draws up rescue plan for Ulster Bank: report
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[March 03, 2014]
LONDON (Reuters) — Part-nationalized
Royal Bank of Scotland <RBS.L> is working on a plan to salvage its
troubled Irish business, Ulster Bank, by merging it with a number of
rivals, the Sunday Times newspaper reported.
Attempts to find a buyer for the business have failed and a team
inside RBS is looking at tie-ups between Ulster and other lenders,
such as Permanent TSB or the Irish units of Danske Bank <DANSKE.CO>
or KBC <KBC.BR>, the newspaper reported.
Bolting the institutions together could allow the new Ulster Bank to
strip out costs and mount a credible challenge to Ireland's top
Ireland's finance minister Michael Noonan said on Saturday he would
like a "significant" new bank with a big balance sheet to enter its
lending market this year to drive competition in the diminished
Noonan said on Sunday that he was looking at the possibility of
overseas banks partnering with Irish lenders to create a competitor
to the country's biggest lenders — Allied Irish Bank <ALBK.I> and
Bank of Ireland <BKIR.I>.
"I'm sending a signal out to the European banking system that a
growing economy in Ireland has space for more banking activity and
we would welcome their participation in Ireland by way of
subsidiaries or by way of going into partnership with some of our
domestic banks," he told national broadcaster RTE.
Ulster Bank has racked up losses of 2.5 billion pounds ($4.2
billion) over the past two years. It accounts for less than 4
percent of RBS's assets but was responsible for 20 percent of its
bad debt charges last year. Ulster is the biggest bank in Northern
Ireland and the third biggest in the Republic of Ireland.
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RBS Chief Executive Ross McEwan said on Friday that he wanted to
develop Ulster as a challenger to Ireland's biggest two lenders.
McEwan was speaking after RBS reported a 2013 loss of 8.2 billion
The Sunday Times said RBS is in talks with a handful of private
equity firms about providing tens of millions of pounds in backing
for the venture.
RBS declined to comment.
($1 = 0.5967 British pounds)
(Reporting by Matt Scuffham; editing by
Catherine Evans and Jason Neely)
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