Natwest considering closing Ulster Bank in the ROI

Timing belt · 14-01-2021 2:25pm

Mungret Native wrote: »

Rebranded to what? PS, no they haven’t rebranded to anything in NI.

I think he is talking about the legal entity Change where Ulster NI became part of the Natwest PLC legal entity.

https://www.sharesmagazine.co.uk/news/market/LSE20201112174422_3779261/Proposed-transfer-of-Ulster-Bank-Limited-business

Davexirl · 14-01-2021 2:26pm

Mungret Native wrote: »

Rebranded to what? PS, no they haven’t rebranded to anything in NI.

There is a planned change from Ulster Bank NI to Nat West.

Timing belt · 14-01-2021 2:29pm

Davexirl wrote: »

There is a planned change from Ulster Bank NI to Nat West.

I thought it was a legal entity change in the background to save costs and they would continue with the Ulster Bank NI Brand.

Doodah7 · 14-01-2021 3:37pm

Timing belt wrote: »

I thought it was a legal entity change in the background to save costs and they would continue with the Ulster Bank NI Brand.

For the present. I would assume that in future years due to 'synergies' and other cost-cutting reasons, that the UB name will fade away to be replaced by the Nat West name.

For starters, the Nat West chevron will be returning and replacing the RBS logo.

Doodah7 · 15-01-2021 9:58am

Phishnet wrote: »

RBS has not covered itself in glory with all the historical issues that it was involved in, ie, rigging the interbank rates, commodities markets, forex etc. The Bank was even hit with a legal bill of 100 million stg by a law firm regarding defending a legal action taken against it by its own shareholders. The various regulatory authorities around the world have fined RBS 100’s of millions of euro, so it has a lot of issues and has decided to dump that branding for a less internationally tarnished name, that being Nat West.

And the pure waste in money and resources moving from NatWest to RBS and now back again...

JTMan · 24-01-2021 10:22am

Sunday Times reports here (paywall):

- Exploratory discussions have been held with AIB, Bank of Ireland and other Irish lenders, about purchasing Ulster's performing loan book.
- Natwest have said "We continue to evaluate the impact of Covid-19 and the challenges to the economy, and we are reviewing our strategy appropriately and responsibly in light of these events". Another hint that they are going?
- Unable to confirm if a decision on Ulster Bank’s future would be made before its 2020 results are announced on February 19.

Claw Hammer · 25-01-2021 4:54pm

The irony is that no one wants the deposits. It might suit the other banks to buy the loan book as they will reduce their own deposits, saving themselves from having to pay the ECB to hold their cash. There can be no doubt that they are going to pull out.

garrettod · 26-01-2021 1:44am

Jim2007 wrote: »

It would be mad for anyone to consider buying it! Buying more capacity in a commodity market where there already is over capacity would be crazy.

Of course we’re talking about geniuses who constructed a financial product where the funding and the lending weren’t matched.... so anything is possible.

If you are referring to the mismatch between short term funding - sourced from peoples savings accounts, and the credit balances in their current accounts - and the provision of long term mortgages, to help people buy their homes - then yes, it is genius.

I think you'll find its been a concept that's been on the go, for a couple of hundred years, dating back to when goldsmiths began lending.

Ultimately, its based on a principal of trust in a Bank, a principal that's supported by most "Western World" based, Central Banks. That's why we see things like deposit guarantee schemes, and Central Banks providing loans to Banks, when needed.

Jim2007 · 26-01-2021 7:10am

garrettod wrote: »

If you are referring to the mismatch between short term funding - sourced from peoples savings accounts, and the credit balances in their current accounts - and the provision of long term mortgages, to help people buy their homes - then yes, it is genius.

I think you'll find its been a concept that's been on the go, for a couple of hundred years, dating back to when goldsmiths began lending.

Ultimately, its based on a principal of trust in a Bank, a principal that's supported by most "Western World" based, Central Banks. That's why we see things like deposit guarantee schemes, and Central Banks providing loans to Banks, when needed.

I have no idea where you are coming from... put having been involved in the construction for various financial products over the past 30 years, I am of the opinion the two most shocking failures of management during the last crisis were the failures of Irish banks to correctly construct their mortgage products and the inclusion of MBS in the capital structure of banks like DB, CS & UBS. It had serious consequences for all the banks involved. Nothing criminal to my knowledge, just ‘group think’ taken to the extreme.

Have we learned from it? No not really... Banks have been required to up the T1 a bit, but they are still probably only half what they should be! Swiss regulators forced a little bit of restructuring on their banks and DB, well it is still a wobbly.

Timing belt · 26-01-2021 1:14pm

Jim2007 wrote: »

I have no idea where you are coming from... put having been involved in the construction for various financial products over the past 30 years, I am of the opinion the two most shocking failures of management during the last crisis were the failures of Irish banks to correctly construct their mortgage products and the inclusion of MBS in the capital structure of banks like DB, CS & UBS. It had serious consequences for all the banks involved. Nothing criminal to my knowledge, just ‘group think’ taken to the extreme.

Have we learned from it? No not really... Banks have been required to up the T1 a bit, but they are still probably only half what they should be! Swiss regulators forced a little bit of restructuring on their banks and DB, well it is still a wobbly.

In fairness regulation has changed massively with banks having to hold way more capital and liquidity. On top of this there is MREL and bank resolution plans..... It is a lot more than topping up 'T1 a bit'

Jim2007 · 26-01-2021 2:17pm

Timing belt wrote: »

In fairness regulation has changed massively with banks having to hold way more capital and liquidity. On top of this there is MREL and bank resolution plans..... It is a lot more than topping up 'T1 a bit'

Yep, just like the massive regulations changes after every previous crisis that was supposed to prevent the next one...

Timing belt · 26-01-2021 2:23pm

Jim2007 wrote: »

Yep, just like the massive regulations changes after every previous crisis that was supposed to prevent the next one...

The simple fact is your post implied that that all that changed was the banks holding onto a bit of extra T1 which is not the case as a raft of regulatory changes took place to prevent a similar situation occurring again. Without these changes a bank or two would probably already have gone under during the covid crisis.

The J Stands for Jay · 26-01-2021 2:26pm

Jim2007 wrote: »

Yep, just like the massive regulations changes after every previous crisis that was supposed to prevent the next one...

Financial services are pretty smart. New ways of having a crisis are constantly thought up (even if sometimes they're just variations on previous ones).

Jim2007 · 26-01-2021 8:59pm

Phishnet wrote: »

I totally agree, financial regulation is there to protect, both consumers and the financial institutions themselves. It was their reckless lending that led to the disaster of 2008, plain and simple.

There is no such concept, nor should there be. People need to take responsibility for their actions and learn from it. And simple blaming someone else is not doing that. Either nobody acted recklessly or everyone did.

The lender and the borrower entered into the transaction based on a property valuation that they both believe to be reasonable accurate. And that valuation was provided by a professional who based it on the going market rates in the area. Nobody had a cunning plan, it is just what happens in every single crash.

This forum is about personal finance not public policy, macro economics nor conspiracy theories. There are other forums for that and we are heading off in that direction and I will no allow it.

If people wish to discuss how the potential closure would impact their personal finances or how they might better protect themselves in the next financial crisis, fine. Anything else from here out will not fly.

JTMan · 29-01-2021 7:46am

The Irish Times are reporting that PTSB might acquire the Ulster Bank SME loans from NatWest.

Announcement on the future of Ulster Bank might occur on 19 February.

https://www.irishtimes.com/business/financial-services/ptsb-circles-ulster-bank-sme-business-as-decision-looms-1.4470442?mode=amp

Timing belt · 29-01-2021 8:01am

JTMan wrote: »

The Irish Times are reporting that PTSB might acquire the Ulster Bank SME loans from NatWest.

Announcement on the future of Ulster Bank might occur on 19 February.

https://www.irishtimes.com/business/financial-services/ptsb-circles-ulster-bank-sme-business-as-decision-looms-1.4470442?mode=amp

That would make sense.. the announcement the same day as annual results published.

JTMan · 29-01-2021 9:56pm

Examiner reporting that Davy's and GoodBody are now both saying the writing is on the wall ...

- Goodbody financials analyst Eamonn Hughes said all the signs were pointing in the direction that the NatWest owner will run down the bank's operations.
- Davy thinks Ulster will exit.

Claw Hammer · 30-01-2021 4:32pm

JTMan wrote: »

Examiner reporting that Davy's and GoodBody are now both saying the writing is on the wall ...

- Goodbody financials analyst Eamonn Hughes said all the signs were pointing in the direction that the NatWest owner will run down the bank's operations.
- Davy thinks Ulster will exit.

There are only saying what the dogs in the street have known for months.

Islander13 · 30-01-2021 4:38pm

All you needed to do was to walk into Ulster Bank - College Green at any time over the past 2/3 years. Zero investment in the building which should be their flagship location

Shame for all the staff

Claw Hammer · 30-01-2021 4:40pm

Islander13 wrote: »

All you needed to do was to walk into Ulster Ban - College Green at any time over the past 2/3 years. Zero investment in the building which should be their flagship location

Shame for all the staff

It's been very bad in there since the Scots born into that bank. First thing I noticed was that the pens on the counter didn't work. The staff dress code went down a notch or two as well.

Timing belt · 30-01-2021 4:41pm

Claw Hammer wrote: »

For several years now I have been of the view that Ulster Bank does not want customers. The level of service has dropped to a very low point

Ironically this is what happens when you cut costs to try and make the bank profitable enough to be kept by its parent bank.

Claw Hammer · 30-01-2021 4:45pm

Timing belt wrote: »

Ironically this is what happens when you cut costs to try and make the bank profitable enough to be kept by its parent bank.

It is what happens when you try to meet stupid class deadlines at the expense of customer service. If there are no customers there would be no profits.

Islander13 · 30-01-2021 4:47pm

Claw Hammer wrote: »

It's been very bad in there since the Scots born into that bank. First thing I noticed was that the pens on the counter didn't work. The staff dress code went down a notch or two as well.

Yeah, and it feels like a ghost building, where there used to be a busy section near suffolk street too.

I know branches arent what they used to be but compare to AIB on Grafton St - chalk and cheese

Timing belt · 30-01-2021 4:55pm

Claw Hammer wrote: »

It is what happens when you try to meet stupid class deadlines at the expense of customer service. If there are no customers there would be no profits.

It might have something to do with the fact that Ulster Bank took massive risks before 08 and ended up a basket case ever since.... Add on top of that banks will not make much of a profit for the next 5 years due to low interest rates... This is one of the first banks to exit which will become common in Europe as we see a mass consolidation due to the banking environment.... Not much to do with class deadlines in fairness.

garrettod · 30-01-2021 8:29pm

Timing belt wrote: »

It might have something to do with the fact that Ulster Bank took massive risks before 08 and ended up a basket case ever since.... Add on top of that banks will not make much of a profit for the next 5 years due to low interest rates... This is one of the first banks to exit which will become common in Europe as we see a mass consolidation due to the banking environment.... Not much to do with class deadlines in fairness.

Every bank took massive risks befit 2008, maybe if UB had participated in the same deal as the other Irish retail banks, and sold billions of rubbish debt to NAMA, they would be in better shape.

I know that their parent company took in investment from the UK Government, but the benefit of that didn't flow to UB, to the same extent that Irish Government / NAMA support benefited AIB, for example.

JTMan · 30-01-2021 8:43pm

Islander13 wrote: »

All you needed to do was to walk into Ulster Bank - College Green at any time over the past 2/3 years. Zero investment in the building which should be their flagship location

Yeah, their College Green branch is like something from another era but most bank branches give a similar vibe.

Ulster Bank are in the process of renovating their Grafton Street branch at the moment. Money down the drain with closure seemingly imminent.

Claw Hammer · 01-02-2021 1:12pm

Timing belt wrote: »

It might have something to do with the fact that Ulster Bank took massive risks before 08 and ended up a basket case ever since.... Add on top of that banks will not make much of a profit for the next 5 years due to low interest rates... This is one of the first banks to exit which will become common in Europe as we see a mass consolidation due to the banking environment.... Not much to do with class deadlines in fairness.

Even before 08, the slide had started.

silver2020 · 02-02-2021 1:58pm

garrettod wrote: »

Every bank took massive risks befit 2008, maybe if UB had participated in the same deal as the other Irish retail banks, and sold billions of rubbish debt to NAMA, they would be in better shape.

I know that their parent company took in investment from the UK Government, but the benefit of that didn't flow to UB, to the same extent that Irish Government / NAMA support benefited AIB, for example.

Benefit didn't flow to UB? - are you serious?

Ulster Bank got a £15 BILLION (sterling) bailout from UK taxpayers and still owes about £11 Billion of this.

AIB have paid back majority of their depositors bailout and Bank of Ireland have fully repaid its depositors bailout including all interest.

Put it this way, if there was a league table of bank write offs it would have Ulster in 2nd place ahead of Irish Nationwide and not a million miles from Anglo.

Timing belt · 02-02-2021 6:57pm

garrettod wrote: »

Every bank took massive risks befit 2008, maybe if UB had participated in the same deal as the other Irish retail banks, and sold billions of rubbish debt to NAMA, they would be in better shape.

I know that their parent company took in investment from the UK Government, but the benefit of that didn't flow to UB, to the same extent that Irish Government / NAMA support benefited AIB, for example.

In fairness UB on it's own could have taken down Natwest/RBS there was that amount of reckless lending undertaken at the time. It was up there with Anglo for risk taking.

If i remember correctly 1/3 of the bailout that RBS got from UK government went directly to Ulster bank despite it only being a little subsidiary of RBS at the time.

silver2020 · 02-02-2021 7:54pm

Timing belt wrote: »

In fairness UB on it's own could have taken down Natwest/RBS there was that amount of reckless lending undertaken at the time. It was up there with Anglo for risk taking.

If i remember correctly 1/3 of the bailout that RBS got from UK government went directly to Ulster bank despite it only being a little subsidiary of RBS at the time.

correct - Natwest got 45bn stg and over 15bn went to Ulster. Another portion went on Irish investors who bought into UK market and their loans came under Natwest/RBS. One retired banker suggests that over 20bn stg was attributed to Ulster and Ulster referrals and there's no chance of that money being recovered

Jim2007 · 03-02-2021 9:24am

The topic is personal finance: How the situation impacts your financial situation, not the fortunes of UB. This thread has run its course. Either back on topic of we call it a day

Q&A · 03-02-2021 10:47am

Jim2007 wrote: »

The topic is personal finance: How the situation impacts your financial situation, not the fortunes of UB. This thread has run its course. Either back on topic of we call it a day

Personally the impact on me is based on exposure to the bank (current account, some meager savings and a mortgage) and the likelihood of it closing. They're both connected with the latter likely to be based on the fortunes of the bank.

With expectations of a decision on the 19th with the publication of the annual accounts its hard not to speculate on Nat Wests thinking. If, like some are suggesting, they announce the planned closure of UB rest assured this thread will only just have begun.

phormium · 03-02-2021 1:16pm

I'm wondering what would happen to the offset mortgages, they are linked with a savings/current account and that's the whole point of them for interest saving reasons. If they sell off the mortgages separately and deposit customers have to go elsewhere what happens the offsetting arrangement?

I have one of these obviously which is why I am wondering.

Q&A · 03-02-2021 2:41pm

phormium wrote: »

I'm wondering what would happen to the offset mortgages, they are linked with a savings/current account and that's the whole point of them for interest saving reasons. If they sell off the mortgages separately and deposit customers have to go elsewhere what happens the offsetting arrangement?

I have one of these obviously which is why I am wondering.

My guess is such loans would be carved out of the loan book and retained. It could easily be run out of a UK office.

You might run into a problem lodging a cheque mind you.

JTMan · 03-02-2021 5:26pm

Irish Times reporting here (paywall) that Ulster Bank staff are "furious" about being kept in the dark about Ulster Banks future.

The article repeats the speculation that the Ulster Bank decision will be announced on 19 February.

03-02-2021 5:31pm

i have a small account with ulster.....how will it closing impact my deposit (havnt any loans,direct debits etc)

I assume theres some law to stop them walking away with it all??

JTMan · 03-02-2021 5:33pm

Deleted User wrote: »

i have a small account with ulster.....how will it closing impact my deposit

You will be given X months to move your deposits to another bank.

04-02-2021 11:25am

Ulsterbank have been continually updating their banking App for Android and iPhone. It's possibly the best of all the Irish banks. Only AIB comes near it.
Is the app and it's ongoing development coming from NatWest's own app and development is therefore the same. It's just I can't imagine them putting so much development into something if they have plans to close down. They just released a new update that now allows push notification on transactions.
All will be revealed in 15 days.

Claw Hammer · 04-02-2021 12:56pm

Deleted User wrote: »

Ulsterbank have been continually updating their banking App for Android and iPhone. It's possibly the best of all the Irish banks. Only AIB comes near it.
Is the app and it's ongoing development coming from NatWest's own app and development is therefore the same. It's just I can't imagine them putting so much development into something if they have plans to close down. They just released a new update that now allows push notification on transactions.
All will be revealed in 15 days.

The developments costs of an app won't figure in the minds of NAT West. the work was probably a cog of what they were doing in England anyway. If the had any intention of keeping Ulster going they wouldn't allow speculation to go on for months nor begin the re-branding of the Northern Irealnd element of the business.

muddle84 · 04-02-2021 7:39pm

JTMan wrote: »

You will be given X months to move your deposits to another bank.

Will this be the same for mortgages and credit cards also? X-number of months to move mortgages and credit card?

Timing belt · 04-02-2021 8:29pm

muddle84 wrote: »

Will this be the same for mortgages and credit cards also? X-number of months to move mortgages and credit card?

There would be no need to move mortgage as these would be sold on and all that would change is that someone else owns them.

Aint Eazy Being Cheezy · 04-02-2021 8:46pm

Timing belt wrote: »

There would be no need to move mortgage as these would be sold on and all that would change is that someone else owns them.

And credit cards?

JTMan · 04-02-2021 8:58pm

Aint Eazy Being Cheezy wrote: »

And credit cards?

You will need to open a new credit card with a different provider.

You will be given X months to get your balance down to zero or to transfer it to your new provider.

JTMan · 04-02-2021 9:16pm

Irish Times reporting here that staff inside Ulster Bank are now being asked to sign NDA agreements to prevent them disclosing what they are working on i.e. work on the likely wind-down.

The article also repeats the speculation again that the announcement will be made on 19 February.

Jakey Rolling · 04-02-2021 9:20pm

I will miss online management of mortgage rates - something UB just introduced in the last 2 years.
Just login in, check what rates available and click to transfer.

Beats trying to get info on the latest rates, writing to the mortgage centre, visiting branch to sign off etc.

Any of the other banks make it this easy?

silver2020 · 04-02-2021 9:24pm

my own feeling is they will stay in some capacity - possibly as a mortgage bank with a single branch as its one of the least time consuming areas and one of the profitable areas too (excluding legacy issues) as it does not need much day to day management.

Business accounts and business lending looks likely to be moved as a block into PTSB (or so the reports said)

Current accounts are costly to manage and credit card management is time consuming, so both of those areas will be closed and you'll get 6 months to transfer to another bank.

Timing belt · 04-02-2021 9:29pm

silver2020 wrote: »

my own feeling is they will stay in some capacity - possibly as a mortgage bank with a single branch as its one of the least time consuming areas and one of the profitable areas too (excluding legacy issues) as it does not need much day to day management.

Business accounts and business lending looks likely to be moved as a block into PTSB (or so the reports said)

Current accounts are costly to manage and credit card management is time consuming, so both of those areas will be closed and you'll get 6 months to transfer to another bank.

Keeping the mortgage book wouldn't release much capital.... My guess is that they want to get the hands on the capital to invest into Natwest and improve it's online platform whether they do this by acquiring a fintech company or build it the themselves. It is what is required to ensure that the Natwest remains competitive going forward.

silver2020 · 04-02-2021 9:34pm

Timing belt wrote: »

Keeping the mortgage book wouldn't release much capital.... My guess is that they want to get the hands on the capital to invest into Natwest and improve it's online platform whether they do this by acquiring a fintech company or build it the themselves. It is what is required to ensure that the Natwest remains competitive going forward.

I don't think capital is the issue. Its the return on investment. the mortgage book is very profitable and they have a very strong mortgage brand but the branch and staff costs pull everything down and means the net profit simply isn't there.

Mortgage margins are very good here and they take account of the extra capital reserves (the amount of reserves will drop at some stage), so it would be worth their while.

Timing belt · 04-02-2021 9:45pm

silver2020 wrote: »

I don't think capital is the issue. Its the return on investment. the mortgage book is very profitable and they have a very strong mortgage brand but the branch and staff costs pull everything down and means the net profit simply isn't there.

Mortgage margins are very good here and they take account of the extra capital reserves (the amount of reserves will drop at some stage), so it would be worth their while.

But if they did that they still need all the back office and support functions which is where the real costs exists. The branch costs are a drop in the ocean compared to the back office and support costs. Plus as I said in my previous post they need to update there UK offering to remain competitive and need money to do so... getting rid of Ulster gives them this.

Daragh1980 · 04-02-2021 10:45pm

The customer service seems to vary. My brother has dealt with their Business Banking Centre in Dublin for last 15 years and has nothing but praise. Relationship Manager available at the end of the phone, any issues are sorted quickly and any lending requests dealt with professionally. He had to get a couple of payment holidays last year due to Covid and it was seamless, all done by email. I think he has been dealing with the same guy all through that time which helps.

Whereas I just have personal account and it can be hit and miss in the branch. Sometimes you really have to chase to get stuff done.

Natwest considering closing Ulster Bank in the ROI

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