Ulster Bank will begin a phased withdrawal from Ireland over the coming years in line with a strategic review completed by its parent company NatWest Group.

According to NatWest Group, Ulster Bank Ireland is not expected to achieve an satisfactory level of sustainable returns over its planning horizon.

The British bank holding company said that the outcome of its strategic review will not impact Ulster Bank’s banking business in Northern Ireland.

Alison Rose – NatWest Group CEO said: “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.

“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.”

NatWest Group, as part of the phased withdrawal, has signed a non-binding memorandum of understanding (MoU) with Allied Irish Banks for selling around €4 billion portfolio of performing commercial loans. The MoU also covers the transfer of the employees who are fully or primarily assigned to the loan book.

The potential sale intended by the MoU will be subject to due diligence, further negotiation, and agreement of final terms and definitive documentation, and also receipt of regulatory and other approvals, and meeting of other conditions.

NatWest Group advised that the proposed sale may not be executed on the terms outlined in the MoU, or may not take place at all.

The British bank holding company also revealed to have initiated discussions with Permanent TSB Group and other strategic banking counterparties regarding their potential interest in acquiring certain retail and SME assets, liabilities, and operations.

While adding that the talks may or may not end in an agreement, NatWest Group said that it prefers to continue to focus its discussions with counterparties who can offer full banking services to customers in the Irish market.

Jane Howard – Ulster Bank CEO said: “We will engage with customers, colleagues, their representatives and our communities in the coming months to listen to their concerns and to work with them and alongside them and to update on how change will be responsibly managed through the phased withdrawal process.

“Despite the disappointment of this decision, Ulster Bank and NatWest, will work hard to minimise the impact on colleagues and customers and ultimately to provide a successful banking transition for customers. In the meantime, we remain open for business across all of our channels for both existing and new customers.”

  Alison Rose, Ireland, Jane Howard, NatWest Group, Ulster Bank, Ulster Bank Ireland