Ulster Bank to pay €1.5bn dividend to Royal Bank of Scotland

Ulster Bank will pay a dividend of €1.5 billion to its UK parent company on November 30th, following regulatory approval.

This will come from surplus capital and is the Irish bank's first dividend payment to Royal Bank of Scotland (RBS) since the crash of the financial sector here in late 2008.

Ulster Bank, north and south of the Border, received a near £15 billion bailout from RBS, which is majority owned by UK taxpayers.

The payment will actually be made by Ulster Bank to its immediate parent company, National Westminster Bank Plc – a subsidiary of the RBS group.

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In a statement this morning, Ulster Bank said the required regulatory approvals for payment of a dividend had been received from the Joint Supervisory Team of the Central Bank of Ireland, and the European Central Bank.

Once the dividend has been paid, Ulster Bank would have a Core Equity Tier 1 ratio in excess of 24 per cent, significantly in excess of regulatory requirements.

Strong balance sheet

The bank said it would remain in a strong capital position following the payment of the dividend.

Ratings agency Moody’s said its Baa3 rating for Ulster Bank already incorporated the £1.5 billion one-off dividend payment to, RBS. “So its rating will not be affected by this transaction,” it said.

Commenting on the move, Gerry Mallon, chief executive of Ulster Bank in the Republic, said the announcement "signals a very important milestone for Ulster Bank and is evidence of our strengthening position as we work to fulfil our potential for our people, our customers and our parent company.

“Ulster Bank remains very well capitalised with a strong balance sheet and is well-positioned to continue to support customers’ ambitions through our excellent products and service.”

Ulster Bank was run as an all-Ireland entity at the time of the crash but its businesses north and south of the Border now operate separately of each other.