UK Govt would like Ireland to buy Ulster Bank?

Scofflaw

The Treasury is reportedly considering trying to persuade the Irish government to take control of Ulster Bank.

Ulster is part of the RBS Group, which is largely owned by the UK taxpayer.

RBS's future is being considered by the Parliamentary Commission on Banking Standards.

The BBC's business editor Robert Peston said that a draft report from the commission called for the split of RBS into a good bank and a bad bank.

However, he added that "another, more radical option is also being assessed by the Treasury".

That would involve somehow removing Ulster Bank from RBS Group - Ulster has been the worst performing part of the group, dragging down its overall performance.

Mr Peston said that one idea raised is to "transfer Ulster Bank into the arms and ownership of the Irish government", by swapping all or part of the bank for the British loans and investments currently owned by Ireland's "bad bank", the National Asset Management Agency (Nama).

http://www.bbc.co.uk/news/uk-northern-ireland-22766801

I can't see this one being a runner - the government would then own almost entirely the loss-making Irish banking sector, plus, as far as I know, the UK part of the NAMA portfolio is the best bit.

cordially,
Scofflaw

Cody Pomeray

It makes sense if it's a logistical swap, designed to cut down on the cost of administration and legal services in either country.

I have no idea what's in NAMA, but on the face of it there seems as though there may be some pragmatism and mutual benefit attached. The government's response if any will be interesting.

everdead.ie

Scofflaw wrote: »

http://www.bbc.co.uk/news/uk-northern-ireland-22766801

I can't see this one being a runner - the government would then own almost entirely the loss-making Irish banking sector, plus, as far as I know, the UK part of the NAMA portfolio is the best bit.

cordially,
Scofflaw

Realistically Ulster Bank would have to be given to us for free so in reality any loan write downs would be paper losses only. As far as I know The UK Loan book has been the easiest for Nama to sell off and raise Capital from.

Bullseye1

The last thing this country needs is another state owned bank. No thanks.

nadia88

First Ulster Bank, then the six counties.

Farmer Pudsey

nadia88 wrote: »

First Ulster Bank, then the six counties.

Do we want either. Maybe we should hand the whole lot back to the UK and apologise for the mess we made of it.

gaius c

Scofflaw wrote: »

http://www.bbc.co.uk/news/uk-northern-ireland-22766801

I can't see this one being a runner - the government would then own almost entirely the loss-making Irish banking sector, plus, as far as I know, the UK part of the NAMA portfolio is the best bit.

cordially,
Scofflaw

We've seen how bank whinging got An Post neutered so if Ulster Bank were seen as a threat to the precarious balancing act the state supported banks are engaging in (by virtue of the fact that they might actually act like a bank and start repossessing if not bought out), then the state paying good money to remove this "threat" would make sense in a Colonel Kilgore kind of way.

Layinghen

Of course the UK government want to get Ulster Bank off its hands. I hope our crowd aren't daft enough to take it. Let us try and deal with the mess we have with Irish owned banks before taking on anymore problems.

zl1whqvjs75cdy

Whatever the benefits of it (I have no clue) I really doubt this will happen. The media will be baying for blood and you know the headlines would be "Government uses your tax to buy bad bank while cutting dole and wages etc." A non runner unless Enda and co enjoy being lynched.

gaius c

Miguel Harsh Sidearm wrote: »

Whatever the benefits of it (I have no clue) I really doubt this will happen. The media will be baying for blood and you know the headlines would be "Government uses your tax to buy bad bank while cutting dole and wages etc." A non runner unless Enda and co enjoy being lynched.

In reality, we wouldn't be buying it. They'd pay us to take it off their hands or swap their trash for our trash.

coolshannagh28

Remember the UK contribution to our bailout which raised eyebrows ,quid pro quo?

Scofflaw

coolshannagh28 wrote: »

Remember the UK contribution to our bailout which raised eyebrows ,quid pro quo?

That was more of an acknowledgement of the importance to the UK of Ireland as a market, and indeed as a hunting ground for their banks.

cordially,
Scofflaw

Are there any Irish or other financial institutions that might take on Ulster Bank for the right price?

Sand

I can only see the Irish government doing this for negative purposes - to attempt to run down a rival to the "pillar banks". It doesn't make any sense whatsoever on a wider strategic level for the Irish people/Irish state but that doesn't mean the morons at the DoF wont think its a good idea regardless.

Fratton Fred

gaius c wrote: »

We've seen how bank whinging got An Post neutered so if Ulster Bank were seen as a threat to the precarious balancing act the state supported banks are engaging in (by virtue of the fact that they might actually act like a bank and start repossessing if not bought out), then the state paying good money to remove this "threat" would make sense in a Colonel Kilgore kind of way.

That's the only benefit I can see.

Ulster bank is one of the things preventing the RBS sell off at the moment, so there could be a temptation to cut and run, repossessing property and holding a fire sale which would destroy any value in the NAMA Irish portfolio.

no one in their right mind would buy it, it won't turn a profit again in my lifetime.

Bullseye1

coolshannagh28 wrote: »

Remember the UK contribution to our bailout which raised eyebrows ,quid pro quo?

Remember the UK contribution to the creation of 100-110% mortgages.

antoobrien

gaius c wrote: »

We've seen how bank whinging got An Post neutered

That's not actually true, seeing as the state savings schemes only total about €800m out of approx €92bn household deposits (and about another €70bn commercial). The problem with the An Post & NTMA schemes for the government is that they are registered as government debt, so An Post was neutered to stop deposit savings from becoming government debt instead of bank capital - something they happen to need. The An Post case is merely one where the banks and government interests aligned.

draiochtanois

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jmayo

Scofflaw wrote: »

http://www.bbc.co.uk/news/uk-northern-ireland-22766801

I can't see this one being a runner - the government would then own almost entirely the loss-making Irish banking sector, plus, as far as I know, the UK part of the NAMA portfolio is the best bit.

cordially,
Scofflaw

Oh FFS.
Who in their right mind would contenance adding to our portfolio of sh**e financial institutions.
Oh wait a minute haven't we still got mostly the same wizards employed in the Dept of Finance as the ones who couldn't see their ar** from their elbow all the way through the bubble, the bank guarantee and the Troika bailout.

At least we hope the current government aren't as idiotic, or beholden, as their predecessors.

BTW our only hope for a proper banking system in the future is if we have some banks outside the control of our state.
The last thing the consumers and indeed taxpayers should ever want is the likes of Rabo, NIB and Ulster to be taken over by us or leave the market entirely.

gaius c wrote: »

We've seen how bank whinging got An Post neutered so if Ulster Bank were seen as a threat to the precarious balancing act the state supported banks are engaging in (by virtue of the fact that they might actually act like a bank and start repossessing if not bought out), then the state paying good money to remove this "threat" would make sense in a Colonel Kilgore kind of way.

That would be a worry and is probably what some mandarins within the heirarchy are actually thinking.

Scofflaw wrote: »

That was more of an acknowledgement of the importance to the UK of Ireland as a market, and indeed as a hunting ground for their banks.

cordially,
Scofflaw

Are you shure it wasn't their exposure they were worried about ?

Granted they do, or at least they did, sell more to us than to India, China and Brazil combined.

Fratton Fred

draiochtanois wrote: »

wrong

it was due to the amount loaned by UK banks to Irish banks

48 billion stg if I recall correctly, there was a FT article about it, it's in their archive if you have access

According to the Daily Mail, at the time of the bailout, the UK's exposure was 88bn mainly due to Ulsterbank's 53bn debt book and Lloyds 27bn in commercial loans. So basically lending to Irish business and private home owners.

http://www.dailymail.co.uk/news/article-1330417/UK-needs-Dublin-bailout-Britains-banks-owed-88BILLION-Ireland.html

the reason is less conspiratorial and more practical. Where do you think all those Nissan Qashqais, Toyota Avensis and Range Rovers are made?

draiochtanois

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draiochtanois

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Scofflaw

draiochtanois wrote: »

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Yes:

Scofflaw wrote:

and indeed as a hunting ground for their banks.

cordially,
Scofflaw

Fratton Fred

draiochtanois wrote: »

To clarify, I'm saying the UK government contributed to the Irish bailout because if we had gone bust their banks would have suffered contagion due to their massive exposure to Irish banks - so they would have had to bail them out to an even greater degree. It was prudent for them to contribute, it has little or nothing to do with Ireland as a market for UK goods

If you consider Ulsterbank and HBoS Irish banks, then yes. But Ireland is worth £29bn a year to the UK economy in general, but is crucial to NI. It was more than just a panic over banks. The Irish economy creates jobs in the UK (and creates huge immigration when it goes tits up).

draiochtanois

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Fratton Fred

draiochtanois wrote: »

I think we are all in agreement that it was altruism on the part of our neighbour :-)

Has any element of the bailout been anything but?

everdead.ie

What's more aren't the UK making a profit of their loan to us they borrowed the money at 3.5% and then loaned it on to us at 5%?

Certainly it was political and demonstrates the size of our contribution toward the UKs trade.

In any case I don't think Cameron could actually sell Ulset Bank at a price that would be acceptable to his government and ours.

gaius c

Edna has met Ulster Bank.
It's a done deal at this stage I'd say.

gaius c

And a link for that previous post.
http://m.brne.ws/business/kenny-unaware-of-ulster-bank-split-proposal-596578.html

Rightwing

Deleted User wrote: »

Are there any Irish or other financial institutions that might take on Ulster Bank for the right price?

It wouldn't surprise me if a 3rd party took them over. The losses are accounted for now, prudent long term acquisition.

Rightwing

everdead.ie wrote: »

What's more aren't the UK making a profit of their loan to us they borrowed the money at 3.5% and then loaned it on to us at 5%?

Certainly it was political and demonstrates the size of our contribution toward the UKs trade.

In any case I don't think Cameron could actually sell Ulset Bank at a price that would be acceptable to his government and ours.

No, the UK is offering us the interest rate they got the loan at themselves. That was nothing more than a favour to us.