‘Banking duopoly leaves us with less choice than ever’
FOLLOWING the announcement that NatWest will wind down Ulster Bank following a phased withdrawal, IFA president Tim Cullinan has said NatWest must make a commitment that it will not sell any of its loan book to a so-called vulture fund, but to banks that can offer a full service to customers.
And the president of the ICMSA Pat McCormack, pictured, said the decision of Ulster Bank to withdraw from the Irish market was “extremely concerning.”
It is estimated that there are 10,000 farmers with borrowings from Ulster Bank and a further 10,000 with current accounts.
IFA president Tim Cullinan said: “This withdrawal has significant consequences for competition in the sector, but the first priority must be to ensure that the loan book ends up with a bank that provides a full banking service and not a faceless fund.
“NatWest has a moral responsibility to their customers to ensure this does not happen. It is positive to learn of the engagement NatWest are having with AIB and PTSB. It’s vital that NatWest respect their long-standing and loyal customers in any sale decision they make.” IFA farm business chairperson Rose Mary McDonagh welcomed NatWest’s intention to facilitate existing customers to move to another full-service lender. “NatWest/Ulster Bank must support its customers in moving to one of the other pillar banks in the State. The IFA has repeatedly highlighted that it’s neither appropriate, nor suitable, to transfer loans to faceless funds,” she said. Ms McDonagh said that Ulster Bank’s exit will further erode the diminishing competition in the sector.
The president of the ICMSA Pat McCormack said the decision of Ulster Bank to withdraw from the Irish market was “extremely concerning” and said that the move “must accelerate Government efforts which should already have
been in train to introduce much more meaningful competition into the Irish banking landscape”. Mr McCormack said that the first concern would have to be the transferral of the existing loans to a new institution on exactly the same conditions and interest rates.
“We cannot tolerate even the hint that any of these loans could be sold on to so-called ‘vulture’ institutions whose record in these matters must disqualify them from any consideration,” he said. Mr McCormack said that in terms of the banking services being offered to the population, we actually have less of a choice now than at any time in the last decade or century.
He said: “Effectively now we have a duopoly – two banks – who control the vast majority of the State’s retail banking centre and thus have an undue influence on the wellbeing of our economy.
“That’s not healthy and that has to change and whether that means actively seeking out and introducing a new foreign ‘main street’ bank or moving towards a much more commercial consolidation of larger credit unions then that is what has to happen,” said Mr McCormack.
He said we also need access to lower and internationally competitive interest rates and loan terms, “we find ourselves with less choice than ever and forced back into a situation where our banking is effectively only available on a ‘take-it-or-leave-it’ basis”.