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Ulster Bank to increase charges
09 August 2009 By Nicola Cooke
Ulster Bank plans to increase the interest rates and other fees it charges to business customers as part of a ‘‘re-pricing’’ strategy to increase its profits.
The bank has issued ‘re-pricing strategy guidelines’ to its business banking staff, instructing them how to approach customers for meetings about the rates they pay.
The confidential guidelines, seen by The Sunday Business Post, advise staff to ‘‘rehearse’’ the script for a meeting and provide them with a sample scenario on how to deal with customer resistance.
Staff have been given a detailed checklist and if customers fail to meet any of the criteria set out, their rates can be increased.
Customers that are in breach of any of the bank’s terms and conditions will be targeted first for increased charges. The bank will also focus on ‘‘top clients’’, who generate an income of more than €20,000 for the bank.
According to the new strategy, the bank wants to increase its rates on loans and other products by 1 per cent, and to secure profit margins of at least 4 per cent from its products. The rate hikes are described in the Ulster Bank document as ‘‘critical to our business plans’’.
It says there is ‘‘a customer expectation that prices will increase’’ and tells staff that their key selling point is the continued ‘‘provision of facilities’’ rather than ‘‘price grounds’’. It is understood that some employees are unhappy with the strategy and have complained to their unions. In response to questions about the strategy, a spokeswoman for Ulster Bank said: ‘‘In line with other financial institutions, we constantly keep our rates under review. Any pricing decisions are discussed with business customers on a case-by-case basis."
Ulster Bank chief executive Cormac McCarthy announced plans for 250 voluntary redundancies last Friday, on top of 750 layoffs connected to the closure of its First Active branches. An internal memo, seen by The Sunday Business Post, indicates that the latest redundancies will be sought from capital and corporate markets, credit risk, communications and corporate services, and the finance department at Ulster Bank’s head office in George’s Quay, Dublin.
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