Yahoo Finance Ulster Bank to begin phased withdrawal from Irish market
Ulster Bank is to begin a phased withdrawal from the Irish market, its parent company NatWest has confirmed.
Explaining the move, NatWest said a review of its Irish bank found that it would not achieve an acceptable level of returns going forward.
Uncertainty now surrounds the bank’s 2,800 staff, although NatWest insists it will try to keep job losses to a minimum.
Ulster Bank’s operations in Northern Ireland are unaffected by the announcement.
Important Customer Notice: please visit https://t.co/mxzErtTcxy for more information. pic.twitter.com/otdbTpgbuW
— Ulster Bank (@UlsterBank) February 19, 2021
Two other Irish banks – Permanent TSB and AIB – have already made moves to potentially acquire Ulster Bank assets south of the border. The Irish Government is a majority stakeholder in both AIB and Permanent TSB.
“Following an extensive review and despite the progress that has been made, it has become clear Ulster Bank will not be able to generate sustainable long-term returns for our shareholders,” said NatWest chief executive Alison Rose.
“As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years which will be undertaken with careful consideration of the impact on customers and our colleagues.”
The announcement came as NatWest revealed that it made a pre-tax operating loss of £351 million in 2020.
Irish Finance Minister Paschal Donohoe said it was a “difficult day” for the Irish banking sector and for the Ulster Bank staff.
Permanent TSB and other banking interests are in talks with NatWest over the potential acquisition of Ulster Bank’s retail and SME assets, liabilities and operations.
NatWest has also signed a Memorandum of Understanding (MoU) with AIB over the purchase of Ulster Bank’s corporate and commercial loans.
Mr Donohoe said those moves represented important developments.
“The decision by NatWest, the parent of Ulster Bank, to exit the Irish market is a very significant event,” he said.
“After 160 years serving the Irish public, today marks a sad day. Our thoughts too are with the Ulster Bank staff as they learn of the closure of the bank here in Ireland.
“However, I welcome the reference made this morning to the two other Irish banks, PTSB and AIB, who are engaging with NatWest regarding the future of Ulster Bank’s SME, mortgage, retail and commercial loan books, as well as the current and deposit accounts held by the Bank.
“While this is positive news and indicates the potential further development of already well established Irish banks, there is still much work to be done over the coming months.”
Mr Donohoe stressed that the Government did not have any role in commercial decisions over the bank’s future.
He added: “Reassurance is also given to customers of Ulster Bank that robust consumer protections are in place in the event of the bank withdrawing from the Irish market, including the Central Bank’s codes of conduct and that the terms of any contract currently in place with Ulster Bank remains in place into the future.
“I also welcome the announcement regarding Ulster Bank staff which outlines that some staff will transfer to AIB in line with the MoU that has been agreed with that bank. The commitment to engage with staff to minimise the impact on them is also to be welcomed. I expect that Ulster Bank will fully engage with staff in an open and transparent manner as the process moves forward.
“The Irish banking landscape will be poorer for the loss of Ulster Bank after all these years but we will focus now on the future and what can be done to support and strengthen a competitive and stable Irish banking system for the future.”
Today is a difficult day for Ulster Bank staff. The FSU's advice team is there for support 👇 https://t.co/SVSLHjb8nq
— Pearse Doherty (@PearseDoherty) February 19, 2021
Ulster Bank’s chief executive in the Republic, Jane Howard, said that no branches will be closing this year.
“There’s never a good time to deliver news like this and I understand that it’s extremely disappointing news for both customers and colleagues,” she told RTE Morning Ireland.
“But now that the decision has been made, my focus and our focus will be on making sure that we complete this phased withdrawal over a number of years, in an orderly fashion, so that we do a good job for both customers and colleagues.
“What’s really important for today is there is no change right now, we’re continuing to offer a banking service, and no branches will be closing this year.
“(Customers) don’t need to take any action and we’ll be starting to communicate with our customers today.”
Ms Howard said she was reluctant to say how many years the phased withdrawal process would take.
“I think it’s unhelpful if I start speculating but it is going to be a number of years,” Ms Howard added.
“I think these things take time and we’ve seen that from the past.”
Sinn Fein’s spokesman for finance Pearse Doherty said the decision is a “hammer blow” to Ulster Bank staff.
“There is uncertainty for the future and huge anxiety for customers, for mortgage holders, and for business, and indeed a big blow to the actual banking sector,” Mr Doherty added.
“Minister Donahue is right in saying that this is a commercial decision of NatWest, but after this decision now we need to, as a State, make the best best efforts to ensure that people are protected, that jobs are protected and that our banking sector has competition.”
The Irish Labour Party said the move by NatWest was a hammer blow for Ulster Bank staff and customers.
The party’s finance spokesman Ged Nash said: “This devastating news is a hammer blow for the 2,800 Ulster Bank staff, for their customers and for businesses across Ireland.
“My immediate thoughts and concerns are with the bank’s dedicated staff whose future is uncertain. Any sale or potential merger must respect the right of staff to have their existing terms and conditions transferred with them and compulsory redundancies should be off the table.”
