Stormont Watch: Arguments Ahead of Likely Rate Cut

[Stratagem]

On the eve of a possible move by the Bank of England to reduce interest rates to a record low of 1.5%, SDLP Leader Mark Durkan has welcomed a letter from the Chairperson of the Treasury Select Committee John McFall MP stating his commitment to consider the Foyle MP’s concerns about the Ulster Bank, a subsidiary of Royal Bank of Scotland (RBS). The SDLP Leader believes that the Ulster Bank isn’t following commitments made by RBS with regard to overdrafts and mortgage rates.

Mr Durkan said: “On 23 November 2008 the RBS Group announced not to increase pricing on committed overdrafts until at least the end of 2009 and to guarantee availability of committed overdrafts for one year, for business banking customers with turnover of under £1 million.

“In addition, the RBS Group made a further statement on 1 December 2008 in which it guaranteed not to initiate repossessions of homes for six months after mortgage customers fall into arrears. It also pledged to maintain this position until the end of 2009.

“However, the same commitments have not yet been made by its Northern Ireland subsidiary.”

In response, the Ulster Bank stated:

“Ulster Bank has adopted the terms of RBS's recent pledge on the certainty of overdraft limits for some time, and is committed to maintaining existing overdraft limits for its SME customers unless there are exceptional circumstances.

“We are also committed to maintaining margins for our SME customers whose risk profile is unchanged. Regarding action for mortgage repossession, Ulster Bank made the same commitment as our parent company RBS at the same time, December 1 2008. Ulster Bank Group contacted Mr Durkan's office on December 19 to clarify these matters with him.”

If the Bank of England’s Monetary Policy Committee does announce another cut in interest rates tomorrow, eyes will once again be focused on the highstreet banks to see if they pass the savings on to borrowers.