3rd Mar 2014 07:00
LONDON (Alliance News) - Royal Bank of Scotland Group PLC. is considering merging its struggling Irish business, Ulster Bank, with Irish rivals after being unable to stem the huge losses at the unit or to find a buyer, the Sunday Times newspaper reported.
The report also indicated that a team inside RBS is looking at tie-ups between Ulster and other lenders, such as Permanent TSB or the Irish subsidiaries of Danske Bank or KBC. Bolting the institutions together could allow the new Ulster Bank to strip out costs and mount a credible challenge to Ireland's top players.
Ulster Bank has generated 2.5 billion pounds of losses over the past two years. It accounts for less than 4% of the RBS balance sheet yet last year was responsible for 20% of bad debt charges.
The report added that RBS is in talks with a handful of private equity firms about providing tens of millions of pounds in backing for the venture.
Last week, RBS reported a much wider loss for its fourth quarter and full year 2013, reflecting impairment losses, charges related to regulatory and legal actions as well as write-down of goodwill. Total income also declined from last year. For the fourth quarter, the state-owned bank posted operating loss before tax of 8.98 billion pounds, wider than 2.23 billion pounds in the prior year. Loss attributable to ordinary and B shareholders was 8.70 billion pounds, compared to 2.62 billion pounds loss last year. Loss per share totaled 77.3 pence, as against a loss of 23.6 pence per share in the previous year.
Copyright RTT News/dpa-AFX
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