There’s not too much that’s Irish about National Irish Bank anymore. Except maybe a few billion in bad Irish property loans.
National Irish Bank is owed by Danske Bank which is the biggest bank in Denmark. This week Danske took a couple of slaps from Moody’s and Standard & Poor’s when both agencies lowered their credit rating. The main reason? A few billion in bad Irish property loans.
Danske bank said the downgrade was unexpected, even though they reckon they’ll lose around €900 million on those Irish loans in the next couple of years.
Nine hundred million euros is a lot of money to be drawing a red line through. And banks don’t like to write off big chunks of money. Heck, none of us do. So, they’re working on ways to start clawing it back.
And that’s where the good Irish public comes in. As of today, National Irish Bank will start nickel and diming* their 167,000 customers with current account fees and charges.
National Irish Bank are certainly not the first to do this though. They are just following the examples set by Bank of Ireland and AIB. Bank of Ireland dumped free banking for most of their customers in March, and last Monday AIB did the same. Even Permo added a heap of new fees in April.
The difference with National Irish Bank though, is that none of their customers will be able to get free banking anymore. AIB customers can qualify for free banking by keeping €2,500 in their current account at all times. Bank of Ireland customers can qualify with €3,000**. Permanent TSB customers... well, you have to do so much to quailfy for free banking with Permo that I won't even go into it here.
So a couple of months ago National Irish Bank notified customers by post that it would begin charging fees on current accounts from June 1st. Most customers will automatically be migrated to a new fee bearing account called the 24/7 package. The new account charges €5 per quarter maintenance, 25c for ATM use, 25c for direct debits and standing orders, 30c for paper credits and 34c for paper debits. The account will no longer carry a chequebook. In their letter, NIB said that: “We believe that’s fair to you and that it’s also fair to us”.***
As the saying goes: “when in Rome, do as the Romans do”. And Danske Bank certainly seems to be adopting the local customs with enthusiasm. Maybe they are more Irish than we thought.
*My apologies for the Americanism, but I can’t think of another phrase that quite captures the process of charging 34 cents for this, 25 cents for that and 30 cents for the other.
** Bank of Ireland customers can also qualify for fee free banking by lodging at least €3,000 in their Personal Current accounts AND making 9 debit payments using 365 Phone/Online and/or Mobile banking over the course of a fee quarter.
*** There are 2 more packages available which do not levy ATM charges and so on, but their quarterly maintenace fees start from €18.25 up to €31.25.