The secretary general of the Financial Services Union (FSU) has called on the Minister for Finance to go over the head of NatWest’s chairman and deal directly with the UK Chancellor to keep Ulster Bank in Ireland.
The FSU’s John O’Connell met with Minister of State for Financial Services Sean Fleming yesterday to press the union’s case for preventing Ulster Bank from exiting the Irish market.
He said he wanted the Irish Government persuade the UK government to use the leverage of its 62pc stake in NatWest to prevent Ulster Bank pulling out.
“We would welcome direct engagement with the Chancellor,” said Mr O’Connell told the Irish Independent after the meeting. “The UK government has a stake in NatWest and we think it is appropriate to engage at the government level. So much is at stake that it would justify such a high-level intervention.”
However, a spokesperson for the Department of Finance indicated the idea was unlikely to go anywhere. “Commercial decisions of Ulster Bank are a matter for the Board and Management of the Bank and its parent company, NatWest,” he said.
He added that Finance Minister Paschal Donohoe had met with NatWest management and was keeping the matter under review.
The FSU has been sounding the alarm on Ulster Bank privately since last July when it met senior figures at the bank to discuss what could be done to keep it open.
NatWest confirmed in September that it was considering winding down the bank, Ireland’s third largest, as part of a strategic review which is due to finish in the coming weeks. It was later reported in the Irish Times that NatWest was in talks with US private equity group Cerberus about selling Ulster Bank’s €20.5bn loan book – a claim NatWest denied at the time.
Banking analysts have said that a wind-down of Ulster Bank would release significant capital that is currently locked up in the bank due to strict regulations that apply to the Irish market.
NatWest was paid €500m in a dividend last year, but Ulster Bank still holds €4bn in core capital against risk weighted assets of €15bn, giving it a much higher capital ratio than competitors AIB and Bank of Ireland.
The FSU warned in a statement yesterday that the exit of Ulster Bank would leave the remaining two major Irish banks vulnerable to foreign takeovers and reduce competition, leading to higher prices.