Ms Jane Howard:

I thank the Chairman and members of the committee for inviting us to attend today’s meeting. I am joined by Ulster Bank’s director of corporate affairs, Ms Elizabeth Arnett.

As the members know, our phased withdrawal is progressing and we have made sure to keep the committee informed at all stages. We have committed to a phased, orderly withdrawal to minimise job losses and support all colleagues with training and development, with a preference to deal with strategic banking counterparties, where possible, who can provide customers with full banking services in the Irish market. We commit to helping our customers move to a new provider as safely and as seamlessly as possible, with plenty of advance notice, and to keep branches open throughout our choose, move, close campaign to ensure customers have access to branch support during their six-month notice period, where possible. There has been no bank-wide voluntary redundancy scheme in the first half of 2022, and it is highly unlikely that we will see large numbers of redundancy exits this year. In addition, we have committed to dealing with our non-performing loans in the later stages of our withdrawal, to allow customers who are in difficulty as much time and support as possible to return to a performing position. We are delivering on all of these commitments as our withdrawal progresses.

Today, I would like to outline the current position and the next steps for our current and deposit account customers, and we are happy to take questions on any aspect of our withdrawal in the discussion and will endeavour to answer them subject to the normal commercial considerations. We announced our plans for the closure of our current and deposit account customers a year ago, in October 2021. Six months later, in April 2022, we formally began writing to customers to ask them to choose a new provider, and move and close their current and deposit accounts on a phased, rolling basis, giving them six months’ notice to do so. We have been communicating multiple times and in multiple ways with our customers throughout this six-month notice period, and there are a number of channels available to them to close accounts. We have engaged in significant advertising and marketing campaigns, as have other important stakeholders such as financial service providers, the Banking and Payments Federation of Ireland, the Department of Social Protection and the Competition and Consumer Protection Commission. The campaigns have been constant, and one can hardly turn on the radio, open a newspaper or go online without hearing a message about moving to a new provider. This might seem excessive sometimes but a programme of this scale that requires so many customers and stakeholders to act, requires this level of communications. Based on our independent research, the communications have worked, and our customers are universally aware of what is happening and of what they need to do.

In addition to our customer communications and in recognition that many other stakeholders external to Ulster Bank would need to play a part in ensuring customers could safely choose, move and close, we commenced a proactive programme of engagement a year ago. To date, we have held over 1,200 stakeholder engagements, from large-scale roadshow events to regular, one-to-one meetings. Many committee members or colleagues in their constituency or parliamentary teams have attended some of these events.

Our objective is to ensure we employ all communication channels to ensure customers are aware of the action they need to take and the supports available to them. I thank all stakeholders for their ongoing support. While communications are a central part of our activity, it is second only to providing practical support and outreach to customers. In this regard, we are very proud of our front-line teams and the lengths to which they have gone to support our customers, and I take this opportunity to acknowledge and thank them for that.

By way of example of the sorts of initiatives we are implementing to provide practical support to customers, we have changed our branch hours to allow more time to support customers move their accounts. We have hosted teams from other financial institutions in our banking halls, so they are on site to open accounts for our customers. We have a full range of supports for vulnerable customers, details of which we have shared with the committee. We have carried out additional proactive contact to customers who might need more help, such as those in financial difficulty, older customers, heavy branch users and customers at the end of their six-month notice period. We have made it easier for customers to close their account in-branch, on the telephone and digitally.

We are already seeing trends that show a significant reduction in reliance on branches for our customers, with in-branch transactions down by 49% and falling each week. At the same time, other financial providers have made it easier for customers to open accounts and we have seen many initiatives in this regard. I will not mention any specifically, but we can see from the enormous number of accounts that have been opened this year - on average 12,500 a week - that the supports put in place by other financial providers are working. In some instances, accounts can be opened digitally in a matter of moments but, equally, for customers who do not want to open accounts digitally there is no significant delay for appointments, with the Central Bank reporting an eight-day waiting period for appointments.

We have also mirrored our process and approach for our business customers, providing them with six months’ notice to choose, move and close as well as multiple letters, prompts and calls.

Having a working current account is crucial for businesses to be able to pay their employees and suppliers, receive payments and carry out all their financial duties. The switching or closing process can typically take longer for a business customer because requirements are often more complex, so I have been engaging proactively with these customers since they received their first letters, and in many cases before then, to ensure they have the support they need. If a customer does not switch or close a business current account, it could have implications for the business in terms of paying employee wages, paying suppliers and receiving payments for its goods and services. Ulster Bank is asking employers to communicate directly with employees who continue to have Ulster Bank accounts to remind them to change their details to avoid any disruptions to salary payments.

We believe we have taken all reasonable steps to support customers to choose, move and close and, to the best of our knowledge, other financial institutions have also taken appropriate steps to encourage customers to choose, move and close.

As the committee is aware, we have significant outreach to customers, with a focus on those approaching the end of their notice period for current and deposit accounts. In the past four weeks we have made, on average, approximately 10,000 calls a week, successfully contacting an average of 6,000 customers per week. In these calls, our colleagues ask customers if they need support ahead of the end of their six-month notice period. The majority of these customers are telling us that they have taken action or are in the process of doing so, and already have their move well in hand. Most customers are telling us that they have opened a new account and need to complete the transfer of their transactions. A small percentage tell us they will now take action, while a very small number of customers have asked us for more time due to personal circumstances. We have now written to the vast majority of customers who need to close their account, which means almost every customer has begun the six-month notice period, with some more advanced than others.

Before I go into the detail of what has been happening, I wish to share one of the learnings from the past six months. When we started this process, we believed the primary metric for success would be the number of accounts that have closed. However, a far more important metric is the degree to which a customer is reliant on the account. When a customer has an account with another bank and his or her salary and other payments are going into that account and the direct debits and so on have been moved to it, the customer is no longer reliant on his or her Ulster Bank account. The customer might never come back to close the account with Ulster Bank, so in such instances we can close the account with no impact on the customer. What is important is that the customer has safely moved to a new provider and is no longer reliant on Ulster Bank. Understanding that reliance, through detailed analysis, has helped us to target more effective communication which, in turn, has driven customer behaviour. For example, members may have heard our adverts targeting customers making nursing home payments or customers in receipt of social protection payments. We have also highlighted salary payments because nothing says you need a bank account more than if your main source of income is banked there.

How have customers been responding? Some customers have gone beyond their six-month notice period and some other customers still have more than five months’ notice left. As such, looking at the headline numbers across the entire population will not tell one very much about customer behaviour and the customer response. Of our personal current account customers who received their first formal notification in April and May, 71% have either closed or materially wound down the level of activity in their current account or left it inactive and dormant, and that percentage is increasing every day. Since our submission last Friday, 80% of our first set of customers have either closed or are inactive on their accounts. We have contacted most of the remainder of these customers as a final reminder and most of them are reporting that they have opened a new account elsewhere or are in the process of moving their payments to a new account. Broadly, this trend is emerging in the other tranches of customers and we are not seeing anything in the numbers that at this stage would change that trend. This is evidenced in a number of ways. For example, 171,000 Ulster Bank accounts were in receipt of social protection payments at the start of the year. This number has dropped by more than 80% to approximately 30,000. Since we submitted our report, it has dropped to 28,000.

What happens now? From the outset, we committed to an orderly and phased withdrawal of the bank from the Irish market. This commitment is more important than ever as we commence the process of freezing and closing accounts. Therefore, in line with our commitment, we will take a considered and careful approach to account closures. We will continue to assess external, operational and other factors to ensure that the right number and type of accounts are progressing to the account freezing and closing stages. As a reminder, our closure process has an additional step built in. Customers have six months’ notice to choose, move and close. On or after the six months, the account is frozen for 30 days and then moves to closure. This is an important interim step and, for some customers, may be the trigger to ensure they are no longer reliant on Ulster Bank. We will also take time to understand the account profile and what impact, if any, freezing the account will have on the customer. That will determine the point at which an account moves forward into the closure process. Ultimately, all accounts will move into the closure process, but in the initial round of closures we will take a very precautionary approach.

What does this mean for customers at the end of their notice period? As some customers are past or close to passing their six-month notice period, a number of things will happen. These will be dependent on the needs of the customer. If a customer needs more support, which may or may not mean more time, we can provide that - the customer just needs to let us know. If a customer is still reliant on the account after the six-month notice period is over, we will try to make contact with the customer again to ensure he or she has all the requirements needed to complete the move to a new bank and service provider. We will not freeze or close the customer's accounts at this time but it is essential that the customer continues the process of moving to another service provider. According to customer feedback and independent research, most of these customers have a bank account elsewhere and are in the process of moving, so we believe they are on the way to completing the process.

If we freeze an account on which a customer is still reliant, we can temporarily reverse the freezing of the account for a short time once the customer contacts us. If a customer is no longer reliant on an account but it is still open, with no activity or a low level of activity, the customer can expect the account to be frozen and closed on or after the six-month notice period. This precautionary, careful and controlled approach means that where a customer is reliant on the account, we can tailor the closure to the customer's individual requirements, and the overall closure of accounts is managed to maintain an orderly process for customers, the industry and other key stakeholders. Right now, we have a temporary pause in the commencement of this activity to accommodate the additional social protection payments announced in the recent budget. Even though more than 80% of customers in receipt of a social protection payment have taken action on their account, there are some who have not done so and they have the potential to be the most vulnerable.

We will start the process of freezing and closing accounts in a controlled and careful way on or after 11 November, beginning with customers who we believe are no longer reliant on their account. We will take a planned break in freezing accounts for Christmas. During this break, accounts that have already been frozen for a month will continue to close unless the customer contacts us, and we will continue our outreach to customers reliant on their account during that time. We will recommence the programme of freezing and closing accounts in the new year, so it is important that customers realise that once their six-month notice period is over, their account will be in line to be closed, but there is help available if they need it.

It is important to remember that Ulster Bank is closing. We need to provide certainty for our colleagues as to when they can expect to leave the bank so they can plan for their futures, and we need to be clear to customers that it is in their best interests to be with a new financial provider that can support their needs into the future. We have endeavoured to ensure that all reasonable steps have been taken to support customers to choose, move and close. We will continue to do so throughout this process.

I thank the members for listening and am happy to take their questions.