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Updated 49 minutes ago
ULSTER BANK will begin a “phase-out” from the market in the Republic of Ireland over the next few years.
The move came after a strategic review of its parent company Natwest. It has more than one million customers, along with 2,800 employees and 88 branches across the country.
Ulster Bank said this morning that the move will not mean immediate change for clients, with changes emerging in the coming years.
The bank said it has agreed a memorandum of understanding with AIB for the sale of a portfolio of outstanding commercial loans of 4 billion euros and the transfer of personnel related to that loan book.
It is also in initial discussions with PTSB about its possible interest in purchasing a number of assets, liabilities and operations. The bank said its preference in the discussions is to do business with other parties that can provide full banking services to the Irish market.
The confirmation will be a significant blow to staff, who called on the government to intervene to prevent the shutdown. Staff are understood to be shocked to have first heard of the shutdown through the media rather than an official announcement.
It is also understood that the worker representatives had repeatedly requested a copy of the terms of reference for Natwest’s strategic review of Ulster Bank’s operations in Ireland, but were rejected.
Jane Howard, CEO of Ulster Bank, said: “NatWest’s decision to withdraw from this market is hugely disappointing and today will be a difficult and worrying time for our colleagues across the bank. It can also raise questions and concerns from customers about how this decision may affect them and their daily banking needs.
I want to make it clear that there will be no changes for customers today, changes will occur in the next few years. Ulster Bank will continue to offer a full banking service at our branches, online and through normal channels to new and existing customers for the foreseeable future. Customers do not need to take any action as a result of this ad. We will communicate with clients in a timely manner for the next several weeks and months.
Howard added that the bank would consult with unions on the best way to manage an “orderly withdrawal” in the coming years.
He added that this year there will be no mandatory exits from the bank.
Speaking to RTÉ’s Morning Ireland, Howard reiterated that, for the time being, everything will continue as usual and that customers will not have to take any action now.
“The really important thing for today is that there are no changes at this time, we continue to offer a banking service and no branch will close this year,” he said.
“(Customers) don’t need to take any action and we will start communicating with our customers today.”
He said a priority going forward will be to minimize job losses and that will be considered in any negotiations on loan book-related jobs.
In a statement, PTSB said it has “ambitious plans” to grow its position in the Irish market and confirmed that it was in talks with Natwest.
Chief Executive Officer Eamonn Crowley said: “We are in discussions with NatWest regarding the acquisition of certain elements of Ulster Bank’s retail and SME business to provide continuity of service to customers and strengthen our ability to offer choice and competition in the market. market in general “.
Speaking to RTÉ’s Morning Ireland, Financial Services Union Secretary General John O’Connell said this decision would affect 2,800 employees in the Republic of Ireland and another 600 in Belfast.
“The focus should be on protecting jobs,” he said. “Jobs should be a priority for everyone. For Natwest, for those interested in acquiring loans and for the minister ”.
In another statement from the union, he expressed “deep disappointment” at the decision.
O’Connell said: “The Minister of Finance has a vital role to play now and he needs to bring all the key stakeholders around the table to discuss and agree on the response to this situation. In approaching this process, we will encourage constructive solutions as long as they provide maximum protection for customers, staff and the branch structure.
“Our position is clear: the maximum number of jobs must be protected, staff must have the option to relocate with the job, and all service agreements must be honored and transferred. There should be no mandatory layoffs: any proposal for a voluntary layoff plan must be agreed with the union … In the same way, vulture funds cannot play any role, they can never be part of the solution ”.
Political reaction
In a statement this morning, Finance Minister Paschal Donohoe said it was a “difficult day” from an Irish banking perspective and for Ulster Bank staff.
He said: “I welcome the reference made this morning to the other two 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 possible further development from the already well established Irish banks, there is still a lot of work to be done in the coming months.”
Donohoe said that neither he nor the government had any role in business decisions like these.
“Ulster Bank customers are also assured that there are strong consumer protections in place in the event the bank withdraws from the Irish market, including the Central Bank’s codes of conduct and that the terms of any contracts currently in force with Ulster Bank will remain in place in the future, ”he added.
Speaking yesterday, Tánaiste Leo Varadkar said that the bank’s potential withdrawal was a “matter of real concern” for the government.
He said Donohoe was evaluating all options to try to minimize any job losses and reduce the negative impact it could have on competition in the industry.
He expressed concern about the effect on staff and clients of media speculation about the bank’s future.
Varadkar told the Dáil that if he closed in Ireland all deposits and savings would be “fully protected”.
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Also speaking to Morning Ireland, Sinn Féin finance spokesman Pearse Doherty said the Irish government must ensure that clients and jobs are protected.
“This is where there is a very clear role for the Minister of Finance,” said Doherty. He said that, as a shareholder in PTSB, the government helps “strengthen” this bank to make it a major player in the Irish market.
“We need more competition,” he said, adding that higher interest rates could emerge with the lack of competition.
Doherty said all banks operating here should enter into talks with Ulster Bank.
“The crucial thing is that we must ensure that the mortgage book is not sold to vulture funds,” he said. “People shouldn’t move their tracking rate mortgage to another bank. If it moves as part of a sale, it is safe. “
In a statement, Labor finance spokesman Ged Nash said the exit was a “hammer blow to staff and clients.”
“My immediate thoughts and concerns are related to the bank’s dedicated staff, whose future is uncertain,” Nash said. “Any potential sale or merger must respect the right of staff to have their existing terms and conditions transferred with them and mandatory layoffs must be off the table.
What we must avoid is the gradual dismantling of the bank and its operations by the vulture funds and other Irish banks, which will undermine any effort to create a true third force. It is up to the government and the Minister of Finance to push for that result rather than act as commentators.
The bank and its assets are now vulnerable and any asset sales to vulture funds must be categorically ruled out.
With reporting from Ian Curran, PA
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