Dáil Éireann Debate, Thursday - 26 November 2020
60. Deputy Pearse Doherty asked the Minister for Finance if proactive engagement will be undertaken with a bank (details supplied) regarding the reported closure of its branches and operations in view of the recent resignation of its chairman, the involvement of another bank in the strategic review of the operations of the bank and the potential sale of its loan book to a company; and if he will make a statement on the matter. [39489/20]
View answerUlster Bank plays a key role in our communities. It supports business, provides local jobs to 3,000 people in towns and cities across the State and has a strong branch network of 88 branches. NatWest, the parent company of Ulster Bank, has undertaken a strategic review of Ulster Bank's operation and its future operation in this State. It has been widely reported that NatWest is considering the full withdrawal of Ulster Bank from the State. The closure of Ulster Bank would be bad for customers, employees and the Irish banking sector. What actions has the Minister taken in recent weeks to deal with this issue?
As the Deputy will be aware, I met representatives of Ulster Bank on 21 October. I outlined that I expected that staff, customers and other stakeholders would be informed promptly about any decisions being made. I used that meeting as an opportunity to emphasise my concerns regarding the impact of such a decision on the economy, the banking sector, staff and those who depend on Ulster Bank for both lending and investment.
News of the review is unsettling for all stakeholders, especially staff and customers. I outlined to the bank my expectation that it will keep stakeholders, especially its staff, fully informed about any developments in the review and engage with them on any proposals or decisions that result from the review quickly. I also emphasised the importance of Ulster Bank to the Irish financial services market, the wider economy and the communities it serves. Ulster Bank confirmed to me that the strategic review is ongoing and no decision has yet been taken. It also confirmed that there is no set timetable for this review and that it is fully aware of the strategically important role that Ulster Bank plays in the provision of financial services to the Irish market.
The continued presence of a viable and active Ulster Bank in the Irish market would be a very welcome outcome. Ulster Bank is a significant employer and has 88 branches across the country and is very important for competition and services.
I note that the chairman of Ulster Bank has resigned for personal reasons. The bank has stated that his resignation is unrelated to the strategic review.
In the absence of direct knowledge about the involvement of any other party in NatWest's strategic review of Ulster Bank's operations, I cannot comment on possible outcomes but I confirm that I will continue to raise this matter with Ulster Bank and its parent company.
Last year, Ulster Bank provided €3.1 billion in new lending in this State. It provides 20% of lending to SMEs and has deposits of €22 billion. Ulster Bank is the third largest mortgage lender in the State. Its withdrawal from the State would lead to a duopoly in the mortgage market that would stifle competition and leave us vulnerable to higher interest rates.
Rumours abound that Cerberus, one of the most aggressive vulture funds in the State, is considering buying the entire loan book of Ulster Bank valued at €20.5 billion. This month we had the premature resignation of Ulster Bank's chairperson, Ruairí O'Flynn, less than two months into the role. This week, it was reported that Goldman Sachs is advising NatWest on the future of Ulster Bank in its strategic review, despite claims from Ulster Bank that this review was internal. It should not be lost on anyone that Goldman Sachs has set up vulture funds in this State to snap up distressed loans. Such a conflict of interest only adds to concerns. Has the Minister in his discussions or consultations with Ulster Bank requested or seen the terms of reference of NatWest's strategic review of the future of Ulster Bank? In line with his remarks to Ulster Bank at the meeting of 21 October and given that Ulster Bank is not keeping staff informed and is not being up front with them, does the Minister believe the staff and customers of Ulster Bank deserve the truth from NatWest? Will he relay that message to them?
I will continue to engage on this matter both with Ulster Bank and its parent company. As I said, I am well aware of the significance of Ulster Bank as an employer, a provider of competition and a supplier of services in the country, in particular the branches it has located in areas outside Dublin. It is a very important employer and bank. I emphasise that I and the Government do not have a formal role in this review. This is a bank which is owned entirely by another broader parent company. Notwithstanding that key point, I will continue to raise my concerns regarding the future of the bank in the country with Ulster Bank and its parent company, and its importance as an employer and a retail bank for Ireland.
The last time the Minister met Ulster Bank on this issue the chairperson was Ruairí O'Flynn, who has resigned from the job after less than two months. Has the Minister had an opportunity to speak to the former chairperson about his departure? Has he asked the CEO of Ulster Bank about the appointment of Goldman Sachs as advisers for NatWest's strategic review into the future of the bank, given its potential conflict of interest? We do not need a passive Minister in this. I understand that it is a private bank and so on, but we need the Minister to ask these questions. Did the CEO inform the Minister of this appointment? Has he been in contact with NatWest in recent days or weeks or, indeed, since 21 October when he last met Ulster Bank?
Last month, I requested that the CEO of Ulster Bank appear before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach to answer questions. The CEO of Ulster Bank refused. The finance committee is united in demanding that Ulster Bank appears before it. Will the Minister add his weight to that call?
We all know that the withdrawal of Ulster Bank from the Irish market would threaten competition in the market. No clarity or certainty has been given to staff, customers, mortgage holders and businesses. It is a grave situation. When does the Minister intend to sit down with or speak to NatWest and Ulster Bank again? Has he elicited any of the information that I have provided to him, particularly around the appointment of Goldman Sachs? What are the next steps that he intends to take?
The matters the Deputy referred to regarding whose services NatWest and Ulster Bank are procuring are not matters in which I am involved, as the Deputy knows. This is a bank in which the State does not have a formal stake or role. Who it procures to provide services is not a matter in which I have any role. Where I have a role is in relaying the strong concerns I have about changes that could happen in relation to the future of Ulster Bank. Far from being passive on this matter, as I informed the Deputy, I have already met Ulster Bank on this matter and I met the then chairman of Ulster Bank at that meeting. I became aware of his resignation at roughly the same time it became apparent to the public. I plan to meet and engage with Ulster Bank again in the coming weeks. I will continue to engage with its owner on the matters which, as Deputy Doherty says, are very serious for banking, employees and the economy.
