Ulster Bank will not take part in NAMA scheme
Published 19/02/2010 | 07:27
ULSTER Bank, the country's largest foreign-owned bank, has made a final decision this week not to participate in the National Asset Management Agency (NAMA) scheme, according to sources.
Today marks the final day for banks to submit an application to take part in the scheme.
The move comes as a small number of NAMA officials grapple with a slew of data being transferred by the five lenders participating in the 'bad bank' scheme. "There is a large bottleneck building up," said one well-placed source.
But they said the banks were still on track to meet a deadline set for the end of next week for the completion of due diligence on the first €19bn tranche of loans bound for NAMA.
The European Commission still has to give the project the green light.
Meanwhile NAMA is believed to have told the banks that public money cannot be used to purchase any loan advanced on the basis of faulty documentation. The toxic loans agency is believed to have been advised of this by the EU Commission. Any so-called 'tainted' assets cannot be purchased under state aid rules, sources said yesterday.
Ulster's decision was expected, even though Stephen Hester, chief executive of Ulster's parent Royal Bank of Scotland (RBS), had told analysts last November that its Irish unit could dump a "small element" of its risky property loans into NAMA. RBS is 84pc-owned by the UK taxpayer.
Ulster chief executive Cormac McCarthy had also written to Finance Minister Brian Lenihan last year to say he believed the bank qualified to take part in the country's 'bad bank' scheme, should it choose to.
Mr McCarthy said that Ulster, as the largest foreign-owned bank in the country, with €63bn of assets, 6,500 employees and 214 branches, reserved the right to apply to join NAMA.
RBS has £280bn (€320bn) covered by its participation in a UK asset-protection scheme.