Tuesday 23 January 2018

Ulster Bank ‘remains committed to Ireland’, head insists

Ulster Bank CEO Jim Brown
Ulster Bank CEO Jim Brown

Donal O’Donovan

THE head of Ulster Bank has said the lender remained “committed to Ireland” even as speculation mounts that its parent Royal Bank of Scotland will plug on the business here. Mr Brown suggested people in work and with means to pay their mortgage are refusing to do so.

Appearing before the Oireachtas finance committee this afternoon, Jim Brown said his bank did not plan to pull out of the island.

Mr Brown added that the first half results for the lender were “solid and encouraging” and that the bank’s core business remained on track to turn a profit by next year.

The bank is in the process of cutting around 1,800 jobs as it looks to revitalise its business.

He said there was no correlation between the unemployment rate and levels of mortgage arrears - unlike in similar jurisdictions such as Northern Ireland.

 

"In most markets the unemployment rate is directly correlated to mortgage arrears, so the higher the unemployment rate is, the higher mortgage arrears tend to become," Mr Brown told the committee.

 

"We've done some analyses across Northern Ireland, which has experienced similar distress to the Republic. Up until 2011, that correlation held. Since then in Northern Ireland, that has continued to be the case. Where unemployment has moved up, mortgage arrears have risen.

 

"But in the Republic, unemployment has come down from a peak, while in the same period mortgage arrears across the market has increased."

Mr Brown followed Bank of Ireland chief Richie Boucher who told the committee this morning his firm had offered deals to some 27pc of its mortgages that were in default.

His appearance is the latest in a bank chief executives to give testimony to the committee this week. AIB chief David Duffy appeared on Tuesday, while Permanent TSB boss Jeremy Masding is due in tomorrow.

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