independent

Sunday 20 April 2014

Departing Dankse Bank does u-turn on customer loans

Danske Bank Head Office in Tallaght, it has been announced that the bank is to cut 150 jobs. Picture credit; Damien Eagers / Irish Independent 31/10/2013
Danske Bank Head Office in Tallaght. Picture credit; Damien Eagers / Irish Independent 31/10/2013

DANSKE Bank has been forced to soften its approach to thousands of customers as it finalises plans to close its retail banking operation.

Some 100,000 Danske Bank personal customers will lose their day-to-day banking facilities when the Danish-owned bank ceases retail operations here in March.

The bank had ruled out providing loans for customers with overdrafts and credit cards that they are unable to clear or transfer to another bank.

When Halifax/Bank of Scotland closed in 2010 it offered low-cost loans to those unable to clear their credit card and overdraft balances.

Before Christmas, Danske Bank said it would not give loans to those unable to transfer card and overdraft debt to other banks. But it now says it prepared to work with those who can't find alternative banking arrangements.

However, the bank insisted there will be no large-scale offer of loans for those with stubborn debts that other banks do not want to take on.

Customers who have contacted this newspaper have complained about the bank refusing loans, and a dearth of information on the close-down plans.

A spokeswoman for the bank denied the wind-up operation for retail customers was being badly handled, insisting it was working closely with the Central Bank.

OVERDRAFTS

"This is not being poorly handled. Not at all. We are continuing to deal with queries from people on our phone lines, the website is being continually updated and we have written to half of our personal customers," she said.

Loans would not be given out on "a wholesale basis" to those struggling to repay card and overdraft balances.

But the bank asked anyone with financial difficulties to get in touch and said it would deal with each struggling customer on a case-by-case basis, she said.

Customers have been given two months to find a replacement current account, and three months to transfer a credit card and overdraft to another bank.

Mortgage and personal loan accounts won't be unaffected by the closure of the retail division of Danske. Danske has some of the cheapest tracker mortgages in the market, with some set as low as 0.5pc over the European Central Bank rate.

This means some mortgage customers are paying interest rates of just 0.75pc on their home loans.

The spokeswoman was unable to say what would happen to those people who were forced to open a current account to service a mortgage.

She added that the bank has been in touch with customers that have average balances outstanding on credit cards of less than €2,000, while the customers with overdrafts that have been contacted have an average balance of less than €1,000.

Irish Independent

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