I would also like to empathise with the thousands of employees who work for Ulster bank and who have been impacted by the announcement that the bank is exiting the Irish market after over 160 years. Some of these employees would be family members and friends of mine so it is a tough time for anyone connected with the bank.

Unfortunately, the story of Ulster Bank ceasing their business in Ireland has been rumbling along since the banking and economic crash of over 10 years ago now.

In addition to the concern of their employees this decision to exit the Irish market will have a significant affect on customers of the bank.

At a basic level and just from an administration perspective this will mean moving their day to day affairs to another bank. I would take a more strategic view when making this decision rather than just move to the easiest option (AIB/BOI/PTSB/KBC etc). Each bank would have different incentives for new customers, fees structures, banking online apps, terms, and conditions etc so it is well worth taking your time making this choice.

It looks like the breakup of the Ulster bank will be split into several parts. The vast majority of the performing loans section will be moving to AIB and PTSB. The non-performing loans will be sold to investment banks or Vulture funds to give them their more familiar title.

Regardless of who a customer’s loan is sold to, the new owner must still follow and comply with all of the regulations and protections that are set out by the Central Bank of Ireland

For the purposes of this article I will give you an idea of some of the calls and enquiries that we have been getting prior to and following the official announcement confirming the Ulster bank exit.

Although certain loans will have different protections and procedures that need to be followed (home loan, residential property loan, commercial loan, personal loan etc) I am writing this article under the following scenarios:

1. The Loan is fully up to date and no arrears at any stage – there will be no issues here as the new bank must honour the original agreement and the contract that was sanctioned and signed with the customer,
2. The Loan had fallen into arrears and a restructure or discussion is in progress with Ulster Bank – the customer is entitled and should be encouraged to complete these discussions and the restructure where possible in advance of the formal sale of the loan by Ulster,
3. The Loan is unsustainable, and no restructure is possible – it is highly likely that this loan will be sold to a vulture fund. Settlement discussions can continue to be had with Ulster prior to the transition to the new loan owner.
4. Read the small print – in some existing loan agreements that on paper are fully up to date there are certain conditions that can allow the bank to review the facility. This could simply be to maintain a certain loan to value %. The new bank may have the option to challenge the sustainability of the loan contract in this case.
5. Options for non-performing/unsustainable loans - This could lead to the possibility of reaching a settlement with the new loan owner as regards the sale of the property or the possible refinance of same with another bank.

The above points are non-exhaustive and there are plenty of other scenarios that we could outline that might or will occur when the loan transitions to the new loan owner.

My advice would be to request a copy of your file from Ulster bank now under the Data Protection legislation.  This is a very simple process, and you are entitled to all of the data that the bank holds on your loan. Depending on the circumstances this can be a substantial file so I would encourage you to read it or ask an experienced advisor to review it for you. There maybe something on your file that is essential when it comes to the negotiations with the new loan owner further down the line.

It is best to be prepared for what is coming rather than reacting in 6- or 12-months’ time when the letters from the new bank start to arrive in the post.

In a lot of the cases that we look after we would have our review completed and the solution lined up for our client well in advance of the new loan owner taking legal possession of the loan.

If you have any questions or concerns, please contact me on the details below.

Regards

Mark Ryan

Banking and Insolvency Partner – Quintas

mryan@quintas.ie

021 4641400