Dáil Éireann Debate, Thursday - 26 November 2020
228. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he sees the formation of a new or alternative lender to replace a bank (details supplied) given its indication to withdraw from Ireland; and if he will make a statement on the matter. [39478/20]
View answer229. Deputy Bernard J. Durkan asked the Minister for Finance his plans to ensure the availability of a reliable banking systems for customers of a bank (details supplied) following the announcement of its intention to withdraw from Ireland; and if he will make a statement on the matter. [39479/20]
View answer230. Deputy Bernard J. Durkan asked the Minister for Finance the number of employees of a bank (details supplied) likely to be affected by the proposal of the bank to withdraw from Ireland; the way in which it will be planned to provide for these employees in the future and at the same time provide for the bank's customers throughout the country; and if he will make a statement on the matter. [39480/20]
View answerI propose to take Questions Nos. 228 to 230, inclusive, together.
As the Deputy will be aware, I met with representatives of Ulster Bank on the 21 of October. I outlined that I expected that staff, customers and other stakeholders would be informed promptly about any decisions being made.
News of the review is, of course, unsettling for all stakeholders, especially the staff and customers. I outlined that I expect Ulster Bank to keep all its stakeholders, especially its staff and customers, fully informed about any developments in the review and engage with them in relation to any proposals or decisions that result from the review promptly.
I also emphasised the importance of Ulster Bank to the Irish financial services market, to the wider economy and to the communities it serves.
Ulster Bank confirmed that the strategic review is ongoing and that no decision has yet been taken. Ulster Bank also confirmed that there is no set timetable for this review and that it is fully aware of the strategically important role that Ulster Bank plays in the provision of financial services to the Irish market.
The continued presence of a viable and active Ulster Bank in the Irish market would be the most welcome outcome. Ulster Bank is a significant employer with 2800 employees and has 88 branches across the country. Ulster Bank is also important in terms of providing competition in the Irish retail banking market.
In the absence of direct knowledge about NatWest’s strategic review of Ulster Bank’s operations, I cannot and will not comment or speculate on possible outcomes as there is no basis for such speculation, which would be open to misinterpretation.
While I will have further engagement with the bank as the review process continues, I would like to emphasise that I have no role in the review or any commercial decisions arising from it. My officials will continue to monitor developments.
With regard to the availability of a reliable banking systems, a recent Indecon report on Community Banking in Ireland, published by my Department in December 2019, concluded that there is extensive provision of banking services by credit unions, An Post, as well as by commercial banking providers in the Irish market. The report found that there are 1,912 branches operated by banks, credit unions and post offices in Ireland, 63% of these branches are post offices or credit unions and 37% are banks. The Indecon report also demonstrates that there is a higher number of branches per capita in many of the counties where a significant percentage of the population resides in rural areas.
An Post
- An Post offers financial services including a payment account, personal loans, credit cards, a range of insurances, money transmission and foreign exchange services.
- An Post offers counter services for a number of retail banks, allowing customers to lodge and withdraw cash at An Post branches.
Credit Unions
- The Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 set out the services that credit unions may provide to their members. These include loans and savings under the 1997 Act and a further suite of services under the 2016 Regulations such as third party payments; ATM services; bureau de change and certain insurance services on an agency basis. I understand that a number of credit unions provide some of the services provided for under the 2016 Regulations. Where a credit union wishes to provide other services to its members, an application may be made to the Central Bank for approval to provide such services in accordance with the provisions set out in sections 48-51 of the 1997 Act.
- One such additional service includes the Member Personal Current Account Service (MPCAS). In 2016, the Central Bank defined and described a suite of additional services known as MPCAS, under which approved credit unions may offer personal current accounts with debit cards, overdrafts and a wide range of payment services within an appropriate risk framework. To date, 54 credit unions have been approved to provide MPCAS.
Cashback
An alternative method for cash withdrawal is cashback. Ireland is one of only 11 EU Member States in which cashback is common practice, and retailers do not charge consumers for availing of the service.
I would welcome the introduction of new lenders to the Irish market. It is, therefore, a welcome development that a new residential mortgage lender has recently entered the market and it will be of benefit to new mortgage borrowers and also to borrowers, in particular to borrowers who may still on a standard variable rate with the lender, who may wish to consider switching to a new lender.
