Ulster Bank-owner NatWest to pull out of Ireland
NatWest Group (NWG.L), the owner of Ulster Bank, has confirmed plans to pull out of Ireland in the coming years.
NatWest said on Friday that it had concluded a strategic review of its Republic of Ireland business and decided it would "not be in a position to achieve an acceptable level of sustainable returns over our planning horizon."
"As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years," the bank said.
"We intend to do this in a responsible way, with careful consideration of the impact on our customers, colleagues and other stakeholders and in a manner that is closely aligned with our purpose and balances the interests of all our stakeholders."
NatWest has signed a €4bn deal to sell its Irish commercial lending business to Allied Irish Bank. The bank is in discussions with Permanent TSB about a possible sale of its retail business in the Republic of Ireland.
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"Our preference is to continue to focus our discussions with counterparties who can provide customers with full banking services in the Irish market," the bank said.
"Nothing changes today for staff or customers. There will be no compulsory departures or branch closures in the Republic of Ireland this year as a result of this announcement."
Ulster Bank's Northern Irish business will be unaffected by the plans.
"In recent years, our strategy for Ulster Bank in the Republic of Ireland has been to improve returns by growing the business, reducing costs and resolving legacy issues," chief executive Alison Rose said in a statement. "I want to pay tribute to our colleagues who through their commitment and dedication have helped to transform this business.
"Our priority over the coming months will remain on supporting our customers, communities and colleagues through these difficult times."
Susannah Streeter, a senior investment and market analyst at Hargreaves Lansdown, said the withdrawal marked "the most radical change on the Irish banking landscape since the 2008 financial crisis."
"The bank has been burdened with a big book of distressed mortgage loans," she said. "It’s also struggled in an era of ultra-low interest rates with net interest margins squeezed and little end in sight.
"Although this radical pruning will be seen as a sad moment in the long history of Ulster bank on the island of Ireland, it is likely to be welcomed by investors as a prudent move towards sustained recovery for NatWest."
The announcement came as NatWest Group announced its full-year results. The bank slumped to a loss in 2020 due to over £3bn in provisions taken to cover possible losses linked to the COVID-19 crisis.
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