THIS IS THE frontpage of the The Times newspaper in Britain this morning which reports that the UK government has given a ‘back-door bailout’ of around £10 billion (€11.8 billion) to the Irish State via Ulster Bank.
The paper reports that the money has been injected into Ulster Bank, which operates primarily in this State, as part of the UK’s £45 billion bailout of its parent bank Royal Bank of Scotland (RBS)at the height of the financial crisis five years ago.
The deal was not approved explicitly by the British parliament in contrast to the UK’s £3.25 billion bilateral loan to Ireland in 2010, the paper says.
It also cites new figures in reporting that Ulster Bank has accounted for one in every four pounds lost at RBS since 2008 and says that Ireland “would have been an unlikely to have coped with the scale of the losses” had it taken over Ulster Bank.
The paper’s banking editor Sam Coates says that the losses in Ulster Bank were not anticipated at the time of the UK bailout and describes the £10 billion as an “injection into the Republic” even though the bank’s parent company RBS is itself 81 per cent owned by the British government.
It is unlikely that government officials here would agree with the paper’s assessment of this as a bailout for the Irish State given it has no stake in Ulster Bank or its parent Royal Bank of Scotland.
This latest report comes after the BBC’s business editor Robert Peston reported last week that the British government is considering a plan that would see the Irish government buy Ulster Bank, an idea which officials here said is not being considered.
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