Minister for Finance Paschal Donohoe has reassured Ulster Bank customers that “robust consumer protections” are in place, after the bank’s parent company NatWest Group confirmed that it intended to withdraw from the Republic of Ireland.
After weeks of speculation, NatWest said this morning (19 February) that it intended to begin a “phased withdrawal” over the coming years, adding that this would be managed in an “orderly and considered manner”. The decision does not affect Ulster Bank’s banking business in Northern Ireland.
Minister Donohoe (pictured) pointed to the Central Bank’s codes of conduct and added that the terms of any contract currently in place with Ulster Bank remain in place into the future.
Talks with AIB, PTSB
Ulster Bank said there would be “no immediate impact” on customers’ products or day-to-day banking. It noted that NatWest was seeking to ensure that customers were supported and job losses were minimised.
NatWest has already agreed a memorandum of understanding with AIB, under which AIB would acquire around €4 billion of performing corporate and commercial loans. The potential deal would include the transfer of the staff managing the loan book from Ulster Bank to AIB.
In addition, Permanent TSB has said it is in “early discussions” with NatWest about taking on some of its businesses in the Republic of Ireland. The talks cover deposits and loans linked to retail customers and small businesses.
Devastating
Meanwhile, responding to Ulster Bank’s announcement, Small Firms Association (SFA) chair Graham Byrne said: “It is devastating news to hear that Ulster Bank, a pillar bank that has been in business servicing the small business community for 156 years, is exiting the Irish market.
"This decision is not just bad news for the Irish banking sector but for the dedicated staff and customers who will be directly affected.
“This announcement is a further blow for Irish small business and entrepreneurs accessing Irish banks. There has been unprecedented contraction since the credit crisis of 2009, which saw the flight or closure of multiple business banks and non-banks."
Slower rebound
"This was not addressed in the past decade and further compounds the lack of competition in business banking. Given the exceptional challenges that both the pandemic and Brexit have created, Ulster Bank’s departure, while phased, will play a significant factor in a slower rebound for indigenous small business," he said.
“We urge the Government to focus on attracting new bank and non-banking activity into Ireland to fill the gap that this will leave.
"Boosting finance providers for all small business will deliver greater options, better products and innovated solutions which will allow small firms to drive the recovery phase of this crisis by creating jobs and growth,” concluded Byrne.