Ulster Bank Group is to absorb the business of First Active, formerly the First National Building Society, with the loss of 750 jobs.
In 2003 First Active was acquired by Ulster Bank Limited, part of The Royal Bank of Scotland Group.
550 jobs are to go at its operations in the Republic and a further 200 in Northern Ireland.
Group Chief Executive Cormac McCarthy said he is confident Ulster Bank can secure 750 redundancies on a voluntary basis.
The company says a voluntary severance package will be made available to staff throughout the group and meetings will be held to discuss the merger and redundancy terms.
The redundancies are part of a move by Ulster Bank Group to merge its specialist mortgage and investment arm, First Active, with Ulster Bank.
Following the merger, the First Active brand will disappear and all First Active customers will be automatically transferred to Ulster Bank.
Ulster Bank Group, a subsidiary of Royal Bank of Scotland, employs 7,000 people in both the Republic and in Northern Ireland.
First Active has 60 branches in Dublin and the larger towns and cities, employing more than 400 people.
There is also a nationwide network of Ulster Bank branches, which was a good idea in the boom when lenders aggressively sought to build their loan books, but it is of little value in a recession.
All 60 First Active branches will be closed.
In locations where there is both a First Active branch and an Ulster Bank branch, one of the branches will be closed and the other will be branded Ulster Bank. In 15 First Active branches (in locations where there is no Ulster Bank already nearby), the branch will be converted to an Ulster Bank.
The merger is expected to be completed toward the end of this year. Ulster Bank is then expected to have 1.8m customers and 295 branches.
A voluntary severance package will be made available to staff throughout the Group.
Meetings will be held with employees and employee representatives in the coming days.
Trade Unions in Ulster Bank and First Active say there must be no compulsory redundancies at either bank as a result of restructuring by their parent bank Royal Bank of Scotland.
At a media briefing, General Secretary of the bank officials union IBOA Larry Broderick said that he believed Ulster Bank Group staff were scapegoats for mismanagement in the parent company.
SIPTU's Owen Reidy described the proposed job cuts as crude and said more talks must take place on the plan.
These will be the first substantial job losses in the retail banking sector arising from the global recession and the bursting of the property bubble.
Today's move comes as Ulster Bank's parent Royal Bank of Scotland struggles to survive the credit crunch, which has wiped out most of its market value.
The British government is set to assume majority ownership of the bank, which was once one of the biggest in the world.
Meanwhile, Gerry Shanahan of the Unite trade union said this morning's announcement was more of what is to come, if there is further consolidation of the banking sector.
