Belfast Telegraph

Rescue plan will keep Ulster Bank open in Republic


Ulster Bank is likely to remain in business in the Republic after its parent company apparently decided against shutting it down in Ireland.

Royal Bank of Scotland, which is owned by the Government, is set to unveil a huge restructuring plan on Friday when it publishes its third-quarter results.

As part of the restructuring plan, RBS will create an internal "bad bank" where it will move as much as £40bn worth of so-called "toxic assets". Much of those loans will come from Ulster Bank, which lent heavily in Ireland during the country's boom.

Those loans will be run down more aggressively than the rest of the bank's performing loans.

The Government has bailed out RBS to the tune of around £46bn since 2008 in an effort to stave off its collapse.

About £14.5bn of those funds have been pumped into Ulster Bank.

Chancellor George Osborne is under pressure to restructure RBS and get the bank back into private ownership, and as part of that effort has been pushing for the lender to be either broken up or dramatically restructured.

Mr Osborne has personally highlighted the problems caused by Ulster Bank, leading to repeated speculation that the division would be wound up.

Now those fears have receded, with Ulster expected to continue operating in the Republic.

That will be a huge boost to the Irish Government as it tries to retain some semblance of domestic competition.

On Friday, ACC Bank became the latest to pull out of Ireland, following the likes of Bank of Scotland (Ireland).

Danske Bank still has operations there but is shutting all its branches leading to speculation that it, too, will leave Ireland.

The RBS decision will bring to a close a process that has lasted months, and could have huge implications for thousands of staff.

Advisers from Rothschild have been hired to prepare a report on RBS, while US asset manager BlackRock has been analysing its £54bn "non-core" portfolio of toxic assets.

No-one from the Ulster Bank or RBS was willing to comment.

Belfast Telegraph