# Ulster bank to pull out ?



## peemac (17 Sep 2020)

Article in Irish times suggests that it is very likely
https://www.irishtimes.com/business...closing-ulster-bank-in-the-republic-1.4357689 

I'm not surprised. Very little IT infrastructure upgrades over the past few years and except some advertising of mortgages, very little marketing. 

They have threatened before, but it seems likely this time.


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## NoRegretsCoyote (17 Sep 2020)

Is it still the case that only AIB, BoI and Ulster do SME lending?

Losing one of three would not be good.


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## peemac (17 Sep 2020)

NoRegretsCoyote said:


> Is it still the case that only AIB, BoI and Ulster do SME lending?
> 
> Losing one of three would not be good.


KBC do business lending and ptsb also offer it.


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## joe sod (17 Sep 2020)

They are not closing in Northern Ireland though same story as Danske bank they also stayed in the North. It must be alot to do with none performing loans and being unable to repossess properties that are not paying the mortgage.


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## Lightning (17 Sep 2020)

I can see why RBS want to exit Ireland:
- Surplus deposits at negative rates. 
- Costly legacy branch network. 
- Lending slowing. 
- Given the state of their IT systems, a merger with PTSB would be very costly and take many years to integrate. 
- A merger with KBC was recently ruled out by KBC. 
- Emerging app competition without legacy costs.  

But exiting Ireland would take a long time, be costly and many resources. The article says the wind down would take 6 years. I bet it will take a hell of a lot longer. 

Sad to see yet another bank likely to exit Ireland.


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## joe sod (17 Sep 2020)

@CiaranT but why are they not exting the North or UK there has to be something disfunctional in the irish financial landscape. Danske made the exact same move 6 years ago. I'd say even BOI or AIB might like to get out too except they are still handcuffed to the state


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## peemac (17 Sep 2020)

joe sod said:


> @CiaranT but why are they not exting the North or UK there has to be something disfunctional in the irish financial landscape. Danske made the exact same move 6 years ago. I'd say even BOI or AIB might like to get out too except they are still handcuffed to the state


They are relatively small here. They are the dominant bank in the UK.


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## joe sod (17 Sep 2020)

CiaranT said:


> - Emerging app competition without legacy costs.


without a legacy of older workers with pension entitlements you mean, a brave new world alright.


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## NoRegretsCoyote (18 Sep 2020)

joe sod said:


> They are not closing in Northern Ireland though same story as Danske bank they also stayed in the North. It must be alot to do with none performing loans and being unable to repossess properties that are not paying the mortgage.



NatWest is a sterling bank and NI is a sterling economy.

Maybe they reckon there is too much risk in having a business (Ulster) that operates in euros. Euro area interest rates are just lower than sterling rates and this produces problems when you have a lot of deposits.


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## Gordon Gekko (18 Sep 2020)

It should be the opposite; if you’re a Sterling business with Sterling exposure, having a foothold in Euroland should be a positive.


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## peemac (18 Sep 2020)

CiaranT said:


> I can see why RBS want to exit Ireland:
> - Surplus deposits at negative rates.
> - Costly legacy branch network.
> - Lending slowing.
> ...


I reckon you have a copy of their internal report    - its as accurate description you could get

The new streamlined players such as KBC (newish to general banking and very much moving to branchless), Revolut, Avant & N26 and more to come all of whom will have a very low cost base probably was the nail in the coffin as lending margins will get smaller

With so much commentary on it, I suspect an official announcement is not far off.


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## MrEarl (18 Sep 2020)

peemac said:


> KBC do business lending and ptsb also offer it.



I think that you'll find that neither do much, when it comes to the SME sector. They've limited experience (KBC used to have more, but wound down and jettisoned a lot of relevant staff), or product offerings. 

PTSB only do relatively small and generally (property backed) secured transactions.

KBC are very selective and tend to only lend to professionals.


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## MrEarl (18 Sep 2020)

Ulster Bank have participated in every one of the main SBCI backed schemes to date, along with AIB and BoI. That probably tells us all something about how they are seen, by the SBCI.


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## NoRegretsCoyote (18 Sep 2020)

Gordon Gekko said:


> It should be the opposite; if you’re a Sterling business with Sterling exposure, having a foothold in Euroland should be a positive.



Why?

Let's say euro business is five per cent of their balance sheet. The fluctuates a lot with the exchange rate. Presumably there is other infrastructure that has to be maintained solely for a euro area presence.


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## MrEarl (18 Sep 2020)

NoRegretsCoyote said:


> Why?
> 
> Let's say euro business is five per cent of their balance sheet. The fluctuates a lot with the exchange rate. Presumably there is other infrastructure that has to be maintained solely for a euro area presence.



If NatWest want to have a Euro presence, the ideal position for them would be to have a Euro banking licence, UB could provide same. (As a brief aside, take a look at what Barclays have done, with their Irish business). 

If NatWest don't want to have a Euro presence, then clearly that's a negative for UB, but then investors need to ask themselves if they want to be exposed to a UK only Bank. 

With the current mess that's known as Brexit, there's likely to be a more negative impact on the UK economy etc. I thnk NatWest would be mad, to have all of their eggs in one basket. Granted, it does mean that they only have to deal with one regulator, one currency, one set of legislation etc.


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## NoRegretsCoyote (18 Sep 2020)

MrEarl said:


> If NatWest want to have a Euro presence, the ideal position for them would be to have a Euro banking licence, UB could provide same.



If that's all you want then I don't think you have to maintain a branch network, take retail deposits and do consumer lending.

My point is that Ulster's RoI operations seem weakly profitable *and *from the perspective of London there is currency risk as well. There doesn't seem to be much diversification benefit from having a small part of your balance sheet doing business with the Irish economy.


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## Brendan Burgess (18 Sep 2020)

Folks, I have moved the questions relating to mortgage holders to this thread 





__





						Implications for mortgage holders of rumoured Ulster Bank pull out
					

Summary   Tracker  customers - The existing tracker is safe.  Whoever buys it would have to respect the existing terms and conditions.   Fixed rate customers - it's unlikely that your mortgage will be sold before UB is closed down.  So no real implications for you.  Thinking of taking out a...



					askaboutmoney.com
				




Brendan


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## Sadim (18 Sep 2020)

Gordon Gekko said:


> It should be the opposite; if you’re a Sterling business with Sterling exposure, having a foothold in Euroland should be a positive.


Not least I would have thought have an EU banking license would offer scope?


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## joe sod (18 Sep 2020)

@NoRegretsCoyote why are they  so worried about Euro exposure if Ireland only a small part of their operations. In the second instance why did danske bank get out of Ireland but maintain sterling exposure in northern Ireland even though they are neither a Euro or a sterling bank . It has to be issues to do with banking in the republic of Ireland. I think ever since the financial crash the government has used the banks as whipping boys, and we went from under regulation of banks to over regulation, and the Irish courts are a law onto themselves with regard to repossessions


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## letitroll (18 Sep 2020)

As much as we all love to hate banks - think we can all agree that a robust, profitable banking system is in everyone's interest.

Its a tough one for policy makers - the Irish market banking profit pool is just too small (if it was bigger the new entrants would have arrived already).......the government has dreamt of creating a genuine third player to counter the dominance of AIB/BOI...UB + PTSB + XYZ was the only hope of that and this announcement quite clearly gooses that completely. It might be time for the policy makers to accept that the size of Ireland points towards a natural duopoly structure.

I'm coming around to the thought that consolidating the Irish banking landscape down into the two main players is now the only viable road forward > allow BOI/AIB to acquire & split UB's Irish assets (BOI could 'swap' its Northern Irish assets to UB in lieu of payment).

In return for cementing the duopoly - the Central Bank of Ireland should/would then need to regulate them like utilities - cap net interest rate margins / ROA, ROE, mandate cost to income ratios to the level of US peers (so they dont get internally bloated).


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## tomdublin (18 Sep 2020)

Regulation doesn't work very well in Ireland as regulators seem to get captured by the industries they are meant to regulate - look at energy, insurance and various parts  of the health sector.


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## letitroll (18 Sep 2020)

tomdublin said:


> Regulation doesn't work very well in Ireland as regulators seem to get captured by the industries they are meant to regulate - look at energy, insurance and various parts  of the health sector.



True and good point.

The financial stability of a consolidated Irish banking sector in the post-GFC world I think is better covered this time given that the Single Supervisory Mechanism (SSM) effectively regulates BOI & AIB. So i think the stability & safety piece is better protected from regulatory capture.

The regulated profit piece though would be open to it.........and I think that capped ROE & targeted cost to income ratio range would need to be tied in someway to US or European peer averages.


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## tomdublin (18 Sep 2020)

Considering the damage they have inflicted and continue to inflict on Irish society & economy it might have been best to nationalize these legacy banks outright, accompanied by an aggressive strategy to attract foreign competitors.  I'm not sure various post-crash governments have been as keen to increase competition as they claim.  There is probably a lot lobbying behind the scenes by established banks aimed at preserving barriers to entry.


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## joe sod (18 Sep 2020)

But sure the banks are barely making any money now with negative interest rates, non performing loans and now covid lockdown. How would competition solve this, no foreign bank wants to come in, the only big foreign owned bank is now getting out even though it has been here for more than  a century and has deep roots, it wants out.


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## Jim2007 (19 Sep 2020)

Gordon Gekko said:


> It should be the opposite; if you’re a Sterling business with Sterling exposure, having a foothold in Euroland should be a positive.



It’s not particularly difficult for a U.K. bank to get a Euroland license if they wish and if they do it would make sense to go for Paris or Frankfurt.  All UB offers is baggage no one needs, especially given the restructuring that will likely happen in the coming years.


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## Gordon Gekko (19 Sep 2020)

Jim2007 said:


> It’s not particularly difficult for a U.K. bank to get a Euroland license if they wish and if they do it would make sense to go for Paris or Frankfurt.  All UB offers is baggage no one needs, especially given the restructuring that will likely happen in the coming years.



It is actually. It takes quite a long-time. Exhibit A being the experience of all of those UK branches based here in Ireland that had to transition to full subsidiaries because of Brexit. Banking licences are not handed out willy nilly.


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## letitroll (20 Sep 2020)

Yep, the evidence is clear, Europe is headed for less banks not more banks and certainly not European players expanding in different EU countries. Banking consolidation across Europe is now the only path to profitability where the banks actually earn more than their cost of capital. 

Look at the list of European banks who's ROE is way below 10%.............& trade consistently post-GFC below P/E's of 10......they're not even earning their cost of capital over a cycle. Many are not businesses anymore but rather prestige/pension vehicles for their management & board.

Pretty clear there is not enough oxygen/profits in the Irish market (with the current interest rate environment) for more than two at scale deposit taking, SME/mortgage, branch based lending banks..............


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## Brendan Burgess (21 Sep 2020)

Good piece in the Irish Times









						Should I switch bank now with Ulster Bank at risk of closing?
					

Q&A: Dominic Coyle




					www.irishtimes.com
				




_if a decision is made to close the bank, it won’t be something that happens in a hurry. This is not a bank on the precipice of collapse but one that is simply facing some hard commercial choices. As such, if the bank is to close, it will have to have its operations wound down over a numbers of months or, more likely, years. 

The bottom line from your perspective is that there is no urgency for you to act and no danger of your salary being paid into a black hole. _

Brendan


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## Drakon (21 Sep 2020)

Strangely, UB are still advertising and sponsoring radio shows in the RoI.


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## Monbretia (21 Sep 2020)

Drakon said:


> Strangely, UB are still advertising and sponsoring radio shows in the RoI.



Wouldn't surprise me at all, nothing moves fast in UB by the time you get approvals etc from on high, those ads will probably still be running when the doors are shut


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## MrEarl (27 Sep 2020)

Drakon said:


> Strangely, UB are still advertising and sponsoring radio shows in the RoI.



Why is that strange, given the official line remains the same - they want to grow the business organically? 

The Bank continues to trade, as normal. 

NatWest carrying out a review that may lead to a different strategy, should not be confused with an announcement having been made, that they've changed their strategy.


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## roker (27 Sep 2020)

Personally I wouldn't have an account in a bank not based in this country. I was in the unfortunate position to be with the Halifax when it close and the Post Bank and the Australian one whose name I cannot remember, something like Nation Irish and of course the Irish Nationwide B Soc.
which was Irish 
I back a good accumulator there.


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## Drakon (27 Sep 2020)

MrEarl said:


> Why is that strange, given the official line remains the same - they want to grow the business organically?




The writing has been on the wall for Ulster Bank for a number of years. 
The financial crisis got the ball rolling. Then there was that disaster a few years ago when people couldn’t access their accounts and were unsure if their direct debits, etc., were being executed or not.
There has been no investment in their technology in years. 

Alison Rose is in the NatWest job less then a year and she has wasted no time in disposing the chaff. A high cost, low profitability arm like UB, which unlike the parent bank is in the EU, is unlikely to be retained. And there’s zero sentimentality either. An internationally high profile brand like Royal  Bank of Scotland (RBS), 15 year sponsor of the Six Nations Rugby Championship, was dispensed with in the at of an eyelid.
UB is gone! If it wasn’t, there would have been positive information leaked, not negative. Waiting till next month for the confirmation is academic. 

Nobody is going to want to open any account with them in the knowledge that within five or six years they’ll be back to square one, or worse. 

So why bother advertise, I ask?


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## Drakon (27 Sep 2020)

roker said:


> Personally I wouldn't have an account in a bank not based in this country. I was in the unfortunate position to be with the Halifax when it close and the Post Bank and the Australian one whose name I cannot remember, something like Nation Irish and of course the Irish Nationwide B Soc.
> which was Irish
> I back a good accumulator there.


NIB


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## newirishman (27 Sep 2020)

Drakon said:


> There has been no investment in their technology in years.



I disagree, at least with that this is not my perception - with UB myself (current account, credit card, mortgage - for many years now); my wife banks with AIB.

anything AIB offers (online banking, app, etc.) is significantly worse than the same UB offering.

Online banking, both web and their apps, have seen significant improvements and new features over the last few years, and continue to get new features on a regular basis - and whilst not quite as slick as my N26 app - no longer far behind.

The disaster few years ago did in fact only inconvenience me slightly, and yes there was one or two other issues. None of them would have been serious enough (for me) to change bank.
Overall, I will be really annoyed if they would in fact pack in completely (which I would be surprised by tbh) given the other Irish banks (regardless of ownership) are as far as I can see really crap.


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## Monbretia (27 Sep 2020)

In fairness they have upgraded their website recently.

I find it hard to believe it will really happen this time, it's a bit like the boy who called wolf, it's far from the first time it was rumoured.  The standing joke the last time this threat was trotted out was that the top guy of RBS,  (can't remember his name now, not Fred the Shred,  youngish bald guy) wanted to go to the top of the RBS headquarters in Edinburgh and throw the keys of UB back across the water.

There is no doubt I think they would have got rid of it if anyone would have taken it on but it didn't happen and unlikely to this time too so total closure is probably the only alternative, a bit messy!  

I always remember being at a meeting early on in their journey to become 'the number one bank on the island of Ireland' and the big wigs saying that they were huge in half the country in basically a line drawn from roughly Galway to Dublin and above that they were flying but not so much below it, a brave regional manager stood up and asked had they ever thought of changing the name from Ulster Bank?  It wasn't such a bad suggestion!


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## peemac (27 Sep 2020)

Monbretia said:


> In fairness they have upgraded their website recently.
> 
> I find it hard to believe it will really happen this time, it's a bit like the boy who called wolf, it's far from the first time it was rumoured.  The standing joke the last time this threat was trotted out was that the top guy of RBS,  (can't remember his name now, not Fred the Shred,  youngish bald guy) wanted to go to the top of the RBS headquarters in Edinburgh and throw the keys of UB back across the water.
> 
> ...


The upgrade was not substantial and at the end of the day they have the benefit of being part of the Natwest group. 

If they make a purely commercial decision, they'll pull out as any reasonable level of profit is several years away and it will require substantial investment in technology and also redundancy programs.

The other part is that they are 60% owned by British taxpayers and have enough local issues to deal with.


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## muinteoir (28 Sep 2020)

Do you think it would affect the mortagages? Would they be sold onto another bank?


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## irishguy (18 Oct 2020)

tomdublin said:


> Regulation doesn't work very well in Ireland as regulators seem to get captured by the industries they are meant to regulate - look at energy, insurance and various parts  of the health sector.


That's true in every country in the world really.


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## Protocol (19 Oct 2020)

Natwest considering closing Ulster Bank in the ROI - Page 2
					

'Competition' in a 'market' dominated by Government owned banks. Yeah




					www.boards.ie
				




A poster on Boards.ie says:

Sunday Business Post implies [broken link removed] that closure is highly likely. "Speculation is rife that the bank is preparing to close its 80-plus Irish branches". Meeting with government minsters in the coming days. Sounds like a precursor to the closure announcement. 

[broken link removed]


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## Peanuts20 (19 Oct 2020)

Nat West have denied any such discussions with Cerberus are ongoing. What is not clear from what I can see is who called the meeting with UB management, the bank or the Minister


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## Lightning (19 Oct 2020)

I would guess the minister is either being given a heads up on the pending exit announcement or the minister wants to be able to show that he did everything he could to save Ulster Bank.


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## Sconeandjam (19 Oct 2020)

I do hope they do not close as we need as much competition as possible. 
Alot of Ulster Bank branches have been closed and mobile units are used down the country.
 I have been with them since First Active years and found them good compared to the two pillar banks. Now one of the pillar banks are going to charge 5euros a month to hold a current account shortly. If Ulster Bank leaves we will be charged even more.


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## skrooge (21 Oct 2020)

DaveLong20 said:


> We currently have a mortgage loan offer from Ulster and intend to draw down.
> Anyone else in a similar position and should we be concerned?


What are your timelines like? If you're going to draw down in weeks keep going. If You've longer why not get loan approval from a second bank. It costs nothing and could give you peace of mind

I'm speculating on speculation but I doubt they'll be pulling the shutters down straight away. They will likely honour any existing mortgage approval in the short term.


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## Sconeandjam (21 Oct 2020)

Great to hear no change to mortgage and can hold onto tracker mortgage.
Just heard on the news that Nat West are still reviewing the future of Ulster Bank so it looks like they will be here for a while yet. Will not be rushing to change banks yet.


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## allaround (21 Oct 2020)

any decision to come out of the market could take sometime, would suspect they'll look to offload as many NPF as possible


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## Eureka101 (21 Oct 2020)

If it’s the same situation as when Danske left the country in 2014, they will sell the entire loan book to a fund, performing & non performing.
I sincerely hope this isn’t the case for UB customers.


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## Protocol (21 Oct 2020)

My NIB/Danske mortgage was sold to Goldman Sachs, serviced by Pepper.

I now have an UB mortgage!!!


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## Pinoy adventure (21 Oct 2020)

What would happen too sumbody who has a large amount of Savings with them ?


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## Lightning (21 Oct 2020)

Pinoy adventure said:


> What would happen too sumbody who has a large amount of Savings with them ?



You will be given X months to transfer the savings to another bank.


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## POC123 (3 Nov 2020)

Protocol said:


> My NIB/Danske mortgage was sold to Goldman Sachs, serviced by Pepper.
> 
> I now have an UB mortgage!!!


Who are you going with next? Remind me NOT to take out a mortgage with them! Seriously though sorry for you dude that is bad luck.


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