer the possibility of making money from their current accounts, if they undertake enough electronic transactions to offset a charge.

‘Major product initiative’

PTSB has said it will announce a “major product initiative” on Monday, which industry sources believe is the current account move. Already there is active competition in the market, with some banks, including PTSB, offering free current account banking, if enough funds are lodged every month. The two bigger banks,

AIB

and

Bank of Ireland

, offer significant incentives in terms of fee cuts if the account balance does not fall below a set amount during the month, as does Ulster Bank. Most banks also offer incentives for older customers and, particularly, for students. The latest move by PTSB – which is 75 per cent State-owned – will step up competition by allowing customers, in some circumstances at least, to earn some return on their current account, provided they undertake enough card transactions to offset a small account charge. While the full details will only emerge on Monday, it is likely that most customers who do not avail of an overdraft will be able to make some return, provided they engage in enough transactions. The move is an effort to attract more funding from retail customers at a time when the bank has said that it is returning to a more “normal” funding structure as ECB support winds down. It also reflects trends in the UK market.