KBC exiting Ireland

Yggr of Asgard

Mastroianni wrote: »

just got a feedback from my payroll admin, he said that it wouldn't be a problem send my salary to N26 but it might be a problem with Irish revenue because a German bank can be suspicious for money laundry, therefore it might be an issue...
honestly I don't see where the issue is since in my N26 account there is my PPSN...

And N26 also having reported the fact that you opened the account to Revenue (there is no more hidden account).

So, if Revenu thinks there is something going on, they can simply ask you to do a tax return.

Mastroianni

any news so far guys?

Yggr of Asgard

Mastroianni wrote: »

any news so far guys?

What is the daily reminder every time you log into the App or the online interface not enough?

Mastroianni

they just don't remind at all.

Smee_Again

Mastroianni wrote: »

any news so far guys?

What news are you looking for? Do you think KBC or BOI are going to be releasing statements on how negotiations are going?

When it's all done and sorted KBC will let you know what your options are, until them just relax.

Think of it like a service provider, if Sky decided to pull out of Ireland you'd just move to a different TV/ISP at the end of your contract, this is no different.

patscott27

I was just wondering about the 0.2 per cent discount for keeping my current account on my fixed mortgage with Kbc. When it is moved to BOI will they honour the discount?

Bob24

patscott27 wrote: »

I was just wondering about the 0.2 per cent discount for keeping my current account on my fixed mortgage with Kbc. When it is moved to BOI will they honour the discount?

I thought about this as well.

I haven't looked at the exact contractual details, but I would not be too hopeful:
1) KBC themselves have always marketed it as an "optional 0.20% discount" so I am not sure they are contractually obliged to keep applying this discount anyway (even without BOI entering the picture).
2) Even assuming they do have a contractual obligation, one term of the offer is that you must get your salary mandated to a KBC current account and pay the mortgage from that account at all time to keep qualifying for the discount. Once KBC has left the Irish market, technically no-one will meet this condition (the wording doesn't say that you need a current account with your current mortgage provider, it does say a "KBC Current Account"; it is not clear whether legally this should be reinterpreted as a BOI current account once the transaction is complete, and even if this was the case BOI could decide play dirty and find a way to make their current accounts even more expensive and unattractive for former KBC customers).

All this is a bit unclear, but I think if BOI has any opportunity to legally avoid honouring the discount, it is what they will chose to do (I don't think they would to it as a gesture of good will).

So basically it will come down to the interpretation of their contractual obligations.

JTMan

After the tracker mortgage scandal, the last thing BoI will want is another scandal/media hysteria linked to removing discounts for former KBC customers.

Even if the contractual obligations give BOI wiggle room, they may decide that it is best not to remove the discounts from a reputation perspective.

The only thing is that with the KBC current account extra you had no fees if you passed 2k through it. BOI might extend the offer if you move your current account to them but you’ll be on the hook for €6pm current account fees.

Smee_Again

One would assume the discounts are just factored into the price BOI pay for the mortgage book. No doubt BOI would up the rate if they could, but there's no reason why they can't honour it either.

Bob24

Smee_Again wrote: »

One would assume the discounts are just factored into the price BOI pay for the mortgage book. No doubt BOI would up the rate if they could, but there's no reason why they can't honour it either.

First KBC and BOI will need to agree on what contractual obligations BOI will have with regards to the discount after the transfer of those mortgages. If the agreement is that they have an obligation to keep applying the discount, yes for sure BOI will rightly argue that it should be reflected in the financial agreement between the 2 banks. But if the agreement is that they won't have any obligation, for sure KBC will also rightly argue that BOI needs to acquire those mortgages based on their non-discounted rate (meaning BOI needs to pay a higher amount to KBC because the loans can deliver a higher yield for BOI).

Smee_Again

Bob24 wrote: »

First KBC and BOI will need to agree and what contractual obligations BOI will have with regards to the discount after the transfer of those mortgages. If the agreement is that they have an obligation to keep applying the discount, yes for sure BOI will rightly argue that it should be reflected in the financial agreement between the 2 banks. But if the agreement is that they won't have any obligation, for sure KBC will also rightly argue that BOI needs to acquire those mortgages based on their non-discounted rate (meaning BOI needs to pay a higher amount to KBC because the loans can deliver a higher yield for BOI).

Yeah, all fair points.

The J Stands for Jay

cisk wrote: »

The only thing is that with the KBC current account extra you had no fees if you passed 2k through it. BOI might extend the offer if you move your current account to them but you’ll be on the hook for €6pm current account fees.

Still cheaper than a 0.2% mortgage rate increase.

Rock Steady Edy

Can you imagine the uproar from KBC customers if through no fault of their own they were being levied with bank charges on their current accounts and an extra 0.2% on their mortgages at the same time? BoI would want to ensure a seamless transition and infuriating customers at the start would not be a good way of helping the business to stay long term.

KBC customers are probably in the main customers who have deliberately avoided the main 2 banks.

I imagine customers with both a current account and a mortgage which has always attracted a 0.2% discount who transfer to BoI (should the transaction even get that far) would have a period of time when the same T&Cs applied.

That's what happened when Rabodirect transferred their Investment Arm to Cantor and Tesco Bank transferred their business to Avantcard - I was a customer of both. In the end, I sold my holding with Cantor just before the fees changed and have switched credit cards but stayed with Avantcard. The switching phase allows the company a period of time to prove itself that it's worthy of your business. If you still don't like it, you can still switch before the end of the grace period.

It would be a good hypothetical question to ask KBC for anyone in the process of fixing with them now.

65535

Got an official letter this morning stating what we already know

PommieBast

Just got an email from BoI stating that they are changing their T&Cs so that they can apply negative interest rates to bank accounts.. :mad:

Smee_Again

PommieBast wrote: »

Just got an email from BoI stating that they are changing their T&Cs so that they can apply negative interest rates to bank accounts.. :mad:

On cash balances over €1m though, right?

PommieBast

Smee_Again wrote: »

On cash balances over €1m though, right?

I suspect it will quickly get applied to lower balances..

JTMan

PommieBast wrote: »

Just got an email from BoI stating that they are changing their T&Cs so that they can apply negative interest rates to bank accounts.. :mad:

The BoI T&C's, on most accounts, have allowed negative rates for some time.

On cash balances over €1m though, right?

Yeah, media reports have said that both AIB and BoI are applying negative rates to personal balances over 1 million.

Bob24

Yes I think most if not all Irish banks have updated their T&Cs in the past year or 2 in order to allow for negative rates on any account (as said above it doesn’t mean they are actually applying negative rates to everyone yet, but the fact that they are allowing themselves to do it in the T&Cs gives an idea of what is coming).

I believe N26 are also charging negative rates for new customers with a balance over 50000 euros (they haven’t enforced it for “old” customers though, presumable because they don’t want to push new T&Cs on them at this stage).

We can all thank the ECB for this …

Yyhhuuu

I have two savings accounts with BOI where 3rd parties pay in to. I have 2 separate accounts for accounting purposes as 2 separate payors Had accounts for years. I closed BOI current account for KBC.

Now BOI updated their T&C to say at future date you can only have savings/ deposit a/c if you have a current a/c. Just can't believe this.

When this happens which banks should I open the savings accounts. I need 2 to 3 deposit accounts as 2 to 3 separate payors each paying once a month. For accounting purposes much easier for me to have separate accounts.

I was thinking of moving to N26 for current account.

The move by BOI is worrying. Do AIB have similar terms and conditions that you must have a current account to open a savings account?

PommieBast

I have four Irish bank accounts (AIB,BoI,PTSB,Ulster) with maxed out deposit limit guarantees in three of them as the result of an aborted property purchase, so somewhere along the line i will get classed as a heavy saver and hence screwed. I need an exit strategy

Bob24

PommieBast wrote: »

I have four Irish bank accounts (AIB,BoI,PTSB,Ulster) with maxed out deposit limit guarantees in three of them as the result of an aborted property purchase, so somewhere along the line i will get classed as a heavy saver and hence screwed. I need an exit strategy

Unless you are planning to used that cash for a property (or whatever else) in the near future, you definitely need to consider your options. You are effectively already been taxed on those deposits as the interest rate your are receiving is lower than inflation so the purchasing power of your savings is slowly shrinking. Plus yesterday the US posted inflation figures higher than anyone had anticipated. If this spreads to Europe (which IMO is likely) it will get even more urgent not to hold too much cash.

Bob24

Yyhhuuu wrote: »

I have two savings accounts with BOI where 3rd parties pay in to. I have 2 separate accounts for accounting purposes as 2 separate payors Had accounts for years. I closed BOI current account for KBC.

Now BOI updated their T&C to say at future date you can only have savings/ deposit a/c if you have a current a/c. Just can't believe this.

When this happens which banks should I open the savings accounts. I need 2 to 3 deposit accounts as 2 to 3 separate payors each paying once a month. For accounting purposes much easier for me to have separate accounts.

I was thinking of moving to N26 for current account.

The move by BOI is worrying. Do AIB have similar terms and conditions that you must have a current account to open a savings account?

Banks can fund themselves almost for free from the ECB, and they are getting charged a negative rate to deposit cash with the ECB: https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html

So once they have their required liquidity ratio, to them small depositors are an operational and financial burden more than anything else (the main point in taking them as customers is to sell them other services on which the bank is making money). So unfortunately I think the experience you are having is likely to spread to most banks.

PCeeeee

Rock Steady Edy wrote: »

KBC customers are probably in the main customers who have deliberately avoided the main 2 banks.

Or who have switched away. I wonder would BOI recognise they are getting customers that will switch?

Bob24

PCeeeee wrote: »

Or who have switched away. I wonder would BOI recognise they are getting customers that will switch?

For current accounts and savings accounts, I'd say yes they know that and they don't care.

But what they are after is mortgages, and once KBC customers have moved to BOI and UB customers have moved to AIB, competition for low rates will be greatly reduced and BOI realistically should retain a decent chunk of those mortgages.

PCeeeee

Bob24 wrote: »

For current accounts and savings accounts, I'd say yes they know that and they don't care.

But what they are after is mortgages, and once KBC customers have moved to BOI and UB customers have moved to AIB, competition for low rates will be greatly reduced and BOI realistically should retain a decent chunk of those mortgages.

Sadly Bob that sounds entirely plausible. Sigh.

silver2020

Bob24 wrote: »

For current accounts and savings accounts, I'd say yes they know that and they don't care.

But what they are after is mortgages, and once KBC customers have moved to BOI and UB customers have moved to AIB, competition for low rates will be greatly reduced and BOI realistically should retain a decent chunk of those mortgages.

PCeeeee wrote: »

Sadly Bob that sounds entirely plausible. Sigh.

Market is showing that this is not the case.

Ireland is a small market, yet even with KBC & Ulster moving out, there are still 6 options open to you. (7 if you include EBS, but they are owned by AIB)

Three of them are private equity funded where long term pensions are invested and they will want the money invested and will be happy with 1%-2% returns.

The two announcements yesterday by Finance Ireland and Avant and a possible further announcement next week by ICS/Dillosk will show that there is plenty of competition out there and the retail banks will have to follow.

These non-retail bank lenders have a much more streamlined operation. No branches, a lot of technology and don't have the legacy issues. They pay a small fee to brokers or a small commission or deal direct and their roll-off rates are also substantially cheaper.

PommieBast

Bob24 wrote: »

Unless you are planning to used that cash for a property (or whatever else) in the near future, you definitely need to consider your options. You are effectively already been taxed on those deposits as the interest rate your are receiving is lower than inflation so the purchasing power of your savings is slowly shrinking. Plus yesterday the US posted inflation figures higher than anyone had anticipated. If this spreads to Europe (which IMO is likely) it will get even more urgent not to hold too much cash.

Longer-term I'll be switching it into Sterling and buying assets in the UK. However one factor is what will happen to the exchange rate once the vaccination bounce fades and Brexit's effects are no longer being masked.

Bob24

silver2020 wrote: »

Market is showing that this is not the case.

Ireland is a small market, yet even with KBC & Ulster moving out, there are still 6 options open to you. (7 if you include EBS, but they are owned by AIB)

Three of them are private equity funded where long term pensions are invested and they will want the money invested and will be happy with 1%-2% returns.

The two announcements yesterday by Finance Ireland and Avant and a possible further announcement next week by ICS/Dillosk will show that there is plenty of competition out there and the retail banks will have to follow.

These non-retail bank lenders have a much more streamlined operation. No branches, a lot of technology and don't have the legacy issues. They pay a small fee to brokers or a small commission or deal direct and their roll-off rates are also substantially cheaper.

Lets see what happens once KBC and UB are actually gone (right know they are still applying competitive pressure as it still makes sense for people to apply for mortgages with them and lock rates which will be retained even of the mortgage is moved to a new lender).

But I am not as hopeful as you are. The new lenders are small operations which are in it for profits. So they have no incentive massively reduce rates and they'll undercut retail banks just enough to acquire customers at a rate they can support. And I suspect they will never be allow to grab any significant share of the market (if it comes to a point whereby they are becoming too large, I would expect offers will be made which their owners can't refuse, as was done with UB and KBC).