Page last updated at 10:29 GMT, Friday, 7 August 2009 11:29 UK

Ulster Bank set to shed 250 jobs

Ulster Bank headquarters in Belfast
The group which owns the Ulster Bank reported a pre-tax profit

The Ulster Bank has announced plans to make another 250 people redundant after making an £8m loss in the first six months of the year.

RBS, which owns Ulster Bank, had an operating profit of £15m but made a net loss of £1bn due to bad loans.

Ulster Bank made an operating profit of £149m but that was also wiped out by £157m set aside to cover bad loans.

It has 132 branches in the Republic and 92 in NI, and is seeking the voluntary redundancies across the island.

In a statement Ulster Bank said its voluntary severance programme in January was oversubscribed.

It said on account of this "and the potential for further restructuring in certain areas" it intended to seek an additional 250 redundancies.

Most of the job losses are expected to be in the Republic.

Larry Broderick of Irish Bank Officials Association held talks with the Ulster Bank on Friday morning.

Committed

He said the bank had given assurances that the redundancies will be "done on a voluntary basis in line with existing agreements.

"They have also confirmed to us that Ulster Bank is committed in remaining in Ireland into the future."

The bank said its results have been "severely affected by economic conditions across the island of Ireland."

Ulster Bank chief executive Cormac McCarthy said there had been a "big exposure in banking to property" which had "suffered greatly".

"Economic activity is down so there is pressure on incomes and margins as well," he added.

"It is reflected in the economies we are seeing in play on the island."

Lending

Profit before the bank's loan losses fell to £149m from £190m a year earlier.

Impaired loans, or loans they believe are unlikely to be repaid, rose to 0.8% of the total loan book, up from 0.1% in the same period last year.

Ulster Bank said these were expected to rise again in the second half of this year.

In the first half of 2009, Ulster Bank's total lending to customers was flat, with mortgage lending up 2%, but deposits fell 17% to £18.9bn.

Interest income fell 8% to £410m.

Its margins were up slightly, but the bank said that although it has become cheaper for it to borrow from wholesale money markets this was largely offset by the increased cost of attracting and holding customer deposits.



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26 Jan 09 |  Northern Ireland

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