Business

Saturday 21 October 2017

Ireland got a £10bn back-door bailout from UK, claims newspaper

The Times reports that Ireland received the cash injection to pump into Ulster Bank
The Times reports that Ireland received the cash injection to pump into Ulster Bank

IRELAND accepted a £10bn 'back-door bailout’ from the UK, a British newspaper has claimed.

The Times reports that Ireland received the cash injection to pump into Ulster Bank, further to the sector’s initial £45bn bail out five years ago.  A subsidiary of the Royal Bank of Scotland, Ulster Bank has apparently received a previously unreported amount of £10bn.

This is more than three times the £3.25bn direct loan offered by the British Government to Ireland in 2010.

The article focuses on the outrage of British taxpayers at another seemingly clandestine financial loan to its Irish neighbours.

It includes calculations from Investec’s Ian Gordon that demonstrate Ulster Bank represented £12.7bn of RBS’s £44.3bn in bad loans since 2008.  “When RBS failed, Ulster Bank accounted for only around 10pc of group loans, yet cumulative Irish impairments since then have been £12.7bn and over just the past three years Ireland has contributed around half of all RBS bad debts,” said Gordon.

Speculation on the topic of the separation of Ulster Bank from parent RBS has now become rife, according to The Times. It quotes an anonymous Tory minister who said that the UK should have insisted that the Irish Government took full control of the bank in 2010. “We should have dealt with this at the time of the bilateral loan negotiations. We missed a trick by failing to do so,” he said.

However, RBS Group executive Stephen Hester last week said that he still intends to keep Ulster Bank under the RBS umbrella.

But Jeffrey Donaldson of the Democratic Unionist Party has outlined concerns UK taxpayers may have. “The situation undoubtedly raises questions about the accountability to Parliament and the British public about the kinds of bailout that have been going on under the surface in the banking system,” he said.

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