RBS pumps a further e480m into Ulster Bank
Saturday October 24 2009
Royal Bank of Scotland pumped a further €480m into its Ulster Bank unit last month, bringing the total of fresh capital provided to its loss-making Irish unit this year to over €2bn.
Earlier this month, UK politicians criticised RBS, which is 70pc government-owned, for using taxpayers' money to prop up its Irish division.
The staggered capital injections have helped cushion Ulster Bank's balance sheet at a time when the all-island lender is suffering from spiralling loan losses, mainly as a result of soured property development loans.
Loans
Ulster posted a £500m (€567.2m) loss for the first half of the year, after writing off £641m of impaired loans. The write-offs largely relate to the £15bn property-dominated portion of the bank's £54bn Irish loan book, which has been bundled off into a separate, "non-core" division.
It plans to either sell off, restructure or write off these loans over time. Some £9bn of the loans moving into the new unit relate to Irish property developers, understood to include its most high-profile borrower, Sean Dunne, who the bank backed in the €379m purchase of the Jurys and Berkeley Court hotel sites.
As part of efforts to slash costs, Ulster Bank is in the process of seeking 250 job cuts in addition to the 750 voluntary redundancies that it announced last January.
The bank is also planning to cut benefits to staff in its defined benefit pension scheme, close the scheme to new members and freeze pay this year. (Additional reporting, Bloomberg)
- Joe Brennan
Irish Independent
