Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach díospóireacht

Withdrawal from Irish Banking Market: Engagement with Ulster Bank and KBC Ireland

Chairman

Arising from our last private meeting, I advise that the minutes of that meeting of 11 May 2022 were accepted.

No. 8 on the agenda is our engagement with Ulster Bank and KBC. I welcome all our guests here today. We look forward to the exchange. From Ulster Bank, I welcome Ms Jane Howard, chief executive; Ms Elizabeth Arnett, director of corporate affairs; Ms Louise Kelly, head of public affairs; Ms Lisa Slattery, head of digital; and Mr. Olaf Fitzsimmons, head of corporate. From KBC, I welcome Mr. Frank Jansen, chief executive; Mr. Barry D'Arcy, chief risk officer; and Mr. Darragh Lennon. We will have brief opening statements, following which we will have engagement with members.

I remind all concerned about the situation regarding privilege. Witnesses and members are covered by privilege, whether they be in this chamber or on the campus of Leinster House. They are asked to respect the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person or entity outside the House or an official either by name or in such a way as to make him, her or it identifiable.

I invite Ms Howard make her presentation.

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, and our head of corporate and SME banking, Mr. Olaf Fitzsimmons.

I understand the committee is keen to get started, therefore, I will keep my opening remarks brief. Fifteen months ago, on 19 February 2021, we announced our phased withdrawal from Ireland and since then we have made significant, sustained progress. At every step we have kept the committee updated and have engaged with customers, the industry and a wide range of stakeholders.

I understand the focus of today's meeting is on the movement of current and deposit account customers to new providers. I would like to take a few moments to speak about our approach. We started our Choose, Move, Close campaign last year when we announced in October the details of our plans, providing customers and the industry with almost six months’ notice to prepare even before we commenced issuing formal letters to customers in April of this year. We very deliberately announced that while customers did not have to take action at that time, they would eventually have to close their accounts. Making that statement allowed us the opportunity to start a very important conversation.

Between October and April we led significant engagement with the rest of the industry, the direct debit originators and other important stakeholders such as groups representing older customers, the Money Advice & Budgeting Service, MABS, and the Department of Social Protection. We placed advertisements in national newspapers to ensure we reached as many interested parties as possible and held roadshow sessions to talk stakeholders through our plans. During this time we also undertook a number of proactive measures to ensure our most vulnerable customers and those who might need extra time and support were fully informed. We committed to keeping our branches open throughout this process. This front-running allowed customers, the industry, the direct debit originators and other stakeholders time to prepare for the formal start of our letters to customers.

On 13 April 2022, we began to write to customers on a phased rolling basis to provide them with six months' notice to choose a new provider, to move and to close their current and deposit accounts. At this time, I am happy to say the volume of activity is in line with our projections and we are not experiencing any operational challenges in our branches or telephony teams in responding to customers. Our letters are being issued in tranches to help facilitate orderly account switching and new account opening across the industry.

We understand that giving customers ample support is as important as giving them ample time to carry out the process, especially those with additional needs. While many customers will not need to come into an Ulster Bank branch, our branches will remain open throughout the process to ensure those who wish to can come in directly to us for face-to-face help. We have also offered to the industry the opportunity to be physically present in our branches and space on our website to help our customers open accounts and I am delighted we will start to see that support available in our branches this month. We have also launched comprehensive online customer support hubs for our personal and business customers, which are updated at every milestone.

This is an important step in the phased withdrawal of Ulster Bank and we recognise that for our customers, especially those who have banked with us for decades, choosing and moving to a new provider requires effort, time and support. Reflecting our unique footprint and history in Ireland, we have a distinct customer base, therefore, the plans we have put in place for this task are in response to that. We are taking a responsible and prudent approach, which includes regular monitoring and evaluation of the progress throughout this process. It is a priority for us that we do the right thing by our customers and colleagues as we support our customers to avail of an alternative financial provider. I thank the members of the committee and we will be happy to take questions.

Chairman

I thank Ms Howard for her presentation. I invite Mr. Jansen of KBC to make his presentation.

Mr. Frank Jansen

I am grateful to the Chairman and members for this opportunity to address the committee. I am accompanied today by my colleagues, Mr. Barry D’Arcy, executive director and KBC Ireland's chief risk officer; and by Mr. Darragh Lennon, director of retail distribution.

We look forward to a constructive discussion on the migration of current accounts as KBC exits the Irish market. It is our intention to be as comprehensive as possible in answering the committee's questions, while fully respecting commercially sensitive information and the boundaries set by the regulatory and ministerial approval process for the transaction with Bank of Ireland.

We understand the crucial importance of a current account in the financial daily lives of our customers. We also understand that changing banks involves time and effort on behalf of customers and it is our intention to support them through that process. We are fully aware of the apprehension about the volume of customers that will seek to open new current accounts and the challenges that presents to the market. We are determined to meet our responsibilities and to minimise to the greatest extent possible the inconvenience caused to our customers.

It might help to provide additional clarity on the number of KBC accounts involved in wider current account migration process, the KBC part of which we expect to be concluded in approximately 14 months, prior to our departure from Ireland. KBC entered the current account market relatively recently, in 2013, which is reflected in KBC hosting a low volume of current accounts. Based on data analysis, we estimate of the 130,000 total current account holders, approximately 52,000 will need to open new accounts or move to new providers. The other 78,000 account holders already have an account with another provider. Of those 52,000 customers, in the region of 97% are digitally active, which should support the migration process and make it easier and more convenient.

Of the 52,000 account holders who will need to move to new providers, fewer than 100 are categorised as vulnerable. They will be separated from the general customer group and provided with a bespoke engagement strategy. This engagement will include more intensive outreach and one-to-one support. We will have a dedicated vulnerable customer phone line and appoint a dedicated vulnerable customer team to meet these customers' specific needs on a case-by-case basis, including empowering the team to make decisions about accommodating any additional needs. The team will work closely with vulnerable customers through the closure process to make sure they understand what action is needed and to offer every support and assistance. Vulnerable customers will also be provided with additional time if it is required to complete actions or close their current accounts if they are unable to do so by the proposed closure date.

In summary, the account closure process will be managed in the following way. Every customer will receive six months' notice of account closure. From 1 June, formal closure notices will begin to issue to specific customer groups on a phased basis, throughout 2022 and early 2023, extending over a 14-month period. Communication will be in plain English, and all technical terms will be clearly explained. It will be made clear to customers who they should contact and how they can contact KBC throughout the process. We will outline any potential impact on customers and explain clearly the actions they are required to take. We will continue to communicate with customers regularly. This will be supported by advertising in relevant media to ensure ongoing awareness of the process.

We have increased our staff dedicated to servicing customers in our contact centre by 40% to ensure that we maintain strong service levels to our customers, including, as I mentioned, creating a dedicated vulnerable customer support team. Additionally, we are increasing staff numbers in our operations department by 20% to meet the expected demand arising from switching and current account closures. We will adjust staff deployment as required and we are confident that our staffing levels will meet expected demand, but we will monitor this and are ready to deploy more staff if needed.

It is important to underline that our business model is such that the vast majority of customers engage with us through our contact centre. Some 90% of customer servicing is done through this me channel and we have made sure and continue to make sure we have the right resources to keep customer service levels high. Our average customer waiting time until we pick up the phone is just 21 seconds in 2022, so customers can have direct contact with our colleagues. Our hubs are also used by a small number of our customers for support and we will continue to review how our customers are using our hubs as we move through the process and we will keep these open as long as that support is needed for a substantial number of our customers.

To further assist customers, KBC will not charge current account maintenance fees from the point at which we commence issuing closure notices in June. This will apply to all customers. The purpose of no current account maintenance fees is to provide customers with flexibility so they can open a second current account without incremental costs with another provider. It will allow them time to switch incoming and outgoing recurring payments from one account to another, at their own pace and at the pace of the payment providers.

Our intention is to take a flexible approach that will ensure that people are supported at every turn throughout this process. I wish to reiterate our very strong commitment to continued support and responsibility for our customers, colleagues, communities and all stakeholders in society. Our exit will be carried out in an orderly and responsible manner, fully respecting all the obligations we hold. I acknowledge and thank all our staff, who continue to provide excellent service and support to our customers through what is a challenging time for them too. They continue to go above and beyond every day and we are extremely grateful for their continued commitment and support.

Even if our customers are required to close their account with us and open a new one, they are still our customers until they are not. Our intention is to take care of them to the greatest extent possible. Our mission is to support them and communicate comprehensively with them, ensuring they have the information they need, understand the actions they need to take and have sufficient time to take those actions. We are ensuring customers do not incur current account maintenance fees, providing support to those most vulnerable and redeploying staff to support all customers, including the 52,000 who we estimate will have to open new accounts. We are doing and will continue to do all that we can for our customers.

Deputy Pearse Doherty

Cuirim fáilte roimh na finnéithe chuig an gcoiste. Welcome to the committee. Unfortunately, it is in circumstances which we would rather not be in whereby both banks, after making hefty profits in this State, have decided to leave. Now, 1 million customers have to find a new banking home. I will direct my first comments to Ms Howard. Ulster Bank has started to issue letters and KBC will do so from next month. How many letters have been issued to customers by the bank to advise them to close their accounts? How many letters are expected to issue each month over the coming period?

Ms Jane Howard

Deputy Pearse Doherty

My next questions are for both institutions. I am concerned, as are other members, about the position whereby people may have difficulty switching and opening new accounts in the context of direct debit payments with utility companies and so on. Will the witnesses from Ulster Bank and KBC talk the committee through what kind of engagement they have had with the utility companies and the regulator in this space? There is potential for huge difficulty and especially at this time when, as Deputy Doherty described, people are experiencing great demands on their household budgets. People are being put to the absolute pin of their collar and the last thing they need is the prospect of missed direct debit payments for bills for electricity, gas, TV subscriptions and telephone services. Will the bank representatives talk the committee through the processes they both engaged in with the utility companies and the relevant regulators?

Ms Jane Howard

I will start and then I will ask Ms Arnett to complement this answer. We engaged with the direct debit originators. We looked at who our customers pay direct debits to, and we identified the top 20 of those. We then called them in. We also engaged with the direct debit originators through Banking and Payments Federation Ireland, BPFI, and it was also a topic of discussion with the Central Bank yesterday. Ms Arnett will speak about the actual engagement model we had.

Ms Elizabeth Arnett

We started this very early because we could see there was a role for us and a role for the receiving institutions, but in between there are the direct debit originators. We ran a press campaign to advertise that we were having engagement with direct debit originators. We could clearly see from our data what the larger 20 are but there are many more that may not feature in a top 20 list. We advertised publicly in the press and we held a briefing session. We learned a lot from that around the challenges direct debit originators would have. We had a very good dialogue with them, and in particular I would mention the Department of Social Protection. We have a very proactive engagement with that Department, which is now on a weekly basis. The Department has set up an online tool where, in real time, a person can change his or her bank account details. Some 10% of pensioners in receipt of a pension from the Department of Social Protection have already used that. This is not surprising to us because we outreached to those customers and encouraged them to move early.

It has been a useful dialogue for us to have from the very outset. We have also seen evidence of direct debit originators that we had not engaged with directly and who received the message. Some pension funds, for example, have been proactively reaching out and letting people know that if they are Ulster Bank customers they need to give the companies the details. Other direct debit originators such as alarm companies and so on have also been very proactive in this space. We cannot do enough in continuing that dialogue and reinforcing it because this is where there could be a real point of pain for customers if we do not have that process as smooth and as easy as we can.

Customers are also giving us feedback on certain service providers to let us know if they cannot find the link on their websites and if it is difficult. We are engaging with direct debit originators to give them that feedback to try to smooth the process, so as to influence it as best we can from our perspective. The BPFI is very engaged in this space as well.

Mr. Frank Jansen

I will skip the industry efforts because we are also part of the Banking and Payments Federation Ireland and involved with that process. I ask my colleague Mr. Lennon, who has been engaged in the industry engagement process, to talk a little about this.

Mr. Darragh Lennon

Similar to Ulster Bank, we have reached out and publicly advertised and held an industry event whereby all of our top 20 direct debit originators were invited. We had a much broader attendance than that at the actual event, at which we shared in detail our plans and numbers, when we expected notices to issue to customers, what supports are there for customers and so on to try to give them a picture as to what the timing might look like from their perspectives. We have then had numerous bilateral engagements with different direct debit originators since that event where they have asked us to share some more detail, perhaps, about our plans or to look individually at our customer base and see where customers might sit.

We have engaged with the Department of Social Protection as well, which is obviously a big one because there is a process to be gone through for customers there in terms of changing social welfare. That is an important process for customers as social protection payments are incoming payments and it would be a very difficult situation if that was not done correctly. Similarly, through the BPFI there are weekly engagements with the BPFI and the direct debit originators. It is a large group of direct debit originators there. We continue to be part of that and will continue to engage.

Deputy Ged Nash

I have one final question. The banks had a round-table meeting with the Central Bank yesterday and, as I said earlier, both Mr. Colm Kincaid and the Governor of the Central Bank made it clear to the committee a few short weeks ago that they did not believe the exiting or receiving banks were ready to execute this process in a customer-focused way. When the banks met Central Bank officials yesterday, did the officials tell them they now believe the banks are ready or do the officials believe the banks have some way to go yet before the industry more generally is ready?

Ms Jane Howard

It was a very constructive meeting yesterday. I thought all parties found it constructive. It is fair to say we all agree we should have those meetings on a more regular basis going forward as we start to support our customers with their actual movement in much bigger volumes. The recognition is there is good momentum right across the industry. It goes beyond the five banks and it is very important for us that it goes beyond the five. There is good momentum but it is also fair to say there is more to do. We have alluded to that already. There is ongoing work with direct debit originators. We all need to do that through the BPFI and also through the Central Bank of Ireland. Given the scale here, we will inevitably see some challenges arise but trying to get ahead of those by working together is the order of the day and everybody was committed to doing that yesterday. It was a very welcome meeting and I am sure there will be more of them.

Chairman

I call Deputy Tóibín.

Deputy Peadar Tóibín

Go raibh maith agat a Chathaoirligh agus míle buíochas le gach duine a tháinig isteach agus as a gcur i láthair freisin. I will start by detailing an experience a constituent had with KBC. The constituent has been in mortgage distress. It is shocking that we are in another housing bubble and housing crisis when the people who suffered from the last housing crisis are still suffering stress with their banks in terms of-----

(Interruptions).

Deputy Peadar Tóibín

The case involves a hard-working family who had part of their debt warehoused under KBC-----

(Interruptions).

Chairman

Deputy, we are not hearing you.

Deputy Peadar Tóibín

Okay. The Chairman may wish to continue with another member and I will come down to the committee room and participate then.

Chairman

We move to Deputy Jim O'Callaghan.

Deputy Mairéad Farrell

Gabhaim buíochas leis na finnéithe as teacht os comhair an choiste. A number of my questions have been asked, which is unfortunately the way sometimes when you are late to ask questions in a committee meeting. I have two key questions that follow on from questions that have been raised. First, Deputy Jim O'Callaghan spoke about accounts that are inactive and then become dormant. I understand that what was being said was that once these accounts are inactive, they go into a trust and it takes 15 years for an account to become dormant and then revert to the State. Are the witnesses saying those moneys will be kept within that trust for 15 years?

Ms Jane Howard

They will stay within the trust for 15 years as per the regulation and then they go into the Dormant Accounts Fund.

Deputy Mairéad Farrell

The other question I had was on overdrafts. I understand that the follow-up from that was that the entities that would be looking to pursue those outstanding moneys would be new ones with different banking licences. Is it the case, therefore, that under no circumstances would those moneys be transferred to debt collectors?

Ms Jane Howard

The first thing is that customers have current accounts and then they have a product on them called an overdraft. For our customers who have an overdraft, the vast majority have good credit and there is no reason they will fail to get a current account with an overdraft with another financial institution. That is the first and most important point.

As Ms Arnett alluded to, there are some customers, whom we have been early in reaching out to, who we know are in some financial difficulty. We are already working with those customers to try to restructure that overdraft for them. In some cases they perhaps should have put it onto a personal loan earlier. For example, they might have built up an overdraft that should be on a personal loan and is reducing over a number of months and years and so we are helping them out. Again, if anybody is listening who is in financial difficulty I ask them to please reach out to us. We are reaching out to our customers and we ask them to reach out to us as we are here to help. This should not stop these customers getting a new current account at another bank, even if they have some challenges with their credit capabilities that mean they would not get an overdraft. In those circumstances we will still help those customers with our people who have specialist skills in helping customers in financial difficulty. That work will continue. Is that clearer? Customers can still get new accounts but the overdraft is a product. Most people should be able to get exactly the same product but for those who cannot we are here to support them.

Deputy Mairéad Farrell

I thank Ms Howard and I understand what she is saying about other accounts and so on.

I fully understand that. As a finance committee, we need to look at the issues that could arise. Obviously, it would be in everyone's interest that that does not happen but it will be a matter of concern for us if it is a situation where some do not. It can be a situation realistically that there will be at least one person affected by this, if we are to be frank and honest about that.

Ulster Bank has not started the process of looking at how or when it will sell those non-performing loans. It could be less than a year, I suppose, from when it is closed.

Ms Jane Howard

It will not be this year. It is likely to be next year. That has not been the biggest priority. The priority has been in dealing with the other asset sales.

Deputy Mick Barry

Ms Jane Howard

It is the same for us. The customers have a choice as to where they have their current account. We have three traditional banks and many other providers who offer a type of current account. This is a choice for people and we will support them whomever they choose to bank with.

Deputy Mick Barry

I suspect that many observers might say it has less to do with customer choice than making decisions that are profitable for the banks.

I have limited time so I will move on to the issue of the shedding of jobs and the closure of branches. I am not speaking about the future but about what has happened in the past. It seems this is making it more difficult to be able to carry out this unprecedented volume of account switching. I know some emergency steps have been taken to bring staff into assist with it but I think the banks have been hampered in their efforts by the extent of job shedding in the past. I am interested in the comments of the witnesses on this.

Ms Jane Howard

As part of the transactions we have agreed with AIB and PTSB, we are looking to protect hundreds of jobs, with 282 going to AIB and approximately 450 going to PTSB. This is a very important part of the reason we did the transaction with these two banks. In terms of where we are today, we have recruited additional people to support our customers. We have no issues with being able to meet the demands of our customers.

We are increasing our resources. Another very important dimension in our case is that we have upskilled people so they can help our customers, whether they come into the branch or call us. We can guide those customers who may want to transfer or open a new bank account online. As I said earlier, and I do not know whether the Deputy was there, with effect from next week we will have representatives of other banks and credit unions in our premises who will be able to support customers with opening an account. This is another very important step forward in supporting our customers.

Mr. Frank Jansen

We have seen a reducing volume of sales since the announcement. We have redeployed quite a number of people who were previously involved in sales to support our transactions and our customers with moving their accounts to other banks. We have staffed up substantially our contact centre and operations department with people to support the expected increasing volume of accounts being moved and closed. As I explained earlier, of those 52,000 customers who need to find a new home, 97% are digitally active. We will provide a solution to customers in the third quarter of the year, from August, so they can close their accounts digitally and make the process even easier.

Deputy Mick Barry

Any serious strategist will hope for the best but prepare for the worst. The witnesses have expressed their hopes they will be able to carry out these changes in the timeframe outlined. There are serious observers, including in the Central Bank and on the committee, who are doubtful the process can be completed within the timescale. The question then arises as to what happens in that scenario. I have been clear and unambiguous. I believe in that circumstance the Central Bank will need to intervene to stop the banks from leaving until such time as the needs of the customers have been catered for. What is the position of the witnesses on this question? They must accept there is the possibility they will not reach the deadlines. What is the plan in that circumstance?

Ms Jane Howard

There is no doubt this is one of the biggest, if not the biggest, movement of accounts in Ireland. I absolutely acknowledge that. The way we have set out the plan is tranched and phased. It gives customers six months and end to end the period is approximately 18 months. As part of this plan we have built in continuous reviews. We will look at what is happening. There is good momentum. The other banks are recruiting resources. The challenge is that we do not know what customer behaviour will be like. We do not know whether customers will act when they get the letter or whether they will leave it to the last minute. We will keep it under continuous review. We will take appropriate action to help our customers to move once they receive the letter. If they do not do this we will review it and see what action is necessary at that time.

Mr. Frank Jansen

From our perspective, as I said, our customers are our customers as long as they are our customers. We will support them. We have put in place a timeline. We have already shown we are flexible when putting it in place. We will continue to be flexible. We think it is a realistic plan. We will put a lot of support in place. We will make sure there is sufficient communication and explanation for our customers as to what they have to do in the process. We will help them with this. We will deliver a booklet with all of the product features and what they will have to do. We will give them a list of their direct debits and standing orders. We will support them in what they will have to do. We will follow up with customers. As Ms Howard said, it is a very important process that has never been done before. If I was on the other side, I would be very happy to take those customers. We have good customers. I would be very happy to see an opportunity to take on additional customers. I am sure the industry, An Post, credit unions and fintech companies will be very eager to take our customers.

Deputy Mick Barry

Mr. Jansen did have the opportunity to have those customers and he chose to leave those customers behind. There is real pressure on them as a result of this. No doubt the committee will engage again on this in the months ahead. A key takeaway of the discussion we have had so far is the indication from the banks that they will at a certain point next year sell non-performing loans.

They have not given any guarantees to the committee that those loans will not be sold to debt collection agencies. In a cost-of-living crisis where people have been put to the pin of their collars, that is very concerning news. The debate and discussion will continue. I will leave it at that.

Chairman

I call Deputy Durkan. We are now into extra time. We were due to meet the other banks at 3 p.m.

Deputy Bernard J. Durkan

I know. I thank the Chairman. I apologise for coming to the meeting so late. I had other commitments all day.

Like the Chairman, I have had ongoing engagement with all the banks in respect of outstanding debts, impaired debts and so on. With one or two exceptions, the banks have been willing to talk. That is helpful in the circumstances that prevail. The banks that are being discussed today have always been courteous. They continue to be so. That is the way it should be because Oireachtas Members act as third-party supports. Certain concession have to be made. We have to be mindful of that, particularly in the context of contacting the borrower without alerting the third party, even though that third party is registered. I acknowledge that.

I refer to the issue raised by Deputy Tóibín. Is it common for banks to write off debt and make a tax concession application for so doing?

Ms Jane Howard

Is the Deputy referring to where bank customers are in financial difficulty?

Deputy Bernard J. Durkan

Yes.

Ms Jane Howard

Typically, there are several things we do to help our customers in financial difficulty. It has mainly been mortgages, if I am being honest. I am referring to the personal book. It starts with understanding their financial position. In some cases, customers may have a significant amount of equity in their home and could trade down. In other circumstances, customers may have other funds available and we can reshape their debt. We may also write a little bit down to acknowledge that they have as well, and meet what they are doing. In other cases, we find that the term is not right. We consider the term and may extend it. There are several things we do, but it is very much on a case-by-case basis. We have some customers who have done everything possible to try to keep up to date with the debt, and we can help them. Other customers, however, may be less willing to find a way to repay their debt. In every case, however, we consider the customers, take them through a case clinic and examine what we can do to get them onto a repayment programme that works for them and keeps them in a home they can afford to be in. That has been incredibly successful. That is the way we have looked at it.

I cannot comment on the tax side. I do not think it is a tax issue, but I am more than happy to take that mater away and revert to the Chairman on it.

Deputy Bernard J. Durkan

I ask Ms Howard to do so because I have been through all these issues with various banks from time to time and my understanding is that banks make tax claims in the event of write-offs of debt or, in other words, under a bad debt heading. That has traditionally been the case and I presume it continues. It is not peculiar to any one bank; it applies to all banks. In the event of an impaired debt being passed over to an incoming bank, such as the warehousing of debt in this particular case, it is important to know whether a tax concession was sought in respect of the part of the debt that was warehoused or that did not live up to expectations through the repayment period. For instance, sustainability becomes a significant issue, but that is sustainability as determined by the banks. The customer has to be part of this as well and his or her needs have to be considered, no matter who he or she is. I am referring to a specific case. In that case, the borrower stated in the context of KBC that there was reference to allowing customers who have fully co-operated to settle their debt, etc. According to the borrower, at the price it was agreed to sell to Bank of Ireland, there would be no financial loss to KBC in what he or she is seeking. I contend that is a reasonable statement, particularly if a tax concession was sought in respect of any part of that debt when it was written off, regardless of to whom it was written off. Our guests from KBC may wish to respond quickly on that issue.

Chairman

I ask our guests to keep their responses short as we have run out of time.

Mr. Frank Jansen

There is no tax consideration in the transaction of the sale of the mortgage loans.

Mr. Darragh Lennon

Deputy Bernard J. Durkan

All right.

Senator Maria Byrne

I thank the witnesses for their presentations. I was upstairs earlier so I listened online. Most of the questions I had have been covered. There are one or two questions I would like to ask. I wish to support the family that wrote to every member of the committee. I know Mr. Jansen gave a commitment that the bank will correspond with or meet the family. I believe a number of people are in a similar situation and fear losing their homes. It is important to stress that. It is also important that they be given a level of service and commitment. I am glad Mr. Jansen has committed to that.

I am a customer of Ulster Bank. I recently went to the bank to work out how to close my account. It is fine for me because I am computer literate. I was able to email my different direct debits and change them over. All of them have changed quite smoothly, bar one, on which I am still trying to communicate. However, a number of older people are very afraid. When they go to the bank they are told they need to do this themselves. That is not right. Somebody must be made available to help these older people because many of them have never used a computer. They have never had to do these kinds of things themselves. I would like a commitment that the different branches will look at helping and supporting older people, especially in respect of transferring their direct debits, because it is not easy to do so if you do not know what you are doing. I also visited the bank to which I am transferring and that has been a good experience. The committee will engage with representatives of those banks later. It is important to get the message out that KBC and Ulster Bank will help, especially older and more vulnerable people.

What will happen with those people who have not come forward or have ignored the letters? They have stayed loyal customers of both banks. They did not ask for the banks to leave; the banks chose to leave. What will happen with those customers? There are quite a few of them. Between the two banks, a couple of hundred thousand customers have not engaged. I would like a response on that, please.

Ms Jane Howard

In terms of the older customers, absolutely we should be supporting them. I do not know if the Senator was upstairs when I said that from next week we will have representatives of the other banks in our branches. We have had credit unions take us up on the offer to be physically present in the branch. That is very important because that is where the accounts for those customers can be opened and we can help them to move. Digital is not right for everybody. In fact, we acknowledge that encouraging older customers to do that digitally could be putting some of them at risk. We want to support them in the right way, face to face. That is why we have invited financial institutions into our branches.

My colleague will address the Senator’s other point.

Ms Elizabeth Arnett

Chairman

I wondered what is wrong with the KBC customers and if they will go for them as well. I have my account with KBC. The assistance provided during my first contact with the bank left a lot to be desired. I had a conversation with a bank representative named Dylan who patched up all the issues and concerns I had. I know it is a difficult job but the bank has to reach out much more, particularly to people, as Senator Byrne and others said, who are not computer literate. That is a concern for members.

Both Ulster Bank and KBC stated they have had positive engagement with the utility companies. I am glad to hear that. As members are aware, the committee sent correspondence to Electric Ireland, Energia, PrepayPower, SSE and Bord Gáis seeking a submission before 9 May. Today's meetings are taking place to help customers and to highlight and try to deal with the issues. They are intended to be constructive and supportive of both the banking industry and customers.

That way we as legislators, in contact with the regulator, become informed and have a role to play. Having written to all these companies asking for submissions by 9 May and enquiring as to their availability to attend a meeting on 13 May, in addition to a follow-up on 17 May, there was no response except from Bord Gáis, which said it would not attend but would provide a note. Today, PrepayPower responded by saying it would provide a note but would not attend. Energia said it would provide information by Friday and would indicate whether a representative would attend. I find that absolutely appalling from utility companies that have the wherewithal to deal with the issues up-front with the banks, their customers and this committee. They have chosen not to do so. That is what I take from their response. We can only reply on the witness's engagements with utility companies to clarify matters for their customers, who may be in arrears and dealing with all sorts of problems.

Following this meeting, the utility companies should respond to the committee, make a submission and attend the committee. They are showing a disrespect to the committee and more so to their customers and the efforts being made by this committee and Members of the Oireachtas to facilitate what is a huge transaction for banks, customers, and those depending on the system. I make that appeal now and will mention it again when the representatives of the other banks come in.

I thank our witnesses for coming in and for their contribution to the meeting. If any other issues arise, I hope they will keep the committee informed; it would help us with our work too. That concludes this section of the meeting.

Sitting suspended at 3.32 p.m. and resumed at 3.34 p.m.

Chairman

I apologise to our guests for keeping them waiting outside. In our first session today, we had a long discussion with Ulster Bank and KBC, which was worthwhile to pursue in the context of the issues. When witnesses are answering questions put by the members, they may bear in mind what I said at the end of that session. We have written to all the utility companies - Electric Ireland, Energia, PrepayPower, SSE group and Bord Gáis - to ask them about their availability to attend Oireachtas committee meetings. We also asked them for a submission and repeated that request on 17 May. Bord Gáis responded by saying it would not attend but would provide us with a note. Today, PrepayPower responded by saying it would not attend. Energia emailed us to say it would provide information by Friday. I repeat that I find that unacceptable behaviour from companies that are meant to look after their customers.

The banks that came before us, KBC and Ulster Bank, outlined what they were doing. They were looking at this from the point of view that all of us are stakeholders, namely members of this committee, banks, customers, utility companies, and others. However, the utility companies we have been dealing with have certainly not shown the same due respect to their customers or this Oireachtas committee. I again appeal to them to think about the invitation we sent and the information we asked for, and to participate fully with all of us as we try to resolve this huge transaction.

I welcome Mr. Jim O'Keeffe and Mr. Brian Nugent from AIB, Mr. Gavin Kelly and Mr. Martin McKenna from Bank of Ireland, and Mr. Eamonn Crowley and Mr. Patrick Farrell from Permanent TSB. We are also joined by Mr. Brian Hayes and other representatives of the banking industry. They are all very welcome. Opening statements will be made followed by engagement from the members. Mr. Hayes will go first. I remind witness of the note on privilege; do not name or upset anyone.

Mr. Brian Hayes

I thank the Chairman and members of the committee. It is a privilege to be here and we appreciate the opportunity to come before the committee as exiting and remaining banks. As an industry group, Banking and Payments Federation Ireland especially appreciates that. I am joined by our head of consumer banking, Ms Michelle Byrne, who has taken on a lot of responsibility in our team for many of the issues we are dealing with across this migration of accounts.

It is safe to say that the loss of KBC and Ulster Bank to the retail bank landscape in Ireland is a significant issue and challenge for the whole sector. It is a significant challenge for customers. They did not ask for or want this. We have an absolute responsibility, from the perspective of exiting and remaining banks, to make sure we deliver results for our customers over the next year as they find a new home for their bank accounts. We are very conscious of that. It is incumbent on the entire sector, including exiting banks, remaining banks, and other providers such as credit unions, An Post, and digital providers, to find solutions as we go forward.

It is a logistical challenge, but I am conscious of one other thing. It is more than just a logistical challenge; it is a reputational challenge. The industry must step up to the plate and stand up to its responsibilities across the piece over the next year or so, to make sure we get this right given everything that has happened in the past. Given our experience of the payment break situation over the past two years, where short-term liquidity was provided by our members to about 180,000 business, corporate and personal mortgage customers, there is a lot of learning we can take from that going forward in terms of what has taken place.

This is the number one priority for our organisation. We are dealing with this every day, week and month for the past year or so. The other day, representatives from the charity sector were in with us about standing orders, such as payments people make to Trócaire and other NGOs. It is a big issue for them to make sure we get it right.

We will have to deal with many issues that throw themselves up as we go through this. We very much appreciate the observations of the members, given the fact that they are all front-line politicians. They hear and see people in their communities. Let us work through that as best we can. From our perspective, people and customers have to have confidence in the system that we deploy among the exiting and remaining banks. We will see a particular challenge going into quarters 3 and 4 of this year. I hope we can demonstrate our readiness to deal with those challenges.

I will not go through some of the issues we had in our submission in much detail but there are questions being raised in terms of the switching code or the alternative of choose, move, close. A customer chooses a new provider, transfers his or her direct debits and closes his or her account. We are agnostic on that. All we are saying is that different customers will choose different journeys. We have to be conscious that it is not a solution for everyone. We are very conscious that whether a customer chooses the switching model or the moving model, there are fundamental consumer protection rights along that journey which have to be vindicated by those exiting and remaining banks.

The issue of direct debit originators, DDOs, has cropped up and it is in our submission. I am conscious of the Chair's opening remarks on the readiness of the industry. We have met the top 20 DDOs over the course of the past number of months on at least three occasions. We have a good engagement with them. Their problem is our problem. It is a problem of resourcing up and making sure, from a remaining-bank perspective, that we are ready to deal with the new customers coming the way of the banks. We still have a job of work to do.

Our organisation has written to the Commission for Communications Regulation, ComReg, and the Commission for Regulation of Utilities, CRU, and we have looked for engagement there. We have raised it with our own regulator, the Central Bank of Ireland. We are very happy that our regulator has written to financial service providers within its own authority. However, there is a job of work to be done there, especially on direct debits, standing orders, recurring payments and credit transfers.

Frankly, the problem will not be opening or close an account. The problem will be in the meat in the sandwich. Effectively, that will be the transfer of all these payments from service providers and making sure that the experience is good. We reckon that approximately 7 million of these transactions emerge. If one takes an average of ten transactions per personal account and somewhere between 30 and 40 transactions per business account, one sees the scale of the challenge. Working together, we will get there, but there is a role for others to do and the example of our own regulator to follow. We would appreciate that.

Vulnerable customers are absolutely essential to get this right. Vulnerable customers do not come with a tag on their back. They are people who may well be challenged digitally. They are potentially older people, although we should not make the mistake that older people cannot deal with some of these issues. They can. However, banks have a considerable role to play there. Our banks have very dedicated teams when it comes to vulnerable customers. They know how to escalate issues. Many of those people will want to meet people face to face. In that regard, face-to-face meetings, home calls, late-night- and weekend-opening branches are crucial.

The implementation of the assisted decision-making legislation will help as we go forward in terms of some issues of capacity. Our members have opened, since the last day of February this year, in excess of 4,000 accounts for Ukrainian refugees who have come to this country. Some 15% of the total cohort or 26% of all adults have had an account opened by our members since the end of February. That is by the co-ordinated action of the remaining banks that have worked with the industry and other agencies to make sure we got into those centres to open those accounts. With regard to communications, we launched a campaign this week on FraudSMART. It is a well-known, industry-wide campaign. There will be many attempted scams of people as we go forward. We as an industry have a big job to do in making sure we get the message out to keep our customers safe.

My last remark will be an appeal to the Chair and other members of the committee. This issue has arisen about anti-money laundering and how one open accounts. To open an account, one needs proof of address and proof of identity. This has been raised in terms of consumer protection and Deputy Doherty has raised it publicly. Some people do not have a passport or driver's licence. One might say that is a minority example and it may well be so, but we would like to be able to open those accounts with public services cards.

We have been articulating for the past five years that we cannot do that under the current legislation. We are precluded from doing that under the current legislation. I am referring specifically to Schedule 5 to the Social Welfare Consolidation Act 2005. If the Oireachtas allowed us to open accounts with public services cards, we could deal with the cohort of customers who find themselves in this position. It would help older people who do not have the documentation to get through this. We cannot do what is illegal. It is currently illegal for us to accept a public services card. If we change the legislation, it would help. I ask the committee to take this up with their colleagues. It is not provided for in Schedule 5 to the original Bill. It is specifically precluded.

Mr. Jim O'Keeffe

I thank the Chairman and members of the committee for the opportunity to meet them today and to allow AIB, along with other representatives of the sector, to discuss what is a transformative development in banking in Ireland. They are providing us with a valuable forum to demonstrate our capacity and readiness to welcome on board customers seeking new financial homes, in the wake of the departure of Ulster Bank and KBC Ireland from the domestic market. I am joined today by my colleague, Mr. Brian Nugent, head of consumer banking. For our part, AIB is disappointed with the departure of these two banks. These exits are prompting sweeping changes that will have far-reaching consequences for the banking sector, customers and the wider economy.

On the one hand, the impending withdrawal of such long-standing institutions will undeniably have a major impact on the operations of the remaining banks. On the other hand, this will also allow us to demonstrate our capacity to incorporate thousands of new customers in an orderly, well-organised manner to ensure continuity of banking services. In this once-in-a-lifetime change to the banking landscape in this country, involving the transfer of 1 million accounts, we will do all that is necessary to ensure that customers of Ulster Bank or KBC who choose to come to AIB have as friction-free and seamless an experience as is possible.

A strong, well-functioning banking system is essential to the lives of households, businesses and individuals. It is especially critical in these times of stress and we deeply appreciate the reverberations of three severe economic shocks - Brexit, Covid and latterly, the war in Ukraine - in our customers’ lives. However, it is perhaps worth recalling the flexibility employed by the bank at the outbreak of the Covid-19 pandemic when, over a very short period, we reshaped our operations on scale to provide almost 80,000 payment breaks and kept our branches open, even as 80% of our colleagues were obliged to work remotely.

Today, the task of managing a smooth and efficient switching programme does not just concern the remaining banking providers and their staff. It also extends to a broad range of critical stakeholders. It involves the exiting banks, Departments, the Central Bank of Ireland, employers, utilities, service providers, insurance companies, and any third party who benefits from the regular transfer of money from a customer account. We must work together with a co-ordinated, planned approach to safeguard against confusion and to streamline the flow of customers into their new providers. With 245 group branch locations and three call centres, AIB Group is already immersed in preparing for the arrival of hundreds of thousands of customers seeking not just to open new accounts, but to begin new financial relationships with the bank.

On that basis, we are allocating appropriately high levels of resources through the redeployment of 300 existing staff and the recruitment and training of an additional 700 temporary staff solely for the task of welcoming new customers. We are also investing major resources in enhancing our digital capabilities to allow customers open new accounts online as part of our leading digital offering. We are especially conscious of the necessity to support vulnerable customers through the change process and we have put in place a dedicated helpline for those who may need extra help opening a bank account with AIB. I can assure the committee that whatever additional resources are necessary will be put in place to talk to and guide vulnerable customers with their switch to AIB.

On any given year, AIB opens 250,000 new accounts. This year alone, we have opened more than 130,000 accounts for customers. These data include non-Ulster Bank and non-KBC customers. We offer two main account opening options. The first is remote via our mobile app. This provides a convenient and efficient means of opening an account that, depending on the complexity of the customer needs, can be completed in approximately 20 minutes. The second is in person at any one of our branches, which takes approximately 60 minutes to complete.

In support of customers in locations where demand is particularly high, we have increased the number of appointments available by offering weekend time scheduling. In tandem with this, we have also adapted our digital account opening process to facilitate greater ease of access for customers. To avoid any unnecessary anxiety, it is important that customers bear in mind that their accounts in their existing bank remain open while they proceed with the establishment of a relationship with the new provider.

The transition of 1 million current and deposit accounts, involving many millions of direct debits and standing orders, is unprecedented. It is a major lift for the sector and disruptive to a large swathe of customers. However, as I mentioned at the start, if all of the stakeholders are part of a coherent plan, we will protect the customer and prove the remaining banks are flexible, robust and organised to convert this challenge into an opportunity.

I thank the members of the committee and I look forward to the discussion.

Chairman

That was a great sales pitch.

Mr. Jim O'Keeffe

I will take that as a compliment.

Chairman

That is what the public want to hear. They want to hear what is on offer, do they not? I call Mr. Kelly.

Mr. Gavin Kelly

I am grateful for the invitation to address the committee. I am joined by my colleague, Martin McKenna, who is head of operations in the bank in Ireland.

The banking sector in Ireland is currently experiencing a period of unprecedented change, with two banks exiting the market. In regard to this matter, we have ongoing engagement with the Central Bank of Ireland, our representative association, Banking and Payments Federation Ireland, BPFI, and with other banks to ensure consumers are as clear as possible as to the steps they need to take to navigate this change.

In preparation, we have responded with a range of supports to assist consumers seeking to open new bank accounts. This includes 500 additional personnel with roles in account opening and operations teams, contact centre teams and mobile support teams based across the Bank of Ireland branch network. We are also providing step-by-step guides for consumers, a dedicated phone line and an online hub. To further ensure consumers are aware of the range of supports in place, we have also recently commenced a consumer awareness campaign on TV and radio, in print and on social media.

So far this year, Bank of Ireland has opened double the number of personal current accounts when compared with the same period in 2021. We anticipate an ongoing high level of demand for new accounts over the remainder of 2022 and into 2023. Seven in ten accounts are currently being opened via digital channels, and customers also have the option of meeting a branch adviser or calling our account opening team to assist them through the process. We have also recently launched a booking system for both business and personal customers to arrange an appointment with their local branch. We are continuously working to improve our customer experience and customer service. In response to the additional demand already being experienced in our call centres, 100 of the 500 roles outlined earlier will be based in these teams, with more than half already in place.

There will, of course, be some customers who need additional support to change account provider. Our vulnerable customer unit is a centre of expertise within the bank and provides support to customers and their families who find themselves in vulnerable circumstances or situations, including age-related or cognitive impairment, financial abuse, addiction or illness. This unit is currently also supporting displaced Ukrainians who need banking services, including guidance on transferring assets and assistance in opening a basic bank account.

In providing excellent customer service, we also must follow certain legislative and regulatory requirements when opening accounts, for example, to prevent criminality and money laundering. These requirements are in place to protect consumers, the financial system and society as a whole from the negative consequences that can arise from abuse of the financial services system. As a result, any Bank of Ireland representative involved in the account opening process receives formal training across these and other areas to ensure compliance with legislation and regulation. New staff members also spend a period of time shadowing experienced subject matter experts before they are deployed both to ensure compliance and to help them better assist consumers who have queries about the account opening process.

As we look to the second half of 2022, and as the Central Bank mentioned when it was recently before this committee, it will be difficult to predict consumer behaviour during this transitionary period. We are, therefore, carefully monitoring our data for any trends and spikes so we can consider how best to tailor our services. Account switching is not just a simple transaction between the exiting and receiving banks. It involves utility companies, payroll units within businesses, Departments and agencies, such as the Department of Social Protection and the Revenue Commissioners, and many other service providers. Since the implementation of the payment services regulation, direct debit originators, including utility companies and telecommunications providers, are now responsible for updating their customer account details on existing direct debit mandates. This means some direct debit originators will not accept instruction from third parties, such as exiting banks, and will only accept instructions to change bank account details from the customer. The engagement and commitment of the wider business community in Ireland is, therefore, vital to ensure full preparation and minimise consumer inconvenience.

Bank of Ireland has moved swiftly to put a range of supports in place for consumers and will continue to do all it can to make this process as smooth as possible. As a full-service retail bank with a 239-year heritage, we are committed to serving the needs of our customers and the Irish economy for the long term.

Mr. Eamonn Crowley

I am joined today by my colleague Patrick Farrell, who is the retail banking director at Permanent TSB, and we both look forward to the discussion with the committee.

The exit of two banks from the Irish market is an unprecedented event in the history of Irish banking. I want to assure the committee that we at Permanent TSB fully appreciate the importance of this challenge and the need for us and the wider industry to meet it. At Permanent TSB, we have five key priority areas of focus to ensure we can support customers, colleagues and communities through this seismic change. These priorities are as follows: safely integrating more than €7.6 billion of mortgage home loans, business loans and credit facilities into our business over the coming months; supporting customers in transferring their banking relationship to Permanent TSB in as smooth and straightforward a manner as possible; preserving jobs and welcoming 450 new Ulster Bank colleagues to Permanent TSB later this year; maintaining our support for local communities by enhancing our branch presence in 25 communities throughout the country, increasing our presence in close to 100 locations nationwide; and continuing to serve and support hundreds of thousands of our existing customers and the provision of home loan mortgages and small business finance into the Irish economy.

There is no more important priority for Permanent TSB this year. Over the past 12 months we have deployed hundreds of colleagues across the Bank to ensure we meet these objectives and deliver for our customers, colleagues and communities. When it comes to account switching, in the first four months of 2022 we opened three times as many current accounts as we did in the same period last year. It is clear many Ulster Bank and KBC customers have already decided to switch bank sooner rather than later, and we are delighted we have been in a position to facilitate all those customers who have already chosen Permanent TSB as their new bank.

I want no one to doubt how important this is to us and how seriously we are taking it. We have always been big promoters of switching and competition. That is clear from our success in growing our share of the mortgage market steadily over the past decade. It is clear in the ambition we have displayed in our agreement to acquire €7.6 billion in Ulster Bank residential mortgage and SME assets, and 25 Ulster Bank branches in communities across Ireland, which signals our intent to be an even stronger competitor in the Irish retail and SME banking market in the years to come. It is clear from our success in outperforming the market for attracting current account switchers from banks that have departed in the past, such as Halifax and Danske, where we overindexed by way of attracting customers to Permanent TSB.

Nonetheless, the simultaneous departure of Ulster Bank and KBC represents a switching challenge of a much greater scale. In particular, Ulster’s current account and deposit account base is far more sizeable than those of banks that have left the market in the past. Switching a banking relationship to a new provider also needs to be considered in the context of the individual needs of customers, in addition to the extensive documentation requirements relating to anti-money laundering for both personal and business customers with which banks must comply. The scale of change and personalisation requirements together create complexity. It creates risk and it creates a requirement to scale up our infrastructure to cope with an unprecedented volume of account switchers.

That said, our plans are well under way in this regard. That is why we have hired approximately 350 additional colleagues to the bank since July last year. Over the coming months, we will also be hiring another 400 colleagues to support the job of welcoming all these new customers and getting them what they need: access to our app, new online banking logins, new cards, new PINs and re-establishing all the payment instructions that underpinned salaries going into their accounts and bills and other payments going out. It is why we will run a major customer awareness campaign to make things as easy as possible and let people know what they need to do.

Okay. I call Deputy Doherty.

Deputy Pearse Doherty

I welcome our guests to the meeting. We have a lot to get through; I hope we get through as much of it as possible. I thank them for answering the questions in the questionnaire. That is very helpful.

I will turn to Mr. Hayes to give us the real scéal. All the banks' representatives have told us how wonderful they are doing in terms of providing resources to customers. With regard to the average call waiting times, in Permanent TSB it is four minutes, it is two minutes and 53 seconds in Bank of Ireland, one to ten minutes in AIB, 21 seconds in KBC Bank, which is topping the league, and 50 seconds in Ulster Bank. However, the Central Bank carried out an investigation and said that the longest call waiting times in some of the retail banks were unacceptably high, with customers waiting over two hours in some cases, and that some telephone lines had an abandoned rate of over 50%. I can speak of that from personal experience, as a person who was on the telephone for over an hour with one of the banks, and I will not mention which. Eventually I hung up because I was so frustrated. Then there is the number of customers. How is it that all the banks' representatives are telling this committee that they have waiting times as little as in the seconds when the Central Bank is telling us that in some cases it is in the hours?

Mr. Brian Hayes

I noted the Central Bank report. Looking at the report, the data the Central Bank was taking it from predated the information that the members gave the committee. I suspect that is for a number of reasons. The banks routinely look at the waiting times involved. As I understand it, most of the data set, and I cannot recall the exact date, was around the time when those call centres, like every other call centre in the country, were affected by staff who were out because of the Covid situation or who were affected by the disease itself. I think the Deputy is referring to data that are somewhat historical vis-à-vis the data in the questionnaire that came back to the committee.

One could argue there is an Achilles heel in our transaction deal.

We have committed to taking over 25 branches without customers. It is our intention to try to attract customers to those branches. Naturally, in the Deputy's constituency, we would love his help to try to make that happen but I appreciate that it may not be possible. We want to try to retain the customers that are in the Ulster Bank branches. It is a risk, however,

Deputy Pearse Doherty

We do not want to be dealing with a situation a couple of years down the road where we find that customers did not migrate to those branches, and then there is a question in terms of closing branches at a future point. What is Permanent TSB doing specifically with regard to those 25 branches, as opposed to trying to attract as many customers as possible? Has it got a specific marketing or target advertisement in respect of those customers?

Mr. Patrick Farrell

Yes. Starting from next week, we will be putting staff members into 22 of the 25 branches. We have got agreement with Ulster Bank to go into 22 of the 25 that are involved in the transaction. We will also be going into 32 of its other branches throughout the country. We will also be supporting that with five mobile branches, which we will be putting on site to support customers.

We will be looking at footfall in the various towns in the Deputy's constituency. Obviously, he has Buncrana, Ballybofey and Killybegs as well. We want to make sure that we are actually in the right place at the right time to support the customer to move across by putting staff in branches and having extra space for mobile branches. We are going to be communicating on the ground and advertising locally to try to encourage customers to come and join us. On the Deputy's point, we want them to be viable, vibrant businesses going forward in order that we can stay and support those communities.

Deputy Pearse Doherty

I appreciate that. Some of it will be helpful. One of the consequences of KBC and Ulster bank withdrawing from the market, which is obviously a terrible thing for consumers and for the footprint of banking in the State, is the reality that many of the loans involved will be transferred to Bank of Ireland and Permanent TSB. Many of those are fixed-rate loans. When customers come off the fixed rate, Ulster Bank charges higher rates. There is a big difference at this point, for example, in an Ulster Bank loan that is transferring to Permanent TSB. Ulster Bank's fixed rate, at its lowest, is 2.2%. Permanent TSB's is 2.8%. What signal, if any, can Permanent TSB send to the customers involved? We expect the European Central Bank, ECB, to increase interest rates, possibly by 0.5%. Given the high rates Irish banks already charge, is there are view that they will absorb some of that ECB interest rate increase for these customers? In reality, Ulster Bank and KBC were offering the lowest fixed rates on the market.

What we do-----

Deputy Pearse Doherty

Is that not the reality? Forget about what the ECB is going to do in the future. That is going to make things worse. From Mr. Kelly's point of view, I am asking him whether any consideration has been given to trying to absorb some of the increases the ECB is looking at implementing or actually addressing the bank's fixed rates, which are quite high - extremely high in the context of Europe - and recognising that the bank is benefiting from these loans and from customers putting their deposits in. The bank is consolidating its footprint.

This is every Christmas rolled into one for the banking sector. We have two banks withdrawing, as bad as that is. This is good news for AIB and Bank of Ireland and, to a lesser degree, Permanent TSB. They are now monopoly players. They are now dominant in the banking sector and it is bad for consumers. That is a good example of how it is bad for consumers because more competition would mean those individuals would have cheaper mortgages than they will have now when they transfer to Bank of Ireland.

Mr. Gavin Kelly

To reiterate, as KBC customers some across when, hopefully, the transaction is approved, we will work very closely with KBC to migrate customers across safely on their existing terms and conditions with their rates protected. It is very important to say that.

Mr. Brian Hayes

It is a very valid question. As I said, we are a month into this. At one level, we are dependent on the exiting banks and their communications strategy that, in fairness to them, has been ongoing for some months now. We are at the start of this process. The regulator is doing what any good regulator should do, which is putting pressure on our regulated entities to make sure they live up to expectations under the customer code in the existing legislation.

The direct answer to the Deputy's question about whether there are more things we have to do better is "Yes". Four areas were identified in the meeting yesterday. One was around data collection and the question of greater alignment of data between the exiting banks and the remaining banks. Another job we can do better is around vulnerable customers and co-ordinating efforts more in that area. An enormous amount of work is going on at present, but there are industry-level engagements we can undertake for vulnerable customers who are really challenged by this. I fully get that. Even though more than 70% of customers may well be opening and closing their accounts digitally, many are not. There is more we can do there. The third area on which we were asked to concentrate was flattening the curve. The major challenge, to be frank, as we go past the summer into quarter 3 and quarter 4 of this year, is what the integrated plans from our members will be and making sure they satisfy the expectations of our regulator in this space. The fourth area was on our engagement with other stakeholders. We have been doing a lot of this work but, to the point we made in our submission, the DDOs are not part of the switching code. No bank can take money from somebody's account tomorrow if it is not authorised to do so. There are other players on the pitch we have to keep working with. We are open to looking at any and all suggestions from our regulator and others on how we can do that. The four areas identified yesterday were data, vulnerable customers, the flattening the curve argument and stakeholder matters.

Deputy Pearse Doherty

I will make two final points. I will pick up on the point made by Mr. Hayes on 70% plus of customers opening their accounts digitally. That is not accurate. I am sure he knows that as the CEO of Banking and Payments Federation Ireland. I will put on record, from the data Bank of Ireland, AIB and Permanent TSB have given us, that 36% of Bank of Ireland current accounts, or almost one in four, have been opened in their branches since the start of the year, which is more than 18,000. The figure for Permanent TSB customers who are opening their accounts in-branch is 51% and 65%, or nearly two out of three, of AIB customers are opening their current accounts in-branch. This leads me to the point that I genuinely and strongly believe the banks are not scaling up enough to deal with the serious pressure that will come at a later stage. People have put the letters to one side, but as more and more attention is paid to this matter there will be a major spike. I will make that point.

It will be disputed but there is nearly an attitude of the switching code having so many problems. I am not saying it is perfect. Obviously, the switching code is not in the best interests of the banks because it is labour-intensive. The receiving banks and withdrawing banks have to do quite a bit of work, which is staff-intensive, but there are benefits to it. Banking and Payments Federation Ireland has been engaged with the DDOs, and I agree 100% we cannot force them to engage, but some are engaging and are willing to do this. On customer awareness, why does Mr. Hayes's organisation not publish a full list - maybe it has and I have not seen it - of all the DDOs, including the most common, the top 20 and others, that are part of, and engaging with, the switching code and others who are not? If somebody wants to switch, it is a matter of the switching code being terrible and certain banks do not use it and all the rest. The alternative is that people do it all themselves, where they can use the switching code and also switch manually for the entities that do not use it, whether it is Spotify, gym membership or whatever. Why does the federation not publish that information so we know who is involved and who is not?

Mr. Brian Hayes

It is a fair point. That is something we are going to do. We want to do two things with the campaign. The CCPC has a very good campaign at present, which I am sure the Deputy is aware of, and we wanted to ensure that was doing its job. Our campaign is around the dos and don'ts on the switching side and on the moving side, and to make sure people are aware.

To the Deputy's point, Ulster Bank is seeing about 10% of its customers using the switching code. It gave that figure in evidence to the committee. One of the advantages of the switching code, at one level, is that people see, from the remaining bank and the exit bank, where exactly things are coming from. The dilemma is, if there is a significant number of DDOs as part of the transaction, someone could be left stranded high and dry, or in a circumstance at the end, where if an individual uses his or her account at the end of the process it could nullify the whole exercise. I hasten to add Ms Byrne has much greater expertise on this than me.

Ms Michelle Byrne

As the Deputy knows, the code is a regulatory code. Relevant members have to comply with it as a matter of law and they must be able to demonstrate that compliance to the Central Bank. The code will work well for some customers, especially those who believe they may need a little more support in the process and, as Mr. Hayes mentioned, those customers who may have little or no direct debits on their accounts. In all of this, the information imparted to the customer and the education the customer is able to access, in terms of understanding what is involved in either doing it themselves or doing it under the switching code, is very important.

It is important customers understand that if they use the code, not everything will move as part of that. A part of it is about being aware. As Mr. Hayes also mentioned, we have had a lot of engagement with direct debit originators. One of the things we asked for from them was that they engage in proactive communications with customers of the departing banks. That will be very helpful in informing those customers how to go about updating their account details with any of those originators. That is another important part of it.

Mr. Jim O'Keeffe

I will give the Deputy some comfort. We talked about the fact that, on a general level, there is some commentary around the switching code. On a practical level, when a customer comes into a branch or meets a colleague to open an account, he or she is talked through the switching code and the options suitable to him or her and, based on the customer's circumstances, branch staff will work with that. We have not disdained the switching code in any shape or form as part of that process. As Ms Byrne outlined, it is a very regulated and very well set out process. It is monitored very closely, etc. While there may be some chat in the universe around it, that is not the policy or the approach we are taking.

On the other comment regarding the numbers, this is an activity where we are driving momentum through it. The Deputy is looking at numbers, which is valid because we shared them with the committee and the data cover the period up to 1 March. If we look at something like digital, and in our case the Deputy's numbers were perfectly correct, we have stepped that figure up to 50% of customers and tomorrow morning we will step it up to 70%. The bank is diverting serious resources that would normally be for other activities to drive it. There is that momentum capability. We are seeing that turnaround time etc. on locations. I would not like colleagues or customers to feel we are sitting on our hands. We want customers to come forward because we are making those changes rapidly to meet them. I give assurance to the Deputy, as the numbers play out over the next while, he will see that trajectory coming through and that momentum will be very evident to him, as new data plays out.

Deputy Pearse Doherty

Please God. We all hope it works out smoothly.

Deputy Ged Nash

There is an opportunity here for the banking sector and individual retail banks to restore badly damaged reputations.

All of us, and the public more widely, are watching this very closely indeed. Representatives from the Central Bank came before the committee in early April and told us that, as far they were concerned, all of the evidence they had suggested that the exiting and receiving banks were not in any way prepared for the scale of the challenge that faces the sector over the next few months.

In his earlier contribution in response to Deputy Doherty, Mr. Hayes told the committee what the Central Bank told him yesterday. Did the Central Bank expressly say to Mr. Hayes and to the banks present here today that, if the Central Bank was not satisfied that the timeline set down by KBC and Ulster Bank for the closure of accounts and the opening of accounts in new institutions was being met, the Central Bank would instruct or force those banks and Banking and Payments Federation Ireland to adapt those timelines and extend them? Did the Central Bank say explicitly that if it was not satisfied, it would be prepared to do that?

Mr. Brian Hayes

I cannot comment on what the Central Bank said or did not say on that issue. I believe it highlighted the issue of the best customer outcome, which was the phrase it put to us, on the exiting side and the remaining side. The Central Bank, rightly, is looking at this very closely to ensure we have the best customer outcome. I am not going to make a comment on what it said on that particular point. That is a matter for it and it would be unfair of me to make a comment.

Deputy Ged Nash

From that I might take it the Central Bank may have had a stern conversation with the banks that were present and that it is positive the conversation has taken place.

Mr. Brian Hayes

It was genuinely a very good conversation.

Deputy Ged Nash

A good exchange of views.

Mr. Brian Hayes

It was a very good conversation.

Deputy Ged Nash

I would expect so. I would hope the regulator would act in the best interests of customers. We all want this to work. This is an unprecedented challenge. We all understand the scale of the challenge the retail banks face and the difficulties that will be presented for the witnesses as senior executives and for staff over the next period of time.

Mr. Hayes referred on a number of occasions to the application of the switching code and some of the deficiencies in the code. It is nobody's fault that deficiencies are there. The switching code is old. Based on what Mr. Hayes said, we could all probably agree it needs to be modernised and updated to reflect new ways of doing business that have evolved over recent years. It certainly needs to take account of that.

We were all very concerned, and I am especially concerned, about the vulnerabilities involved in direct debit payments, standing orders and so on. I am aware that Banking and Payments Federation Ireland, BPFI, is conscious of that. I appreciate Mr. Hayes confirming this will be a priority for BPFI and the member banks.

I am a little concerned about what was said around stakeholder engagement. I may have picked it up incorrectly. The witnesses spoke of engagement with utility providers. The Chairman has put on the record the displeasure of this committee at the response of utility and energy companies with regard to their engagement, or lack thereof, with this committee on this issue. From what I can understand from what Mr. Hayes has said, and perhaps he would clarify this, contact was made, or sought, with the Commission for Regulation of Utilities, CRU, and with the Commission for Communications Regulation, ComReg, but that the engagement was not necessarily forthcoming. If that is the case-----

Mr. Brian Hayes

In fairness to them, we have raised-----

Deputy Ged Nash

Strictly speaking, it is not within their remit but I do not want them to take a minimalist view of what their remit is around the requirements they would place on companies. They need to take a customer-focused approach as well. This could potentially be catastrophic for many customers who find themselves in very difficult situations as things stand at present. Perhaps Mr. Hayes will elaborate on what the engagement with the CRU and ComReg was and where it stands at the moment.

Mr. Brian Hayes

We have written to the CRU and ComReg outlining our concerns in the process and citing the fact we have had pretty regular engagement with the direct debit operator community, who have come to all those meetings and who appreciate the information from our remaining and exiting banks about their plans. They are getting ready for the significant transaction changes that are going to occur. The points I was making in both correspondence we sent to the other regulators were around the timeliness, the resourcing issue, and meeting us to see if we can do something together.

I am aware that people have made suggestions. The Financial Services Union is on record as looking for a task force. Our colleagues in the Central Bank made the point to us yesterday around organising the stakeholder bit. We are open to doing anything. We would be at any meeting, at any time, at any place and anywhere, when everyone is around the table. There needs to be a bit more joined-up action here. I am not laying blame on other regulators here. I am just saying that we would be grateful if what the Central Bank has done in highlighting to other financial services entities under its authority, they would do the same to other entities under their authority in other regulatory settings. That will take a bit of time. We will be around any table at any stage. There is an enormous amount of knowledge across the sector, as the committee is hearing today from our colleagues on the exiting and the remaining side, which can help us all to get there.

Deputy Ged Nash

Obviously that would be a good idea, and I appreciate BPFI's efforts in that regard. BPFI certainly sees sense and the member banks see sense in actually working co-operatively with the regulators, but I would not want them to take a minimalist interpretation or view of what their remit is in this.

I also have some practical questions for the bank representatives before us this afternoon. My understanding is, and the witnesses may correct me if I am wrong, that all the banks represented here today have cut their opening times in call centres in recent times. Is that correct?

Mr. Jim O'Keeffe

From AIB's perspective, we have various call lines with different times, such as for cards and so on, where customers require out-of-hours service. We have condensed some of our lines to the normal nine-to-five hours. We have continued with those critical lines where customers may require out-of-hours support.

Mr. Eamonn Crowley

That is the same for Permanent TSB. We have similar support for fraud and things of that nature on card lines. For the main service we have condensed and shortened those hours. This is primarily related to resourcing issues due to the impact of Covid and an increased customer demand, particularly as the new digital security SEA authentication came in last year. The level of interaction by customers has actually increased and call types have lengthened, which has put extra pressure on those call centres. It requires a certain consultation time to obtain that service.

My final question relates to call centres. I understand Permanent TSB let go a number of call centre staff over recent years but has re-added staff. Of course, staff will also transfer from Ulster Bank under TUPE legislation over a period. What is the net gain of staff?

Mr. Eamonn Crowley

We have not let staff go in our call centre, but the call centre is a natural stepping stone for staff into the wider bank. It is something of a route for staff given that working in a call centre is quite a challenging job and they are very well educated in system processes and dealing with customers. As a result, they lend themselves to promotion or movement into the branch network and other parts of the bank such as fraud and issues of that nature. That has been a feature of the call centre staff.

We have increased our headcount numbers in the call centre. Within the 450 staff moving over, there is no element of call centre staff because they support the retail banking network and the current account customers, who, unfortunately, are not coming to us. It is the mortgage customers who are moving to us. The current account customers do not fit into the TUPE definition, from that perspective.

In ramping up our capacity, while we have put an awful lot in place, we understand customers could behave in different ways. None of us knows the exact timing and we talked earlier about flattening the curve. Our commitment is not only to investing in the people and technology we have to date; if we need to do more into 2023, we will do that to ensure every customer will have the easiest possible journey across to us. We see this as a great opportunity to get as many new customers as possible into our business. They are our future growth, and it is a significant commercial opportunity for us to do that.

Deputy Jim O'Callaghan

I am sure there are customers of Ulster Bank, and indeed KBC, who have overdraft facilities at present, and I assume it is not the case that the bank can guarantee them the same overdraft facility if they move across. Is that correct?

Mr. Patrick Farrell

We cannot guarantee anyone in that regard and the customer would have to go through a credit assessment. That is a requirement. Nevertheless, there is no waiting time. Customers can either come into a branch, go through a credit assessment and give us their financial details, or they can even apply online and we will contact them to obtain and verify their financial details in order that we can then make a credit decision. We will also make some changes in midsummer whereby customers will be able to apply online and get an approval in principle, and they will then be able to upload their documents.

So if customers come from Ulster Bank then they will be able to rely on their Ulster Bank performance and credit history as opposed to the situation in the past whereby when a customer joined a new bank then he or she would need to create a credit history with the new bank. There is no waiting time. We are trying to facilitate all customers who have a requirement for a credit card, an overdraft or a personal loan. We want that business and we want to help people to move that business across to us. Obviously we must make sure that the product is suitable for the customer. We must go through a proper credit assessment to make sure that that suitability is there.

Deputy Jim O'Callaghan

I note the general question but is the credit assessment that PTSB would perform on a potential customer relatively similar to the credit assessment that would have been performed in the past by Ulster Bank?

Mr. Patrick Farrell

Yes, it is. For example, if we get a customer's statement from his or her Ulster Bank current account then we will use that as part of our credit assessment.

Deputy Jim O'Callaghan

Could I ask Mr. O'Keeffe the same question in respect of extra human resources in order to enable face-to-face meetings? What level of extra resources has AIB put in?

Mr. Jim O'Keeffe

I ask my colleague, Mr. Nugent, to comment on the scale of the resources in the branches and, indeed, the contact centre in terms of what we have even if we stand still. We have already redeployed around 150 resources and we have on-boarded about 150 more. We intend to redeploy about another 150 and we expect to bring on board about another 550 over the coming months.

The Deputy asked about appointments, and Deputy Pearse Doherty mentioned them earlier. Our penetration of customers coming onto the digital app was lower at the beginning. We have worked through that and, as I said, we are now launching into 70%. During that period we accommodated customers with face-to-face appointments in the network. What we are doing now is that as we release some of that it means there will be much more capacity available in the network to meet customers as we convert those over. It is not like they suddenly disappear. Our colleagues who have worked hard in the network will be able to pick up on that extra piece. There is another part. From our perspective, because of the wide range of branches that we have, as many as 82 of the locations overlap with ourselves. In terms of the Ulster Bank locations that exist, we have been fortunate enough to pick up a lot of the activity that we are seeing coming through there.

The additional piece is important. To give the Deputy a sense of the scale that exists today, and even before we add on that piece, it might be important for Mr. Nugent to comment.

Mr. Brian Nugent

From our perspective, face-to-face is hugely important. We have nearly 250 locations if one counted all of our branches and different brands across the patch so it is hugely important for us that we have those interactions and they work well for our customers. We would do about 34,000 interactions in our branches with customers in terms of branch visits. That is a huge part of our business and it continues to be hugely important to us. We have about 1,500 colleagues working on that across, for instance, the AIB brand in our branches.

As I said earlier, at the moment 70% are coming in digitally and 50% of those received their account number on the day they opened the account, which is a really important first step for customers and it gives them confidence because they need that account number for salaries, etc. as they move.

Earlier I mentioned that we have 2,500 colleagues already in our branch network and contact centres. We overlap with most of the Ulster Bank locations that are closing, as in over 80 of them. Today, we have Bank of Ireland staff present in Ulster Bank branches in Blanchardstown and Eyre Square, and tomorrow in Patrick Street Ulster Bank, actually opening accounts and giving information on Bank of Ireland accounts. They are already up and running and live. We will continue to support Ulster Bank in the various different spots that it feels sit needs extra support in and we will put staff in. Specifically, we put in an extra 50 resources to make sure that we kept appointment wait times for customers down to a minimum and, if at all possible, accommodate them there and then. We are putting those 50 resources in to be on the road, and to respond and meet customers at their homes or businesses where a little bit of extra help is required. It is an important point to call.

Please work ahead.

Deputy Bernard J. Durkan

How many minutes do I have?

Chairman

I am advised by the clerk that the Deputy has two minutes.

Deputy Bernard J. Durkan

I recognise what Mr. Brian Hayes said about the service to customers, personal services, etc. It must be emphasised that the customer must be served. The banks will become irrelevant if the customer cannot be served.

From the point of view of these Houses, there must be a greater emphasis on the fact that members of the Houses are persons of special interest in terms of security and I do not know how that came about. To the best of my knowledge, I have never created a security problem, at least not so far, but I know that there have been security problems in the banks, and the banking system, and I am not so sure that the customer was always at fault. I look forward to a response to what I just said.

The thing that I most want to complain about is the anticipated opening hours of banks. First, it is not possible to conduct all work without calling into a bank, having a face-to-face meeting, talking to a person or establishing a contact. That used to be a big part of security once upon a time.

The opening hours are so restricted that it is virtually impossible for people who are at work, on shift work or whatever the case may be to arrange to meet their bank.

A large sector of the security relating to the banks seems now to have transferred to the shoulders of customers. It is a regular occurrence, particularly from the point of view of Members of these Houses, that online transactions are interrupted by some security guru or other on the basis they want you to repeat whatever information has been inputted and it will be verified in due course. It is annoying, especially if one is in a hurry.

A large number of bank branches throughout the country have closed. I do not know how it will be possible to continue in business without a number of banks available, open and dealing with customers. Even the ATM in Leinster House was closed and taken away. I do not know why. The excuse I was given was that it was not making money. I know of a few other ATMs that were not making money because the money was being extracted with a JCB. It would not normally happen in the Houses of Parliament. I am anxious to get a reply to that issue. I would like an indication as to when it can be restored because it was a safe area for people to access in a city that is becoming increasingly unsafe to access ATMs in the open air.

I was recently approached by a customer who had a golden years account for many years. I am not talking about myself. The man in question transferred his account from Ulster Bank to Bank of Ireland and the same account does not apply. What is wrong with cherishing customers who were other banks' customers until now and had to change over because their bank is leaving the market? The over-55s and holders of those particular accounts are entitled to treatment equal to that they have come to expect.

The Senator asked about customers who might face difficulties when they come over to us. As an unfortunate outcome of the crisis, we have built a core competence around dealing with customers who face financial difficulties. Support will be afforded to people who face financial difficulty when they transfer to the bank.

Dealing with vulnerable customers is a key focus for us. We have a dedicated line. We have undertaken thousands of hours of training. It is an area we survey and manage tightly. We can already see the benefit to vulnerable customers who are transferring to the bank. Our colleagues in the network, as I am sure is the case for the banks my colleagues represent, are visiting nursing homes to help customers who are facing challenges in moving their accounts. How we are supporting people on the ground is probably not often lifted up to this level. We can all be confident that support will be provided.

Mr. Gavin Kelly

My answer will be similar. We are in negotiations with KBC, to whose representatives the committee talked earlier. It is critical that when customers come across, they understand their rights and the way in which their accounts are managed in Bank of Ireland will be the same as was the case in KBC. I am proud of our track record in helping customers in financial difficulty. We have proved in recent years that our primary focus is to keep vulnerable customers who find themselves in difficultly in their homes. Many of the services and solutions we have provided are working and have allowed those customers to maintain their homes. That is an important part of how we conduct our business and it will not change for KBC customers when they come across to Bank of Ireland.

I reiterate with regard to vulnerable customers that this is a key time for us as an industry. It is important we stand up and are counted with regard to how we support vulnerable customers. It is great that so many customers are using our digital services. We will be judged on how we support vulnerable customers as they move their accounts.

We have looked at a number of different types of journeys that customers might find themselves on and areas where they might find themselves in difficulty. We are offering support. We are training staff. As others have said, we are making sure we are there to support customers and, if necessary, going to meet them in nursing homes, at their premises and in their own homes to offer that support. We are constantly trying to change our processes to support customers.

Mr. Patrick Farrell

Like the other two banks, we have, unfortunately, built up a core competency in this area. We will take the time to look after those customers who are in financial difficulty and help them when they come across.

The Senator also asked about more vulnerable customers, sometimes elderly customers, who need a bit of extra time and assistance. As I mentioned earlier, we have launched a "just a minute" programme in our branches. It helps those customers to identify that they just need that little bit of extra time and someone to talk to about the mad digital world. The majority are going into the digital world but we all know many people who need a little bit of time, attention and care. That time is available. Our colleagues around the country are offering support.

Mr. O'Keeffe mentioned his staff are visiting nursing homes and my colleagues around the country are also doing that. Even during the pandemic, they looked out for elderly customers who they noticed were not coming into the branch anymore. In some cases, they even did a weekly shop for those elderly customers.

There is a lot of care going on at local level that would not be seen at this level. Our colleagues do amazing work around the country. We have an enhanced care team in our contact centre. This is a special, dedicated line where the staff are not trained on average call times, call handling or anything of that nature. They are trained to spend time with the customer for as long as it takes, listen to what the customer needs to do, spend that time with them to help them move across and look after their needs. Hopefully, that gives the Senator some assurance.

Senator Maria Byrne

I thank Mr. Farrell.

Mr. Brian Hayes

I have just three concluding remarks, because I know the Chairman is under pressure.

Deputy Durkan raised three issues. We will give a written reply directly to the clerk to the committee on them. I believe he was referring to PSD2, which is domestic and European law, and which the banks must implement with regard to strong customer authentication that requires a double-click for security. We will come back on the ATMs, the PSD2, and the opening hours.

The Senators raised questions on those two very significant institutions that are leaving, one of which was in the country for 150 years and the other for 40. Both banks remained after the crash when they had significant positions and did not cost the Irish taxpayer anything. We must prosecute that question. It is a fundamental question. I am happy to come back to deal with that on behalf of the industry at a public session. I am aware that some of these issues will be played out in the dialogue on the banking review, which I know Deputy Doherty attended in Tullamore on Monday.

Retail banking is a scale business. We are a population of 5 million. The cost of regulation - the actual cost to income ratio - in Ireland is approximately 65%; across Europe it is approximately 50%. Let us consider the way in which our industry is structured with the cost of capital. We must hold approximately three times as much capital as our European peers. There are issues around security that we must address at some point in the future. There are also issues around net interest income. The Irish banking sector obtains 80% of its income from interest, whereas in the European case it is more like an average of 60%. Every fee increase that an Irish bank has to propose must go through the Central Bank of Ireland under section 149 of the Consumer Credit Act. No other country in Europe has that. The only other country in the world that operates that is Nigeria.

We have major problems as an industry that I would love to discuss further with the committee and with my colleagues in the BPFI. We really must have a proper debate on it. That debate is predicated on not forgetting the past, the reputational issues and the legacy issues, but also having the courage to address some of those fundamental commercial issues that are no different in other European jurisdictions. As a country we really need to have that debate.

If I am an investor and I want to invest in any of these public limited companies in front of me here today, I would expect a return of 8%, 9% or 10% on average per year for my investment. These companies are owned by investors. These are public limited companies. The European average is 8% and Ireland's average in normal times pre-Covid was between 4% to 5%. If I am not returning equity then I am not going to have the money into my business to invest in technology and all the things we need. We really need a serious debate about all the factors that are making the landscape for retail banking in Ireland challenging. Perhaps that is an issue for another day.

I saw the Behaviour & Attitudes survey on Monday, which was independently compiled face-to-face. Goodness knows, from a previous life I would probably recognise a dodgy poll or survey if I saw it. This particular survey, however, showed that according to Behaviour & Attitudes, 82% of the people surveyed were either extremely satisfied or satisfied with their Irish banking service. This is not the narrative that is out there. I believe there is a problem in that. The experience of ordinary people as they go about branches, as they deal with the digital offering, and as they deal with the call centres seems to be broadly satisfied, but the industry as a whole has this very difficult and challenging narrative. We have a job to do, collectively, in addressing that and making sure of the translation of that. It was a very interesting survey on Monday. It was independent and nothing to do with us. It was conducted face to face and gives some quite encouraging remarks, especially to the 22,000 people who work in this sector and keep the sector going. We owe it to them to keep their heads up as we go through this very challenging period.

The joint committee adjourned at 5.15 p.m. until 1.30 p.m. on Wednesday, 25 May 2022.

Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach díospóireacht - Wednesday, 18 May 2022

Withdrawal from Irish Banking Market: Engagement with Ulster Bank and KBC Ireland

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Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach díospóireacht -
Wednesday, 18 May 2022