# Ulster Bank Nearly Doubles Tracker Provision



## SaySomething (23 Feb 2018)

As reported in the Irish Times - their 2017 results have just landed this morning at 7am. I'm sure there will be more coverage during the day.

Operating loss off €151 million, due mainly (according to the Irish Times) to an increased provision for the tracker examination of €192 million in 2017. 

Note. They paid RBS, their parent company, a dividend of €1.5 billion in January 2018. That surely had to hit the P&L, no?

The bank had provisioned €211 million for the costs of the tracker examination in 2016. That's close to doubling it with an overall provision of €400+ million. 

https://www.irishtimes.com/business...s-looks-set-to-cost-up-to-192m-more-1.3403053


----------



## SaySomething (23 Feb 2018)

Apologies the figures above don't add up when I review their actual annual report. However, this in itself is interesting. Quoted directly from the RBS 2017 report:

_"RBS has made provisions totalling €298 million (£248 million) to date for this matter, including an additional provision of €87 million (£76 million) in 2017. Of the €298 million (£248 million) cumulative provision, €75 million (£64 million) had been utilised by 31 December 2017. 

Separately, in April 2016, the CBI notified UBI DAC that it was also commencing an investigation under its Administrative Sanctions Procedure into suspec ted breaches of the Consumer Protection Code 2006 during the period 4 August 2006 to 30 June 2008 in relation to certain customers who switched from tracker mortgages to fixed rate mortgages. This investigation is ongoing and UBI DAC continues to co-operate with the CBI. 

As part of an internal review of the wider retail and commercial loan portfolios extending from the tracker mortgage examination programme, UBI DAC identified further legacy business issues. A programme is ongoing to identify and remediate impacted customers and a charge of €101 million (£89 million) has been recognised in 2017 based on expected remediation and project costs in relation to these items"_​


----------



## RedOnion (23 Feb 2018)

SaySomething said:


> Note. They paid RBS, their parent company, a dividend of €1.5 billion in January 2018. That surely had to hit the P&L, no?


No, this was a dividend, so paid out of reserves from previous years profits. It doesn't touch P&L.

As you say, there will be further commentary during the day. I wouldn't assume that the provisions for overcharging relate to mortgage tracker issues.


----------



## SaySomething (23 Feb 2018)

Thanks @RedOnion I've added in further detail just above your post regarding the provisions from their annual report. It explains them a bit more. I think the Irish Times took a more top-down approach but it's clear that there has been an increase in the provision alright. With interestingly a low proportion of it spent to date.


----------



## RedOnion (23 Feb 2018)

Thanks, our posts crossed - I wasn't sure how much had been made public about their other issues which have been rumoured.

Specific to tracker redress - these numbers align to what they've been saying. Only 25% of the provision had been used at year end.


----------

