Ulster Bank and KBC Bank are to press ahead with plans to begin freezing and closing customer accounts over the coming weeks despite concerns raised this week by the competition watchdog and criticism from Gabriel Makhlouf, governor of the Central Bank of Ireland.
It is understood that Ulster Bank will begin freezing accounts belonging to customers whom it believes are no longer reliant on their services from November 11th as planned. The accounts, estimated to be around 3,600 of the 17,300 subject to the first batch of notice letters, will then be closed 30 days later.
The NatWest-owned lender began writing to customers in batches from April, giving them six months’ notice to find alternative service providers and close their Ulster Bank accounts.
The original deadline set was October 8th for the first tranche of customers but this was pushed back to November 4th to facilitate customers in receipt of additional social welfare payments announced in Budget 2023. Bank executives then told the Oireachtas finance committee last month that the deadline would be further pushed back to November 11th.
Your work questions answered: My hours have been cut but someone new has been hired. Can my employer do this?
Cliff Taylor: How the return of SSIA-style incentives might be on the cards for Irish households
From intern to CEO: does it pay to be a company lifer?
My remuneration ‘was substantial’: The interview transcript Derek Quinlan didn’t want made public
A spokeswoman for KBC Bank Ireland said the first wave of account closures would begin in December as planned. “The current account closure process will proceed from that point in four-week cycles, and we expect it will continue until August 2023,” she said.
“At the beginning of this process, we estimated that 52,000 of the 130,000 total number of KBC current account holders may need to open a new account or move to a new provider,” the spokeswoman said. “Today, that figure is down 29 per cent to 36,900. To date, 65 per cent of all current account customers have received account closure notices.”
The Belgian lender will continue to issue these notices into the first four months of 2023.
The Banking and Payments Federation Ireland said “significant progress has been made by the industry” but “there is still work to be done” to complete the switching process. A spokeswoman said the bank lobby group urges “all impacted customers who have yet to take action in moving provider to do so now”.
Mr Makhlouf said on Wednesday that the handling of the process so far had “left something to be desired” and that the Central Bank could move to delay the banks’ exits if it was appropriate to do so to make sure that customers are not “left stranded”.
However, urging stakeholders to redouble their efforts over the coming months, he said: “The answer to this is not just to say there is going to be loads more time. The answer is to actually get everybody to be working towards the transition.”
Mr Makhlouf’s remarks followed the publication of research by the Competition and Consumer Protection Commission that revealed one in eight customers of the exiting banks had yet to decide on a new account provider. Some 60 per cent of customers who had switched, meanwhile, reported experiencing difficulties with the process.
A spokeswoman for Ulster Bank said the lender did not comment on the Central Bank’s actions.
