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Ulster Bank confirms exit from Irish market

Ulster Bank has announced a phased withdrawal from the Republic of Ireland over the coming years that will be managed in an “orderly and considered manner”. 

The bank, which is owned by UK lender NatWest, has 1.1 million customers here, along with 2,800 staff in 88 branches around the country. 

Its Northern Ireland unit, which also uses the Ulster Bank name, is not part of NatWest’s strategic review launched last year.

“Ulster Bank will continue to communicate with customers throughout this process and remains open for business, new and existing through all business channels,” the bank said.

As part of the phased withdrawal, Ulster Bank said that a non-binding Memorandum of Understanding with AIB has been agreed for the sale of a €4 billion portfolio of performing commercial loans.

The bank said that staff working on these loans will also transfer to AIB.

It said the potential sale remains subject to due diligence, further negotiation and agreement of final terms and definitive documentation. 

Ulster Bank also said it is in early discussions with Permanent TSB about its potential interest in buying certain retail and SME assets, liabilities and operations. 

It said these discussions may or may not result in agreement. 

“Our preference is to continue to focus our discussions with counterparties who can provide customers with full banking services in the Irish market,” Ulster Bank said today.

Ulster Bank’s chief executive Officer Jane Howard said the decision by NatWest to withdraw from Ireland is “hugely disappointing”.

“Today will be a difficult and worrying time for our colleagues across the bank. It may also lead to customer questions and concerns as to how this decision may impact them and their day-to-day banking needs,” Jane Howard said. 

“I want to be clear that there will be no change for customers today, changes will happen over the coming years,” the CEO said.

“Ulster Bank will continue to offer a full banking service in our branches, online and through normal channels for existing and new customers for the foreseeable future,” she said. 

“Customers do not need to take any action as a consequence of this announcement. We will communicate with customers in a timely manner over the coming weeks and months,” she added.

Ms Howard also said the bank will now consult with employee representative bodies to determine how best to plan and manage an orderly withdrawal of the Bank over the coming years. 

She said there will be no new compulsory departures from the bank this year. 

“I am acutely conscious of our responsibilities to our colleagues and I am wholeheartedly committed to managing this process in a fair and responsible manner,” she said.

“The phased withdrawal will include the careful and responsible execution of a strategy over time to deliver constructive solutions for our customers and their banking services within the Republic of Ireland,” she added.

The Ulster Bank CEO said the bank will engage with customers, staff, unions and communities in the coming months to listen to their concerns and to work with them and alongside them and to update on how change will be responsibly managed through the phased withdrawal process.

“Despite the disappointment of this decision, Ulster Bank and NatWest, will work hard to minimise the impact on colleagues and customers and ultimately to provide a successful banking transition for customers,” she stated. 

“In the meantime, we remain open for business across all of our channels for both existing and new customers,” she added.

Speaking on Morning Ireland, Jane Howard said the bank is supporting its staff and it is engaging with representative bodies, stating they have same objectives to minimise job losses and to support colleagues where that is not possible. 

Ms Howard said the focus now that the decision is made is making sure that the bank completes this phased withdrawal over a number of years in an “orderly fashion” so they “do a good job” for both customers and colleagues. 

She said she has met and spoken with many Ulster Bank colleagues so she knows how they are feeling.

She said there is no change right now for customers and Ulster Bank will continue to offer a full banking service. 

“No branches will be closing, they don’t need to take any action and we will be communicating with our customers from today,” she stated. 

The Ulster Bank CEO refused to be drawn on how many years it will take for the phased withdrawal from Ireland, simply stating that these things take time. 

She said the important message is that it will be a number of years and Ulster Bank has time to support customers to transition to another bank. 

Ms Howard also moved to reassure employees that with the main consideration of any negotiations with other banks will be the transfer of staff as part of the business being sold.

She said that Ulster Bank had reached a memorandum of understanding with AIB, adding that there is a clear agreement in those negotiations that all the colleagues that support that commercial loan book would transfer.

Ulster Bank’s priority and preference is to work with the full service banks, she added.

Ulster Bank’s parent NatWest today reported a pre-tax loss of £351m for the year to the end of December, better than an average of analyst forecasts of a £418m loss.

The bank had made a £4.2 billion pretax profit in 2019.

Article Source – Ulster Bank confirms exit from Irish market- RTE

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Bank of Ireland to refund 35,000 mortgage customers

Bank of Ireland is to refund tens of thousands of its mortgage customers after it discovered that it had overcharged them.

Around 35,000 accounts were impacted by the error that arose when repayments were miscalculated by the lender.

“This meant that they were paying on average 80c extra each month and the average total reimbursement to customers is €16.35,” the bank said.

“We are in the process of writing to customers to notify them of this error, refund them the amount they overpaid to their mortgage, and to apologise for any confusion caused.”

The blunder looks set to cost the bank around more than €572,000.

However, around a third of the 35,000 now face an increase in their repayments over the remaining term of their loans.

On average they will have to pay around €2.09 extra on top of what they are currently repaying each month.

This is because they had availed of a flexible mortgage option at some earlier point in their mortgage.

As a result, their future repayments now have to be recalibrated to take account of the bank’s error, in order to ensure they still clear the remaining balance by the time their mortgage matures.

Article Source – Bank of Ireland to refund over 35,000 mortgage customers – RTE – Will Goodbody

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Irish online retail sales soar by 159% in 2020 – Wolfgang Digital

Irish online retail sales grew by 159% in 2020, according to new figures from digital agency Wolfgang Digital, up from average annual growth of 32% between 2017 and 2019.

Wolfgang said the trend was revealed after analysis of over €0.5 billion of online spend, an estimated 7% of the total Irish e-commerce market size.

Today’s data also revealed that 67% of Irish online retailers are now in the “one million plus club” –  merchants that turned over €1 or more in online revenue. 

This figure is up from 41% in 2019, Wolfgang Digital said.

Its research showed that the largest 15% of retailers in the market claimed an enormous 84% of total consumer spend. Meanwhile, the smallest 35% businesses battled it out over a meagre 1% of the e-commerce market. 

The report also reveals that Amazon appears to have cut its advertising spend in Ireland by approximately 50% post-Brexit. 

Wolfgang Digital said this presents a window of opportunity for Irish e-commerce retailers of all sizes to win new customers while Amazon develops its first fulfilment centre in Ireland.

Alan Coleman, CEO and founder of Wolfgang Digital, said that Irish businesses have seen a spectacular return on investment in e-commerce in 2020. 

“While Brexit has undoubtedly posed a massive challenge to smaller retailers, Amazon’s move to temporarily halve its ad spend in Ireland is a massive opportunity for those businesses that can react quickly,” Mr Coleman added.

Article Source – Irish online retail sales soar by 159% in 2020 – Wolfgang Digital – RTE

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European new car sales drop by 25.7% in January

European car registrations dropped in January, industry data showed today, as measures to restrict a second coronavirus wave hit sales in the region’s largest markets. 

New car registrations dropped by 25.7% year-on-year to 842,835 vehicles in the European Union, Britain and the countries of the European Free Trade Association (EFTA).

This is according to figures from the European Automobile Manufacturers’ Association (ACEA) showed. 

All of Europe’s five largest markets posted declines. 

Registrations in Spain registered the biggest drop of 51.5%. Sales in Germany, Britain and Italy fell by 31.1%, 39.5% and 14% respectively. France saw a smaller drop of 5.8% in the month. 

Sweden was the only EU country where sales were positive, rising 22.5%, with low registration figures in January last year due to a vehicle tax increase behind the increase. 

Sales at Volkswagen and Stellantis dropped by 28.1% and 27.4% respectively, while Renault reported a fall of 22.9%.

Luxury automakers also posted losses in January with sales at BMW falling 16.8% and rival Daimler reporting a 17.9% decline.

Article Source – European new car sales drop by 25.7% in January – RTE

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Donohoe says public finances still within overall budget

The Minister for Finance, Paschal Donohoe has said the public finances are still within the overall budget published last October.

However, he said if current programmes to support incomes and businesses during Covid-19 are extended “well into 2021” then “much or all” of the contingency funds set aside will be used up.

The Minister said decisions will be made in the next few weeks on the extension of programmes beyond the 31 March.

He said he believed that support will be needed “for quite some time.”

The Minister made his comments at an online press briefing this afternoon following a meeting of the Eurogroup. 

In response to a question on the level of capital reserves required to be held by Irish banks, the Minister said this was a matter for the Central Bank.

He said, however, that the high level of reserves had enabled Irish banks to play an in important role in responding back to the impact of Covid-19 on the balance sheets of firms and the overall health of the economy. 

The Minister also said plans were being put in place to put forward proposals from Ireland to avail of the EC’s Recovery and Resilience Facility.

He said the most likely projects would be in the areas of the ‘green transition’ and ‘digital transformation’ of the economy as well as investment in skills and training. 

Article Source – Donohoe says public finances still within overall budget – RTE – Robert Shortt

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Job postings continue to grow, still down 24% – Indeed Ireland

Job postings on Indeed Ireland were down 24% in early February compared with the same time last year, according to new research from the jobs website.

However, despite the ongoing lockdown, the figures show that listings continue to grow and have not returned to the low of -54% last June.

The study reveals growth right across Europe, with Poland recording the biggest recovery, up 10%, followed by Italy, up 7%.

The research shows that overall, Ireland’s recovery is currently faring better than that of the UK or Spain, but is behind the other five EU countries examined.

Sectoral impacts from Covid-19 have been very uneven, according to the study. 

Only job postings in the areas of healthcare and manufacturing have exceeded their pre-pandemic baselines. 

The sectors worst hit include food and beverage (-62%), customer and personal services (-45%) and construction (-36%).

Jack Kennedy, economist at Indeed, said the new research shows that the situation is improving for Ireland.

“A successful vaccine rollout could mean face-to-face service sectors like hospitality and food service could make a comeback later in the year.

“This would be of significant benefit in helping to limit the rise in unemployment as these sectors are labour-intensive. 

“It would also benefit younger workers who have borne the brunt of the crisis, with the youth unemployment rate standing at 56% on the Covid-adjusted measure,” he said.

According to the research, the number of job postings mentioning remote work has increased from 3.6% to 13.4% over the past year.

Some occupations have seen particularly large jumps in the share of remote job postings.

The study also reveals that the highest prevalence of remote work is in arts and entertainment, tech, engineering and business roles.

Similarly, searches for remote work quadrupled over the same timeframe, with most of the uplift seen in periods of tight lockdown, with a big jump in spring 2020 and a further increase over the winter.

Article Source – Job postings continue to grow, still down 24% – Indeed Ireland – RTE – Gill Stedman

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Covid supports to extend beyond March, says McGrath

The Minister for Public Expenditure and Reform has confirmed that the various pandemic supports will be extended beyond the end of March.

Speaking on RTÉ’s News at One, Micheal McGrath said the Government will set out its new plan next week as regards Covid-19 and “a line of sight” for people, businesses and households in relation to the vital supports that are there at this time.

He said provision has been made in the budget for 2021 of around €5.5 billion for a contingency fund and a recovery fund, while €6.5 billion has also been allocated to different departmental budgets for Covid related costs. 

Mr McGrath said because of the current restrictions, this provision of around €12 billion is being used up, but he said the Government believe it’s the right thing to do to continue with these supports.

While the Minister said this level of support can’t continue indefinitely, he added that these supports would continue for “as long as is necessary” in line with public health restrictions.

He said the eventual withdrawal and tapering off of supports will have to be done in tandem with the public health environment in “a very careful and gradual way”. 

Mr McGrath said the country’s public indebtedness is “rising significantly” as a result of the pandemic.

He said at the start of last year, the country had a debt of around €200 billion.

By the end of this year, Minister McGrath said this will be north of €235 billion, however, he said they were availing, to the maximum extent possible of the very favourable borrowing conditions, by re-financing their debt and availing of the longest possible maturity.

“While our stock of debt is rising, the cost of servicing it is falling and the average interest rate is falling,” he said.

“It is our view that the re-opening of the economy eventually, when it is safe to do so and getting people back to work, will do the bulk of the heavy lifting when it comes to closing the budget deficit.” 

He said they’re being advised by both domestic and international bodies, including the European Central Bank and the European Commission that the Irish Government and other Governments need to continue providing these supports because of the lifeline they are providing to the Irish economy.

He said “the borrowing conditions are favourable at the moment” and they’re taking maximum advantage of them to put themselves in the best possible position over the next number of years “that we won’t be facing a cliff edge in terms of re-financing”.

Article Source – Covid supports to extend beyond March, says McGrath – RTE

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Banking Federation critical of capital reserve rules

The banking industry’s representative association, Banking and Payments Federation Ireland, has published a report claiming Irish banks are forced to hold three times the amount of capital as its European counterparts.

The federation (BPFI) says this is adding to the cost of lending and mortgages here.

When a bank makes a loan or sells a mortgage to a customer, it must retain certain levels of reserves in case the loans are not paid back. These are set by regulators like the Central Bank.

In a major study of over 600,000 mortgages across the five main Irish banks, BPFI says the level of capital reserves its members must keep are “trapped at levels of the financial crisis”.

The study says Irish banks hold almost three times the average eurozone capital amounts and over three times the amounts held in French and Spanish banks.

It says stricter mortgage lending rules brought in five years ago have had little or no impact on lowering the amounts banks must set aside.

It blames the low rates of recovery on problem loans through the judicial process here compared to Europe.

Ireland has the second highest mortgage rates in Europe, next to Greece.

Article Source – Banking Federation critical of capital reserve rules – RTE – Robert Shortt

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3,666 decrease in PUP recipients over last week

Almost 477,700 people are set to receive the Pandemic Unemployment Payment this week – a decrease of 3,666 over the last week, according to the Department of Social Protection.

Meanwhile the numbers claiming the Covid-19 Enhanced Illness Benefit fell by 34% over the last week – from 7,149 to 4,707 – reflecting the drop in overall recorded cases as Level 5 restrictions have taken effect.

The 477,665 figure for PUP claims does not include a further 188,543 people who were recorded on the Live Register at the end of January.

In total, over 666,000 workers are currently entirely reliant on the State for income support.

This week’s PUP payments will cost €143.3 million.

Minister for Social Protection Heather Humphreys noted that this week’s figures reflected the first reduction in the number of people receiving the PUP since Level 5 restrictions were introduced in late December.

“This is a positive development and shows that the rate of applications for the PUP has levelled off,” the minister said.

She added that the majority of counties had fewer people on PUP this week, with most sectors also seeing a drop.

She welcomed the fact that over 10,000 people had closed their claims to return to work, saying it was encouraging for businesses and the economy.

However, she cautioned against breaching public health guidelines to return to work, saying: “I cannot stress strongly enough that people should only be returning to work outside of their own home where it is absolutely essential.”

She also reminded the public about means-assessed financial supports – including assistance with heating costs and rent supplement – which are available to those in need during these difficult times.

The minister also welcomed the 34% drop in the number of people claiming the Covid-19 Enhanced Illness Benefit.

She described the reduction as “encouraging”, saying it reflected that the efforts people were making to adhere to Level 5 restrictions were paying dividends.

Construction saw the largest weekly drop in PUP claims, with 705 fewer people receiving the payment.

The decrease in the Wholesale/Retail sector was 679, with a reduction of 520 in Manufacturing.

All sectors except Electrical/Gas/Water supply sector will have fewer people receiving PUP this week.

The department said this reflects the number of people who have closed their claims in recent weeks to return to work.

The sectors with the highest number of PUP claims this week are Accommodation and Food Service activities (111,280) followed by Wholesale and Retail Trade (75,927) and Construction (62,197).

The counties with the highest numbers of PUP claims are Dublin (148,879) followed by Cork (48,658) and Galway (25,496).

The top three sectors with the largest number of employees closing their Pandemic Unemployment Payment to return to work are Construction (2,167), Wholesale and Retail Trade (1,785), and Manufacturing (1,308).

Dublin had the greatest number of people closing their claims to return to work (2,526), followed by Cork (1,047) and Kildare (510).

Around half of claimants are receiving the maximum benefit rate of €350 per week. 

Article Source – 3,666 decrease in PUP recipients over last week – RTE – Ingrid Miley

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ICTU warning over reduced redundancy for workers on PUP

Hundreds of thousands of workers could lose out on redundancy payments if their employment is terminated because time spent claiming the Pandemic Unemployment Payment will not count when calculating entitlements. 

The Irish Congress of Trade Unions has urged the Government to reform employment law so that the period spent on the PUP will count towards redundancy payments.

It says that without reform, some employees could lose out on up to a year of redundancy pay having been laid off due to the pandemic through no fault of their own.

At present over 480,000 people are claiming the PUP – which means that while they have been temporarily laid off, there still remains the prospect of a return to work when the pandemic ends. 

Normally after four weeks of layoff, a worker would have the right to demand a return to work, or to be made redundant – so that they are not left in limbo indefinitely.

However, last March, the Government suspended this right under Section 12 of the Redundancy Payments Act 1967 amid fears that employers would be faced with a tsunami of redundancy lump sum claims, which would then fall to the State if businesses could not pay. 

While that suspension is currently due to be lifted at the end of March next, observers believe it may be extended due to the ongoing pandemic. 

Where workers are made permanently redundant, they are entitled to at least two weeks’ pay per year of service (capped at €600 per week). 

However, in a letter to a senior official in the Department of Enterprise Trade and Employment on 5 October, 2020, the General Secretary of the Irish Congress of Trade Unions Patricia King noted that at present, the legislation does not provide for the inclusion of periods of layoff from work as “reckonable for service purposes”.

Ms King states: “In the specific instance of Covid-19 where lay-offs have been imposed on workers with no recourse to Section 12 of the Act whereby they can claim redundancy payments it is clear that a double jeopardy has been created.”

“I would request that in such circumstances no worker should be penalised in relation to their reckonable service which have arisen in circumstances beyond their control,” she added.

Ms King also cited allegations that some employers who could not pay redundancy were advising employees who were set to lose their jobs permanently to continue claiming the PUP. 

“This is highly unsatisfactory and fails to take into account that these workers are entitled to move on and seek to develop future employment opportunities,” she said.

Speaking to RTÉ News, Ms King noted that a massive tide of redundancies has not yet materialised, because the situation has “stagnated”, with people still laid off on PUP pending developments with the pandemic. 

However, she voiced concern about the implications for thousands of workers in businesses that may not survive.

Some have been on PUP consistently for almost a year, she noted, but may not be aware that that period would not count for redundancy calculations. 

She said the legislation providing the right to claim redundancy after a four-week period had been intended to avoid workers being left in limbo, and that it had never been envisaged that they could be left in this position for almost a year. 

Ms King said the matter had been raised with the government and at the Labour Employer Economic Forum, but that Congress had been told that the Attorney General was considering the matter. 

A spokesperson for the Department of Enterprise, Trade and Employment said: “This issue is the subject of discussion with representatives of trade unions and employers.”

In a statement issued this afternoon, the spokesperson said: “The current situation is that the Redundancy Payments Act 1967 provides that a period of layoff within the final three years of service before redundancy is not allowable as reckonable service and is not included as service for the purposes of the calculation of the redundancy lump sum payment.

“So, as it stands, an employee who is in receipt of the Pandemic Unemployment Payment is on layoff from their employment and that period of layoff is not allowable as reckonable service.

“The Department sought legal advice on the matter. It is legally complex for several reasons, and the Department is considering the full implications before any decision is made. The Department will continue to discuss with trade union and employer representatives.”

Article Source – ICTU warning over reduced redundancy for workers on PUP – RTE – Ingrid Miley

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