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Ulster Bank still taking on new business in the Republic despite closure plan


A man passes an Ulster Bank branch in Raheny, Dublin (Brian Lawless/PA)

A man passes an Ulster Bank branch in Raheny, Dublin (Brian Lawless/PA)

A man passes an Ulster Bank branch in Raheny, Dublin (Brian Lawless/PA)

Ulster Bank has written to customers in the Republic stating that the bank remains open to new business despite announcing last week that it was winding-down and exiting the Republic of Ireland.

Operations in Northern Ireland are not affected.

According to correspondence seen by Belfast Telegraph sister newspaper the Irish Independent, the bank has notified personal customers in the Republic that “a decision has been made for a phased withdrawal of all its banking activity”, in line with its corporate announcement last Friday.

However, in the same letter the lender said it “will remain open for all new business”, suggesting that customers might still open new accounts, take out loans or apply for credit cards while the wind-down is ongoing.

A broker who does business with the bank said that Ulster Bank is now “untouchable” for new customers and that the communication was a “formality” that shouldn’t be taken seriously.

Last Friday Ulster Bank confirmed that it would be leaving the market in the Republic over a period of several years in “an orderly and considered manner”.

Chief executive Jane Howard said in a statement that customers did not need to take any action and that the bank would be communicating with them in the coming weeks and months.

Ulster Bank has agreed a non-binding memorandum of understanding with AIB for the sale of the bank’s €4bn (£3.4bn) performing commercial loan book. Permanent TSB is also in discussions with the bank for the acquisition of its personal banking business and possibly the SME business, which has about a 20% market share.

News of Ulster Bank’s departure followed months of speculation about the future of the bank in Ireland after it was reported that NatWest, its UK owner, had hired Goldman Sachs to conduct a strategic review of the business. Private equity group Cerberus was also reported as a potential buyer.

NatWest was receiving poor returns on Ulster Bank, with €4.5bn (£3.9bn) of capital “trapped” in its Irish subsidiary to back its lending here, according to banking analysts. Heavy risk weighting required by European regulators meant that it could be years before profitability at the Irish bank would improve - believed to be a key factor in the decision to close.

Ulster Bank did not respond to a request for comment.

Independent News Service