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Ulster Bank IT failure cost bank over €100 million

The company said that the operational costs reached €103m, including redress for 750,000 customers which cost €52m.

Image: Sam Boal/Photocall Ireland

ULSTER BANK HAS said that the costs of an IT failure at the bank have reached over €100 million in total, a figure which could increase in the future.

The costs have been calculated at an RBS Group level and subsequently broken down by division and a provision of  €103m has been made at Group level for Ulster Bank costs associated with the incident.

The bank said this provision covers all operational costs associated with the incident, as well as redress of €52m to 750,000 customers across the island of Ireland.

Chief Executive Jim Brown said of the figures:

As we continue to deal with customer claims and costs associated with the incident, we expect that there will be some additional costs to the Bank over the coming months.

Financial performance

The company has seen a slightly improved financial performance in Q3 of this year.The Ulster Bank figures are included in the RBS Interim Management statement, and show that total income increased by €9m to €269m.

Brown said that the market remains difficult and “we continue to see an elevated level of mortgage arrears”, adding they are working with their customers who are in financial difficulty to offer them support.

Expenses fell by €3m over the period, which the bank said is due cost management initiatives continuing to progress.Impairment losses remained high at €415m, which resulted in an operating loss of €306m, which decreased by €4m.

Brown commented:

In a continuing challenging environment, in which recovery from the group technology incident was a primary focus, Ulster Bank delivered a slightly improved financial performance. Operating profit before impairment increased by 12%, to £87m [€110m], as a result of a solid income performance in the quarter and lower expenses.

Customer deposits remained flat on a constant currency basis, and there were no significant outflows following the group technology incident, reported the bank. Retail and SME balances increased marginally in the quarter while the loan to deposit ratio improved by 3 per cent to 141 per cent.

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