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 Header Item Covid-19 (Drug and Alcohol Services, and Homelessness): Statements (Continued)
 Header Item Ceisteanna ó Cheannairí - Leaders' Questions

Thursday, 18 February 2021

Dáil Éireann Debate
Vol. 1004 No. 4

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  12 o’clock

Ceisteanna ó Cheannairí - Leaders' Questions

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty Tá scéal ann inniu go bhfuil sé le fógairt ag NatWest amárach nach mbeidh Ulster Bank ag trádáil níos mó sa mhargadh ina dhiaidh dó a bheith anseo ar feadh 160 bliain. Drochscéal a bheas ann d’oibrithe, don phobal, do ghnáthchustaiméirí agus don gheilleagar ar fud an Stáit. Tá Ulster Bank ar cheann de na hiasachtóirí is mó do mhorgáistí agus do chomhlachtaí beaga agus measartha sa Stát seo. Gan an banc, tá baol ann go mbeidh ardú ar rátaí úis agus go dtiocfaidh lagú ar an ngeilleagar. Má tá deireadh ag teacht le Ulster Bank sa Stát seo caithfimid cinnte a dhéanamh nach dtitfidh iasachtaí isteach i lámha na gcreach-chistí.

Tomorrow, NatWest will announce the future of Ulster Bank in this State. It has been reported that Ulster Bank is set to leave the market after more than 160 years. If that is to pass, it would be a major hammer blow for workers, communities, mortgage holders and small businesses. Ulster Bank plays a key role in our communities, providing jobs for more than 2,400 people across the State and with 88 branches serving very important communities and more than 1 million customers. It is a major player in our banking sector, responsible for 20% of all SME lending and with a 15% share in the mortgage market. In 2019 alone, it provided €3.1 billion of new lending into our economy. The Deputy Governor of the Central Bank wrote to me back in September and said that the Irish banking sector is already heavily concentrated, with five banks accounting for the majority of mortgage lending and only three banks accounting for the majority of SME lending. Ulster Bank is one of them. The Deputy Governor continued: "Ulster Bank's exit from the market could contribute to an upward pressure on interest rates and weaker credit availability." That is the reality before us.

There has been speculation for months that Cerberus, one of the most aggressive vulture funds in this State, is circling Ulster Bank's entire €20.5 billion loan book. This would be an unacceptable outcome for homeowners and borrowers and it must be avoided at all costs. I have always said that the best scenario is that Ulster Bank remains a part of our banking sector. I hope that is what will come to pass tomorrow. However, if it comes to pass that NatWest announces Ulster Bank's withdrawal, given its impact on the banking sector, communities, borrowers and, indeed, the economy, there is a responsibility on the Government to act to ensure that all that can be done is done to minimise the damage that would be caused. We could have a €20.5 billion loan book on the line. We cannot allow vulture funds with no interest in our communities, businesses or economy to rip up that loan book.

The State remains a key player in the Irish banking sector, with a 14% stake in Bank of Ireland and a majority shareholding in both AIB and Permanent TSB. The Government must now look at how those pillar banks and Permanent TSB could play a lead role, if the worst comes to pass tomorrow, by offering some degree of security to mortgage holders, businesses, personal customers and workers. Has the Tánaiste spoken to either of the pillar banks or Permanent TSB to track a path forward in the interest of Ulster Bank staff and customers? Does he agree that now is the time to create a third force in the banking sector to challenge AIB and Bank of Ireland? On my request, the finance committee wrote to the Minister for Finance and the Central Bank a number of weeks ago requesting that they take an active role in responding to the possible withdrawal of Ulster Bank from the market? Will the Tánaiste commit to that today?

The Tánaiste: Information on Leo Varadkar Zoom on Leo Varadkar I thank the Deputy. I am aware of the media reports in regard to the future of Ulster Bank in the Republic of Ireland. This is, as everyone in the House will appreciate, a commercial matter for its owner, NatWest. It will not be a Government decision, nor does it require Government approval. However, it is a matter of real concern and one that the Government is taking very seriously. It is a matter of real concern to Ulster Bank's customers, staff and the communities it serves.

The Minister for Finance has been in close contact with Ulster Bank and its parent, NatWest, in recent days and, indeed, in recent months, and he has kept me informed of developments. He is assessing all options with a view to protecting customers, minimising job losses and avoiding compulsory redundancies where possible, and also reducing the negative impact there could be on competition for banking services in Ireland. It is important to say that in any scenario, people's deposits and savings are fully protected and can be transferred to another bank. Two months' notice must be given to customers of any change or development such as this. When it comes to mortgages and loans, the terms and conditions will remain unchanged and EU consumer protections continue to apply.

In regard to the suggestion that we try to develop a third force in our banking sector that would be able to compete with Bank of Ireland and AIB, this is something that I and the Government support. If it is possible to develop a solution on those lines, that is something we are exploring and want to explore.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty I thank the Tánaiste. We recognise that there are protections there, including for mortgage holders. However, if these loans fall into the hands of vulture funds, there could, upon review of those mortgages, be significant consequences for borrowers. I also recognise that this is a decision for NatWest and that it is outside the control of Government. However, if the decision is taken tomorrow, which seems to be the direction of travel that this has been on for quite a period of time, there is a responsibility on Government to act, as the Tánaiste says, to protect borrowers, customers and staff, protect the footprint of our banking sector and also protect competition within the sector.

I ask the Tánaiste to ensure that, after tomorrow's decision, there is an immediate engagement with the finance committee and Opposition spokespersons and that the Government lay before us an options paper as to how we can utilise our majority State-owned shareholding in our banks to try to achieve the objectives which I think everybody in the House shares, namely, to protect customers, business owners, mortgage holders, staff and our banking sector.

The Tánaiste: Information on Leo Varadkar Zoom on Leo Varadkar I thank the Deputy. I will be speaking to the Minister for Finance about this again today. I am sure he will be willing to engage with Opposition spokespeople and members of the committee on this issue as things develop. I will take that up with him later but I am sure he will be happy to brief spokespeople and engage with the committee.

As the Deputy knows, the Minister has already engaged with representatives from both Ulster Bank and NatWest in recent months. He also met with the Financial Services Union last December, as did I in recent months. When he met with representatives of Ulster Bank last October, he emphasised that he expected that staff representatives would be consulted and kept informed of any developments throughout the review process. I am concerned about the impact that ongoing media speculation is having on staff and customers of the bank. As the Deputy knows, customers, staff and the Central Bank must be informed promptly of any decisions that are made.

On the question of whether other banks in which the State has a shareholding have an interest in elements of Ulster Bank, while I appreciate that this is a pertinent question, I cannot comment on speculation about that as it would be inappropriate to do so for reasons of Stock Exchange market abuse rules. The Central Bank has clear requirements that apply when firms cease operations or transfer operations to another entity. Customers must be informed about those decisions and given at least two months' notice to move to alternative providers. If their loans are transferred, they must be given full details of the arrangements. All mortgages or loans which are sold or assigned to a new creditor will continue to be subject to the terms of the contract entered into by the borrower. If a loan is sold, the relevant Irish and EU consumer protections continue to apply.

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