Job Cuts As Ulster Bank Makes Losses

One of Northern Ireland's top banks has revealed losses.

Ulster Bank has announced that it plans to make a further 250 people redundant as a result of making an £8m loss during the first six months of 2009.

The news follows mixed financial news nationally with a £6 billion figure announced in combined profits from HSBC and Barclays on Monday and the Lloyds Banking Group and the recently nationalised Northern Rock reporting losses of £4 billion and £724 million respectively the next day.

To confuse the financial picture further, the group which owns Ulster Bank, RBS, actually reported a pre-tax profit of £15m during the same six month period.

Indeed, Ulster Bank made an operating profit of £149m but that was wiped out by £157m set aside to cover bad loans.

The Northern Bank also last week revealed that it was closing some branches in Northern Ireland due to the downturn.

They will all shut in September in a move that increases the numbers to ten inside just two years - coming on top of five other branch closures last year.

However, the Northern said there would be no job losses as a result of the latest round of closures.

Ulster Bank has a total of 92 branches currently in Northern Ireland and 132 in the Republic.

A voluntary redundancy scheme will be applicable to all Ulster Bank branches across the island of Ireland. A similar scheme in January was oversubscribed, according to the bank.

A statement said the bank intended to work with "our employees and their representatives to seek an additional 250 redundancies".

The bank said its results have been "severely affected by economic conditions across the island of Ireland."

Ulster Bank Chief Executive Cormac McCarthy said there had been a "big exposure in banking to property" which had "suffered greatly".

"Economic activity is down so there is pressure on incomes and margins as well," he added.

"It is reflected in the economies we are seeing in play on the island."

But, Ulster Bank said these were expected to rise again in the second half of this year.

Moves are also in hand to monitor the situation at political level.

Yesterday, the NI Finance Minister, Sammy Wilson, met with representatives of financial community to discuss the economic downturn.

The meeting was the first of the Executive's Cross Sector Advisory Forum's Banking, Finance and Lending sub-group, aimed at making recommendations addressing problems arising from the economic crisis.

Following the meeting, the Minister said: "There is no doubt that the banking sector has a crucial role to play in helping Northern Ireland's businesses in this difficult economic climate.

"A confident local financial sector is a prerequisite for a return to economic growth and prosperity," he said.

See: Northern Shuts Down Further Branches

(BMcC/JM)