# Implications for current account holders if Ulster Bank closes?



## mmclo (15 Feb 2021)

As this looks fairly certain now think there might be something to be said for a general thread? My two cents worth in terms of questions?

Will they be required to provide a switcher service?
Pros and cons of using Revolute, N26 etc?
What happens to credit card accounts, couldn't they be kept on?
What will be the impact on competition?

It may all be easier in these fintech times but it's one of the biggest bank closures in this countries history I think


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## Pinoy adventure (15 Feb 2021)

Has it being made public it's closing ???


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## RedOnion (15 Feb 2021)

Pinoy adventure said:


> Has it being made public it's closing ???


No.


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## gianni (15 Feb 2021)

Michael McGrath was quizzed about it today by Brian Dobson.

He didn't confirm/deny anything. But then again UB have no state involvement so it's debatable as to how much he knows.

That said, the tone of his responses suggested (to me) that UB are out the gap..


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## RedOnion (15 Feb 2021)

Natwest (their parent) will announce their Group Annual Results on the 19th February (this Friday).  Things may (or may not!) be clearer after that.


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## skrooge (15 Feb 2021)

mmclo said:


> will they be required to provide a switcher service?



There's already an existing service provided among the domestic banks



mmclo said:


> Pros and cons of using Revolute, N26 etc?


Pros for these are they are cheaper/easier than bricks and mortar banks. Could be looked at regardless of Ulster banks decisions


Con no good if you use cheques. Not sure of Revoluts banking status. If it's not licenced it's not covered by a deposit guarantee scheme. ... Open to classification on that one as I know they were looking for one in Latvia(?)




mmclo said:


> What happens to credit card accounts, couldn't they be kept on?



Yes they could but it would defeat the point of closing down in the first place. Alternatively the credit card book could be sold. MBNA did this with it's credit card business, now known as avantcard.



mmclo said:


> What will be the impact on competition?


Unlikely to be good. Really depends on how any wind down is carried out (if there is to be one) and who buys the loan books

They have a sizable corporate loan book so were providers of credit to businesses. When the economy reopens being down a business lender won't do anyone any favours.


On the household front that were reasonably competitive on fixed rate mortgages and their flexibility on overpaying was a nice addition to the market. 

Deposit market - having €20 billion looking for a new home won't help already closed to zero rates



mmclo said:


> It may all be easier in these fintech times but it's one of the biggest bank closures in this countries history I think


In fairness to us we've weathered banking closures before. I've had the pleasure of (opening and) closing  accounts with danske, Halifax, nationwide (IE & UK) and a few others. But it's definitely one of the more established names and branch networks.


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## RedOnion (15 Feb 2021)

skrooge said:


> Not sure of Revoluts banking status. If it's not licenced it's not covered by a deposit guarantee scheme. ... Open to classification on that one as I know they were looking for one in Latvia(?)


The entity your account is with does not have a banking licence.


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## Pinoy adventure (15 Feb 2021)

RedOnion said:


> Natwest (their parent) will announce their Group Annual Results on the 19th February (this Friday).  Things may (or may not!) be clearer after that.


@Red if it was wound up,would those with deposits be given a cheque for the balance of there accounts ?


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## mmclo (15 Feb 2021)

What about historical statements etc. not sure it's all online, can think they might be needed in time, shouldn't everyone get a data dump? I've been with them all my banking life


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## RedOnion (15 Feb 2021)

Pinoy adventure said:


> @Red if it was wound up,would those with deposits be given a cheque for the balance of there accounts ?


I've absolutely no idea, but it's very unlikely that another bank would be interested in taking the deposits in the current environment, but anything could happen.  It's a complex full bank structure, so nothing is going to happen overnight if they decide to exit, so you'll have plenty of time to plan.


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## skrooge (15 Feb 2021)

Pinoy adventure said:


> @Red if it was wound up,would those with deposits be given a cheque for the balance of there accounts ?



AFAIK when NWUK wound down it's IE operations any residual deposits were transferred to the UK. I imagine the same would happen here. The cost of warehousing those deposits in the UK would be minimal.  They would sit there until claimed earning zero (or worse) interest. 

Can't see them sending out cheques. Imagine how many accounts have outdated details.


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## Peanuts20 (16 Feb 2021)

bear in mind that if NW announce UB is to close, it could take years to wind down so nothing is going to happen overnight. In the short term, the bigger issue will be a strike by staff (which is understandable in fairness)


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## RedOnion (16 Feb 2021)

skrooge said:


> AFAIK when NWUK wound down it's IE operations any residual deposits were transferred to the UK


Just remember, very different times. Banks actually wanted more deposits back then!


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## skrooge (16 Feb 2021)

RedOnion said:


> Just remember, very different times. Banks actually wanted more deposits back then!



I appreciate times have changed but operationally NWUK and UB are the same. They don't want Irish deposits.

While Ulster Bank doesn't want the deposits it's ultimately up to the account holder to take them. Most will be withdrawn within the short term. Withdrawal of current account facilities will be key. We'll all shuffle on if we're not able to get paid or pay for things.

Operationally transferring the small balance to the UK won't cost much. Remember the likes Anglo deposits and AIB direct? 

It's this residual that might take years to whittle down. I'm not thinking huge money but all those forgotten accounts that have €10 sitting in them add up. Fine send a cheque out but when it comes back "not at this address" all you've done is cost yourself the price of a stamp. You Wearhouse it in NW until such time as it becomes dormant.


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## NiallSparky (16 Feb 2021)

Peanuts20 said:


> bear in mind that if NW announce UB is to close, it could take years to wind down so nothing is going to happen overnight. In the short term, the bigger issue will be a strike by staff (which is understandable in fairness)



What would the strike be for?


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## Peanuts20 (17 Feb 2021)

NiallSparky said:


> What would the strike be for?


 because 2500 people employed by the bank are going to lose their jobs. They'll strike to firstly try and prevent it, knowing full well they won't succeed so then they will strike for the best redundancy package or best package to TUPE over to anyone who takes over part of the business.


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## NoRegretsCoyote (17 Feb 2021)

mmclo said:


> What about historical statements etc. not sure it's all online, can think they might be needed in time, shouldn't everyone get a data dump? I've been with them all my banking life



There will still be a legal entity that is obliged to respond to requests for certain information.


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## Bronte (17 Feb 2021)

Why is the Dail Finance Committee suggesting they will be able to force Ulster Bank to sell to BofI or AIB.  They have no power to do this surely?


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## HollowKnight (17 Feb 2021)

Bronte said:


> Why is the Dail Finance Committee suggesting they will be able to force Ulster Bank to sell to BofI or AIB.  They have no power to do this surely?


Saw that in the news today and thought it was surely illegal from a anti-competition POV.


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## Mrs Vimes (17 Feb 2021)

My mortgage is with UB, I have found them absolutely appalling to deal with.
My current account is with AIB, I have had very few difficulties with them for many years.
If AIB buy IB mortgages, this puts me in a position I do not want to be in, in that my current account would not be as separate from my mortgage account as I like.
I may have to move my current account.
(I would not get a mortgage now, and I certainly would not get the tracker rate I fought to regain!)


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## horusd (17 Feb 2021)

Looks like it's going to happen.
https://www.irishtimes.com/business...sh-market-after-more-than-160-years-1.4487912

I have  a deposit account with them, but will move that assuming I have to.   I think a lot of the online banks, N26, etc will probably pick up a fair bit. of business.


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## peemac (17 Feb 2021)

horusd said:


> Looks like it's going to happen.
> https://www.irishtimes.com/business...sh-market-after-more-than-160-years-1.4487912
> 
> I have  a deposit account with them, but will move that assuming I have to.   I think a lot of the online banks, N26, etc will probably pick up a fair bit. of business.


I reckon the other banks would love you to move deposit account to n26. Banks are awash with deposits and don't relish the 20bn coming from Ulster


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## Peanuts20 (18 Feb 2021)

HollowKnight said:


> Saw that in the news today and thought it was surely illegal from a anti-competition POV.



Not if UB is seen as strategically important.


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## di74 (18 Feb 2021)

I've been with UB my entire banking life, current account, deposit account, credit card and mortgage. How will tracker rates be dealt with if the loan book is sold?
Don't relish the thoughts of having to find a new bank.


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## RedOnion (18 Feb 2021)

di74 said:


> How will tracker rates be dealt with if the loan book is sold?


The tracker rate is contractual.  A sale doesn't change that (we've already seen thousands of tracker mortgages sold; Danske, BoSI, etc)


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## Setanta12 (18 Feb 2021)

Should people go to limit of their overdraft and stay there - get salary etc paid into another account?


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## Sunny (18 Feb 2021)

Well I for one will miss Henry Hippo....Good memories. 

It is a real shame to see this happen. Some great people working in Ulster Bank. Hopefully large chunks of it will be able to be sold off and as many jobs as possible saved. Good opportunity for Permanent TSB to become a serious competitor to AIB and BOI if they are allowed and able to take over part of it. With persistent doubts over KBC, we need a strong third banking player.


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## Sunny (18 Feb 2021)

Setanta12 said:


> Should people go to limit of their overdraft and stay there - get salary etc paid into another account?



Why would someone do that?


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## NoRegretsCoyote (18 Feb 2021)

HollowKnight said:


> Saw that in the news today and thought it was surely illegal from a anti-competition POV.



The state can't compel a private entity to continue offering a service, even if its loss would result in increased market concentration.

The state could (probably) offer a subsidy available to all banks to keep branches open or the like. But that wouldn't be a good idea.



Mrs Vimes said:


> If AIB buy IB mortgages, this puts me in a position I do not want to be in, in that my current account would not be as separate from my mortgage account as I like.



In practical terms how would it make any difference?


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## RedOnion (18 Feb 2021)

Sunny said:


> Why would someone do that?


To run up massive interest charges, and a terrible credit record, obviously...


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## mmclo (18 Feb 2021)

Sunny said:


> Well I for one will miss Henry Hippo....Good memories.
> 
> It is a real shame to see this happen. Some great people working in Ulster Bank. Hopefully large chunks of it will be able to be sold off and as many jobs as possible saved. Good opportunity for Permanent TSB to become a serious competitor to AIB and BOI if they are allowed and able to take over part of it. With persistent doubts over KBC, we need a strong third banking player.


What are the KBC doubts?


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## Monbretia (18 Feb 2021)

My first thought is the staff obviously, having previously being one even if very briefly!   It won't be easy get another job in a banking area, it hasn't been easy for last 10+ yrs not to mind now.  Other than that I have a very nice little system going with my UB accounts of which I have about 8, pain having to try and replicate that.  Also wondering how the Offset/Current Ac mortgage will be dealt with as the reason it works is because it's linked to several of those accounts.   That link will surely have to be broken if mortgages and current accounts go their separate ways to different institutions.


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## RedOnion (18 Feb 2021)

Monbretia said:


> Also wondering how the Offset/Current Ac mortgage will be dealt with as the reason it works is because it's linked to several of those accounts.


I would suggest looking at what happened with Danske Bank.
UB certainly will look at it, to understand what they did positive & negative.

Danske didn't sell the offset mortgage book initially, and then at end of 2019 to hurry things up they offered a 30% discount to some customers to clear their offset mortgage. The discount reflected both the offset and the low teacher margin (as low as 0.5% in some cases).

For a sense of timescale - this offer was 6 years after Danske announced they were exiting!


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## _OkGo_ (18 Feb 2021)

Mrs Vimes said:


> If AIB buy IB mortgages, this puts me in a position I do not want to be in, in that my current account would not be as separate from my mortgage account as I like.
> I may have to move my current account


Why would having a current account and mortgage with the same bank be a problem? In many cases this is an advantage to you, e.g. KBC offer a discount of 0.2% on mortgage rates with a current account, AIB give fee free banking on the account


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## Monbretia (18 Feb 2021)

Interesting!  I wasn't aware of how Danske handled it, funny enough I had thought myself the likely  way to do it was offer us something to go away!   Rate is 1.15% over ECB


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## RedOnion (18 Feb 2021)

Monbretia said:


> Interesting!  I wasn't aware of how Danske handled it, funny enough I had thought myself the likely  way to do it was offer us something to go away!   Rate is 1.15% over ECB


Danske were able to do that because they kept a banking licence here for business / corporate banking. It's interesting that they waited 6 years before making an offer.
In practice it's going to take UB years to wind down, so it might be similar.

*If they decide to exit.


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## Monbretia (18 Feb 2021)

Flip it, I'll have it nearly paid off by then!


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## EmmDee (18 Feb 2021)

RedOnion said:


> Danske didn't sell the offset mortgage book initially, and then at end of 2019 to hurry things up they offered a 30% discount to some customers to clear their offset mortgage. The discount reflected both the offset and the low teacher margin (as low as 0.5% in some cases).
> 
> For a sense of timescale - this offer was 6 years after Danske announced they were exiting!



Not true of the whole book. I had an offset mortgage and it was transferred to Pepper long before 2019. The "compensation" for losing the offset was a reduction on the standard variable rate (roughly 30%). But there was no reduction in the principal


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## RedOnion (18 Feb 2021)

EmmDee said:


> Not true of the whole book.


There an exception to every rule! 

Yes,  maybe it was the tracker ones that they had held onto, as both the margin and offset were contractual. I don't have the exact details, but I have seen specific cases that were offered the discount in 2019.


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## Bronte (18 Feb 2021)

RedOnion said:


> The tracker rate is contractual.  A sale doesn't change that (we've already seen thousands of tracker mortgages sold; Danske, BoSI, etc)


Jill Kirby on the radio said it's a problem.


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## Mrs Vimes (18 Feb 2021)

_OkGo_ said:


> Why would having a current account and mortgage with the same bank be a problem? In many cases this is an advantage to you, e.g. KBC offer a discount of 0.2% on mortgage rates with a current account, AIB give fee free banking on the account


I suppose because when we were in MARP years ago we were always glad that UB couldn't get to our current account. We had to cancel our DD with AIB after UB took more than the amount we had agreed with them and then switched to paying over the phone but they continued to present DD which we had to charge-back.

The level of incompetence and down-right lies we experienced gives me an unsavoury feeling of schadenfreude to see them lose their jobs I must say.


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## tiarnalamh (19 Feb 2021)

We are a couple over 66 and would like advice on which bank is best for us to move our Ulster Bank accounts to.  We have no mortgage, but have a joint current account accommodating several direct debits and two deposit accounts,  with free banking.  What's best for us with regard to above?


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## RedOnion (19 Feb 2021)

tiarnalamh said:


> I am over 66 and would like advice on which bank is best for me to move my Ulster Bank account


AIB, Bank of Ireland and PTSB all have free banking over 66. They all offer full banking services and have branch networks.
KBC offer free banking to over 60, but without a full branch network. My understanding is that they don't offer cheque books if that's something you use. 

If you need a branch, I'd suggest picking one with a convenient branch location.


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## Pinoy adventure (19 Feb 2021)

RedOnion said:


> AIB, Bank of Ireland and PTSB all have free banking over 66. They all offer full banking services and have branch networks.
> KBC offer free banking to over 60, but without a full branch network. My understanding is that they don't offer cheque books if that's something you use.
> 
> If you need a branch, I'd suggest picking one with a convenient branch location.


@Red which bank would you recommend for under 60s ?


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## RedOnion (19 Feb 2021)

@Pinoy adventure 
Take a look at the best buys here: https://www.askaboutmoney.com/threads/personal-current-accounts.21774/

If you deal with cash or cheques, stay away from KBC.


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## Germaine (28 Mar 2021)

Sunny said:


> Well I for one will miss Henry Hippo....Good memories.
> 
> It is a real shame to see this happen. Some great people working in Ulster Bank. Hopefully large chunks of it will be able to be sold off and as many jobs as possible saved. Good opportunity for Permanent TSB to become a serious competitor to AIB and BOI if they are allowed and able to take over part of it. With persistent doubts over KBC, we need a strong third banking player.


Hi, I'm an Ulster bank customer currently looking into opening new accounts.  I was interested in KBC...would you mind explaining what you mean about persistent doubts about KBC?


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