Business Irish

Monday 16 September 2019

Ulster Bank unclear over numbers who lost homes in tracker mortgage debacle

Gerry Mallon, CEO of Ulster Bank
Gerry Mallon, CEO of Ulster Bank

Gretchen Friemann

Ulster Bank remains unclear about the number of tracker mortgage borrowers who lost their homes as a result of the long-running tracker mortgage debacle and will not offer compensation to all affected customers until next year.

Gerry Mallon, chief executive of Ulster bank, made the admission this morning at an appearance before the Oireachtas Finance Committe.

He also revealed the number of borrowers caught up in the overcharging scandal, which has buffeted the industry for years, has risen to 3,500 from an earlier calculation of 2,000.

According to its recent results Ulster Bank, owned by UK parent RBS, has set aside €206m to cover the costs of a mortgage redress scheme for customers but in his submission to the committee this morning, Mr Mallon said the precise compensation owed to each customer has yet to be caclulated.

He also conceded the bank remains unclear about how many customers lost their homes as a result of the bank's failures. "We have not concluded the process of establishing the number of customers for who the actions of the bank caused the loss of their homes," he said.

While he stressed the number of borrowers affected to this extent is low, he warned the figure may rise.

"We have identified a small number of customers for whom this is the case and we have made contact with them already to begin the process of redress and compensation. The numbers are currently low but that could change as we work through the process so I can not confirm final numbers until we are through Phase three."

The Ulster Bank boss said a customer redress scheme remains under construction as the lender grapples with the scale of compensation owed to each borrower.

"The number of customers remediated so far is small. We are starting the process very slowly in order to test all of the calculations for each customer. We are building up a process to have a much more intensive model for calculation, contact and remediation."

"Nevertheless," he added, "the process will take a number of months and will run well into 2018 before all cases are addressed. Customers then have a further 12 months to appeal if they are unhappy with any aspect of our redress and compensation payment."

While attention is likely to centre on the Ulster Bank's handling of the tracker mortgage issue, Mr Mallon also sought to emphasise the lender's determination to expand its local operations. He said "we are the third largest player in the Irish market and we want to grow our market share."

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