Dáil debates

Thursday, 3 July 2014

Topical Issue Debate

Bank Branch Closures

5:55 pm

Photo of Catherine ByrneCatherine Byrne (Dublin South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Ceann Comhairle for the opportunity to raise this issue. It was with great shock and disappointment that I learned this week of the decision of Ulster Bank to close nine branches across the country, including two in my constituency of Dublin South-Central. The branches in Inchicore and Kimmage are scheduled to close by the end of November. However, I take the opportunity to take the staff in the Inchicore and Kimmage branches for their courtesy and the professionalism shown to the customers over the past number of years. I bank in the branch in Inchicore. I am glad the staff will not lose their jobs but the move will have dire consequences for our local community as we will be left with no local bank facility after Ulster Bank pulls out.

More than 4,000 households live in Inchicore and it was once home to three main banks - Bank of Ireland, AIB and Permanent TSB - and a number of buildings societies but all of them have closed their doors. The closure of the Ulster Bank branch will be very inconvenient for local people who will have to travel into town to access over-the-counter banking services. It will also mean the loss an ATM service for the village, which will be a major inconvenience.

I understand the bank is moving more of its services online to cut costs but it must recognise online banking does not work for many people for a variety of reasons. Elderly customers, in particular, will be targeted. They are being punished due to their inability to access the nearest branches. There is no direct bus service to the nearest Ulster Bank branch in Palmerstown. For many years, the bank relied on the custom of local people but now those very people are being penalised for their loyalty. They are angry and frustrated at the closure of their local banks.

I share the concerns expressed by local business people that the closure will result in the loss of business locally in Inchicore and Kimmage, with fewer people coming into the villages to do business. The village of Inchicore can ill-afford another empty shop unit as currently there are seven.

People feel especially hard done by when they see how banking institutions have been supported by the State and are now returning to profitability. They feel that they should also be supported but instead they feel abandoned. This is not the first announcement of branches closing and, sadly, it may not be the last. It is the end of retail banking as communities know it. We need to maintain a decent level of service for customers, young and old, and, therefore, I urge the Minister to engage with the banking sector to keep branches - at least one branch - open in our towns and villages where people can get a proper banking service.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | 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.

6:05 pm

Photo of Catherine ByrneCatherine Byrne (Dublin South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I listened with regret to the response of the Minister of State but I did not raise the matter in the expectation of a miracle. I raised it because of the human factor. I have been contacted by many local people, in particular elderly people, many of whom are unable to access transport or a bus service to the nearest bank, which means many of them will have to go to another bank and go through the entire process of changing where they bank. Such a change fills older people with fear and might prompt them to withdraw their money from the bank and put it under their mattress. I would be concerned about that.

The proposed change to mobile and online banking might be progress for the banks and result in significant savings but customers in the area welcomed the personal touch from staff in Ulster Bank following the closure of Bank of Ireland. I did not raise the matter because I expected a miracle and the decision to be overturned but because it was important to signal the human cost to customers in my local area. Banks have a responsibility to look after people who supported them for years. I thank the Minister of State for his reply.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In the first part of my contribution I outlined the position from the banking perspective. Deputy Byrne accepted that the Minister for Finance cannot interfere in the closure of bank branches. Deputy Byrne is an experienced public representative. I have encountered the phenomenon in my constituency and I understand the fear to which she referred. Such fear and concern is real. People could decide to withdraw their money. I appeal to Deputy Byrne to tell her constituents that it is not a good idea to take their money out of a bank and put it under the mattress or elsewhere in their home, because people with cash are often robbed or attacked in their home. The banks should deal with customers individually. The Minister for Finance will impress on the banks the need to address the concerns of customers. If people in an area have become fearful due to the closure of a bank branch the bank has a responsibility to allay their fears. It is important that banks deal with the issue.

Deputy Byrne has made a strong case on the human aspect of the closure of branches of Ulster Bank. I will relay the matter to the Minister so that he can express those concerns to the banks and to ask them to deal with the concerns of individuals, who might withdraw their money for fear that the bank will close. We have witnessed the closure of bank branches in rural communities in particular and people have adjusted to the situation in time. I accept that they need help and support. Deputy Byrne, as a concerned public representative, has brought their pain to the attention of the Oireachtas. We cannot interfere but we will certainly help to allay people's fears.