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Ulster Bank and KBC announced last year they will both exit the Irish market, the withdrawal of both banks represents the biggest movement of current and deposit accounts in the State’s history and the process has started. How will their exit affect you?

Mortgage Holders:

KBC’s mortgage accounts that are up to date with repayments have been sold to Bank of Ireland and the accounts will transfer over to Bank of Ireland by the end of the year.You will receive written notice before this happens.

KBC’s mortgage accounts that are in arrears will be managed by Pepper Finance as these accounts have been sold to a US private equity firm CarVal.Communications for these accounts have already been issued by KBC.

Ulster Bank’s mortgage accounts that are up to date with repayments have been sold to Permanent TSB. Any Tracker Rate Mortgages that are also up to date with repayments have been sold to AIB. There is no plan announced for any of the mortgage accounts that are in arrears.

For both banks, your current mortgage interest rate and terms and conditions will remain the same however it is worth noting that if you are on a fixed rate when you come to the end of your fixed-rate period, you will be limited to either Bank of Ireland’s or PTSB’s interest rate options which are currently significantly higher than KBC’s and Ulster Banks.

Current Account Holders:

The two banks have just under 500,000 current accounts that will need to be closed. There are no deals in place for another bank to take over existing Current Accounts. So, you will need to set up a new Current Account yourself. Any overdrafts will have to be cleared before the account is closed.

Both banks have already begun writing to customers to give them six months’ notice to close their current accounts. If your account is not closed within the six-month period, Ulster Bank and KBC will force close the account for you and issue you with a cheque for any remaining balance.

Technically there is a current account Switching Code in place from the Central Bank that all banks must follow to make switching accounts easier, which you could use. In theory, this means your new bank and old bank are supposed to work together to transfer all your direct debits and standing orders for you and have your new account open within 10 days. However, this rarely works quite so smoothly and given the level of accounts that are due to be closed, I would recommend taking on this task yourself to ensure it is done right.

It would be advisable to go ahead and begin the process now to open a replacement, so you have time to review your options. Also, switching over Direct Debits and Standing Orders can take some time.If you are opening a joint account or have a non-EU Passport, you may have to go into a branch in-person to open an account and there are long waiting times for an appointment at the minute.It is worth noting that many banks will allow you to open a single account online where you can upload any required documents through their online application facility.

Think carefully about what it is you value in a current account. Do you simply want the one with the fewest fees, or are things like mobile payments, a cheque book, an app, access to a branch network and reward schemes also important? Do you need an overdraft facility?

Deposit Account/Savings Account Holders:

KBC’s deposit accounts were included in the deal made with Bank of Ireland so all deposit accounts will be moved to Bank of Ireland.You will receive written notice from KBC before this happens.

Ulster Bank’s accounts were not included in any deal so these accounts will also need to be closed. Again, Ulster Bank will write to customers to give them six months’ notice. If you don’t close the account within the six months notice period, Ulster Bank will force close the account and post a cheque out to you for the closing balance.

If you have decided to place the funds in a new deposit account, you should be able to transfer the funds to your new account through your online banking. With interest rates being at an all-time low and following on from my colleague Sean’s article last week, it may be an opportune time to consider investing the money in a fund that offers some form of capital protection.

Jacinta Clerkin BSc QFA FLIA RPA is a Qualified Financial Advisor, Fellow of the Life Insurance Association and Retirement Planning Advisor. You can contact her through John F. Loughrey Financial Services by telephone on 074-9124002 or by email on jacinta@jfl.ie.