NatWest confirms review of Ulster Bank as Covid-19 bites

Statement comes after report that wind-down of lender is being considered

UK banking giant NatWest confirmed on Friday that it was carrying out a review of strategy at Ulster Bank in the Republic, after The Irish Times reported that a wind-down of the lender was being considered.

“We continue to evaluate the impact of Covid-19 and the challenges to the economy and we are reviewing our strategy appropriately and responsibly in light of these events,” a spokeswoman for NatWest said.

“In the event of any changes being made to our strategy, these would be undertaken with full consideration of any impact on customers, colleagues and shareholders in the first instance. Our priority now is to continue to remain focused on supporting our customers and colleagues in these difficult times.”

In the meantime the strategy to grow Ulster Bank in the Republic “organically and safely remains unchanged”.


The Covid-19 crisis has dampened demand for lending and is expected to lead to a spike in bad loans, and Ulster Bank has been struggling for years with high costs and low profitability.

Sources have said in addition to considering a wind-down of Ulster Bank, NatWest, formerly Royal Bank of Scotland (RBS), was also weighing the merits of merging the business with another lender, though the latter is said to be a less likely outcome.

While 75 per cent State-owned Permanent TSB is seen as the most likely candidate for a tie-up, no approaches have been made by NatWest. A rundown of the business would take an estimated six years and involve a number of loan portfolio sales, which would attract both rival banks and non-bank lenders, industry sources said.

Jobs at risk

A spokesman for the Department of Finance said it “noted” the report that NatWest was examining options for Ulster Bank, which has “a sizeable market share in terms of mortgage lending and SME lending”.

“It is important to have competition in every sector but particularly in banking in order to provide greater choice and lower-cost services for customers,” he said.

Ulster Bank announced last week that it was cutting 266 positions, or 9.5 per cent, of its workforce, in order to rein in costs as banks across Europe grapple with a prolonged income squeeze caused by muted loan growth and ultra-low interest rates. Covid-19 has added to the pressure on the sector. AIB and Bank of Ireland have announced this year that they plan to eliminate a combined 2,900 employees over the coming years.

With a wind-down of Ulster Bank on the table, the positions of the remaining 2,500-plus staff, as well as its 88 branches, are at risk. An exit of Ulster Bank would also increase the dominance of Bank of Ireland and AIB in the market.

The Financial Services Union wrote to NatWest chief executive Alison Rose and Minister for Finance Paschal Donohoe to raise its concerns.

The union had been engaged in ongoing negotiations on restructurings in the bank and this strategic review had at no point been disclosed to the union, it said. Its Ulster Bank negotiating team will meet over the weekend to consider further steps.

"This is a shocking revelation for staff and their families, and runs contrary to all the commitments both Ulster Bank and RBS/NatWest have given FSU and staff over the last number of years," said Gareth Murphy, the union's lead negotiator with Ulster Bank. "We are in the middle of difficult restructurings to secure the future of the bank when this lands in the media."

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times