New low-cost account puts pressure on the main banks to cut their fees
THE pressure to radically ease the cost of day-to-day banking for consumers is building, as a leading bank is set to launch a new low-cost current account.
Belgian-owned KBC Bank is set to become the first entrant in the current-account market here in more than a decade, the Irish Independent has learned.
It follows revelations that Permanent TSB is to scrap fees for existing and new customers who take up its current account.
The moves by KBC and Permanent TSB are set to ratchet up pressure on AIB and Bank of Ireland, in particular, as the two banks have made it almost impossible for customers to avoid fees and charges.
KBC Bank, which already has a strong presence here in mortgage lending, corporate banking and savings, is in test phase with its new product.
The bank's executive director Dara Deering confirmed the move.
"We are currently engaged in product testing and research with a view to launching our new current account later in the year and further details will be available when we are closer to launching our current account on the market," she said.
The bank would not reveal details of how the new product would work, other than saying it aims to bring "real choice and welcome competition to the market".
The new KBC current account is expected to be cheaper than those offered by AIB and Bank of Ireland, and to compete with the plans next month by Permanent TSB to drop fees and charges on everyday transactions.
KBC Bank Ireland opened its first high-street branch just before Christmas as part of plans to open a further five outlets and double the number of mortgage customers over three to five years.
KBC has been in business in Ireland for 40 years but had largely concentrated on corporate lending before moving into the area of home loans. Permanent TSB shocked its rivals when it was revealed that it plans to drop fees from next month.
The move will put huge pressure on AIB and Bank of Ireland, both of which have put severe charging structures in place that cost the average account holder up to €120 a year, experts said.
Permanent TSB and KBC will be hoping to attract some of the more than two million customers of the big banks.
And Ulster Bank will now find it difficult to go ahead with its plans in the summer to bring in charges for its current account customers.