Britain's consumer watchdog is considering whether Northern Ireland's personal banking market should face a full Competition Commission probe after it found evidence of weak competition between the province's top four banks.

Ulster Bank, Northern Bank, First Trust Bank (an AIB subsidiary) and Bank of Ireland impose a number of current account charges that are not found in the rest of the UK and have admitted that their charges are not directly cost-related, the Office of Fair Trading (OFT) said yesterday.

The OFT also said there was evidence of collusion on price between the four top providers of current accounts in the North.

Unlike elsewhere in the UK, where competition for customers is fierce, the banks in Northern Ireland do not actively compete for customers to switch accounts, and there appears to be a low level of switching by customers between banks and between accounts within the same bank, the OFT said.

In response to the report, Ulster Bank said that more than 80 per cent of its current account holders enjoyed free banking, and Bank of Ireland said 90 per cent of its customers paid no transaction charges.

First Trust said it had co-operated fully with the OFT and would now enter a period of further consultation.

Northern Bank said it took the report very seriously. "We absolutely refute any suggestion of collusion," it said a statement. "We do not engage in collusion. We are aggressively competing head-to-head with all players in the market."

The OFT said it would decide by early summer whether it would refer the banking market to Britain's competition authorities. The watchdog's initial probe was triggered by a complaint from consumer groups in the UK and Northern Ireland.