Ulster Bank is to axe 250 more jobs after today announcing losses of £8m for the first half of 2009.
The all-Ireland bank’s profits have slumped 105% from £172m profit and its bad debts have soared from £18m to £157m. There is no breakdown of the figures for Northern Ireland.
Ulster Bank, which has 282 branches in Ireland, 92 of those in Northern Ireland, has already saved £11m in staff costs in the first half of this year. It shed 200 jobs in Northern Ireland through its voluntary severance scheme and 500 posts in the Republic.
Cormac McCarthy, chief executive, Ulster Bank, said: “Our voluntary severance programme, introduced in January 2009, was very heavily over-subscribed. Taking account of this over-subscription and the potential for further restructuring in certain areas of our business, we now intend to work with our employees and their representatives to seek an additional 250 voluntary redundancies.”
It is understood that the Republic will suffer the majority of the surprise job losses announced today.
Ulster Bank’s parent company, Royal Bank of Scotland (RBS), edged back into the black today with a £15m profit for the first half of 2009. The profit at the bank, which is 70% owned by the taxpayer after a £20bn bailout, came despite bad debts and writedowns soaring to £7.5bn.
Chief executive Stephen Hester, who has been charged with the turnaround of the troubled bank, said it had been a “momentous” six months for the business.
He added: “There will be no miracle cures. Our task is no less than one of the largest bank restructurings ever done, in the face of strong economic headwinds.
“Overall results may not substantially improve until 2011 and full recovery will take time.”
The corporate sector suffered the heaviest losses for Ulster Bank with impairments of £107m, mainly attributed to property development loans. Mortgage bad debts were £23m.
Mr McCarthy, said: “Our results are set against the backdrop of very difficult market conditions.
“As part of the recent strategic review undertaken by RBS we have clearly defined our future business strategy and we have already taken significant steps to adapt to the environment we face.
“Ulster Bank is deeply embedded in both the Northern Ireland and Republic of Ireland economies and is fully committed to serving the needs of our 1.9 million customers.”
It also emerged that RBS has established a non-core division to separately manage a pool of assets and businesses which will be disposed of, restructured or run down in a disciplined manner over time. Ulster Bank has identified assets for this division.
Mr McCarthy added: “We expect conditions to remain challenging for the foreseeable future.”
On Wednesday local bank, First Trust, also reported losses of £41m for the first half of 2009.