The UK's competition authority said yesterday that Northern Ireland's banking market lacked competition because banks had unduly complex fee structures and provided little clarity on their charges for services.

The competition commission said that Northern Ireland's personal current account customers were likely to incur higher charges and receive lower levels of credit interest than they might expect in a more competitive market.

It said in a provisional report into the sector that no single remedy would address the competition problems, but that they would probably require a package of remedies.

It said that possible remedies include forcing banks to:

use easy-to-understand terminology and explanations of the levels of charges and interest rates;

give detailed breakdowns of the charges on each statement and advance notice of them;

remind customers of their right to close their accounts and switch to other providers;

publish statistics on customer switches.

"It's difficult for customers to make comparisons between competing providers due to the failure of the banks to explain sufficiently or fully their unduly complex charging structures and practices," said Christopher Clarke, inquiry group chairman, in a statement.

"It took us many months to understand what the charges are and how they are applied," he added.

Clarke said the four major clearing banks derived a competitive advantage from their extensive branch networks and that the sector lacked competition, despite a number of significant recent changes in the market.

The clearing banks are Bank of Ireland, First Trust, which is owned by AIB, Northern Bank, which is owned by NIB parent Danske Bank, and Ulster Bank.

The commission said there was also a perception that switching accounts would be difficult, time consuming and risky, so customers saw little benefit in changing providers.

Banks said competition had increased since the inquiry began, while Which?, the campaign group whose complaint sparked the inquiry, said the report did not go far enough.

"We are disappointed that the commission did not go further in analysing these charges to conclude whether or not they were excessive, and if so what could be done to remedy the situation," said Alena Kozakova, a competition specialist at Which?.

Bank of Ireland said it would take the opportunity to improve the information it provides. Ulster Bank said it would work with the commission on the feasibility of remedies, but that some of them could be costly and hard to implement.