Banks, Financial

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Economy

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Financial

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Financial

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Banks

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Categorized | Banks

Ulster Bank to pay RBS €1.5bn dividend


Posted on November 25, 2016

Ulster Bank will pay a dividend of €1.5bn to its parent group Royal Bank of Scotland, the first since the bank had to be rescued by its parent group during the global financial crisis.

Ulster Bank, which operates separate businesses in the Republic of Ireland and Northern Ireland, said the payment – due to be made on 30 November through National Westminster Bank, which is technically Ulster’s parent company – was evidence of its “strong capital position”.

It also suggests growing confidence among bank executives in both parts of Ireland that the worst is over after years of declining profitability and surging defaults on commercial and retail mortgages.

Ulster Bank said on Friday the payment of the dividend followed regulatory approval for the move from both the Central Bank of Ireland and the European Central Bank. The payment is from Ulster Bank’s operations in the Republic of Ireland, which were separated from its operations in Northern Ireland last year.

Gerry Mallon, Ulster Bank’s chief executive, said the bank “remains very well capitalised with a strong balance sheet and is well positioned to continue to support customers’ positions through our excellent products and services.”

Ulster Bank was among the Irish banks that nearly collapsed in 2008 when the global financial crisis hit. Along with peers such as Allied Irish Banks, it was heavily exposed to property developers on both sides of the Irish border, many of whom were forced into bankruptcy when credit disappeared and house prices collapsed.

RBS, which is still majority owned by UK taxpayers, was forced to inject £15bn to recapitalise Ulster Bank during the financial crisis.