Ulster Bank’s parent company Royal Bank of Scotland has said it will invest £700 million (€817 million) between 2013 and 2016 in improving its branches as part of a shift in focus towards its domestic lending business.

The bank, which also owns NatWest, said the money would be spent on refurbishments across its 2,066 branches and initiatives to improve customer service.

RBS, 82%-owned by the British government, said it would improve complaints handling and allow customers to open accounts more quickly.

It also plans to simplify the processing of mortgages and provide new self-service machines in its branches.

The bank is concentrating on its routine retail operations, having cut back its huge investment banking business since it was rescued with a £45.5 billion state bailout following the 2008 financial crisis.

The British government wants it to focus on lending to households and small businesses.

The new initiatives are part of a strategy set by Ross McEwan, who was appointed head of RBS's UK retail business in August last year, joining from Commonwealth Bank of Australia, where he was in charge of retail banking services for five years.

In a presentation to investors, Mr McEwan said he planned to make RBS the best retail bank in Britain.

"There's a big space there for it. I've not met anyone who believes there's great retail banking in the UK," he said.

Mr McEwan said the bank will invest in rejuvenating its NatWest brand, which accounts for 80% of its business, and in re-building its RBS brand and growing market share in Scotland.

Mr McEwan faces a challenge in restoring the image of the bank after a computer systems failure caused disruption to millions of its customers last year while the bank faces a £3.5 billion compensation bill for mis-selling.