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British chancellor hints at Ulster Bank sell-off

George Osborne told bankers last night that a review is to be carried out into breaking up Royal Bank of Scotland, Ulster Bank’s parent company.

Image: Paul Faith/PA Archive

THE CHANCELLOR OF the Exchequer, George Osborne, has hinted that Ulster Bank could be sold off from its parent Royal Bank of Scotland in the UK.

In his annual Mansion House speech to bankers in London last night, Osborne said he has ordered a review of the break-up of state-owned RBS into a good and bad bank with the latter likely to include the troubled Ulster Bank and other non-performing assets.

He said the sale of RBS was “some way off” with that indications that the sale could be delayed until after the next general election in the UK, scheduled for 2015.

But this may not prevent the more immediate sell-off of Ulster Bank which reported over €1.2 billion in losses last year and has been beset by a series of problems in recent months including IT failures and under-collection errors.

“We will see whether its right for Britain to, in effect, see RBS broken up. The review will be swift. It will be conducted by the Treasury with external professional support,” Osborne told bankers.

“We’ll look at a broad range of RBS’s assets, but particularly assets in Ulster Bank and UK commercial real estate.”

The bad bank will only be set up if it meets three objectives, he said: if it supports the British economy, if its in the taxpayers’ interest and if it accelerates the return of the bank to private ownership.

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The British government has pumped some £45 billion in into the bank which was rescued at the height of the financial crisis five years ago.

Earlier this month it was suggested that the British government might try to sell Ulster Bank to the National Asset Management Agency (NAMA) in a bid to shift it off its own books. This suggestion was quickly dismissed by the Irish government.

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About the author:

Hugh O'Connell

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