| 14.7°C Dublin

No cost-cutting at Ulster Bank as NatWest denies 40pc cutback plan

 

Close

Future needs: Ulster Bank CEO Jane Howard has put the bank’s search for a new HQ on hold

Future needs: Ulster Bank CEO Jane Howard has put the bank’s search for a new HQ on hold

Future needs: Ulster Bank CEO Jane Howard has put the bank’s search for a new HQ on hold

Ulster Bank is not planning dramatic cost reductions beyond measures already announced, despite a report its UK parent aims to slash overheads by 40pc, sources at the Irish bank have insisted.

A report in the weekend's 'Sunday Times' newspaper said top managers at newly renamed NatWest were to be presented with plans to slash up to £3bn (€3.28bn) of costs over five years yesterday, ahead of financial results due to be reported on Friday.

That cost-cutting would dramatically reduce staff and branch numbers.

NatWest, the former Royal Bank of Scotland, owns Ulster Bank and the Irish operation has consistently reported higher costs relative to the UK retail bank.

The 'Sunday Times' report said NatWest would look to reduce annual operating expenses from £7bn to £4bn.

Ulster Bank had announced plans back in February to cut its costs, including a redundancy scheme for 100 managers as part of an earlier £250m group wide cost-cutting plan.

However, the bank's parent insisted there is no plan to go beyond such already announced plans.

A NatWest Group spokesperson said: "We do not have any plans of this type. We set out our strategy in February, which includes a £250m cost reduction target, and we are committed to delivering on that."

Ulster Bank declined to comment further, saying the bank is in a so-called "closed period" ahead of announcing financial results this Friday when it is precluded from making market- sensitive comments.

Sources in Dublin insisted there is no plan for further cutbacks here, but warned that the cost of doing business is being looked at given the current levels of uncertainty the industry and the economy is facing.

Bank profitability was already under severe strain at the start of this year as a result of historically low official interest rates, which the European Central Bank has warned will not rise any time soon.

Since then, the Covid-19 pandemic has hammered banks' income and is set to drive up loan losses while at the same time driving up costs. Those costs include the resources required to deal with tens of thousands of payment break requests.

In the wake of the Covid outbreak, CEO Jane Howard said she had put a search for a new Ulster Bank headquarters on hold to assess the bank's future property needs as more staff work from home.

Irish Independent