NatWest using Covid as ‘cover’ for Ulster Bank review, FSU says

Ulster Bank, Central Bank refuse to appear before Oireachtas committee on bank’s future

NatWest is using the coronavirus crisis as "a cover" to carry out a review into its Ulster Bank business in the Republic, which is known to be actively looking at winding down the unit, the Financial Services Union (FSU) has claimed.

Speaking to members of the Oireachtas finance committee on Tuesday, FSU general secretary John O'Connell said: "It seems clear that NatWest have decided to use Covid-19 as a cover to prioritise some other agenda over any long-term strategy. They have decided that staff, customers, and communities in the Republic of Ireland are of little significance."

Mr O’Connell said a closure of Ulster Bank would lead to an “effective duopoly in banking”. An Ulster Bank spokeswoman declined to comment. AIB and Bank of Ireland are by far the largest of the State’s five retail banks.

Seeking engagement

The Oireachtas finance committee's chairman John McGuinness said refusals by both Ulster Bank and Central Bank top officials to appear before the committee to discuss the bank's future is "unacceptable". He said both will be written to again to seek engagement.


The Irish Times reported in September that NatWest, formerly known as Royal Bank of Scotland (RBS), is actively considering winding down Ulster Bank in the Republic, which holds about a 15 per cent share of the State's mortgage market and is responsible for around 20 per cent of small business lending.

NatWest said at the time that the Covid-19 pandemic has added to challenges facing the bank, which has been dogged for years by high costs and low profitability in an era of ultra-low central bank interest rates and muted loan growth. The strategic review is also looking into alternative options, including a potential merger between Ulster Bank and another lender.

It subsequently emerged that US investment firm Cerberus, one of the most aggressive buyers of non-performing Irish loans since the financial crisis, has been looking at the potential of making a bid for Ulster Bank's remaining €20.5 billion loan book. NatWest has said it is not in talks with Cerberus.

Worried customers

Mr O’Connell quoted an unnamed Ulster Bank branch worker as highlighting how uncertainty over the bank’s future has made it “extremely difficult” for frontline staff.

“Customers are asking daily when we are closing. They are asking what will happen to their account, savings, and mortgage when the bank closes,” he cited the staff member as saying.

He said that the bank employee added: “I try to reassure them that it is purely speculation, and that Ulster Bank and NatWest are committed to Ireland but honestly, customers are not buying it. It is so hard to tell customers this when I feel like I am lying to them.”

The FSU secretary general said claims by NatWest and Ulster Bank that there is no timeline for a completion of the review are “not credible”.

Ulster Bank has eliminated more than 1,000 roles since 2008 and is currently in the middle of another cost-cutting drive to axe 266 of its remaining 2,800 positions. It has 88 branches throughout the Republic.

Minister for Finance Paschal Donohoe plans to meet representatives of NatWest, but a meeting has yet been scheduled, a spokesman at his Department said.

Mr O’Connell called for a wider debate on the future of banking as lenders prepare to shed thousands of job in a fresh wave of cost-cutting. Bank of Ireland said in late October that the equivalent of 1,450 full-time its roles will be eliminated by the end of 2021 – with a total of 1,700 full- and part-time staff taking up a voluntary redundancy offer.

AIB will next year reopen a programme to cull 1,500 net jobs by 2023, having paused the plan earlier this year as Covid-19 struck. Last month, Permanent TSB said that it was cutting 300 jobs, mainly targeting managerial positions.

“We must all act now: for our communities, to protect jobs and vital commercial infrastructure; for the bank’s customers, to protect them from vultures and who knows what; and finally, to ensure a competitive banking system in Ireland, for our citizens, our SMEs and for our economy,” Mr O’Connell said.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times