Sunday 24 September 2017

Dan White: Chop for RBS boss could trigger second phase of bank crisis

The hidden aspect of our economic downturn has been the losses suffered here by foreign-owned banks.

Dan White

Dan White

THE abrupt departure of Stephen Hester as RBS boss, coming just a week after he denied Ulster Bank would be sold, serves as a warning that the Irish banking crisis may be about to enter a second, more dangerous, phase.

Normally the identity of British bank bosses is of interest only to business anoraks on this side of the Irish Sea. Not so with RBS, which owns Ulster Bank in this country. RBS has been 81pc-owned by the British government since the £45bn (€52.9bn) bailout in 2008. One of the biggest headaches for RBS has been Ulster Bank, which has swallowed up almost a third of the British government's £45bn.

While Mr Hester's departure seems to have been caused by his falling out with UK Chancellor of the Exchequer George Osborne, it would be naive to assume that it was entirely unrelated to events at Ulster Bank. The continuing problems at its Irish offshoot are making it difficult, going on impossible, for the British government to sell all or part of its RBS shareholding.

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