Northern Ireland banking inquiry: the story so far

A Westminster inquiry into the Northern Ireland banking industry has heard its first evidence from senior bankers.

Executives from the Bank of Ireland and Danske Bank faced questions from the Northern Ireland Affairs Committee on Wednesday.

The BBC looks at what has been learned from the inquiry so far.

BUBBLE-ERA PROPERTY DEBTS ARE STILL A PROBLEM

CBI vice-chairman Ian Coulter said there were no easy answers

One of the most striking statements to the inquiry came from Ian Coulter, the former CBI chairman and leading corporate lawyer.

He described the banking situation as "the biggest risk factor and the key blocker to the Northern Irish economy".

He pointed to the property crash which contributed to about £10bn of bank loans, made between 2001 and 2007, going bad.

A portion of those loans are still being worked through, which he described as "a major problem for our economy to digest".

He said there was a continued ripple effect as otherwise sound businesses found dealing with their property loans to be a drain on money and time.

Committee member Ian Paisley junior asked him if this was "a call for debt forgiveness".

Mr Coulter said debt forgiveness was not "the right term" and that there were "no easy answers".

THE BANKING ISSUES MIGHT BE CYCLICAL

The formal title of the inquiry refers to 'The banking structure in Northern Ireland' - the implication being that there are structural factors which disadvantage customers in Northern Ireland.

However, in her evidence the eminent economist Kate Barker suggested the refrain that "the banks aren't lending" may simply reflect where we are in the business cycle.

She has already led a study on access to finance for small businesses which concluded there was "not any particular evidence that businesses in Northern Ireland were more harshly treated".

She told the committee that lending to small and medium businesses over the last few years "has been a very risky business; as recovery starts it will become less risky. I would expect we will see a response from the banks to that".

However, she qualified that by saying she was "slightly agnostic" on that point because "we are only just at the start of the upturn".

AN ULSTER BANK-STYLE IT MELTDOWN COULD HAPPEN AGAIN

Sam Woods, a director in the Bank of England's Prudential Regulation Authority (PRA), was asked about the major IT failure at RBS/Ulster Bank in 2012.

Following those problems the PRA asked the UK's other major banks to check if they could face similar issues.

Mr Woods said this had revealed "a number of deficiencies" and remedial action was under way.

He said that progress was being made across the industry, but the main problem was that the IT systems were "so antiquated".

He told the committee: "I feel we are a very long way from being able to sit here with confidence and say that the UK banks' IT systems are robust."

SOME CUSTOMERS HAVE HAD A REALLY HARD TIME

SDLP MLA Patsy McGlone hit out at long delays on lending decisions

No bank customers have appeared before the committee and evidence from Daithi McKay of Stormont's finance committee suggested this was down to "a climate of fear".

His fellow MLA Patsy McGlone spoke of one constituent who was "literally in tears" because of a long delay by a bank taking a lending decision which was going to affect her family business.

The MLAs suggested that Northern Ireland needed its own "Tomlinson exercise" referring to a report from the businessman Lawrence Tomlinson who said he had found evidence that RBS in Great Britain had needlessly forced some "good and viable" firms into insolvency.

One note of caution was struck by the Finance Minister Simon Hamilton who said that while he had seen anecdotal evidence of "sharp practice", some complaints could be more complex than they first appeared.

He said: "You get some of the story, but you do not get all of the story, and you have to then tease that out in engagement with the bank."