Ulster bank to pull out ?
- Thread starter peemac
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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.
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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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.
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.
Gordon Gekko
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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.
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..............
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..............
Brendan Burgess
Founder
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Good piece in the Irish Times
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
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
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
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.
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.
which was Irish
I back a good accumulator there.
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?
NIB
newirishman
Registered User
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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.
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!
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!
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.
That's true in every country in the world really.
Natwest considering closing Ulster Bank in the ROI
Can't say I'm suprised if it happens, not good for staff or customers and competition....even if Advent only started up the other day.
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]