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Ulster Bank in the Republic told its 2,800-strong staff on Friday that “all strategic options” remain on the table, after The Irish Times reported that its UK parent is actively considering the liquidation of the lender, which continues struggling with low profitability more than a decade after the financial crisis.
Bank CEO Jane Howard highlighted comments from parent group NatWest CEO Alison Rose to analysts in August that while Ulster Bank’s growth strategy has “not changed,” Covid-19 “It presents different challenges for the economy, and we will continue to consider all strategic options in relation to that business.”
Fusion
“That position has not changed. It is important to emphasize to your colleagues and clients that we have seen comments like this before and that, like the stories above, it is also speculative, ”Ms Howard said in the note. “I know it can be a distraction, but I ask that you focus on serving our customers well.”
Sources have said that NatWest, formerly Royal Bank of Scotland (RBS), is also weighing the merits of Ulster Bank Ireland’s merger with another lender, although this is said to be a less likely outcome.
While the government-owned 75 percent permanent TSB is considered the most likely candidate for an alliance, NatWest has not made any approach. A business downturn would take about six years and involve a series of loan portfolio sales, attracting both rival banks and non-bank lenders, industry sources said.
A Finance Department spokesman said the report “pointed out” that NatWest is examining options for Ulster Bank, which has “a sizeable market share in terms of home loans and SME loans.”
“It is important to have competition in all sectors, but particularly in banking, in order to provide more options and lower-cost services for clients,” he said.
Ulster Bank announced last week that it would cut 266 jobs, or 9.5 percent, of its workforce in order to control costs as banks in Europe grapple with a prolonged revenue squeeze caused by moderate growth in revenues. ultra-low loans and interest rates. Covid-19 has increased the pressure on the sector. AIB and the Bank of Ireland announced this year that they plan to cut 2,900 employees combined in the coming years.
Personal
With a liquidation of Ulster Bank on the table, the jobs of the more than 2,500 remaining employees, as well as its 88 branches, are at risk. An exit from Ulster Bank would also increase the dominance of the Bank of Ireland and AIB in the market.
Ulster Bank’s Financial Services Union (FSU) negotiating team met last night and again this morning in an emergency session to discuss the Irish Times report.
The union had been involved in ongoing negotiations over restructuring at the bank and this informed strategic review had never been disclosed to the union, it said in a statement.
“This is a shocking revelation for staff and their families and goes against all commitments that both Ulster Bank and RBS / NatWest have made to FSU and staff over the past few years,” said Gareth Murphy, FSU Lead Negotiator with Ulster Bank. “We are in the middle of difficult restructurings to secure the future of the bank when it lands in the media.”
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