Ulster Bank before the Oireachtas Finance Committee

Brendan Burgess

Brendan Burgess

Founder
Messages
52,091
Jim Brown: UB is staying in the market in the Republic because we see it as profitable

The CB proposals will impact on FTBs

68% of FTBs we approved this year would not have met the criteria. (before the 15% exceptions)
 
Michael McGrath

Why is the North so much cheaper?

Brown
The rate in the North reflects the cost of providing the funds

The cost of deposits in the North is half the rate in the Republic

We have very competitive fixed rates 3 years and 7 years

McGrath
Do you market the best rates to customers of other banks

Brown:
Yes

McGrath
Do you offer it to existing customers

Brown: They are locked in at the rate at the time they took out the mortgage

McGrath: Arrears ?

Bell: We have seen an increase in engagement from customers especially where we initiate legal action against them
 
Kierán O'Donnell

You didn't fill in the questionnaire properly

1) You didn't tell us your cost of funds
2) You didn't tell us the proportion of variable and tracker mortgages

So what is your cost of funds?

There is a lack of competition in the Irish mortgage market at the moment.
You are in both markets, but you have completely different rates.

Brown
For the Republic : same as other banks - in the range of 1% to 1.5%
In the North: it's cheaper - not specified

We have surplus deposits in Northern Ireland
We have a shortage in the Republic

55% of our book is tracker? (not sure did he say 55% or 65%?)

NIM is 2.32% (across the island of Ireland)

O'Donnell: This is the highest NIM by a significant margin so why don't you cut rates.

Give us a breakdown between South and North

Brown: That is sensitive information

O'Donnell: There is a big difference at lower LTV rates and that is because there is no competition in the market.

You are making good profits compared to other lenders in the RoI market.

Brown: At 2.32% our margins are too low - all banks should be above 2.5%

O'Donnell - Are you going to reduce the rates ?

You are exploiting the lack of competition
 
Pearse Doherty

Yiz are making a mess of things - tax relief on mortgages, IT failure, etc.

Do you have your own IT systems , or are you relying on RBS?

Brown:
We leverage on the RBS system which gives us a competitive advantage.

Bell: We expect to see about 2,000 repossessions over the cycle.

Doherty: What are your loan criteria at the moment

Brown:
Highest LTV is 90%
Highest LTI is 4.5 times

85% are 3.5 times or lower.

We are comfortable with the Central Bank's 3.5 guideline
 
Senator Aideen Hayden

In relation the the variable rate , you are making them pay for the cheap tracker mortgages. Your bad debts are falling, your cost of funds is falling, so you should be reducing the SVR.

You have 5,500 legal actions out of 12,000 cases in arrears. You are scaring people into engaging in a process. Way higher than the other financial institutions.

AIB is funding IMHO to get people to engage.

You really have a problem if you are engaging in legal proceedings with over 50% of your customers in arrears.

Brown
We have 500 people dealing with arrears cases.
Of the 4,500 who have gone into the court process, they have not engaged with us at all despite our calls and visits.
We have someone at the steps of the court trying to get them to engage

Are you prepared to fund an independent process

Bell: We will work with any third party which the customer asks us to deal with.

We have provided referrals to the Insolvency Service, and where appropriate, we will pay for it.

There are 8,000 customers who are no longer in arrears, because of our work.

We are going to have a bunching in the court system, as it's so inefficient.

Hayden: You have very few split mortgages - what do you mean by "economic concession"

Bell: The 1,885 customers who took a rate reduction were offered a split mortgage, but took the economic concession.
 
Paul Murphy

Rant about RBS fine

Questions about RBS in Edinburgh outsourcing work to India

Would a local IT presence in Ireland have been able to solve the problems in Ireland?

How many outsourced staff do you have?

Brown
Ulster Bank has 600 jobs overseas - but these are RBS employees
 
Liam Twomey

ptsb write off debt. Do you do anything similar?

Bell: Where a customer is eligible for social housing, we don't pursue the shortfall.

The cost of rental always exceeds the cost of a restructured mortgage
 
Fidelma Healy Eames

I have worked with David Hall in Galway. You are extremely slow in awarding a restructure. And the fact that it is based in Scotland, makes it even worse.

"you are sending 4 texts a day including calls"

Brown

We don't have 50% of our arrears in the legal system.

We had 20,000 customers in arrears. That has reduced significantly.
We have 8,000 customers who were in arrears, who are now current.

< 90 days due are handle from Scotland
> 90 days are generally dealt with from Dublin

But it's the same unit under the one management.

I don't recognise the charge that we are slow to offer solutions.

Eames: Why do you not offer split mortgages? What are the criteria?

Are we in a property bubble?

Brown: No we don't think that is a case. The sharp jump is not unusual
 
Boyd Barrett ( I think he was the only one left at the meeting?)

We are likely see a serious increase in repossessions?

Brown
4,500 are in legal process out of 12,000 over 90 days

Bell
2,000 are not engaging or not paying.

We adjourn if people start paying

Repayments on unsecured debt are, on average, twice the shortfall on mortgage repayments.

Boyd Barrett
Are you saying that people are paying their unsecured loans firs?

Bell: Absolutely

Restructured mortgages are always cheaper than renting an equivalent house.

Mortgage to rent is a disaster and can't work. We are working on a "mortgage to lease" scheme which should be a lot simpler.
 
You must log in or register to reply here.
Back
Top