Banking Overview
How much do you know about your bank? Do you know what type of businesses it lends to?
Does it refuse to lend to companies with poor human rights records, that sell arms or pollute the environment, for example? Does your bank offer services to those on low incomes or the unemployed? And how many women sit on its board?
Such questions often go unasked of the banking sector. But the same caring principles that make you buy Fairtrade goods and recycle household waste can be applied to how you bank too.
Key green and ethical issues to consider
Finding a green or ethical banking option
How banks use your money
The money that you deposit in your current or savings account doesn't just sit there untouched until you require it again - your bank lends it on to others at interest.
Banks don't just lend money to current account-holding customers either, they lend to large corporations, public institutions and even governments.
As many banks are listed on the stock exchange, they are answerable to external shareholders who expect healthy returns on their investments.
While the Treasury hands down some prohibitions as to who banks can and can't do business with, it still leaves them relatively free to engage with companies that you might not approve of and they use your money to do it.
Would you approve if your bank was lending money to heavy polluting industries or even to an oppressive regime?
Key green and ethical issues to consider
Responsible Lending
The recent global economic downturn is often attributed to the 'sub prime crisis'.
Sub prime lending means giving loans to people who are considered to be in higher risk categories - those more likely to default or who have a poor credit history, for example.
This type of lending is not problematic in itself - credit unions and community development finance institutions regularly lend to sub prime candidates. Instead, irresponsible lending to customers in the sub prime category is the problem.
In the build up to the 'crunch' some financial institutions were lending 100% mortgages (and in some cases more) to people who would not be able to make their repayments in the long term.
Lending responsibly shouldn't be limited to just mortgages - it applies to all loans, big and small, and to the provision of credit cards too. Figures from the Bank of England show that UK residents owe £233bn on credit cards, overdrafts and other loans.
Key questions to ask: Does your bank have responsible lending policies that ensure that its products are targeted in an appropriate manner? And does it provide advice or debt management services to customers who fall into financial difficulty?
Climate Change and the Environment
Banks have an impact in these areas, not just in terms of who they lend to or invest in, but how they run their own operations. It is important to find out what your bank is doing to improve its environmental performance as a business: have they pledged to go carbon neutral for example? Or do they offer any green products to their customers?
Financial Exclusion
There are an estimated two million people in the UK without even the most basic bank account. Is your bank doing anything to address this situation?
For more details see our Financial Exclusion section.
Project Finance
In its most basic form, this type of financing is for companies and governments where lenders are repaid through the revenues generated, i.e. the lender has a vested interest in the success of a project.
Common projects receiving finance are petrochemical and chemical plants, power plants, telecommunications and infrastructure. But do lenders ensure that these projects are conducted in a green or ethical way?
Use our search facility to find out about your bank's policy on the environment, ethical lending, responsibility towards its customers, equal opportunities and other issues.
Finding a green or ethical banking option
Building Societies and Credit Unions
Mutual building societies and credit unions are generally smaller, customer-owned operations that primarily lend to individuals and so are less likely to have the same exposure to issues like the arms trade, for example.
Green and Ethical Alternatives
There are a number of banks and building societies with prominent green and ethical credentials.
- Co-operative Bank: this bank's robust green and ethical policies govern its current accounts, savings and investment products.
- Smile: this internet arm of the Co-operative Bank shares the parent company's ethical policy.
- Triodos Bank: this bank offers green and ethical savings accounts and investments. The bank was established in 1980 in the Netherlands and now has significant operations in the UK.
- Ecology Building Society: this mutual building society offers a range of green savings accounts and mortgage options.
- Charity Bank: this bank invests through loans to benefit charities and communities. It offers saving accounts and cash ISAs to consumers.
You can use the banking section search to find the banks that perform best against our green and ethical criteria.
Your next steps
What do you do now? Check out our guide Next Steps - Banking for information on how to give your bank account a green and ethical makeover.
Useful links to know
The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. The FCA aims to protect consumers, ensure the industry remains stable and promote healthy competition between financial services providers. The FCA has a useful guide to your banking rights. Visit www.fca.org.uk or call the FCA consumer hotline 0800 111 6768 for more information on your rights and the FCA's work.
The Prudential Regulation Authority (PRA) www.bankofengland.co.uk is part of the Bank of England and is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and investment firms. It supervises financial institutions at the level of the individual firm.
The Financial Ombudsman Service www.financial-ombudsman.org.uk is a service set up by the UK Parliament to sort out individual complaints that consumers and financial businesses are not able to sort out themselves.
Banking Search
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Bank / Building Society Profile
First Trust Bank
Green/Ethical Products
- Basic Bank Account (available to customers in Northern Ireland only)
Ethical Lending or Insurance
No evidence of an ethical lending policy found for First Trust Bank.
However it states that it applies environmental criteria in assessing credit risk. No further information was found on the extent to which this policy would preclude the bank lending to entities on ethical grounds.
Human Rights
No policy was found to indicate that First Trust Bank avoids lending to or insuring companies that directly contribute to human rights violations.
Financial Exclusion
- Basic Bank Account (Northern Ireland only)
No evidence that the company provides direct financial support to or engages in partnerships with Credit Unions and CDFIs (Community Development Finance Institutions).
- Have a standard that all websites should comply with WA1 accessibility standards (level 2AA) as provided by the World Wide Web Consortium (W3C).
- AIB Group will on request provide Braille, or large print statements and correspondence.
- AIB Group has piloted lower level counters in branches and we are constantly reviewing accessibility to our buildings, taking account of planning issues. 69% of our branches are accessible with 44 ramps/platform lifts having been installed in the last number of years. Entrance doors to branches are also being automated facilitating accessibility.
Parent company has an on-going AIB Microfinance Fund target for 2012. No further information on whether available in the UK or the extent to which it is available.
First Trust Bank’s (AIB Group (UK) Plc.) parent company Allied Irish Banks Plc. reports that since 2006, it has been contributing to the Social Finance Foundation (an organisation which makes loan finance available at affordable interest rates to community based projects and micro enterprises, which yield a social and financial return). At the end of 2010 the bank reports that €15 million of these approved loans have been drawn down. The bank initially provided €6.27 million to the foundation and since 2009 has also provided an annual payment of €1.5 million, which will continue to 2021.
Environment
First Trust Bank's environmental policy covers the key areas of climate change, energy efficiency and waste. However, it does not mention water.
It shows commitment to continued improvement of its environmental performance.
Carbon Neutral
No commitment to become fully carbon neutral was found.
However First Trust Bank’s (AIB Group (UK) Plc.) parent company Allied Irish Banks Plc. has set challenging energy targets in Ireland - a 20% reduction in AIB's energy consumption and 30% reduction in AIB's carbon footprint by 2014.
Equal Opportunities
First Trust Bank’s (AIB Group (UK) Plc.) parent company Allied Irish Banks Plc. has a diversity policy which takes into consideration the key equality issues of race, gender and disability but not sexuality.
Women on the Board
Parent Company:
1/11 women hold top level board positions (9%).
Voluntary Standards & Initiatives
First Trust Bank is a member of Business in the Community (a business-led charity focused on promoting responsible business practice).
Historically the parent company Allied Irish Banks Plc. has participated in the Carbon Disclosure Project (CDP) - In 2010 Allied Irish Banks participated in the report on Ireland by CDP.
Charitable Giving
No evidence of First Trust Bank being involved in any charitable contributions however their parent company Allied Irish Banks has the following:
In 2010 AIB gave €1.82m through 182 local branches to be shared among 546 local deserving children's projects
With regards to community investment and development programmes, Allied Irish Bank reports that it invests in the community through corporate giving programmes and community sponsorship. Its major initiative is the Better Ireland programme, which provides funding to groups working with disadvantaged children.
The Allied Irish Banks Better Ireland programme is currently under review.
First Trust Bank
- Current Accounts
- Savings
- Investments
- Credit Cards
- Loans
- Mortgages
- Insurance (Travel)
- Student Current Account
- Student Credit Card
First Trust Bank
AIB Group (UK) Plc.
Registered Office
4 Queen's Square,
Belfast
BT1 3DJ.
