Royal Bank of Scotland’s top brass paid a flying visit to Dublin this week as the group’s board held a regular meeting here.
Chairman Howard Davies and chief executive Ross McEwan paid a number of courtesy visits, including to Minister for Finance Michael Noonan and IDA Ireland.
They are believed to have reiterated to the Minister that they are committed to Ulster Bank, whose operation in the Republic has been separated from the Northern Ireland business into a stand-alone entity led by new chief executive Gerry Mallon.
RBS’s stated plan is to grow the business organically in the Republic.
At an investor conference in London on Tuesday, Mr McEwan said RBS wanted to increase Ulster Bank's mortgage market share, improve its capital efficiency and reduce its costs.
RBS’s meeting with the IDA set tongues wagging that the bank might be considering relocating some of its UK activities to Dublin in the wake of the Brexit result. It’s not the only bank in the UK trying to make sense of what Brexit will mean for its business and how it should restructure to retain access to the European Union.
It’s a remarkable turnaround when you consider that just 2½ years ago RBS initiated a strategic review of Ulster Bank’s operation that many here believed would result in it quitting the Irish market altogether or, at best, significantly diluting its stake in the bank.
However, the opposite has proved to be the case. The strong turnaround in the Irish economy after we exited the troika bailout at the end of 2013 facilitated the sale of problem loans at an accelerated rate and at better-than-expected prices.
It also assisted a return to profitability for Ulster Bank, which is back in growth mode and has sought regulatory approval to return some capital to RBS, which bailed it out to the tune of £15 billion after the crash.
The Brexit result has also now made the bank in the Republic a potentially important strategic EU-based asset for RBS, and signals how there could be some upside for Ireland from the UK’s decision to turn its back on Europe.