Ulster Bank to pay €1.5bn dividend to parent

Irish subsidiary of RBS takes another step to normalising its capitl structure

Ulster Bank, the Irish subsidiary of Royal Bank of Scotland, said on Tuesday it will pay its parent a dividend of €1.5 billion, as it takes a further step to normalising its capital structure.

Following approval from both the Central Bank and the ECB, Ulster Bank said that it will pay its immediate parent company, NatWest Holdings, also a subsidiary of RBS, a dividend of €1.5 billion on January 29th. Post dividend the bank will have a CET1 ratio in excess of 22 per cent, while the bank said it "remains in a strong capital position following payment of the dividend, significantly above regulatory capital minimums".

"This is another important milestone for Ulster Bank as we continue to increase our strength and sustainability and work towards our ambition to become the number one bank for customer service, trust and advocacy," said Gerry Mallon, Ulster Bank's chief executive.

Owen Callan, analyst with Investec, said that the move is a "is a further step in normalising the capital structure" of thebank.

It’s the second time that Ulster Bank has paid a dividend since the advent of the banking crisis in late 2008, having also declared a dividend of €1.5 billion back in November 2016. During the banking crisis Ulster Bank, both north and south of the Border, received a near £15 billion bailout from RBS.

Ulster Bank is not the only Irish based bank weighing up offering a return to its shareholders; Bank of Ireland is also expected to pay its first dividend in a decade in the coming months.

Fiona Reddan

Fiona Reddan

Fiona Reddan is a writer specialising in personal finance and is the Home & Design Editor of The Irish Times