Tom Hayes (Tipperary South, Fine Gael) | Oireachtas source

I thank Deputy Catherine Byrne for raising this important topic. I am aware of the recent Ulster Bank announcement in regard to the closure of branches and sub-offices over the next few months. This is a commercial and operational matter for Ulster Bank.

Ulster Bank is part of the Royal Bank of Scotland group and the bank had previously announced its intention to reduce its network and this current announcement is confirming the locations.

It would not be appropriate for the Minister for Finance to become directly involved in the selection of branches the bank may decide to close. That said, I fully understand and appreciate the concerns of Ulster Bank customer and their employees at this time, in particular those in the Deputy's constituency. The statement that there will be no additional job losses as a result of the announcement is to be welcomed. I understand that staff will be redeployed within the branch network.

Ulster Bank has said it is reducing the number of branches in response to changing customer behaviours, in particular the use of mobile and online banking. The change is not unique to Ulster Bank customers and the move to increased usage of mobile and online banking is evident across the banking landscape. The national payments plan, which was agreed by Government last year, estimates that savings of up to €1 billion per annum could be made to the economy as Ireland migrates away from cheques and cash in favour of electronic payments. The Deputy may be aware that figures recently released by the Central Bank show that the number of business cheques written in Ireland has dropped by 21% since 2012. The Deputy may also be aware of e-Day, which is on 19 September. E-Day is the day from which all State agencies will no longer accept cheques from businesses or write cheques to them. I assure the House that consumers are not affected by e-Day.

The Minister for Finance has previously said he expected that the restructuring of the banking sector in Ireland and the recovery of the economy will present opportunities for the entry of new market participants. The Deputy may be aware that Bank of Ireland announced on 26 June last that it had agreed to sell the distribution platform, together with €250 million of mortgage assets at par, to Dilosk Limited. No deposits are transferring as part of the sale. That follows an amendment to its restructuring plan which allowed the bank to retain its life assurance subsidiary, New Ireland. The bank committed to certain substitution measures including the sale of the ICS distribution platform together with, at the option of the acquirer of the platform, up to €l billion of mortgage assets and a similar quantum of matching deposits. The purpose of the ICS substitution measure is to support new entrants in the Irish mortgage market thereby increasing competition to the benefit of the consumer.

Dilosk Limited has confirmed that it has applied for authorisation from the Central Bank of Ireland as a retail credit firm and once it is so authorised, it will be required to fully comply with all relevant consumer protection codes, including the code of conduct on mortgage arrears. Mortgage holders will therefore be afforded protection. Given the reduced number of lenders now operating in the mortgage market, this transaction is to be welcomed as it introduces a new entrant and should therefore contribute to greater competition.

The concerns of Ulster Bank customers and its employees at this time are fully understood, however, this decision is not one in which the Minister for Finance has any role. The bank will continue to have a substantial branch presence across the country and Royal Bank of Scotland has publicly committed to building on Ulster Bank's current position to make it a compelling challenger bank to the main domestic banks and to focus firmly on the customer. That is to be welcomed. The continued presence of a viable and active Ulster Bank in the Irish market will be important in fostering competition for banking services. It is vital that businesses and consumers have a range of banking options available when using financial services and accessing credit - all of which will become increasingly important as the economy recovers.

See this speech in context