Ulster Bank to remain in Irish market: RBS

Friday 01 November 2013 21.41
Around £9bn (€10.6bn) worth of Ulster Bank assets could be transferred to an RBS 'bad bank'
Around £9bn (€10.6bn) worth of Ulster Bank assets could be transferred to an RBS 'bad bank'

Ulster Bank’s parent group Royal Bank of Scotland has recommitted itself to the Irish market following the announcement of a major company overhaul.

It said Ulster Bank was an "important business for the whole island of Ireland" and that it wanted to ensure it had a "viable and sustainable business model" into the future.

The Ulster Bank business is to form part of a wider company review, which would likely see around £9 billion (€10.6 billion) worth of assets being transferred to an internal "bad bank".

RBS, which is more than 80% owned by the British government, is to create the internal division to manage troubled assets worth £38 billion in total, avoiding a full split of the company.

The business review initiated by its new chief executive Ross McEwan will report back in February.

The lender revealed its plans as it said operating profits more than halved to £438m in the third quarter on a year earlier.

RBS will make a substantial loss this year as the faster run-down of assets in the internal bad bank will cause an accounting write-down of up to £4.5 billion.

When one-off items and an additional charge of £250m to cover redress for the mis-selling of payment protection insurance are included, RBS made a bottom-line loss of £634 million in its third quarter results.

Separately, RBS has suspended two of its traders in connection with an investigation into the possible manipulation of foreign exchange rates.

Regulators in the UK, the US and Switzerland are looking into whether banks colluded to set exchange rates.

The executives from three banks have been put on leave although no-one has been accused of any wrongdoing.