The Government yesterday poured cold water on reports from the UK that the treasury there is considering a proposal that would transfer some or all of Ulster Bank to the Irish State as part of a radical plan to restructure its parent company, Royal Bank of Scotland.
It is understood that this might involve swapping some or all of Ulster Bank for the British assets of the National Asset Management Agency.
A spokesman for the Department of Finance said no formal discussions have been held with the Government on this proposal. “This is not being considered. There have been no approaches made,” he said.
A draft report from the UK Parliamentary Commission on Banking Standards, which was leaked yesterday, is reported to have called for the break-up of RBS into a good bank and bad bank.
'Bad bank'
RBS received a £45.8 billion (€53.6 billion) bailout from the UK taxpayer following the financial crisis and further restructuring would see its toxic assets hived off into a "bad bank".
UK taxpayers own 81 per cent of RBS.
A source close to the UK treasury confirmed that other options are being considered and that, although an Irish takeover had been discussed, no formal approach had been made to the Government here.
The report could put pressure on chancellor George Osborne to drop his plans to sell part of the UK government's 81 per cent stake in the bank.
A spokesperson for the UK treasury added: “The government’s policy remains that RBS continues to become a stronger and safer bank that supports the British economy, which, in time, can be returned to full private ownership when it’s in the interests of the taxpayer to do so.
“We will set out the way ahead once the parliamentary banking commission has completed its work.”
No comment
Ulster Bank declined to comment on the proposal and said it remains a "core part" of RBS.
"As the third largest bank on the island of Ireland, Ulster Bank employs approximately 6,000 people who serve over 1.9 million personal and business customers. RBS has invested over £15 billion in capital into Ulster Bank Group since the start of the financial crisis and is committed to the Irish market."
Ulster Bank made a loss of £1.04 billion in 2012 after impairment charges of £1 billion were booked. It has 13,500 mortgage customers in some form of forbearance by the end of 2012. In its recently published first quarter results, RBS said credit trends here had “turned a corner”.
Ulster Bank provided loans to a number of high-profile transactions during the property bubble years, including the €1.166 billion sale of budge hotel chain Jurys Inn; Sean Dunne’s purchase of the former Jurys and Berkeley Court hotels in Ballsbridge; and Arnotts’ ambitious Northern Quarter retail development in Dublin.
