Ulster Bank to meet Paschal Donohoe to discuss bank’s future

Parent company NatWest is considering winding business down

Ulster Bank has about 2,800 employees in Ireland

Ulster Bank has about 2,800 employees in Ireland

 

Minister for Finance Paschal Donohoe will meet Ulster Bank chief executive Jane Howard and her new chairman Ruairí O’Flynn on Wednesday morning to discuss the bank’s future in the Republic, as its UK parent, NatWest, actively considers winding down the business as part of a strategic review.

It is expected Ms Howard will highlight that her current mandate is to grow the business, even as NatWest carries out a review of the unit as the Covid-19 pandemic has added to the problems of the lender, which has struggled for years with high costs and low profitability.

NatWest, formerly known as Royal Bank of Scotland (RBS) and majority-owned by the UK government, is also weighing the merits of merging the business with another Irish lender, though this is said to be a less likely outcome.

The Irish Times reported last Friday that US investment firm Cerberus iwas looking at making an approach for Ulster Bank’s €¤20.5 billion loan book in the Republic.A spokeswoman for NatWest said no talks were taking place with Cerberus.

Role

Mr Donohoe has said in replies to parliamentary questions on Ulster Bank in the past month that the Government has “no formal role in such a review or any commercial decisions that result, as these are a matter for the board and management of the bank and its parent company, NatWest”.

Still, he has highlighted that the bank is a “significant employer, with 88 branches and a significant market share in terms of mortgage lending and SME lending, and it is important in terms of providing competition in the Irish market”.

As of June it had net loans of €20.5 billion, a mortgage market share in the “mid-teens” per cent, 20 per cent slice of the SME market and “very strong corporate lending franchise”, according Goodbody Stockbroker analyst Eamonn Hughes. It also employed about 2,800 people at the time, but has since sought to cut 266 positions.