Ulster Bank faced court order in tracker investigation before €38m fine

Regulator found lender devised ‘deliberate strategies’ to overcharge customers

The Central Bank came close to resorting to the High Court to force Ulster Bank to co-operate properly with its tracker mortgage investigation into the lender, which resulted in a record €37.8 million fine.

Ulster Bank, which said last month it is quitting the Irish market, was found by a five-year Central Bank investigation to have devised “deliberate strategies” to shift borrowers off cheap mortgages during the financial crisis and only put those who complained on the correct rate.

The bank admitted to 49 separate regulatory breaches in relation to the tracker debacle, the regulator said on Thursday.

Borrowers lost 43 properties as a result of overcharging as they were denied their right to a low-cost mortgage linked to the European Central Bank’s main rate. Family homes accounted for 29 of these cases.



The Central Bank revealed that Ulster Bank failed at one stage to hand over certain documents to meet a statutory deadline, prompting the “unprecedented step” of the regulator certifying the bank for non-compliance, which would have allowed it to seek a High Court order.

“Ultimately this was unnecessary as the information was provided,” it said.

Ulster Bank chief executive Jane Howard apologised on Thursday for the bank's "responses to [the] investigation" and to affected customers.

Ulster Bank has paid €128 million in refunds and compensation to 5,940 overcharged mortgage customers caught up in the fiasco. Ms Howard said that a line has yet to be drawn under the matter, as the Financial Services and Pensions Ombudsman continues to consider customer complaints.

The regulator has previously said that it is looking at the conduct of firms and senior bankers as part of investigations across the industry, but has declined to say whether individuals will be subjected to enforcement proceedings.


Ulster Bank’s fine is by far the largest ever levied by the Central Bank and brings the total level of tracker-related penalties to date to €81.6 million.

The Ulster Bank sanction comes five weeks after its UK parent, NatWest Group, confirmed that it will withdraw from the Republic in the coming years as it has struggled since the financial crisis to deliver acceptable profit returns. AIB and Permanent TSB are in talks to buy much of Ulster Bank's €20 billion loan book.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times