RBS chief Hester says group has no plans to sell off Ulster Bank
THE chief executive of Royal Bank of Scotland (RBS) says his bank has no plan to sell Ulster Bank.
The 100pc-owned Irish unit of RBS is part of the "core" RBS bank, Stephen Hester said in a long interview with the Irish Independent.
RBS has been forced to pump almost £14.3bn (€16.8bn) into Ulster Bank to cope with losses on boomtime lending, prompting speculation that the parent could pull out of Ireland altogether rather than keep ploughing in fresh capital.
That speculation was fuelled further this week by reports that the UK Treasury could ask the government here to take over Ulster Bank.
However, in a frank response to the question, Stephen Hester said pulling out of Ulster Bank has never made financial sense.
"Keeping Ulster Bank was always 'Plan A.' Of course we looked at alternatives, but there has never been a moment in the last five years when leaving Ireland was the preferred option," he said.
Career banker Hester was brought in as an outsider to turn around RBS by the then Labour government in 2008.
The costs of keeping Ulster Bank were under review as he unsentimentally slashed the size of the global bank by selling some units and shutting others.
His comments come ahead of the publication later this month of a high-level report on the future of RBS by a British parliamentary commission on banking standards.
RBS is state-owned. The report will include an option of splitting RBS into a 'good' or 'core bank' and 'bad' bank as it is readied for a return to private ownership.
The bank has already spilt itself internally, but the commission proposal would be for a bigger break-up.
The report will be considered by UK Chancellor George Osborne, who ultimately controls RBS through the UK's 81pc stake in the bank.
The implications for Ulster Bank of even a 'good/bad' split are unclear.
An option not in the parliamentary commission report but that has been looked at by UK civil servants is to hand Ulster Bank to the government here in exchange for a share of NAMA assets in the UK.
That suggestion did not come from within RBS, according to sources at the bank, and it is not seen as a runner in Dublin where the Government is trying to exit banks it already owns.
On the wider Irish recovery Hester said he sensed a strong "sense of determination, and relative unity within Ireland to follow through to fix the country's well-known problems".
There are encouraging signs here, he said, including in the property market and declining unemployment as well as the balance of payments and the Government's own healthier finances.
He said the focus for Ulster Bank having survived the crash is to improve as a bank and ultimately make a return on its shareholder's capital.
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