Ulster before Oireachtas Finance Committee this morning

Brendan Burgess

Brendan Burgess

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Finance, Public Expenditure and Reform, and Taoiseach (Joint) CR2, LH 2000 9 a.m.
AGENDA: Session A: EU Semester [Mr. Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, European Commission]; and

Session B: Progress made regarding resolution of the Tracker Mortgage Redress Issue (resumed) [Representatives from Ulster Bank]

So, not sure what time they will start at.
 
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I will be writing to Pearse and John McGuinness in the morning on foot of this - I have several questions for them to ask Mr Mallon, particularly regarding the changes in the new contract vs the original contract.

I would also suggest to anyone who switched their mortgage, if they did not get a full interest repayment to ask them to ask why not - mine was fully repaid from 2008 to 31st December 2017, accounting for the time with AIB. From what I understand others have only been paid for the period they remained with Ulster Bank
 
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no problem @UBanker

I've asked them some similar questions today too

1. Why have the conditions in the contract changed & is this the case for existing tracker customers ie those who did not lose their rate through fixing
2. Why have some switchers only been repaid for the period until they moved their mortgage while others have received full payment up to Dec 31st
3. As section 2 of the mortgage contract clearly stated the Ulster Home loan rate as ECB +0.85 and the fixed rate authority referred to the Ulster Bank Home loan rate, which part was confusing and ambiguous? As this was also the information provided by banking staff were they incorrectly trained in selling the product
4. Finally, a very small amount of compensation has been paid relative to the bank tying the hands of customers for 10 years, and also in many cases fighting cases they had no right to fight - The bank has recently agreed to give employees a rise of up to 5% and paid a dividend to their parent of 1.5billion, the second such dividend in 14months - why has compensation been so low, forcing customers to fight further for proper restitution.
 
This exchange between Pearse Doherty and Governor Lane is interesting

Deputy Pearse Doherty: With regard to the Ulster Bank figures, it is disappointing that 3,380 customers who were identified in September, with some having been identified at least a year before that, still have not been repaid. The banks will appear before us again and they have given us answers to prewritten answers. Ulster Bank is an outlier. The progress is absolutely appalling in comparison with PTSB and so on. It is just not acceptable. When we questioned the Minister as to why Ulster Bank is being given until the end of June to make sure all its customers have been paid back and compensated, he said it was the result of the systems the bank operates. Is the Central Bank of the view that the bank does not have the capacity to increase the level of compensation and redress beyond what it has identified because of the systems it operates?

Professor Philip Lane: The unfortunate answer is yes. We have pushed this as hard as we think we can to maximise the pace at which Ulster Bank. and all other lenders for that matter, pay out. This is where we are. There is a phased approach for Ulster Bank because it seems the way its internal files and computer files are such that they create this mechanical, operational constraint. We wish it was different. We have pushed them to what we think is a feasible pace. When Ulster Bank is before the committee, this can be pursued because it does read odd. It is something to ask about.
 
Hope we will have somebody in attendance tomorrow for 10.30.

Important we all highlight issues to members to highlight deplorable lack of progress by Ulster Bank.
 
Interesting news item on Rte website Business indicating that UB will say have still only identified 3,500 and still working to identify remaining.

Unbelievable after 2 years and 200 staff working on this
 
following is on the committee schedule:

What's on this week
The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach will meet in Public Session at 9.00 a.m. on Thursday, 1 February 2018 in Committee Room 2, LH 2000, Leinster House.

Session A: EU Semester [Mr. Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, and also in charge of Financial Stability, Financial Services and Capital Markets Union]



To commence at 10.30 a.m.

Session B: Progress made regarding resolution of the Tracker Mortgage Redress issue (resumed) [Ulster Bank Representatives]
 
Don’t know if the website is more up to date than the email so can’t guarantee it will happen at 10.30!
 
I expect the proceedings not to go live until closer to 11am. I'm not there (am in work) but attempting to monitor when I can.

10.26 Recording suspended until Ulster Bank appears
 
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They are starting now

Paul Stanley - Chief Financial Officer
Elizabeth Arnett - Head of Corporate Affairs

Just under 3,500 have been identified

The delay in identifying them is unacceptable and apologise.

We started in March 2016 which added 3 months which could have been avoided.

We have 200 full time people working on the programme

Let me explain the challenges

We started with 300,000 customers in scope
64,000 started on trackers and are still on trackers

We conducted in in depth review of over 7,000 cases.

We had 5 mortgage systems across 2 banks.

We found over 1,600 customer journeys and some customers with 20 different points on the journey.

The vast majority of the 3,500 were affected by ambiguous contracts

We did not meet the standards of clarity. We are putting this right, accepting that the pace is frustratingly slow.

88% - due to ambiguity

12% - operational errors and

Around 2,500 are still with UB

For those who have left - we are committed to fixing by end of Q2

For those who have lost their home as a result of losing their tracker
  • €50,000 offered up front
  • A single point of contact
  • A meeting
1,200 customers paid so far.

The letters can contain up to 30 pages but also a summary

They require manual calculations which can't be systemised.

There is no advantage to us in dragging our feet

We are still finalising the numbers but don't expect it to be on the same scale.
 
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Michael McGrath

Where is Mr Mallon? He should be here.

Stanley: He is leaving, but is not on leave.

McGrath - What about the 15 who have lost their homes?

Stanley: They have all been contacted - there may be more when we go through the buy to lets which might have been mis-classified

The loss of value
We will do our utmost to get them into a home

We have one of the 15 on our books
13 "voluntary" sales/surrenders
1 repossession and sale
1 repossession which we still own

McGrath;
2500 are still UB customers

1,200 paid to date of the 2,500? No: Some to the redeemed customers

Stanley: We are on track to have it sorted by end of June - 2,500 by end of Q1

McGrath: I get more emails from UB customers than from any other lender. They are getting no information and are very frustrated.

I don't detect confidence that you have got to the bottom of this - that the 3,500 figure is final.

Stanley: We are talking to the CB and will have the final numbers in a few weeks .
There are potentially other groups.

McGrath
What state are your IT systems in?

Stanley : The 5 mortgage systems are legacy systems. We now have two and they are far more robust.

McGrath: Have you contacted the 1,000 who have left
Stanley: We have contacted 500. We will contact 400 shortly. We are having difficulty in locating the other 100.
 
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McGrath
How do you calculate redress for those who have left

Stanley
We will do a calculation to the end of the mortgage term or give them the option of returning

Any customer coming back to us will get the tracker they were on.

McGrath - what about former First Active customers?

Stanley: Yes, they are included. They are treated in the exact same way. We make no distinction. Some were affected. We will give you the FA numbers.
 
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