News Archives - Page 2 of 336 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

‘Chronic underinvestment’ harming recovery prospects – Ibec

Decades of chronic underinvestment in key infrastructure is threatening to undermine the prospects for economic recovery, according to Ibec.

Publishing its submission to the mid-term review of the National Development Plan, the business group says such under-resourcing has resulted in quality of life challenges in areas like housing, environment, health, childcare, and commuting.

It says the last year, while presenting enormous challenges, has demonstrated that Ireland now has ‘unprecedented wealth-generating capacity’ to invest in future development.

“Whilst the short-term focus may be on the challenges and changes brought about by Covid-19 and Brexit, we must plan for these less dramatic but equally important long-term challenges which litter our country’s path,” Fergal O’Brien, Ibec Director of Policy and Public Affairs said.

The submission calls for, among other things, an upskilling programme to get people – who may be left unemployed after state supports conclude – back into the workforce, addressing the long term under-funding of higher education, as well as investment in innovation to address the competitiveness aspects of Brexit.

It says an extra €70 billion should be deployed on key infrastructural projects with an acceleration of some key projects, including the Dart expansion plan and the Metro North plan in Dublin.

This could be achieved, it said, by addressing issues in procurement, project management and reform of the planning system.

“Reform is urgently needed in order to reduce overall project delivery times by 50%. In order for the investment plan to achieve its objectives and deliver a meaningful improvement to quality of life, radical reform is required to ensure that much needed infrastructure projects are delivered as quickly as possible,” the submission says.

Post-pandemic economy

While Ireland’s economy was the only one in the EU to register growth in Gross Domestic Product (GDP) terms last year, we have had among the strictest pandemic restrictions in Europe and for longer periods.

That has contributed to a deficit for the 12 months to the end of February of €14 billion, as reported by the Department of Finance yesterday.

However, income tax receipts have held up well and Central Bank figures on deposits suggest that households have been saving significant amounts of money since the pandemic restrictions were introduced.

Some commentators suggest a large portion of that money could be released into the economy as restrictions are gradually lifted, supporting an economic recovery.

“While the plan for economic recovery must address multiple evolving aspects of both the Covid and Brexit crises, the experience of the past year has shown that Ireland now has unprecedented wealth-generating capacity to ambitiously resource this plan. A substantially enhanced and more ambitious National Development Plan must be central to the recovery strategy,” Fergal O’Brien said.

Article Source – ‘Chronic underinvestment’ harming recovery prospects – Ibec – RTE – Brian Finn

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Exchequer deficit climbed to €14bn by end of February

Exchequer returns for February show that the budgetary situation has now deteriorated by €1.7bn compared to the same period a year ago, due to the decline in tax revenue and the increase in spending.

The figures will show a deficit to the end of February of €14bn on a twelve month rolling basis.

The Minister for Finance, Paschal Donohoe said the figures continue to demonstrate the continuing effect of the Covid-19 pandemic on the public finances.

Tax revenues to date this year are down by €830 million, or nearly 9% on the same period last year;

However, income tax receipts have continued to hold up well and are slightly ahead of their performance last year.

Minister Donohoe said the impact of the pandemic on tax revenue has been most acute on VAT receipts, with VAT revenue down €400m or 13% versus the same period last year.

This, he added, was a reflection of the effect of the public health restrictions on consumption.

Mr Donohoe said he expects as restrictions continue that tax revenues will continue to decline and the state will continue to run “a very significant deficit.”

But he added that there does appear to be some grounds for optimisim regarding the economic performance for the rest of this year.

He said public health restrictions are having an effect on reducing the spread of disease, the vaccination programme continues to gain pace and there is strong resilience in income tax receipts which points to how some companies continue to adapt to the new environment we are now in.

He also pointed to the breadth of economic support in place to support employers, something he claimed is an investment in the recovery.

The figures show that spending by the Department of Employment Affairs and Social Protection was up €1.8 billion year-on-year, mainly due to the cost of the Pandemic Unemployment Payment (PUP) and Employee Wage Subsidy Scheme (EWSS).

Although it continues to grow, Mr Donohoe said the deficit is very much in the middle when compared to other comparator countries.

The figures show that excise duties were down by €130 million, or 15%.

While total net voted expenditure to end-February was just under €9 billion, or 11% ahead on the same period last year.

Article Source – Exchequer deficit climbed to €14bn by end of February – RTE – Will Goodbody

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Dublin benefits most from Brexit financial services relocations – EY

Dublin remains the most popular destination for UK financial services firms looking to relocate staff or operations as a result of Brexit, according to EY.

The accounting and consulting firm has been compiling a tracker of movement of services and staff at 222 financial services firms in the UK since the Brexit referendum in 2016.

36 firms say they have either moved or are considering moving staff or services, or both, to Dublin specifically.

Of the 36, nine are universal banks, investment banks and brokerages, 18 are wealth and asset managers, while the remaining six are insurers or insurance brokers.

Luxembourg was the second most popular destination after Dublin with 29 companies relocating staff or services there, followed by Frankfurt and Paris.

The EY Financial Services Brexit Tracker also finds that 43% – 95 out of 222 – of financial services firms have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe.

This takes the total number of job relocations since the EU referendum to almost 7,600, up from 7,500 in October 2020.

However, the number of new jobs created in the EU by these firms has remained static at around 2,850 roles.

“Our data shows that even in the grip of a pandemic, firms are still making decisions and moving people and assets to respond to the reshaped geo-political landscape,” Professor Neil Gibson, Chief Economist with EY Ireland said.

“Sitting atop European charts has become an encouragingly welcome trait for Ireland, with economic growth and tax receipt data likely to mimic its performance in the tracker.”

He pointed to rising costs in Ireland as a potential brake on the momentum.

“This is certainly an angle competitor cities are using to try to compete with Dublin for post-Brexit relocations,” he added.

The figures also show that the volume of UK assets that have migrated to European countries since the Brexit vote has increased to almost €1.5 trillion, up from almost €1.4 trillion in October 2020.

24 firms – ten banks, nine insurance providers, and five wealth and asset managers – have so far transferred or announced an intention to transfer assets out of the UK to Europe due to Brexit.

Article Source – Dublin benefits most from Brexit financial services relocations – EY – RTE – Brian Finn

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Major reset of EU-UK relations being considered by EU

Senior EU figures are contemplating a major reset in relations with the UK that would coincide with the formal ratification of the free trade agreement at the end of April, RTÉ News has learned.

The idea would be for both sides to work towards a package of solutions around the outstanding issues of the Northern Ireland Protocol, as well as other areas of tension, such as the status of the EU’s delegation to the UK.

Senior figures have confirmed to RTÉ News that a formal, set-piece event marking the ratification of the Trade and Co-operation Agreement (TCA), which was concluded by both sides on Christmas Eve, could inaugurate a more harmonious relationship.

It is understood very tentative discussions have been under way at a senior level between officials in Brussels and London.

There has been a fractious start to the new post-Brexit relationship from the beginning of January, with simmering tension over the Northern Ireland Protocol, vaccine procurement, the diplomatic rights of the EU ambassador to the UK, and the alleged discrimination against citizens from a number of eastern European member states over UK work visas.

The fear among senior EU officials is that unless there is a clear reset then the relationship could become one of perpetual tension.

Some observers have seen the appointment of David Frost, the former UK Brexit negotiator, to the role of overseeing the future relationship as reflective of a dynamic that could be more about confrontation than co-operation.

The European Parliament is expected to formally ratify the TCA on 24 March, meaning national capitals would give their final and formal consent to the treaty early to mid-April.

Senior figures envisage a possible “handshake” moment involving British Prime Minister Boris Johnson and EU leaders that would symbolically mark a new, more harmonious era in relations.

This would ideally coincide with both sides signing off on a package of solutions to the most contentious outstanding issues, especially the Northern Ireland Protocol and the London embassy issue.

However, it is understood that there would have to be hard negotiations in the coming weeks in order to provide the political space for a genuine reset.

The Northern Ireland Protocol remains the most difficult issue, following the European Commission’s move to invoke Article 16 at the end of January.

Demands by unionists for the protocol to be scrapped have thus far fallen on deaf ears, but London and Brussels remain some distance apart on how to resolve the deepening antagonism over trade barriers on goods moving from Great Britain to Northern Ireland.

In December, both sides reached agreement on how to implement the protocol, which came into effect on 1 January.

A grace period, during which Northern Ireland supermarkets importing huge volumes of food from Great Britain would be absolved from needing expensive and cumbersome documentation, expires on 1 April.

A meeting on Wednesday of the EU-UK Joint Committee, co-chaired by commission Vice President Maroš Šefčovič and his UK counterpart Michael Gove, concluded with no real breakthrough on the outstanding issues.

It is understood Mr Šefčovič has requested another joint committee meeting before the end of March, ahead of the deadline for the grace period to end.

The UK has asked for two grace periods, related to food safety rules, to be extended until 1 January 2023.

Article Source – Major reset of EU-UK relations being considered by EU – RTE – Tony Connelly

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Mortgage approvals fell 16% in January

The number of mortgages approved in January fell by 16% compared to the previous month, according to figures published by the Banking & Payments Federation Ireland.

A total of 3,355 mortgages were approved last month, a decline on the December figure, but a 2.8% increase on the same period last year.

Breakdown of approvals

Approvals for First Time Buyers were down 20% compared to the previous month, but up 7.5% compared to the same month last year.

Despite this, the figures show that first-time buyers made up over half of the approvals with 1,709 mortgages approved for this group.

Mover purchasers accounted for just over 27%, with 911 mortgages approved.

Value of approvals

Mortgages approved last month were valued at €823 million, of which FTBs accounted for €409 million and mover purchasers for €271 million.

Overall, the value of mortgage approvals fell by 15.9% compared to the previous month, but rose 10.7% on the same time the previous year.

Brian Hayes, Chief Executive of BPFI highlighted the year-on-year growth in both approval volumes and value.

“This points to a solid pipeline for drawdown activity as we move in to 2021.

“It’s also interesting to note the 10% year-on-year increase in both the volume and value in mortgage switching which demonstrates that lenders are continuing to support customers through the switching process.

“Our latest mortgage approvals data shows mortgage approval activity performed well in January particularly when we take into account that level 5 restrictions were in place throughout the month,” he said.

Annualised mortgage approvals

The latest BPFI figures show there were 43,241 mortgage approvals in the twelve months ending January 2021, valued at €10,420 million.

Annualised mortgage approval activity to end-January 2021 increased in volume terms by 0.21% compared with the twelve months ending December 2020 and increased in value terms by 0.77% over the same period.

Annualised purchase mortgage approval volumes rose by 0.29% compared with the prior period to 35,122 in the twelve month period, while the annualised value of purchase mortgage approvals was €8,768 million, up by 0.87%.

Article Source – Mortgage approvals fell 16% in January – RTE – Gill Stedman

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Youth unemployment worsening, according to CSO figures

Today’s Labour Force Survey figures confirm that the crisis in youth unemployment is worsening.  

The number of people aged 15-24 in employment fell from 264,000 at the end of the fourth quarter of 2019, to 226,600 at the end of 2020 – a decrease of over 14%.

CSO statistician Jim Dalton said this was probably due to younger people being employed in the sectors worst hit by the pandemic, including Food and Accommodation, Retail, and Other activities including recreation. 

He noted that some people currently on the Pandemic Payment were not categorised as unemployed under formal ILO criteria – and that the real extent of the employment crisis may not emerge until vaccination is complete, the economy opens up and it becomes clear which sectors are still viable. 

The Labour Force Survey research also confirms the growing trend towards working from home. 

In the four weeks before the pandemic struck a year ago, just under four fifths of those in employment (78.6%) indicated that their main place of work was the “employers or own premises”. 

However, by the fourth quarter of 2020, that figure had fallen to just over half (55.3%)

Again, in the four weeks before the pandemic, just one in 20 people in employment (4.8%) reported that their main place of work was home.

By the end of last year, that figure had soared to over a quarter (27.7%).

In the same four week pre-pandemic period last year, people working from home indicated that they carried out 41% of their work remotely – but by the end of the fourth quarter of last year, that figure had almost doubled to 74.3%.

The CSO’s Labour Force Survey is the official source of labour market statistics for Ireland and includes the official rates of employment and unemployment. 

The CSO noted that “absences from work” jumped by 70.5% to 324,900 in the fourth quarter compared to the same time in 2019 due to the fall out of Covid-19.

This resulted in a fall of 8.5% or 6.6 million in the number of hours worked per week over the year to 70.8 million hours.

It said the impact on hours worked varied across the different economic sectors.

The number of hours worked in several sectors such as Public Administration & Defence and Information & Communications were near 2019 levels.

But absences as a share of employment were highest in other sectors such as Accommodation & Food Services, Other Activities (recreation and culture) and Transport & Storage and the hours worked in these sectors was significantly lower in Q4 2020 than the levels from a year earlier.

There are still many people who have lost their jobs as a result of the Covid pandemic who do not meet the International Labour Organisation definition of unemployed. 

This is evident in the difference between the LFS unemployment rate and the CSO’s COVID-adjusted rate, which counts all recipients of the PUP as unemployed and stood at 19.4% in December before rising again to 25% by the end of January 2021. 

The CSO said that while 2.3 million people were officially employed in the fourth quarter, when adjusted for PUP recipients the figure would have stood at 1.97 million (some 390,000 lower) at the end of December and 1.83 million in January.

The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar said that today’s numbers lay bare the devastating impact that the pandemic has had on the economy and employment. 

Mr Varadkar said that more than 400,000 jobs have been lost and a quarter of the labour force is now unemployed. 

He said the figures also show the disparity and unfairness of the virus with job losses heavily and disproportionately affecting the private sector and sectors like retail, hospitality, tourism and entertainment especially.

Mr Varadkar said that maintaining social solidarity must be paramount and for this reason Government has decided to extend all financial supports for business and workers up to June 30. 

“When it is safe to re-open our economy ,we should do so, but not before,” the Minister said.

“In doing so, we will need to ensure that we put in place a National Economic Plan to enable a return to full employment no later than 2023. It must focus on helping businesses and individuals worst affected to get back on their feet; to get businesses back open, people back to work or education and ensure that post-pandemic we have more security for everyone,” he added.

The Finance Minister said the latest Level 5 public health restrictions have had a significant and rapid impact on the labour market with numbers of claimants for the PUP rising to peak of 481,000 at the start of February, with more than 1 million persons combined in receipt of income support from the State in the form of the PUP, the EWSS and the Live Register. 

“However, I am encouraged by the fact that, the rise in the number of people relying on the PUP has stayed well below the peak of 600,000 from early May last year, and has fallen in recent weeks to now stand at 473,000,” Paschal Donohoe said. 

“Moreover we are now in a position to start reopening our schools on a phased basis. If we continue our diligent efforts, as we have done to date in reducing the spread of the virus for a third time, many people will return to work once Level 5 restrictions are lifted,” he added.

Article Source – Youth unemployment worsening, according to CSO figures – RTE – Ingrid Miley

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Key actions needed to reduce insurance costs – NCC

The National Competitiveness Council (NCC) has said key actions must be taken to reduce costs in the Irish liability insurance market, including bringing personal injury award levels in line with other jurisdictions.

The council also said that steps must be taken to ensure consistency in award levels and reduce settlement costs, if prices are to come down.

“To tackle the high cost of insurance, it is crucial to know what is driving costs upwards, and all signs point towards personal injury settlement costs,” said the council’s chair, Dr Frances Ruane.

“This includes the award levels, and the costs of settling disputes.”

Publishing its latest bulletin on insurance costs, the NCC said it believes now is the right time to re-examine the issue of high insurance costs.

It also said the importance of competitive insurance costs for Irish enterprises, particularly small and medium sized firms, needs to be re-emphasised.

The council said insurance markets move through repeating cycles, with periods where cover is readily available at reasonable prices and others where costs are high and coverage limited.

It said the evidence currently available indicates that the personal and employers’ liability insurance markets here are in the so-called ‘hard market’ phase of high prices and low availability and have been since 2012.

The competitiveness watchdog said key actions, such as bringing personal injury award levels in line with other jurisdictions, ensuring award levels are consistent and reducing settlement costs are now needed in order to lower costs and increase availability.

The Judicial Council is currently considering new draft guidelines that could recalibrate the current high level of awards granted in the courts for minor personal injuries.

The NCC said it hopes that adoption of the guidelines will “fully address this issue and insurance costs will gradually start to fall”.

But it also stated that if this fails to reduce costs, then further action like the Oireachtas setting award guideline levels may have to be considered.

“Ultimately, for insurance costs to come down, personal injury settlement levels need to be aligned with those in similar countries, and they need to be consistent,” Dr Ruane said.

The council also said that measures to enhance and reform the role of the Personal Injuries Assessment Board are required and competition in the market needs to be promoted.

It is not the first occasion that the council has examined the issue of insurance costs, because it said there is compelling evidence that the high price of employers’ liability and public liability insurance undermines the competitiveness of Irish businesses, especially small and medium sized firms.

Article Source – Key actions needed to reduce insurance costs – NCC – RTE – Will Goodbody

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Commercial property vacancy rate rises to 13.5%

13.5% of commercial properties listed across the country were vacant in the final quarter of last year, according to figures published by GeoDirectory and EY-DKM.

The number of vacant properties increased marginally by 0.2% in the fourth quarter, with 28,572 units unoccupied last December. 

The findings of the report suggest that it is too soon to determine the full impact of the Covid-19 pandemic on the commercial property landscape.

However, it states that key trends and indicators are beginning to emerge.

Regional breakdown

The figures show that commercial vacancy rates in Connacht and Ulster were above the national average of 13.5%, while Munster was equal to the national average.  

Leinster recorded vacancy rates below the national average.

Sligo had the highest number of vacant commercial properties, with 19.9% or almost one-in-five such properties unoccupied. 

With the exception of Kildare at 14.4%, the figures show that all counties in the greater Dublin area registered commercial vacancy rates lower than the national average, with Meath recording the lowest rate at 10.1%.

In the capital, the vacancy rate fell marginally by 0.1% to 11.9%.   

The data shows that in the fourth quarter of last year there were 2,011 fewer retail and wholesale address points in Ireland when compared to the previous year – this represents a decline of 5.3%. 

Similar declines were also recorded in the education (5.5%) and industry (5.0%) sectors.

The report also analysed the commercial vacancy rates in a number of towns across the country.  

Ballybofey in Co Donegal, at 29.2%, was the town with the highest commercial vacancy rate amongst 80 towns sampled, followed by Edenderry in Co Offaly at 27.5% and Edgeworthstown in Co Longford at 26.9%.

Greystones in Co Wicklow, at 7.2%, continued to have the lowest commercial vacancy rate across the 80 towns, while Gorey in Co Wexford at 8.1% and Carrigaline in Co Cork at 8.3% also posted noticeably low vacancy rates.

Dara Keogh, CEO of GeoDirectory, said it has been an extremely turbulent 12 months for commercial sectors in Ireland.

“The number of retail and wholesale units fell sharply in 2020. This may be as a result of Covid-19 restrictions, but also could point to the changing face of retail with businesses moving towards an online model,” he said.

Annette Hughes, Director, EY-DKM Economic Advisory, said that previous GeoView commercial property reports have highlighted an east-west divide in terms of economic activity and she said this appears to be increasing.

“Outside of Leinster, no province recorded a commercial vacancy rate below the national average, while stubbornly high rates of commercial vacancy are recorded along the west coast,” she said.

“These are also areas with the highest proportion of tourism and hospitality units, which have been severely impacted by Covid-19 restrictions,” she added.

Article Source – Commercial property vacancy rate rises to 13.5% – RTE – Gill Stedman

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SFA calls for urgent launch of Covid Business Aid Scheme

Many small businesses will be forced to close and cut jobs if the Government does not quickly launch the Covid Business Aid Scheme (CBAS).

That is according to the Small Firms Association, which has called for the €60m in supports aimed at businesses that are ineligible for other Covid supports to be rolled out.

“Hundreds of small business owners in the supply chain have suffered severe falls in revenue and sales because of the crisis but have not been allowed access the same relief as non-essential retail, tourism, and hospitality businesses,” said Sven Spollen-Behrens, Director of the Small Firms Association.

“These firms are suffering just as equally and need to see CBAS rolled out in the next few weeks or else they will be forced to close.”

Mr Spollen-Behrens said it was disappointing that the new Covid plan, announced by the Government last night, provided no clarity for these so-called “orphaned” small businesses.  

He welcomed the extension of economic supports until the end of June.

“These will go a long way to ensure eligible businesses do not go under and jobs are saved,” he said.

Meanwhile, retailers said they were disappointed and frustrated by the Government’s latest Covid plan.

Retail Excellence said the extension of the current restrictions, including on non-essential retail, to at least April offered nothing to its members other than “wait and see”.

“We believe the Government needs to do more and to signal some concrete steps that can pave the way towards a full reopening of retail in due course,” said Duncan Graham, chief executive.

“The first step is the reintroduction of Click and Collect. It’s a modest proposal but it could be done overnight and it would demonstrate to retailers that there is some hope down the line.”

The organisation also wants a roadmap to full reopening, including reopening of garden centres on St Patrick’s Day, shopping by appointment in all stores from Easter and a full reopening of retail from May 1.

Tourism leaders also expressed disappointment with the Government’s announcement. 

The Irish Tourism Industry Confederation (ITIC) also said more clarity was needed around a reopening timetable for its members. 

CEO Eoghan O’Mara Walsh, said additional financial support would be required while the tourism industry was closed and demand non-existent as firms are “teetering on the brink”.

He also expressed concern that there was no mention of restoring international connectivity.

“As an island nation Ireland is exclusively dependent on air and sea access and we must plan a restoration of connectivity in a safe manner with a scale-able testing regime as well as exploring the use of health passports,” he said.

“We can’t leave a “closed sign” above the country for tourism reasons as well as broader economic ones”.

Article Source – SFA calls for urgent launch of Covid Business Aid Scheme – RTE – Will Goodbody

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Ulster Bank defends decision around plan to withdraw from Irish market

The chief executive of Ulster Bank has defended the decision of the bank and its parent NatWest not to give advance warning of its plan to withdraw from the Irish market to staff.
In a written opening statement provided to the Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach, Jane Howard said that until the NatWest board made a decision on Friday morning, there was no certainty as to the final outcome of the review. 

She accepted that this situation, coupled with the ongoing media speculation and some of the communications issued to workers, added to the stress of the situation.  

Ms Howard also explained how speculation that appeared in the media in September about the bank’s future left it in the difficult situation of not being able to update staff because the review was underway, but the outcome was uncertain. 

She told TDs and Senators that there was a requirement to conduct discussions in a manner that ensured commercial sensitivity and confidentiality, while in the latter stages of the review management were subject to additional restrictions until the board made a decision that could be publicly announced to the market. 

The bank boss said the lender’s decision to decline to meet with the committee during the review was because the matters were, and in some cases still remain, commercially sensitive.

She also said there was a clear rationale for NatWest’s decision to wind down the bank, adding that over the last ten years, its strategy has been to improve returns by growing the business, reducing costs and resolving legacy issues. 

But despite the progress made, it has become clear the bank is unable to generate sustainable returns over the long-term for shareholders, she stated.

The committee was also told that negotiations with AIB and Permanent TSB, along with other counterparties, on the potential sale of loans, may take many months to progress.

Ms Howard reiterated that there will be no immediate changes for staff and no new compulsory departures this year and that it does not intend to close any branches this year.

Customers will also be unaffected in the short term, she said, with the bank set to continue to offer a full banking service for the foreseeable future, most likely until 2022 at the earliest. 

The CEO also told committee members that in communicating with customers through a process that began last week, the Consumer Protection Code has been placed at the heart of the activity.

Aontú leader Peadar Tóibín said the treatment of Ulster Bank employees was “absolutely outrageous” as they had been “left in the dark” up to the last minute. 

Ms Howard has said that the manner in which the exit of the bank from the Irish market was communicated was “not the way anyone would have wanted” and that she has personally apologised for this. 

Fine Gael’s Neale Richmond told the committee that he has heard from many concerned constituents, including an 85-year-old lady in Dundrum who was wondering if her ATM Card would still work and people wondering what would happen to their mortgage or business account.

He asked Ulster Bank management how they are engaging with customers who are worried about their accounts and mortgages. 

Labour Finance Spokesperson Ged Nash also criticised Ulster Bank management for the manner in which employees were treated.

He said that it was an insult to them and that they deserved better.

Mr Nash said that he does not think employees should accept that as of last Thursday Ulster Bank did not know whether it would remain operating in Ireland or not.

He said nobody could be asked to accept that a major bank of this scale would make a decision of this magnitude overnight.

Ms Howard said that their decision to exit the Irish market was due to the bank being unable generate long-term returns to an “acceptable level”. 

She that this has been a challenge for the bank over recent years. 

Ms Howard said other factors such as negative interest rates, competing with new entrants to the market and maintaining facilities such as a mobile app also contributed to the decision.

Mr Nash added that he believes Ulster Bank was paying “lip-service” to attempts to change the culture of banking in Ireland.

He asked Ms Howard if she thinks she should resign from the Irish Banking culture board.

Sinn Féin’s spokesperson on finance Pearse Doherty said that the treatment of workers was not acceptable and should not have happened. 

Ms Howard reiterated commitments to ensure that there would be no compulsory exits this year, that there would be no branch closures this year and that the memorandum of understanding with AIB would seek to ensure that staff would travel with any loans that AIB acquires.

He asked the bank’s senior management if they are engaging with any “vulture funds” regarding the procurement of elements of the Ulster Bank loan book.

Deputy Doherty asked that they give an assurance that this will not happen. 

Jane Howard, CEO of Ulster Bank, said that when the bank sells mortgages and other loans, customers will be protected under the consumer protection code. 

He said that Ulster Bank’s decision is terrible for “staff, for customers, for regions that are dependent on your branches, but it’s also a terrible position for banking in this state. It’s a great decision for investors in Natwest”.

Deputy Doherty said the selling-off of the Ulster Bank loan book would see dividends increase for shareholders. 

However, he warned that this would come at the expense of the Irish banking system and the people “who fattened up this bank for over 160 years”. 

Mr Doherty said that if loans were to transfer to Bank of Ireland and AIB, it would have implications for competition and could leave both Bank of Ireland and AIB with over 90% of SME loans in the country.

Ms Howard reiterated commitments to ensure that there would be no compulsory exits this year, that there would be no branch closures this year and that the memorandum of understanding with AIB would seek to ensure that staff would travel with any loans that AIB acquires.

She said that Ulster Bank was still in the early stages of discussion with Permanent TSB and others. 

Ms Howards said that there are now regular engagement sessions with colleagues 

She said that it was a core objective of the bank to minimise job losses, hence the memorandum of understanding with AIB.

FSU says behaviour of Ulster Bank management was “deplorable”

Earlier, the union representing staff at Ulster Bank described the behaviour of management at the lender and its parent NatWest in the six months leading up to last Friday’s announcement last Friday as “deplorable”. 

In a written opening statement provided to committee, Financial Services Union (FSU) general secretary John O’Connell said staff and customers had been subject to abysmal treatment by the bank.

He said the union had met with Ulster Bank CEO Jane Howard on five occasions since September, when news of the review by NatWest of Ulster Bank’s operations emerged.

He said that on every occasion the bank refused to provide terms of reference of the review, who was conducting the review, or any update on its progress with staff and customers getting their information through the media instead.

Given the bank has signed a non-binding memorandum of understanding with AIB to sell it commercial loans, Mr O’Connell questioned whether anyone believes it credible for Ulster Bank to have adopted a position that no decision on the review was taken until last Thursday evening.

He also criticised NatWest for deciding last September not to engage with staff and their representatives and to not operate to good change management practices and agree a communication channel.

He claimed the group instead chose to add to the mental stress and anxiety of their staff, despite claims it cares passionately about their employee’s wellbeing.

Mr O’Connell also criticised the Central Bank, saying the outcome of the review was an indictment because of its failure to act. 

“For months, there has been media reports on the failure of the bank to engage with key groups and for months consumers and staff looked to the regulator to take action,” he said.

“But the Central Bank can act now and give communities an assurance that no branch closures will be acceptable during the pandemic.” 

The union boss also accused the two banks of putting pursuit of profit above all else.

“There is no doubt that NatWest and Ulster Bank management have failed their staff and customers,” he told the committee.

“Their deplorable behaviour over the last six months needs to be addressed at the highest level in Government and by the Central Bank. In its comments on Friday the regulator failed to highlight even once the poor treatment of staff. Not good enough.”

He said priorities need to be agreed around the withdrawal, including that jobs must follow the work to other institutions, that compulsory redundancies are not acceptable under any circumstances and that there should be no consideration of branch closures until the end of 2022 at the earliest. 

“Agreeing these three issues would give certainty to staff and customers,” he said. He also reiterated the FSU’s call for a banking forum to be set up to examine the future of banking here.

Mr O’Connell told the committee that Ulster Bank said in a statement that there would be no compulsory redundancies.

However, he said 40 staff are fighting for their jobs and trying to stop NatWest and Ulster Bank from making them redundant.

He also said it was far from clear what the impact on colleagues in Northern Ireland would be with concerns over the future of 600 jobs in Ulster Bank’s Belfast office.

Mr O’Connell said the union’s belief is that proposals to sell Ulster Bank loans to PTSB and AIB that are currently being developed would be the best possible outcome as they would enable as many jobs and branches in Ireland to be maintained.

He said week after week during the review, staff were asked questions and they were giving information to give to customers that they did not even believe themselves.

He said staff were impacted by this.

He said there are regulatory authorities who are responsible for governing health and safety, and they should receive a copy of the committee’s deliberations he added.

Additional reporting Tommy Meskill 

Article Source – Ulster Bank defends decision around plan to withdraw from Irish market – RTE – Will Goodbody

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