The Central Bank should make it easy for banks to open accounts for Ulster Bank and KBC customers

AFAIK every bank has a legal obligation to carry out due diligence on new customers.

Data on KBC and Ulster systems will be in many cases out of date or with gaps, so not reliable for customer onboarding.

I don't think the Central Bank can get around this.
 
I have already been through the process. In the Spring we got an appointment in the AIB within a week. Brought all our I.D. with us. Account opened there and then. Took about 40 minutes. Got a cheque book after 10 days (I still think they are a great back up). Set up a monthly statement. Got our debit cards.
Now just manually moving across our DD'S etc.

The whole thing was and is a pain in the backside.

But then again what isn't these days.

Never got replies from emails sent to Mercer, Laya, GlowPower......

But then again....I saw on Ear to the Ground the other night that we are importing peat moss from Latvia........
 
MrEarl said:
Hello Skrooge,

Perhaps you are forgetting that holding surplus deposits is actually costing Banks money - it's not as simple as suggesting that they be paid a zero rate, as that could potentially cost a Bank up to 0.5%.

With negative rates expected to continue for a couple of years yet, and Banks already awash with funging, you'd be asking them to take on a notable cost - I can see why they don't seem to want the UB Deposit customers.
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I take the point that the bank's don't need this additional funding in of itself. But in the context of buying the loan book I think it's slightly different.

Take BOI, rather than buy €9 billion of loans - and pay roughly par value - they've acquired €4 billion of liabilities and are paying out €5 billion. They must see some value in the deposits. If only to reduce the net up front cost of buying the loans.
 
For most people, it will be easy enough to open an account in a new bank.

But for maybe 10% of people there will be problems. 10% of 600,000 is 60,000 people. The new banks are just not going to be able to handle that level of problems.

Brendan
 
skrooge said:
I take the point that the bank's don't need this additional funding in of itself. But in the context of buying the loan book I think it's slightly different.

Take BOI, rather than buy €9 billion of loans - and pay roughly par value - they've acquired €4 billion of liabilities and are paying out €5 billion. They must see some value in the deposits. If only to reduce the net up front cost of buying the loans.
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While I understand the point, I think that the discount would be too severe, if they incorporated the deposits into the deal, so the purchasing Bank would never pay it.

To try and make it work, in your example, we wouldn't just be talking about €4bn in respect of the deposits, but also adding an additional figures to cover related admin, and say possibly up to three years of additional negative rates impact - so that €4bn deposit book might be seen as having a related cost of closer to €4.4bn. That's not attractive to a Bank, at a time when they are awash with funding, and can't even lend out all that they currently have.
 
Brendan Burgess said:
For most people, it will be easy enough to open an account in a new bank.

But for maybe 10% of people there will be problems. 10% of 600,000 is 60,000 people. The new banks are just not going to be able to handle that level of problems.

Brendan
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While we agree on the fact that the Banks won't be able to cope, I think the number will be a lot less than 60,000 - as quite a few people already have more than one bank account, at more than one Bank.

There's a real opportunity for the likes of the Credit Unions and An Post, to win some business, as a result of UB and KBC withdrawing from the market, but I'm seeing very little from with party, in terms of them taking a strong proactive approach. Small mention of UB closing on a few CU websites, isn't enough, if they are serious about breaking into this space.

I think the CU and An Post are most likely the best future providers, for those that may need regular interaction over the counter etc.
 
MrEarl said:
While I understand the point, I think that the discount would be too severe, if they incorporated the deposits into the deal, so the purchasing Bank would never pay it.

To try and make it work, in your example, we wouldn't just be talking about €4bn in respect of the deposits, but also adding an additional figures to cover related admin, and say possibly up to three years of additional negative rates impact - so that €4bn deposit book might be seen as having a related cost of closer to €4.4bn. That's not attractive to a Bank, at a time when they are awash with funding, and can't even lend out all that they currently have.
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Just to be clear it's not my example I took the details from the info that was released.

€4 billion of deposits are moving. That bit is fact. My speculation is that this will include current accounts. Seems odd to me to take the regular savers but not offer a medium for people to access them.
 
Brendan Burgess said:
That is my point. They should be adapted for the very difficult position we find ourselves in.

A letter from Ulster Bank saying that Johnny has a balance of €56,000 in his current account should suffice to meet all the requirements.

Brendan
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Disagree, all new accounts require new AML validation. To do otherwise opens the door for AML abuse.
I mean how do we know Johnny is still alive, it could be his son masquerading as Johnny and drawing a deceased person's pension. Yeah, that old chestnut still occurs in this day and age
Let's ride the waves on this and see where it lands
 
Nordkapp said:
Let's ride the waves on this and see where it lands
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No. It's better to alert the Central Bank to the upcoming chaos and ask them to take steps now to minimise it.

The AML rules need to be relaxed or adapted to facilitate such a mass move.

Brendan
 
Brendan Burgess said:
The AML rules need to be relaxed or adapted to facilitate such a mass move.
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I don't see how the Central Bank could relax or adapt AML requirements - these are legal requirements stemming from EU Directives.

But the Central Bank should certainly be making sure that the remaining banks have the resources and processes in place to on-board a significant number of new customers over a relatively short period of time.
 
Brendan Burgess said:
No. It's better to alert the Central Bank to the upcoming chaos and ask them to take steps now to minimise it.

The AML rules need to be relaxed or adapted to facilitate such a mass move.

Brendan
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While I agree with you about needing to put pressure on the Central Bank to do something - I think you are wasting your time, trying to get them to to ease the AML rules.

What the CB could easily do though, is issue a very clear directive to the two outgoing Banks, as to how they are to manage their withdrawl process, and account closures.

UB have said that they'll give customers up to 6 months notice, which is better than the CB required minimum (I think it may be 2 months - tbc ? ) - but the CB needs to instruct both KBC and UB to stagger the notifications, so as not to create a bottleneck, with all customers needing to move within the same 6 month period. Roll it out over a staggered 12-18 months, and it's much less of a problem, for example.
 
MrEarl said:
When all is said and done, there's no value in either current accounts or deposit accounts, for Banks, these days (in fact, the large majority of these accounts are operated at a loss) - so neither the outgoing Bank, or the potential new Bank, have any interest in trying to make life easier for the customers who are impacted by both UB and KBC exiting the market.
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This is very true. More customers does not mean more profits, it usually means more free loaders which are a drain on resources. I expect that the other banks will be selective about the customers they take on or alternatively filter afterwards and some people may struggle to find a bank willing to take them on. Some may even be forced to accept the minimum services set out in the EU directive.
 
There has been some, we'll call it modernisation, to the AML rules. I distinctly remember being in BOI for a mortgage and giving them a print out of the digital account statements from my BOI current account, only to be told that they can't accept digital print outs. Even printed statements from the same branch, with their own stamp, needed "extra" validation.

In recent time, banks have been better at accepting printed statements or bills. I know personally that providing any sort of address validation is problematic given all the statements are digital these days.
MrEarl said:
UB have said that they'll give customers up to 6 months notice, which is better than the CB required minimum (I think it may be 2 months - tbc ? ) - but the CB needs to instruct both KBC and UB to stagger the notifications, so as not to create a bottleneck, with all customers needing to move within the same 6 month period. Roll it out over a staggered 12-18 months, and it's much less of a problem, for example.
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The wording UB have used suggest that they may be planning on some kind of staggering of notifications, probably to stop themselves being overwhelmed with things too. I doubt it'll go over more than a few months as even 3 months of notifications would push the closure to the end of the year.
 
Brendan Burgess said:
The AML rules need to be relaxed or adapted to facilitate such a mass move.

Brendan
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That would require a change in legislation, just so people don't have to bring a copy of their passport and a utility bill to a bank?!!!

Asking a bank to certify the identity of 600,000 or even 60,000 different people is a massive undertaking. And seeing as the bank is leaving the country, it is not something that is going to be done. It is much easier for 60,000 people to do it once than one company do it 60,000 times.
 
A piece on the Claire Byrne show just now with Owen McGee about transferring accounts, etc.
 
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