Foreign banks say no thanks to Irish savers and borrowers
With today’s announcement that RaboBank is about to exit its online savings offers, it means over the last few years, savers and borrowers in Ireland have experienced a major contraction in options to save…and borrow.
RaboBank had an estimated 90,000 savings accounts here in Ireland. The Dutch bank said that it will pay any future interest up front to customers as it speeds up withdrawal.
RaboBank is not alone.
Last year, Tesco exited the Irish credit card market. Up to that point, it had offered one of the best deals to customers.
Since the credit crunch almost a decade ago, non-Irish financial services have exited the Irish market in droves. It began with the exit of Bank of Scotland (Ireland). This was the bank that had heralded the tracker-boom when it undercut Irish lenders in the late 1990’s and early 2000’s with cut price mortgages that are todays financial albatross around the necks of Irish banks.
Following the BOSI exit came the departure of Danske Bank from day-to-day banking activities and the closure of it’s branch network across the country.
Nationwide UK (Ireland) dumped its 14,000 Irish customers to ‘concentrate’ on its UK business.
Leeds Building Society have become inactive in the savings landscape and while it officially has a continued presence in Ireland, it advises those visiting its website that things are under review and it is no longer accepting new savings business from new accounts.
Ireland is a small market
All of the exits underpin the major feature of the Irish market; it is miniscule. And with the rise in capital and compliance requirements across the EU, there is very little ‘easy’ business nowadays. In fact, having a non-domestic presence is expensive and risky and without a hefty profit margin or the promise of one, the rationale for remaining (or entering) is doubtful and probably will no longer pass a basic risk assessment.
Other banks that exited include Bank of America and the MBNA card it offered and PostBank which was at one point seen as a potential rival to the likes of Bank of Ireland and AIB. But is lifted anchor and sailed east when the economic waters around Ireland got choppy in 2010.
Which brings is back to the plight of savers and borrowers.
At present, they have become persona-non-grate at non-Irish banks. They are likely to remain so for a long time to come.