Ulster Bank's opening statement
hairman, members of the Committee, good afternoon and thank you for inviting us to attend today’s meeting. I am joined by Ulster Bank’s Director of Corporate Affairs Elizabeth Arnett and our Head of Corporate and SME Banking, Olaf Fitzsimmons.
15 months ago, on the 19th of February 2021, we announced our phased withdrawal from Ireland and since then, we have made significant, sustained progress. At every step, we have kept the Committee updated and have engaged with a wide range of stakeholders. This progress has been guided by a number of principles and commitments, made to our customers and colleagues. We have committed to:
- A phased, orderly withdrawal.
- Minimise job losses and support all colleagues with training and development.
- A preference to deal with strategic banking counterparties, where possible, who can provide customers with full banking services in the Irish market.
- Help our customers to move to a new bank as safely and as seamlessly as possible, with plenty of advance notice.
- Keep branches open throughout Choose Move Close.
- No bank-wide voluntary redundancy scheme before the first half of 2022, and it is highly unlikely that we will see large numbers of redundancy exits this year.
- Dealing with our non-performing loans in the later stages of our withdrawal, to allow customers who are in difficulty as much time and support as possible to return to a performing position.
A lot has happened since February 2021 and we have met many key milestones, all of which are in line with our commitments and have required significant effort from our colleagues, and for that I am deeply grateful. Those key milestones are summarised below and include:
- A binding agreement with AIB for the sale of our portfolio of performing commercial lending and the transfer of approximately 280 colleagues. I’m pleased to say that on 28 April, the Competition and Consumer Protection Commission announced their decision to approve this transaction.
- A binding agreement with Permanent TSB for the sale of our performing non-tracker mortgages as well as performing loans in our micro-SME business; Lombard Asset Finance business and 25 Ulster Bank branch locations. As part of this transaction, which is still subject to regulatory approval, approximately 450 colleagues will transfer to PTSB. Our transactions with AIB and PTSB mean colleagues keep their jobs in the banking sector; mortgage customers move to a full-service bank; and they ensure a continuity of credit which is key to sustaining a business.
- On 29 April, NatWest Group announced that they have entered exclusive discussions with AIB for the sale of Ulster Bank’s performing tracker (and linked) mortgage portfolio.
- We started our Choose, Move, Close campaign last year, in October, when we announced the details of our plans, providing customers and the industry with almost six-months’ notice to prepare even before we commenced issuing letters to customers in April 2022. After extensive industry and stakeholder engagement, on 13 April we formally began to write to customers, on a phased, rolling basis, providing them with six months’ notice to Choose a new provider for their current and deposit accounts and Move and Close their accounts and I will speak in more detail about this in a moment.
- We agreed a new Colleague Agreement with the Financial Services Union in 2021 and with the body representing manager-level colleagues which includes enhanced redundancy terms. And in February this year, we reached agreement with the FSU on a new Pay arrangement for 2022, which sees pay increases for our people.
- We have invested over €1.5m in formal educations supports for our colleagues alongside extensive career planning and other support to help re-skill for the future, including a grant of €5,000 for each colleague for further training, as part of their redundancy package.
I understand the focus of today’s meeting is on the movement of current and deposit account customers to new providers and I would like to take a few moments to talk about our approach.
We have been very thoughtful about this and have engaged extensively with stakeholders, including our regulators throughout this time. We wanted to strike the right balance between allowing ample time for customers to make a considered choice and then move their accounts, and for the other providers and Direct Debit Originators, or DDOs, to prepare. We are conscious that giving too much time could inadvertently prompt inaction, which would not be in the best interests of our customers.
We started our Choose, Move, Close campaign last year, in October, when we announced the details of our plans, providing customers and the industry with almost six-months’ notice to prepare even before we commenced issuing letters to customers in April 2022. We very deliberately announced that while customers did not have to take action at that point, they would eventually have to close their accounts. Making this statement allowed us the opportunity to start a very important conversation. This frontrunning allowed customers, the industry, the DDOs and other stakeholders time to prepare for the formal start of our letters to customers.
Between October and April, we led significant engagement with the rest of the industry, the DDOs and other important stakeholders such as groups representing older customers, MABS and the Department of Social Protection. We placed ads in national newspapers to ensure we reached as many interested parties as possible and held Roadshow sessions to talk stakeholders through our plans. During this time, we also undertook a number of proactive measures to ensure our most vulnerable customers and those that might need extra time and support were fully informed. These included outreach to 30,000 older customers with a direct phone call from our local branch team and an engagement programme with organisations that represent older customers and customers in vulnerable situations such as Age Action and Safeguarding Ireland.
On 13 April 2022, we began to write to customers. At this time, I am happy to say that the volume of activity is in line with our projections, and we are not experiencing any operational challenges in branches or in our telephony teams in responding to customers. These letters are being issued in tranches, to help facilitate orderly account switching and new account opening across the industry.
We understand that giving customers ample support is as important as giving them ample time to carry out this process. And whilst many customers will not need to come into an Ulster Bank branch, our branches will remain open throughout this process to ensure those customers who wish can come directly to us for face-to-face help. We have also offered to the industry the opportunity to be physically present in our branches and space on our website to help customers open accounts and
I’m delighted that we will start to see that support available in branches this month. We have also launched comprehensive online Customer Support Hubs for Personal and Business customers which are updated at every milestone.
For customers who need additional support, we have a number of measures including a dedicated phone line; specialist, trained frontline colleagues; proactive calls offering support after each letter; and proactive outreach to customers who may need additional support within our communities, for example nursing home residents. We have also engaged with the industry to ensure they are aware of the types of customer situations that will require their additional support.
Customers do not need to take any action until they receive their formal letter, however our colleagues are ready to support them if they wish to begin the process now. After customers receive their initial letter, they will be prompted at various times over their six-month notice period, through reminder text messages, prompts in our mobile app and internet banking as well as follow-up letters, emails, and calls.
This is an important step in the phased withdrawal of Ulster Bank, and we recognise that for our customers, especially those who have banked with us for decades, choosing and moving to a new provider requires effort, time, and support. Reflecting our unique footprint and history in Ireland, we have a distinct customer base so the plan that we have put in place for this task is in response to that. We are taking a responsible and prudent approach which includes regular monitoring and evaluation of the progress throughout this process. It is a priority for us that we do the right thing by our customers and colleagues as we support our customers to avail of an alternative financial provider. I thank the members of the Committee and we are happy to take questions.
ENDS.