Ulster Bank’s plans to close branches and lay off additional staff will be a “shattering blow” to its workers and customers, according to the head of the Irish Bank Officials’ Association.
Larry Broderick was responding to comments made by Ulster Bank chief executive Jim Brown in The Irish Times about planned cuts at the bank.
In his interview today, Mr Brown also said that Ulster Bank's parent company, Royal Bank of Scotland, has commissioned investment bank Morgan Stanley to advise it on potential merger opportunities for its Irish arm.
Ulster Bank, which is the biggest bank in Northern Ireland and the third largest in the Republic, has racked up losses of £2.5 billion over the past two years.
Ulster Bank accounts for less than 4% of RBS's assets but was responsible for 20% of its bad debt charges last year.
IBOA general secretary Larry Broderick said further cuts at Ulster Bank would have an impact on the service offered to customers, as it would come on the back of 1,600 permanent job cutss over the past four years.
“Ulster Bank is one of many banks which appear to be using internet banking and mobile phone as the pretext for withdrawing face-to-face services to customers”, said Mr Broderick.
“Ulster Bank, of all banks, should know how dangerous it is to become too dependent on IT solutions.”
He said the plans for cuts do not tally with previous comments by Mr Brown, and RBS chief Ross McEwan, that said the bank would put customers “at the heart” of everything it does.
Speaking about the potential for mergers in his interview in The Irish Times today, Jim Brown said there may be further consolidation in the market and the bank was looking to see what role in could play in that.
"There are a number of smaller institutions, without getting into the specifics, and there may be opportunities with those in terms of fulfilling our strategic ambitions, but I couldn't mention specifically who they might be," Mr Brown told the newspaper.
RBS's own chief executive Ross McEwan said last month that he wanted to develop Ulster as a challenger to Ireland's biggest two lenders - AIB and Bank of Ireland.
Earlier this month The Sunday Times newspaper said a team inside RBS was looking at tie-ups between Ulster and other Irish lenders, such as Permanent TSB or the Irish units of Danske Bank or KBC.
At the same time Finance Minister Michael Noonan said he would like a "significant" new bank with a big balance sheet to enter its lending market this year to drive competition in the diminished sector.
Mr Noonan said he was looking at the possibility of overseas banks partnering with Irish lenders to create a competitor to AIB and Bank of Ireland.
"If you look at the banking market, it's very clear that there's the two pillar banks and there's us. What we're looking to do is to become a more compelling choice in the market," Mr Brown told the Irish Times.
"The Government is aware that we are looking at other options. The Government has been very clear. They are looking for a third banking force in the market. There's a lot of work to be done to see if its viable or not," he stated.