NatWest poised to decide on exit from Irish market - source

Padraic Halpin
·2-min read
FILE PHOTO: People maintain social distance while they queue outside a Natwest bank in Wimbledon

By Padraic Halpin

DUBLIN (Reuters) - NatWest is poised to make a decision on withdrawing from the Irish market, a source familiar with the matter said on Thursday, as Ireland's deputy prime minister described the potential exit "as a matter of real concern".

The British bank is Ireland's third largest lender with an estimated 15% share of the mortgage market, 10% share of the SME market and a 20 billion euro ($24.2 billion) loan book.

Its Northern Irish unit, which also uses the Ulster Bank name, is not part of a strategic review launched last year.

The Irish Times reported on Wednesday that the NatWest board was set to decide on Thursday on a proposal to wind down its operations in the Republic of Ireland. The Financial Times also reported it was preparing to start a phased withdrawal, citing sources familiar with its plans.

A source told Reuters that a decision on withdrawing was imminent, without giving further details.

"It is a matter of real concern and one the government is taking very seriously," Deputy Prime Minister Leo Varadkar told parliament.

The bank and its Irish unit, which employs 2,800 people and has 88 branches, declined to comment on the reports. It publishes full-year results on Friday.

Watch: ‘Markets are looking through the noise’ say's Belpointe chief strategist

The move is the latest by NatWest Chief Executive Alison Rose to strip out costs and simplify the lender since taking the helm in late 2019, after cutting back investment bank NatWest Markets and axing digital venture Bó just months after its launch.

The lender is also selling part of Adam & Co, a private bank founded in 1984 and named after prominent Scottish economist Adam Smith, a source familiar with the matter said. Sky News first reported the plans.

The exit by a string of foreign banks a decade ago following Ireland's banking crash has left the market shy of competition. The central bank has raised particular concerns on lending to small- to medium-sized enterprises (SMEs), where Ulster is one of just three lenders of scale.

The Irish Times reported last month that Irish mortgage lender permanent tsb had hired investment bank Morgan Stanley to advise on a potential bid for Ulster's Irish small- to medium-sized business loan portfolio.

Allied Irish Banks, one of Ireland's two dominant banks, the small local non-bank lender Dilosk and investment firms Cerberus and Lone Star have also been reported to be interested in parts of the loan book.

($1 = 0.8280 euros)

Watch: What is a credit rating and why does it matter?

(Additional reporting by Iain Withers in London; Editing by Edmund Blair and Jan Harvey)