A formal announcement is expected on Ulster Bank’s operations in the Republic of Ireland tomorrow.
Updated Feb 18th 2021, 12:53 PM
LEO VARADKAR HAS told the Dáil that the Government will explore all options if NatWest Group decides to wind down Ulster Bank in the Republic of Ireland.
NatWest had been carrying out a strategic review of its operations in the Republic of Ireland for a number of months.
Last night, the Irish Times reported that a decision is set to be made this evening with a formal announcement expected tomorrow morning when the UK group announces its full-year results for 2020.
Sinn Féin finance spokesperson Pearse Doherty raised the matter at leader’s questions this afternoon.
He said one option available to the government would be to leverage its shareholding in other banks to create a “third force” to safeguard competition within the market, which is dominated by Bank of Ireland and AIB.
Permanent TSB has long been considered a prime candidate for a merger with Ulster Bank.
“The State remains a key player in the Irish banking sector, with a 14% stake in Bank of Ireland and a majority shareholding in both AIB and Permanent TSB,” Doherty said.
“The government must now look at how these pillar banks and Permanent TSB could play a lead role if the worst comes to pass tomorrow, offering some degree of security to mortgage holders to businesses to personal customers and to workers.”
Asked by the Donegal TD if he would support the creation of a “third force” in Irish banking to compete with Bank of Ireland and AIB, Tánaiste Leo Varadkar said, “that is something that I support and something that government supports.
“And if it’s possible to develop a solution on those lines, that’s something that we are exploring and want to explore.”
‘Difficult and deeply troubling’
There has been an influx of calls from Ulster Bank mortgage holders looking at options to switch to another lender, mortgage brokers have said.
It comes as it appears likely that the bank will exit the Irish market and slowly wind down its operations over the coming years.
Ulster Bank employs roughly 2,800 people in the Republic of Ireland.
Earlier this month, the Financial Services Union described a meeting with the CEO of the bank as “difficult and deeply troubling”. It also called on the Finance Minister Paschal Donohoe and the Central Bank to “make urgent statements about the situation”.
“If NatWest decides to exit the Irish market, any solution needs to involve the maximum protection for customers, for jobs and the branch structure,” the general secretary said.
“There is a lot going on at the moment, we understand that, but this issue cannot be allowed to slip under the radar. A decision is coming, and it is coming fast – action is therefore needed now.”
This morning, brokers at MyMortgage.ie said that customers are assessing their options ahead of the expected wind down of Ulster Bank’s operations.
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Its head of credit Joey Sheahan said: “Although the future of Ulster Bank is still unclear, even if they do decide to exit the Irish mortgage, they will still have a duty of care to current customers and obligations to fulfil in that regard, so mortgage holders should not be worried or anxious.
“That said, it would be prudent to look at this time as a chance to review your current position mortgage-wise – primarily, what rate you are paying, and how this compares to what is currently being offered in the market.
Although Ulster Bank’s possible departure from the Irish mortgage market would not be a positive development in the Irish banking sector – particularly, from both a competition and an employment perspective, the uncertainty surrounding Ulster Bank’s future could at least turn out to be a beneficial wake up call to mortgage holders who are paying rates in excess of what they could get elsewhere.
Ulster Bank is part of the NatWest group based in the UK. NatWest has not yet confirmed the closure of its operations in Ireland.
Paschal Donohoe was told by Ulster Bank in October last year that “no decision [had]yet been taken” on the future of the bank’s operations in Ireland.
Donohoe told Ulster Bank that staff, customers and other stakeholders “must be informed properly about any decisions being made”.
He had said previously he was “very concerned” at the reports of Ulster Bank’s expected closure.
— Additional reporting by Ian Curran