RBS Ulster unit to cut 1,800 jobs as it eyes profits
Royal Bank of Scotland Group Plc will cut as many as 1,800 jobs at its Ulster Bank unit as part of a plan to return the Irish division to profit within two years.
The lender will also close about a quarter of Ulster Bank’s 238 branches, according to a presentation to analysts on the Edinburgh-based bank’s website today. Headcount at the division will fall to 4,000 to 4,500 by 2016 from 5,800 at the end of 2012. The Irish bank last year announced plans to cut 950 jobs.
“We are outraged that details of something that affects staff and branches has come out this way,” Larry Broderick, general secretary of the Irish Bank Officials Association, the country’s largest financial union, said by telephone. The group “won’t be cooperating with any proposed change until there’s full consultation.”
The cuts in jobs and branches will help Ulster Bank to return to profit by 2016, the lender said. Ulster Bank has cost its British parent £14.3 billion (US$21.7 billion) to rescue since racking up losses from the collapse of Ireland’s real estate bubble in 2008. The lender, which hasn’t posted a profit since 2007, was split two years later into a core bank and non-core bank, which includes assets to be sold over time.
“We’re on the way to delivering a good profitable bank but clearly it’ll be smaller than it was at the peak of the boom,” Ulster Bank chief executive officer Jim Brown told analysts.
RBS said revenue at Ulster Bank is “broadly stable,” with impairment losses falling £154 million in the first quarter from the year-earlier period. The amount of new residential mortgages in arrears for more than 90 days declined in two of the past three months, according to the lender. It didn’t give a profit forecast for 2016.