UPDATED 5.12pm
ULSTER BANK WILL look to further cut costs despite registering a profit of €486 million over the past three months.
But after speculation the bank’s UK parent company the Royal Bank of Scotland (RBS) would sell off its Irish operations to a private-equity firm, it was today officially confirmed the bank was staying in the hands of its government-run owner.
RBS confirmed Ulster Bank would remain a “core part” of its operations as it told investors the subsidiary bank, which operates about 200 branches and offices across the island of Ireland, offered a “good strategic fit” with its retail and commercial operations.
“We have a good market position and believe that Ulster Bank can deliver attractive returns, with appropriate investment,” RBS said.
Ulster Bank recently went on a cost-cutting drive and has closed up to 40 branches and sub-offices as it tried to cement profits.
In its management statement, RBS said it was still focussed on “implementing cost-saving initiatives” in the Irish lender.
Ulster Bank recorded an operating profit of £394 million (€486 million) over the past three months, up from only £46 million for the previous quarter.
Rising property prices are helping the bank
RBS said the performance was mostly because the value of its assets and loans had increased due to rising Irish property prices and “proactive debt management”.
Ulster Bank has been busy offloading bad loans, including a €1.7 billion-odd portfolio linked to 315 Irish and UK properties.
The bank’s total income for the three months was £214 million (€272 million) and its operating expenses were £150 million (€191 million), with the rest of the profit coming from the boost to its asset values.
Chief executive Ross McEwan said both the UK and Ireland were showing signs of growth and its balance sheets were looking “significantly better” than expected at the start of the year.
But we know we still have a long list of conduct and litigation issues to deal with and much, much more to do to restore our customers’ trust in us,” he said.
RBS has been hit with a £4 billion lawsuit in the UK from disgruntled investors who claim it hid its perilous financial state before the government’s 2008 bailout.
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