Brendan Smith warns of disruption as Ulster Bank and KBC exit
Brendan Smith warned about the disruption from the announced exits of Ulster Bank and KBC from the Irish market, highlighting the scale of affected accounts and the risks to border communities. He urged the Government and the Central Bank to include the Financial Services Union in negotiations and to protect customers during account migration.
Scale of customer impact
Brendan Smith described the exits as the biggest logistical challenge for the Irish banking sector since the euro, citing 960,000 Ulster Bank accounts and 300,000 KBC accounts in the state. He pointed to long-term branch closures and reductions in personnel over the last decade, saying those trends increase potential disruption and place extra pressure on remaining bank employees, and he noted families, individuals and businesses in Cavernman are concerned about loss of services.
Union representation missing
He criticised the omission of the Financial Services Union from stakeholder discussions, calling the union a key stakeholder. He asked the Government and the Department of Finance to use their influence with the Central Bank to ensure the Financial Services Union is present at all relevant negotiations for an orderly exit.
Regulatory and ministerial actions
The minister and officials are engaging with the banks that intend to leave, and the minister and KBC have confirmed customers will receive six months' notice to close accounts. Officials are also working with the Banking and Payments Federation to ensure remaining banks are prepared to accept switching applications. The Central Bank issued CEO letters on 27 April setting out expectations for a customer-focused approach and will meet retail bank leaders at a roundtable on 17 May to discuss readiness for account migration.
Consumer protections and switching code
Brendan Smith said regulators and ministers should insist on adherence to the Consumer Protection Code 2012. He emphasised that the Code of Conduct on switching of payment accounts should be applied to support customers and prioritise their interests during the unprecedented volume of account transfers.
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It's very regretful that Ulster Bank and KBC would be exiting the Irish market. Traditionally, the Ulster Bank had a very significant presence in the border region, and I know of many families, individuals and businesses in Cavernman who are very concerned about the loss of banking services. This is by far the biggest logistical challenge for the Irish Bank since the introduction of the Euro, when one considers that there are 960,000 Ulster Bank accounts and 300,000 KBC accounts in our state. The backdrop to this as well is significant branch closures over the last decade, and also recent reduction in personnel through redundancy and non-replacement of retiring staff. So we've reduced number of branches and significant drop in personnel, which would mean that there can be huge potential for disruption and so much additional pressure on bank employees. There's a narrative out there about regular contact with key stakeholders, including the Central Bank, the Competition and Consumer Protection Commission, and Banking and Payments Federation. There's a non-acceptable omission is the Financial Services Union, representative body for bank employees. They are a key stakeholder, and I would ask the Government and the Department of Finance to use their influence with the Central Bank to ensure that the Financial Services Union are at all the relevant negotiations. I know the Central Bank are convening talks later this month with the five banks, and the Financial Services Union, representative of the employees, should be present at all such negotiations that are critical for a smooth transition in the exit of these two banks from our state. Thank you, I can call it. I thank the Deputy for his comprehensive presentation, and Minister Donoghue and his officials are engaging with the banks that have indicated their intentions to leave the market, KBC and Ulsterbank in particular. Minister Donoghue and KBC have recently confirmed that they will provide their customers with six months' notice to close their accounts. Minister Donoghue and his officials are also engaged with the Banking and Payments Federation of Ireland to ensure that the remaining banks are prepared to accept applications from customers who are switching from the closing banks. Minister Donoghue and his officials, as you have said, Deputy, on 27 April, the Central Bank issued so-called dare CEO letters to the five retail banks and to the largest financial services direct debit originators, setting out the regulators' expectations and the requirement for a customer-focused approach. And on the 17th of May, the Central Bank will meet with the leaders of the retail banks at a roundtable meeting to discuss their readiness for the migration of accounts from both Ulsterbank and KBC, and to ensure that all parties prioritise the interests of customers and prospective customers throughout the unprecedented volume of account migration. And I will certainly convey to the Minister your point in relation to a key stakeholder of the financial services union. And I think we will also be insisting that the Consumer Protection Code of 2012 is adhered to, and that in all aspects, that the Code of Conduct on switching of payment accounts with payment service providers is in place to support customers.
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