Dáil Éireann Debate, Thursday - 18 July 2013
176. Deputy Michael McGrath asked the Minister for Finance if his Department has been in contact with the UK Treasury about the UK Government's review of the Ulster Bank's parent company, Royal Bank of Scotland; if so, the Irish Government's position on the issue; and if he will make a statement on the matter. [36684/13]
View answerIn his Mansion House speech of 19 June 2013, the UK Chancellor of the Exchequer announced a review of Royal Bank of Scotland. The purpose of the review is to assess the merits of creating a “bad bank” for some RBS assets and it is due to conclude in the autumn of 2013. The Chancellor made some references to Ulster Bank in the context of the future orientation of RBS in dealing with the future of the two UK banks in which the British Exchequer has a significant shareholding. Last Friday, the UK Treasury announced the appointment of BlackRock Solutions as asset specialist advisor to the review. BlackRock Solutions will work alongside Rothschild and Slaughter & May, the respective corporate finance and legal advisors.
The Deputy may be aware that RBS held an Investor Roundtable on Ulster Bank in London on 2 July 2013 during which Ulster Bank set out its business strategy and the macro-economic environment for Ireland. Ulster Bank described itself as the number three player in the Republic of Ireland with 1.3m customers - 1.26 m Retail and 80,000 Corporate. It informed investors that it has a clear strategy to create a ‘Really Good Bank’ whilst tackling legacy issues; it intends to deliver a smaller, lower cost and profitable bank. Ulster Bank confirmed that it is ‘cautiously optimistic’ about the Irish market. Data published at the end of June show that, having returned to growth in 2011, Ireland achieved a second successive year of growth in 2012, with GDP expanding modestly by 0.2 per cent. Ulster Bank is correct in seeing that Ireland is a place where the banking sector can expect to achieve returns which are acceptable to investors.
The recent successful launch by BlueBay Asset Management LLP (BlueBay) and the National Pensions Reserve Fund (NPRF) of a new vehicle that will provide loans to larger SMEs and mid-sized businesses in Ireland also shows that positive sentiment has returned. The new vehicle has raised the full target amount of €450 million (including an NPRF commitment of €200 million) and has launched within the expected timescale. The very significant level of investment from third-party institutional investors is at the upper end of the range anticipated by BlueBay and the NPRF.
Normal ongoing engagement between my officials and their UK counterparts now includes the possible implications of the review for Ulster Bank and any assistance that the Treasury requires with the review will be provided as part of this engagement.
