Ulster Bank: RBS 'considers merger' with Irish rivals
The Ulster Bank could be merged with some of its Irish rivals, according to a newspaper report.
Royal Bank of Scotland (RBS), Ulster Bank's parent company, is said to be considering the tie-up to cut costs, said the Sunday Times.
Potential merger candidates could include Permanent TSB or the Irish subsidiaries of Danske Bank or KBC.
Ulster Bank is the largest bank in Northern Ireland and the third largest in the Republic of Ireland.
RBS revealed mounting losses at Ulster in last week's annual results, with the business slipping deeper into the red with operating losses of £1.5bn in 2013 against £1bn in 2012.
The bank had an operating profit of £317m though that was wiped out by bad loan charges of almost £1.8bn.Competitors
Ulster Bank said its big loss reflected a one-off charge relating to bad property loans and that underlying performance was improving.
It suffered badly in the island-wide property crash and has been the worst-performing part of RBS in recent years.
It is understood that attempts to find a buyer for the ailing arm have so far failed.
But RBS is now said to be holding discussions with private equity firms over providing backing for a scheme to merge Ulster with competitors.
Such a deal could see RBS reduce its stake in Ulster to less than 50%, which would help remove losses from its balance sheet.
It has long been a thorn in the wider group's side, now accounting for a fifth of all bad debt charges despite only representing 4% of the balance sheet.
RBS declined to comment on the merger report.