Written answers

Wednesday, 24 February 2021

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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231. To ask the Minister for Finance the outcome of discussions he had with a bank (details supplied) in relation to its decision to withdraw another bank from the Irish market; if he had discussions with other banks in relation to the decision; and if he will make a statement on the matter. [10561/21]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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232. To ask the Minister for Finance if he had discussions with a union (details supplied) in relation to the need to protect the employment of staff in a bank; the measures that will be implemented to protect jobs and the consumer rights of the bank customers; and if he will make a statement on the matter. [10562/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 231 and 232 together.

The NatWest Group (NatWest) announced its 2020 Full Year results on Friday, 19 February. As widely expected, NatWest confirmed that it intends withdrawing from the banking sector in the Republic of Ireland and gradually wind down its Ulster Bank business.

NatWest concluded that Ulster Bank would not be able to achieve an acceptable level of return for shareholders and have decided to begin a phased withdrawal over the coming years.

NatWest has committed to seeking solutions where:

- Customers and colleagues are well supported;

- Job losses are minimised with no new compulsory redundancy departures this year;

- Stability is maintained in the sector; and

- NatWest’s withdrawal from the Irish banking sector is achieved in an orderly manner.

The Deputy will be aware that I have engaged with Ulster Bank, its parent company, NatWest and the Financial Services Union (FSU) prior to this announcement. In all of these engagements, I strongly emphasised the importance of timely communication with customers, staff and other stakeholders in relation to strategic decisions regarding Ulster Bank. I also met with the FSU on Friday morning after the announcement and I have committed to further engagement with the FSU in relation to this issue.

At this point in time I cannot reveal any detail of discussions with AIB and Permanent TSB (PTSB) for confidentiality and stock market abuse reasons. I am supportive of trying to bring about an outcome that is good for both AIB and PTSB, but more importantly Ulster Bank’s customers, staff and the Irish economy generally.

I understand, that there are approximately 2,800 staff employed some of whom are located in Northern Ireland. Whilst the management of staff matters, including staffing levels, is entirely a matter for Ulster Bank and any counterparty who acquires its business, I would expect all stakeholders to be very sensitive in relation to the needs and rights of staff. This includes full compliance with European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (TUPE Regulations), and honouring all agreements in place between the bank and staff representative bodies. In addition, I would expect these entities to engage with staff representative bodies as appropriate.

I am advised by the Central Bank of Ireland that Ulster Bank’s withdrawal from the Irish market must be undertaken in accordance with the provisions of Irish financial services legislation, including the Central Bank’s codes of conduct.

Provision 3.11 of the Consumer Protection Code 2012 requires that a regulated entity that intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated entity must:

- notify the Central Bank immediately;

- provide affected consumers with at least two months’ notice to enable them to make alternative arrangements if they so wish;

- ensure all outstanding business is properly completed prior to any transfer, merger or cessation of operations; or, in the case of a transfer or merger, inform customers as to how continuity of service will be provided following a transfer or merger; and

- in the case of a merger or transfer of regulated activities, inform customers that their details are being transferred to the other regulated entity, if that is the case.

In relation to loans, where they are sold or transferred to another regulated entity, the consumer protections in place for borrowers will not change and the relevant Irish and EU consumer protections continue to apply. All mortgages or loans which are sold or assigned to a new creditor will continue to be subject to the terms of the contract as entered into by the borrower. As a matter of contractual law, the new creditor will not be able to unilaterally change the terms and conditions of the contract.

It is also worth noting that under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, if a loan is transferred, the holder of the legal title to the credit must be authorised by the Central Bank as a credit servicing firm, if it is not already regulated as a credit institution or a retail credit firm. Such credit servicing firms must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank, such as the Consumer Protection Code 2012 (Code) and the Code of Conduct on Mortgage Arrears 2013 (CCMA).

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