Sunday 21 January 2018

Ulster Bank to slash branches and lay off up to 1,800 workers

Charlie Weston Personal Finance Editor

ULSTER Bank will lay-off up to a third of its staff, close many rural branches and get tough with those in mortgage arrears.

Bank boss Jim Brown revealed the shock plan to lay off as many as 1,800 staff and close up to 40 branches.

The British-owned bank, which employs 5,800 staff on both sides of the Border, is in the process of shutting 22 branches on the island.

Now it plans a new cull of between 30 and 40, and will lay off between 1,400 and 1,800 workers.

Larry Broderick, the general secretary of bank staff union IBOA, responded angrily to the surprise announcement.

However, the bank said last night that much of the reduction in staff numbers would come from people retiring and others going to other jobs.

Ulster Bank told investors in London that it saw a lot of evidence of "strategic defaulting". This is where people can meet their mortgage payments but choose to use the money for something else.

Mr Brown and fellow executive Stephen Bell said the bank would go to the courts to seek repossessions.

Ulster Bank claims that no payments are being made on more than a third of the mortgages it has issued. The average mortgage in arrears has €173,000 owed on it.

Typical repayments of €650 a month are being received by the bank. But if homeowners had to rent a similar property, they would end up having to pay €1,000 a month, Mr Bell said.

The bank said it would meet targets being set by the Central Bank for resolving problem mortgages "mainly via legal routes".

All banks have to offer a long-term solution, which includes repossession, to half of those in arrears by the end of the year.

Union chiefs said the bank's announcement had come as a bolt from the blue, without prior consultation with employees.

Mr Broderick said: "I sometimes wonder if the senior management in Ulster Bank are deliberately trying to sabotage the bank's future by their cavalier approach."

The loss-making bank has laid-off close to 1,000 staff already, but its aim is now to end up with between 4,000 and 4,400 staff by end 2016.

A spokesman said it currently has 214 branches, 135 in the Republic and 79 in the North.

Mr Brown told investors the plan was to get to a situation where there are between 175 and 185 branches.

This will mean closing dozens of mainly rural branches and further cutting back on staff.

Branches that remain will be in larger towns and cities, with fewer staff working in them.

New cost-cutting at the bank comes weeks after the British chancellor raised the possibility of selling Ulster Bank's assets.

STRENGTH

George Osborne said he has ordered a review, to report in the autumn, into the possibility of breaking up Ulster's parent, Royal Bank of Scotland (RBS).

British taxpayers have had to sink €16.3bn into saving Ulster Bank. Now it plans to use the strength of RBS to "build a market-leading proposition" in Ireland and return to profitability by 2016.

Moves to close more branches come as all the major banks, with the exception of Bank of Ireland, are cutting back.

AIB has plans to close 67 branches, leaving only 200.

Danske Bank, previously National Irish Bank, closed its 27-branch network at the end of last year.

Permanent TSB closed 16 branches, while it changed two into self-service branches and amalgamated two more. It has 72 full branches left. The withdrawal of Halifax Bank of Scotland resulted in the loss of 44 branches in 2010.

Irish Independent

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