Natwest considering closing Ulster Bank in the ROI

Timing belt

Jim2007 wrote: »

From experience, it will take about 10 years to fully settle all of the banks affairs, but most of the business will be gone within 6 months. And there is not much the central bank can do since it will no longer be a licensed bank. The biggest stick the Central Bank has is to withdraw a license, but if you don’t want the license....

So long as the bank terminates it’s relationship with its customers in accordance the T&C they both signed up to there is no recourse.

Exactly...I also assume the 10 years is where it is a shell of a company with no staff and just closing out legal stuff.. the real business and staff is disposed off very quickly at the outset once announced and is easily achievable within a year.

thunderdog

While there won’t be a merger with PTSB, PTSB may be ‘encouraged’ to take on some of ulster banks less favourable portfolios, similar to how PTSB was ‘encouraged’ (i.e. told) to take on the newbridge Credit union book back in the last financial crash

silver2020

Geuze wrote: »

I don't recall Danske taking 7 years.

They scaled back at first, yes, by closing retail current accounts, as far as I recall.

And also sold the mortgage book.

I don't have any dates to hand, but it did not take 7 years.

6 years

https://www.danskebank.ie/en-ie/Personal/customer-service/Customer-information/2013/Pages/closing-danske-account.aspx

Assuming Ulster pull out, you can probably apply a similar timeline.

Current accounts and credit card 3-6 months notice of usage being terminated, but 2-6 years to pay off balances.

Mortgages were 3-4 years before the servicing was transferred (danske still owned the mortgages afaik).


The only people who will need to do anything within 3-6 months are current account holders and credit card holders and its very easy to switch to another bank - you fill out one form, the bank does all the work with direct debits and standing orders.




The other possibility is that they will continue but with a much more scaled down branch network and relevant drop in staff numbers. These branches will be come regional hubs rather than traditional branches.

the_amazing_raisin

silver2020 wrote: »

The other possibility is that they will continue but with a much more scaled down branch network and relevant drop in staff numbers. These branches will be come regional hubs rather than traditional branches.

I could see them trying to do this, UB becoming another Revolut or N26, given the investments they've been putting into the online side of the business over the past decade they might not want to waste it


And presumably in a post Brexit world there is some value in having a banking license within the EU. Does NatWest have any other EU based banks?

AlmightyCushion

cruisey1987 wrote: »

I could see them trying to do this, UB becoming another Revolut or N26, given the investments they've been putting into the online side of the business over the past decade they might not want to waste it


And presumably in a post Brexit world there is some value in having a banking license within the EU. Does NatWest have any other EU based banks?

A better comparison would be KBC. A traditional bank with only a handful of branches/hubs here.

Jim2007

cruisey1987 wrote: »

I could see them trying to do this, UB becoming another Revolut or N26, given the investments they've been putting into the online side of the business over the past decade they might not want to waste it

One looser taking over another with what and for what purpose??? We're in this situation because there is over capacity and banks are not profitable.

cruisey1987 wrote: »

And presumably in a post Brexit world there is some value in having a banking license within the EU. Does NatWest have any other EU based banks?

They are already have multiple licenses in their own right.

Claw Hammer

The reality is that bricks and mortar banking is at nothing for the momnent. No bank wants cash deposits coming from local businesses and doesn't want low profit retail customers coing in the doors of a bank branch. Most aspects of the banking operation which make money can be done remotely. The overheads of maintaining a branch network are enormous. The benefits of having branches are diminishing.

baldbear

If they announce Friday they are pulling out will that mean straight away new mortgages won't be offered or could that take awhile? Our fixed is up with them in a few months.

silver2020

baldbear wrote: »

If they announce Friday they are pulling out will that mean straight away new mortgages won't be offered or could that take awhile? Our fixed is up with them in a few months.

why would that affect you?. Only your fixed rate is up, not your mortgage. They will continue that as normal.

baldbear

silver2020 wrote: »

why would that affect you?. Only your fixed rate is up, not your mortgage. They will continue that as normal.

I'm clueless and asking for selfish reasons. I don't know what usually happens in this scenario. Are new mortgages stopped straight away, a years time etc.

I was thinking of just staying with them on another fixed rate if possible.

Larbre34

The mortgage book will go to NatWest. NatWest already has multiple banking licences in Ireland other than UB anyway for its investment operations so I doubt mortgage customers will notice a difference.

Theres a good chance the other providers will offer switcher incentives to coincide with UBs demise so I wouldn't be concerned to have my mortgage with them at the moment.

py

silver2020 wrote: »

why would that affect you?. Only your fixed rate is up, not your mortgage. They will continue that as normal.

The fixed rate being up presents an issue when the variable interest you're being moved to is not competitive. You then need to get your financial affairs in order for a 6 month period that other banks would require. If you're in a position to do that, that's great but if not it can result in paying over the odds for some time.

Timing belt

Larbre34 wrote: »

The mortgage book will go to NatWest. NatWest already has multiple banking licences in Ireland other than UB anyway for its investment operations so I doubt mortgage customers will notice a difference.

Theres a good chance the other providers will offer switcher incentives to coincide with UBs demise so I wouldn't be concerned to have my mortgage with them at the moment.

The only entity on the cbi register is Natwest markets nv that has a credit license

silver2020

py wrote: »

The fixed rate being up presents an issue when the variable interest you're being moved to is not competitive. You then need to get your financial affairs in order for a 6 month period that other banks would require. If you're in a position to do that, that's great but if not it can result in paying over the odds for some time.

I can see why so many people pay over the odds on mortgages as so many don't understand them.

There is no 6 month waiting period None, nada, zilch. That poster could start switching tomorrow morning if a new rate was not competitive. Its also written in your contract what rate you will move to and it is very unlikely that any company servicing the mortgage book or taking it over will suddenly jack rates up as its extremely easy to switch to another institution once your finances are good condition.

Of course, a few may not have the ability to switch, but a rate change would affect ALL customers, so that is a risk no bank will take as they'd lose all the good customers immediately.


Lets not scaremonger over this

Jim2007

Claw Hammer wrote: »

The reality is that bricks and mortar banking is at nothing for the momnent. No bank wants cash deposits coming from local businesses and doesn't want low profit retail customers coing in the doors of a bank branch. Most aspects of the banking operation which make money can be done remotely. The overheads of maintaining a branch network are enormous. The benefits of having branches are diminishing.

Even the digital banks are posting losses... The reality is that they have successfully turned the industry into a commodity industry and an unprofitable one at that.

Jim2007

baldbear wrote: »

If they announce Friday they are pulling out will that mean straight away new mortgages won't be offered or could that take awhile? Our fixed is up with them in a few months.

It is all speculation at this point and only time will tell which way NatWest will jump.

It is important to remember that this is a very different situation, than that that went before. We are talking about a profitable loan book, not a block of bad or doubtful debt. So the players are going to come with a differ perspective. They are more likely to be interested in managing it as a going concern that winding it down.

Once a decision is made and if the decision it to wind down the bank, then it will definitely not be business as usually, but how that will impact renewals is anyones guess. I'd expect any buyer to be interested in renewing and continuing current loans at a minimum as it represent a good return in today's market. But I could be totally wrong.

Timing belt

Jim2007 wrote: »

It is all speculation at this point and only time will tell which way NatWest will jump.

It is important to remember that this is a very different situation, than that that went before. We are talking about a profitable loan book, not a block of bad or doubtful debt. So the players are going to come with a differ perspective. They are more likely to be interested in managing it as a going concern that winding it down.

Once a decision is made and if the decision it to wind down the bank, then it will definitely not be business as usually, but how that will impact renewals is anyones guess. I'd expect any buyer to be interested in renewing and continuing current loans at a minimum as it represent a good return in today's market. But I could be totally wrong.

A buyer would need a license by CBI to offer renewals or new lending....so assuming none of the existing banks buy the loan book it will be a wind down of the loan book

Q&A

Timing belt wrote: »

A buyer would need a license by CBI to offer renewals or new lending....so assuming none of the existing banks buy the loan book it will be a wind down of the loan book

Not necessarily it could be licensed in another European country. Regardless it's not that difficult to get a license if a firm wants to offer mortgages. Avantcard offers mortgages. While it's licenced by the CBI it's not a bank. You only need a banking license if you take deposits.

http://registers.centralbank.ie/FirmDataPage.aspx?firmReferenceNumber=C129700

jj880

https://www.irishtimes.com/business/financial-services/law-to-block-sale-of-ulster-bank-assets-to-vulture-funds-considered-1.4486734

"introduction of legislation to require that any sale of Ulster Bank assets is to another pillar bank or banks, notwithstanding the competition issues that might arise as a result,” the report added."

Paschal has already said it's nothing to do with the government. Its almost like the government is trying (poorly) to cover their position for all possible outcomes. Next week it will be: Sure look didnt we think about blocking the sale to X but we couldn't block it because of Y. It doesnt sound good with this kind of spoofing going on in the run up to the announcement.

Darc19

jj880 wrote: »

https://www.irishtimes.com/business/financial-services/law-to-block-sale-of-ulster-bank-assets-to-vulture-funds-considered-1.4486734

"introduction of legislation to require that any sale of Ulster Bank assets is to another pillar bank or banks, notwithstanding the competition issues that might arise as a result,” the report added."

Paschal has already said it's nothing to do with the government. Its almost like the government is trying (poorly) to cover their position for all possible outcomes. Next week it will be: Sure look didnt we think about blocking the sale to X but we couldn't block it because of Y. It doesnt sound good with this kind of spoofing going on in the run up to the announcement.

That's an Oireachtas committee. Basically a shower of publicity seeking back benchers from various parties who know feck all about anything.

They come up with sh1te like this to pander to tabloid types.

Yeah, let's make north Korea type rules and also ask more banks to set up here. Hypocritical fools

Members of the committee include Pearse Doherty SF, Paul 'mouthy' Murphy, John 'I hate FF' McGuinness FF and John 'I hate FG' Deasy FG.

FF and FG tds are there to keep them busy and out of harm's way.

Jim2007

jj880 wrote: »

https://www.irishtimes.com/business/financial-services/law-to-block-sale-of-ulster-bank-assets-to-vulture-funds-considered-1.4486734

"introduction of legislation to require that any sale of Ulster Bank assets is to another pillar bank or banks, notwithstanding the competition issues that might arise as a result,” the report added."

Paschal has already said it's nothing to do with the government. Its almost like the government is trying (poorly) to cover their position for all possible outcomes. Next week it will be: Sure look didnt we think about blocking the sale to X but we couldn't block it because of Y. It doesnt sound good with this kind of spoofing going on in the run up to the announcement.

A lot of political nonsense. The construction has a couple of things to saw about ownership of private property... and then there is EU competition law... both of which leaves them very impotent.

Darc19

Darc19 wrote: »

That's an Oireachtas committee. Basically a shower of publicity seeking back benchers from various parties who know feck all about anything.

They come up with sh1te like this to pander to tabloid types.

Yeah, let's make north Korea type rules and also ask more banks to set up here. Hypocritical fools

Members of the committee include Pearse Doherty SF, Paul 'mouthy' Murphy, John 'I hate FF' McGuinness FF and John 'I hate FG' Deasy FG.

FF and FG tds are there to keep them busy and out of harm's way.

Absolute idiots!!!! Nobody will be incentivised to set up here. If anyone was smart they’d be courting AvantMoney to take over, Bankinter could set up shop here with branch network and all, fold CC and new mortgage business together and leave the SME up for the highest bidder.

Jim2007

Deleted User wrote: »

Absolute idiots!!!! Nobody will be incentivised to set up here. If anyone was smart they’d be courting AvantMoney to take over, Bankinter could set up shop here with branch network and all, fold CC and new mortgage business together and leave the SME up for the highest bidder.

In a parallel universe! Like the rest of the European banking sector Bankinter is struggling and reporting losses.... The last thing investors and venture capitalists want to hear about now is that their banking interests are taking on more loss making operations.

NatWest is not getting out of the market because it’s a great business!

Q&A

[Deleted User] wrote: »

Absolute idiots!!!! Nobody will be incentivised to set up here. If anyone was smart they’d be courting AvantMoney to take over, Bankinter could set up shop here with branch network and all, fold CC and new mortgage business together and leave the SME up for the highest bidder.

Let's not confuse a loan portfolio that will be in demand with a delivery channel which appears outdated.

There's is some money to be made through traditional lending but not enough to cover the cost of running a branch network and turn sufficient profit. The likes of avantmoney which has no branches and works via brokers is more cost effective. An n26 style completely virtual model would likely be even more efficient.

silver2020

The day of bank branches in every small town is a thing of the past. No-one will take this over with branches. If they decided to stay open, it will be without branches. I reckon BOI will close at least half their branches within 5 years, same for AIB and PTSB. The post office will be able to deal with some of the mundane everyday tasks and Credit Unions (soon with debit cards) will also play a role in everyday banking.

But there's simply no need for bank branches. I've a business and can't remember the last time I actually needed a service that had to be done in a branch. As for personal banking (Ulster) - its been almost 2 years since I was in a branch and even then it was a one-off (won over €5k cash in Punchestown - can't see myself having a day like that again!! ) .

Sheep Shagger

An Post are beefing their financial services, there's nothing to stop a new player coming in to buy the business. Close the branch network and outsource that bit to An Post (if they want to stick with a current account offering)

As has been said before, bankimg and in particular, lending can and is profitable where running a branch network isn't. Neither is running currently accounts with poor balances, poor cross selling opportunities and dealing with processing paper (cheques) and physical notes and coins.

Anyway we're all speculating until Friday.

Timing belt

Sheep Shagger wrote: »

An Post are beefing their financial services, there's nothing to stop a new player coming in to buy the business. Close the branch network and outsource that bit to An Post (if they want to stick with a current account offering)

As has been said before, bankimg and in particular, lending can and is profitable where running a branch network isn't. Neither is running currently accounts with poor balances, poor cross selling opportunities and dealing with processing paper (cheques) and physical notes and coins.

Anyway we're all speculating until Friday.

Don’t forget the lending book is financed by the customer deposits without them an entity needs wholesale funding which is not the most stable form of funding. Yes a fund could continue lending but if the market share is significant it will mean new legislation as the central bank will step in and regulate the shadow banking sector because of the risk to the financial system.

Q&A

Timing belt wrote: »

Don’t forget the lending book is financed by the customer deposits without them an entity needs wholesale funding which is not the most stable form of funding. Yes a fund could continue lending but if the market share is significant it will mean new legislation as the central bank will step in and regulate the shadow banking sector because of the risk to the financial system.

Currently the mortgage book at UB is deposit funded but selling the loan book separately would decouple that relationship.
It's true the CBI would regulate it but the level of regulation would be a lot less then if it is not a deposit taking institution. If it's not taking deposits or won't need a banking license. Likewise it won't have to hold capital to the same degree as a bank.

In other words it would have a competitive advantage. Where it would lose out of cross selling like banks (try to) do.

Timing belt

Q&A wrote: »

Currently the mortgage book at UB is deposit funded but selling the loan book separately would decouple that relationship.
It's true the CBI would regulate it but the level of regulation would be a lot less then if it is not a deposit taking institution. If it's not taking deposits or won't need a banking license. Likewise it won't have to hold capital to the same degree as a bank.

In other words it would have a competitive advantage. Where it would lose out of cross selling like banks (try to) do.

Agreed they would have a competitive advantage and the current regulations requirements are not as strict. What I am saying is that new regulations will come into play if the shadow banking sector grows... it is already in the spot light of the CBI

JTMan

Its over ... The Irish Times are confirming tonight that Ulster Bank are set to exit Irish market after more than 160 years.

Board approval on Thursday evening. Wind down announcement on Friday morning.

Unclear if Natwest will be able to say who is purchasing what parts on Friday or if that will happen at a later stage.