Ulster 05 Oct 2017 10am Ulster Bank Finance Committee Hearing - Live Thread

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SaySomething

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If you have access to video you can watch the Finance Committee hearing at this link: http://www.oireachtas.ie/parliament/watchlisten/watchlive/committeeroom2/

  • There will be a blank screen at the start.
  • When the committee are ready and not in private session it will start broadcasting.
  • Typically the bank will make a prepared statement to the committee.
  • The floor will then be opened up to questions.
  • Each member of the committee will be allocated specific time to question.

Unlike before I won't have access to video because I will be there. I can't guarantee that I can post updates on this thread while I'm there because of connection issues. So if you're watching and hear something of relevance please post below so those who can't watch/listen can be kept in the loop.

If anybody else intends to be there feel free to send me a DM/say hello.
 
Okay it's just starting. Will keep this up as long as I'm permitted to do so.
Gerry Mallon beginning pre-prepared statement.

A number of affected GRG customers here with me. Quite a few people in the gallery.
 
They are off

Gerry Mallon CEO U
Paul Stanley Head of Finance
Eddie Cullen Head of Commercial
Andrew Blair Debt Solutions
 
Mortgages - application times reviewed

We have a mobile mortgage service - we can visit applicants for mortgages in their own home

We have steered away from cash back and offer some of the most competitive rates in the market

We don't offer any deal to a new customer which is not available to an existing customer

The overpayment allowance on fixed rates is now 10% per annum

Tracker mortgage examination update

We failed to
We did not live up the standards of full transparency and disclosure

Phase 1 is complete
Phase 2 has been submitted to the CB March 2017 - until they review it, Phase 2 is ongoing.
Phase 3 and 4 are ongoing.

Just under 3,500 impacted customers have been identified.

For 57 it would have resulted in an increased rate, so they have not been put back.

Under 40 have been "mediated" - edit, maybe he said, "remediated"?

We are starting slowly to test the model.

It will run well into 2018.
They will have12 months to appeal

We have identified a small number of customers who have lost their homes. The numbers are low, but could be higher.

Two independent appeals panels have been appointed:
legal/accounting/ consumer reps
 
Gerry Mallon: Full redress for all affected customers will be well into 2018
 
Redress 40 customers out of 3500 and running well into 2018. Is that 31/12/2018 or when? Just over 1%.
 
MM (Michael McGrath)
Tracker queries

Mentions the number of questions. Whoops. Sorry lads.

GM (Gerry Mallon)
Everything that we say about the examination, including the numbers, could be subject to change. Nothing is finalised as the examination progresses.

Less than 40 have been redressed. LESS...
 
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A lot of your customers have been touching us

The numbers have risen by 75% since December
Why? When did you realise it?

GM: Until the CB has concluded, everything we say is subject to change

In Dec, there was a primary cohort of customers

There were no large defined cohorts, but a number of small cohorts

MMcG
When were customers put back

GM
All back on the right rate by the end of March

MMcG
Dec 2015 you were told by CB to do this
When did you realise it was 3,500?
GM: Between Dec 16 and March 17
MMcG: Have you started paying people back?

GM: Yes. It's very complicated. We need due diligence. and manual calculations.
But it is being progressively wrapped up.

It is going to be "well into 2018" before it will be wrapped up.

MMcG: If the customer owed the bank money, you would be a lot quicker in chasing up

GM: I appreciate that. It's not just resources. We have 200 subject matter experts. We have a large team. But it's complex.

MMcG: It's not difficult
GM: It is
 
Paul Stanley:
In some cases it can be automated
But others need to be done manually.

GM: Everyone is working late hours
It's dreadful for the customers.

McGrath: We have to remember the human stories behind these cases.

How many have lost their homes?

GM: We are looking at causality
< 14.

But the numbers are still moving.

But it's only a handful. We have contacted them about remediation.

I estimate that in the 10s will have lost their homes.
But only in the teens due to the bank's fault.

McGrath: When will you be finished

GM: We don't know as it depends on the Central Bank to approve it.

We have made a provision of >€200m and don't see any need for that to increase. That includes the admin cost

McGrath: People who have been examined, but not impacted, have they been informed.

GM: Of the 3,500 - 1,000 have redeemed their mortgages.

McGrath: How will they be dealt with?

GM: We will contact them.

McGrath: Runs out of time.
 
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M McGrath reminds ULB of the real people behind the figures... loss of homes, etc
 
Those deemed not impacted were not informed.
1,000 approx customers who have left Ulster Bank and they are complicated.
We issued 500 letters before Christmas, then a further 1300 in Jan/Feb.

Pearse Doherty
Only a 1/4 were put back before Christmas. That is not acceptable for justifyable. It can't be that difficult.

Gerry Mallon
Asks to go into private session to explain calculations. *is he for real? * - at a later date.
 
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SaySomething said:
Asks to go into private session to explain calculations. *is he for real? *
Click to expand...

Hi SS

That is reasonable. The calculations are extremely complex. On that Committee the only ones who might benefit from such a session would be Pearse and Michael. There is no point in discussing it with the rest of them.

It's more to get an understanding of the complexity rather than the calculations themselves.

Brendan
 
Gerry Mallon: There is no incentive for us to drag our feet in this process.

Pearse Doherty: For an institution who deals with over 1 million accounts. That less than 40 customers have been redressed is not acceptable.

You're still issuing letters of arrears to customers who wouldn't be in arrears if you fixed this mess.

Is the final report submitted to the Central Bank?

UB
yes in effect. Can you please clarify?

Pearse Doherty confirms CB rules

UB
Yes, subject to Central Bank oversight.

Sorry I missed the compensation levels but they mention 12% for standard and up to 20% for arrears cases.
 
Pearse: The other banks have redressed 2,600 but you have done fewer than 40!

But it's no more complex than other banks?

You are still chasing borrowers for arrears who would not be in arrears if you had not overcharged them in the first place.

What will the level of compensation be?

Stanley:

12% for non arrears

13.5% to 20% for arrears cases

We are giving the 14 who lost their houses an initial €50k.

New mortgage contracts contain the following clause:
"The lender will not be liable for any loss if the lender fails to meet its obligations due to factors outside its control"
 
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Customers who have lost their homes are receiving an initial €50,000. When they come in to meet us & afterwards we will resolve further compensation over the next 2 months.

Pearse Doherty now questioning new mortgage contracts & a clause where the bank will not be liable in certain circumstances.

*I have raised this with the Central Bank myself actually*

Ulster Bank say that a significant number of customers already subject to this clause. Pre existing customers had to be moved to this new contract to comply with the new mortgage systems.

Rose Conway Walsh now talking about concerns that this contract does not create a fair and equal relationship between the banks and the consumer/state.
 
Confusion on Phase 2 submitted in March or due by 30 Sep. September was deadline.
Don't follow logic of them submitting in March.

Presume Committee should have this in advance⁉
 
Rose Conway Walsh: Have you identified who is responsible for the tracker issue?

Gerry Mallon: The tracker mortgage was a popular product 2001-2007. In 2007 there were a lot of customers who moved onto fixed rates by their choice.

Rose Conway Walsh: Was there a section within the bank that made these decisions. Was there any dissenting voice?

Gerry Mallon: I haven't seen any evidence, yet, but i would welcome it if there is any, of people deciding not to return people back onto their tracker rate.

No contact from the Gardaí
 
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