POLITICAL pressure is growing for an inquiry into allegations that Ulster Bank secretly lodged potentially enormous liabilities against small business customers.
A former senior executive at the lender’s parent company, Royal Bank of Scotland (now NatWest), has accused his former employer of leaving business customers with significant financial consequences over the way some loans were handled.
The allegations by Ian Tyler, former group head of capital at RBS, have been published by The Times newspaper in London.
He claims Ulster Bank secretly lodged potentially large liabilities against small business customers both in Northern Ireland and in the Republic, and when it looked like it may emerge, forced business customers into NatWest’s Global Restructuring Group (GRG).
NatWest have rejected all the allegations.
But political pressure is growing on the banking group and the UK’s Financial Conduct Authority (FCA) following the publication of an extensive investigation by The Times.
Alliance Party MP Stephen Farry, DUP North Antrim MP Ian Paisley Jnr and Sinn Féin’s finance spokesperson, Colm Gildernew, have all intervened.
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Mr Farry said: "I am concerned at the allegations.... and am pursuing this matter further with the FCA."
Mr Gildernew described the allegations as "disturbing".
He said: “I have written to the FCA and have urged them to ensure Ulster Bank customers are receiving the same protections and redress that others have received.
“It is important that all those affected are properly compensated.”
Labour’s former shadow chancellor John McDonnell and Will Wragg, the Conservative co-chair of the all-party parliamentary group on fair business banking, have also expressed concern.
A spokesperson for the FCA said: “We are aware of and are considering the concerns raised; however there are legal restrictions which prevent us commenting on specific firms.”
The alleged wrongdoing relates to fixed-rate loans sold by Ulster Bank to small and medium-sized businesses before and during the global financial crisis.
Mr Tyler alleges the loans came with undisclosed financial derivatives or “swaps”, and liabilities that customers were not told about.
According to The Times report, NatWest said references to derivatives, or “swaps”, in financial documentation were in error and that it had not in fact lodged such liabilities against customers.
The FCA did previously oversee a £2.2 billion compensation programme for the mis-selling of swaps to banking customers. But the Ulster Bank fixed-rate loan borrowers were omitted.
NatWest has not stated how many of the disputed fixed-rate loans were sold to customers in Northern Ireland and in the Republic, where the banking group is winding up its Ulster Bank business.
However, Steve Middleton, a former RBS/NatWest employee who now works with the whistleblowing charity BankConfidential, believes potentially hundreds of small business customers on both sides of the border may be affected.
A spokesperson for NatWest said: “We entirely reject all allegations that Ulster Bank – or any NatWest Group company – engaged in criminal fraud in relation to the sale of fixed rate loans.
“This specific customer case was the subject of a complaint to the Financial Ombudsman Service in 2017, which made no findings of fraud. The bank considers this case to be closed.”
If you have been affected by the issues raised in this story - contact business@irishnews.com
