In a statement, Ulster Bank confirmed that customers who have been making regular monthly repayments in accordance with their credit card terms will see their outstanding balances written off, with no adverse impact on their credit rating. This move is expected to benefit thousands of customers, providing significant financial relief as the bank winds down its operations in the country.

The bank also addressed the situation of “non-performing customers” who have been enrolled in a payment plan. These customers will also see their accounts refunded without any negative impact on their credit rating due to the refund. Additionally, Ulster Bank has reached out to those who have missed payments and have not engaged with the bank regarding their outstanding credit card balances. These customers have been given 60 days to engage with the bank to discuss repayment options or settle their debts.

For those who fail to engage with the bank within the stipulated 60-day period, Ulster Bank warned that their balances would be written off, but this would come with a significant downside. Customers with a credit limit of -€500 or more could see an adverse impact on their credit rating, which might affect their ability to borrow money or access credit facilities in the future.

Ulster Bank’s decision to write off these balances follows its earlier announcement in September 2022, when it provided six months’ notice to its remaining 75,000 credit card holders that their cards would no longer be usable from March 2023. At that time, the bank also warned that any recurring transactions would be canceled and returned unpaid, urging customers to continue making monthly payments on any outstanding balance.

While the bank has not disclosed the total cost of writing off these accounts, the move underscores the significant financial and operational implications of Ulster Bank’s exit from the Irish market. Details of this decision were first reported by the Irish Times, highlighting the far-reaching impact on both the bank and its customers.

Impact on Credit Ratings and Future Borrowing

Ulster Bank has reassured customers who have maintained their repayment schedules that there will be no negative impact on their credit ratings due to the write-off. However, the bank has also made it clear that those who fail to engage and whose balances are written off could face future difficulties in obtaining credit.

This development is a critical step in Ulster Bank’s withdrawal from the Republic of Ireland, marking the end of an era for the bank and its customers. The financial landscape in Ireland continues to evolve as other banks adjust their operations in response to Ulster Bank’s exit.

“AIB is making a payment of €100 to former Ulster Bank tracker mortgage customers as a gesture of goodwill, to acknowledge any instances during their transfer where the customers’ experience fell short of our standards,” a spokesman confirmed, underlining the bank’s commitment to customer satisfaction.

The bank also assured that no customer would be financially disadvantaged due to any errors made during the transfer. “This is in addition to ensuring that no customer is out of pocket as a result of any error on our part. We look forward to continuing to support these customers in the years ahead,” the spokesman added.

The total cost of these goodwill payments amounts to €3.3 million. AIB acquired approximately €4 billion worth of tracker home loans, covering 33,000 accounts, from Ulster Bank last July. This acquisition represents 80 percent of the mortgages AIB had agreed to purchase from the UK-owned lender, which is withdrawing from the Irish market. The remaining €1 billion of loans are scheduled to transfer in the second half of this year.

In the immediate aftermath of the migration, AIB was compelled to issue apologies on two occasions last August due to problems experienced by some customers. Initially, the bank apologized to a group of tracker mortgage customers who had been mistakenly notified by letter of a sharper-than-expected increase in their monthly repayments from October. AIB clarified that the letter was incorrect, and those larger repayment increases would not occur.

Subsequently, the bank had to apologize to around 40 customers whose direct debits were cancelled following the transfer of mortgages from Ulster Bank.

Tracker mortgage holders have benefited from the lowest rates in the Irish market for over a decade, until the European Central Bank (ECB) began increasing rates almost two years ago. The ECB’s key lending rate, which tracker loans are pegged to, stood at zero from March 2016 until July 2022. The rate peaked at 4.5 percent last September but was reduced by a quarter of a percentage point last week.