Tuesday 25 June 2019

Ulster Bank will look at more sales of distressed home loans

Interim chief executive Paul Stanley said bank will assess loan book.
Interim chief executive Paul Stanley said bank will assess loan book.
Donal O'Donovan

Donal O'Donovan

Ulster Bank will consider further distressed mortgage sales once it completes the disposal of 6,500 problem loans later this year.

Interim chief executive Paul Stanley said that the bank will assess the €1.6bn distressed loan book sale once it closes in "Q3 or Q4" this year, as well as the pace of resolutions of problem mortgages by the bank itself before making a decision.

The bank is under pressure from European regulators to cut its stock of bad loans to around 5pc of all loans by the end of next year.

"We'll have another run through the book at that point, I wouldn't rule one out," he said.

He was speaking after the bank announced an operating profit of €100m in the six months to June 30, significantly up on the €12m reported in the same period last year. The performance was driven by a number of one-off items, as well as a 9pc (€10m) reduction in operating expenses, the bank said in a trading update.

The bank had been behind its traditional mortgage market share coming into the year, Paul Stanley said, but had recovered and now expects further uplift in the second half of the year after introducing a 2.3pc two-year fixed rate - the cheapest in the market - in June.

Pricing at that reduced level is sustainable for the bank, given its cost of capital, he said.

Ulster Bank has not been asked to consider any potential merger partners by the European Central Bank (ECB) or by officials in Dublin, he said.

That was in response to a report in the 'Times' newspaper that Danièle Nouy, chairwoman of the supervisory board at the European Central Bank, suggested that Permanent TSB and Ulster Bank be merged at a meeting with officials from the Department of Finance in April.

The ECB across Europe has been talking about consolidation in general terms, Paul Stanley said, and Ulster Bank would consider potential deals, he added.

However, no putative merger is under discussion, the interim chief executive said.

Irish Independent

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