| -1.4°C Dublin

bank exit Ulster Bank to begin ‘phased withdrawal’ from Irish market

AIB and PTSB confirm talks to takeover parts of the bank including some staff


A man passes an Ulster Bank branch in Raheny, Dublin. Photo: Brian Lawless/PA Wire

A man passes an Ulster Bank branch in Raheny, Dublin. Photo: Brian Lawless/PA Wire

A man passes an Ulster Bank branch in Raheny, Dublin. Photo: Brian Lawless/PA Wire

Ulster Bank owner NatWest Group (NWG) intends to begin a phased withdrawal from the Republic of Ireland.

NatWest CEO Alison Rose said the decision will not involve any branch closures or compulsory redundancies in 2021.

AIB has already confirmed it is in advanced talks to buy Ulster Bank’s €4bn corporate and commercial loans including taking on staff directly involved in managing that side of the business. The Irish bank has entered into a non-binding Memorandum of Understanding with Natwest, it said.

Permanent TSB said it is also in early discussions with NatWest to acquiring parts of Ulster Bank’s retail and SME assets, liabilities and operations. For a bank, loans are assets, deposits are liabilities and operations refers to staff and systems.

UK bank NatWest confirmed the plan to leave the market here in a message to shareholders first thing on Friday morning. The bank said withdrawal from the Irish banking sector is to be achieved in an orderly manner.

"NWG has concluded that, despite the significant progress that has been made in recent years, Ulster Bank in the Republic of Ireland will not be in a position to achieve an acceptable level of sustainable returns over its planning horizon.”

In the near-term, it is expected that there will be minimal change for Ulster Bank customers and colleagues, the bank said.

The bank said it will ensure: customers and colleagues are well supported; there is continued servicing of retail and SME clients; job losses are minimised; stability is maintained in the sector.

Just minutes earlier Ulster Bank said its NatWest Group (NWG) parent was continuing a review of the Irish bank’s operations. The announcement was posted to the London Stock Exchange at 7am on Friday morning, just ahead of a results press conference due to be held by NatWest Group.

Meanwhile, majority state owned AIB and Permanent TSB were already in talks with the bank’s parent.

Crucially the Government is supportive of the Irish banks’ plans, which will copper fasten state control of the banking system in the medium term despite a policy that favours privatisation. That policy is trumped by the desire to ensure stability in the banking sector, it is understood.

In a lengthy written statement on Friday morning the Minister for Finance, Paschal Donohoe, said Ulster Bank’s exit was: “a difficult day from an Irish banking perspective, and also for the Ulster Bank staff who are receiving news of this development.”

Talks with Permanent TSB and AIB to buy parts of Ulster Bank signal a potentially important development for the Irish banking sector, the minister said, but he said the moves were not being directed by the Government.

“It must be remembered that neither the Government nor I have any role in commercial decisions such as these and that any decision of this nature is a matter for the banks and their boards, who remain independent," he said.

“However, I welcome the reference made this morning to the two other Irish banks, PTSB and AIB, who are engaging with NatWest regarding the future of Ulster Bank’s SME, mortgage, retail and commercial loan books, as well as the current and deposit accounts held by the Bank. While this is positive news and indicates the potential further development of already well established Irish banks, there is still much work to be done over the coming months’.”

The Financial Services Union (FSU), which represents many of the bank’s more than 2500 staff, said it was deeply disappointed by the confirmation that Ulster Bank is exiting its operations in the Republic of Ireland.

Download the Sunday World app

Now download the free app for all the latest Sunday World News, Crime, Irish Showbiz and Sport. Available on Apple and Android devices

Online Editors

Top Videos