Bank in overcharging row loses finance chief

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Michael Torpey, the finance director of Ulster Bank, is to stand down, the Northern Ireland-based bank has confirmed. The announcement was made less than a week after the bank admitted that student account holders had been overcharged £2m.

In August, the bank, owned by the Royal Bank of Scotland, said that it had overcharged borrowers nearly £3m on payment protection insurance.

More than 50,000 Ulster Bank customers were over-charged because of the two systems failures. Refunds of about £115 per customer are being processed for the overpayment of insurance premiums, and about £66 each for the failure to apply discounts on fees and interest rates on student accounts.

Ulster Bank insisted that Mr Torpey's departure was unconnected with these problems. It confirmed that "following a number of years as group finance director, Michael Torpey will be leaving Ulster Bank Group in the coming weeks to pursue other interests – a new appointment... will be announced in due course."

A spokeswoman said that there was also no connection between Mr Torpey's resignation and the heavy use by Ulster Bank of securitisations. Ulster Bank is reported to have issued about £9bn in mortgage-backed securities, though the bank's spokeswoman was unable to confirm this.

Mr Torpey joined Ulster Bank four years ago from First Active, where he was finance director, when RBS acquired First Active and merged it with Ulster Bank. First Active's chief executive, Cormac McCarthy, transferred at the same time to Ulster Bank as the combined business's chief executive.

Ulster Bank operates in Northern Ireland and the Irish Republic and is the third largest bank on the island, with about 15 per cent of Ireland's mortgage lending. It has 1.7 million customers and 275 branches. Its operating profit grew by 20 per cent in the first half of this year, to £238m.

Eamonn Hughes, banking analyst at Goodbody Stockbrokers, said that despite the overcharging problems, Ulster Bank is regarded as a very effectively managed bank. "The CEO is regarded as one of the best bankers in the country," he said. "It is one of the more aggressive players in the market and the big player on the SME side."

He added that while the bank had committed strongly to securitising mortgages, this is not considered a problem given its position within the RBS group. "It is one aspect of funding," said Hughes. "I would have thought it is less of an issue than for some of the other [Irish] domestic banks."