Ulster Bank losses widen as it continues exit from Republic

Group said the redress and compensation process related to the tracker mortgage scandal has now largely concluded

Ulster Bank reported an operating loss before tax of £985 million (€1.1 billion) last year compared to an operating profit of £50 million in 2021 as it continued its withdrawal from the Irish market.

The results were included in parent group NatWest’s 2022 earnings published on Friday.

The deficit was made up of a £723 million loss on Ulster Bank’s continuing operations, and a £262 million loss on its discontinued businesses. This compares to a loss from continuing operations of £414 million in 2021 and profits of £464 million from discontinued operations.

Those discontinued business lines include commercial loans and mortgages sold to AIB as well as a swathe of assets acquired by Permanent TSB, including €5 billion of mortgages.


The results show that operating expenses from continuing operations included £678 million in Ulster Bank, of which £195 million were withdrawal-related costs. In 2021, operating expenses in Ulster Bank totalled £482 million, of which £17 million were withdrawal-related costs.

Ulster Bank said the redress and compensation process related to the tracker mortgage scandal has now largely concluded, although certain cases remain outstanding.

Customers have lodged tracker mortgage complaints with the Financial Services and Pensions Ombudsman (FSPO). The bank is challenging three of the ombudsman’s adjudications in the High Court. The outcome and impact of that challenge on those and related complaints is “uncertain but may be material”, the bank noted.

Other customer remediation in Ulster Bank has identified further legacy business issues, and these remediation programmes are “ongoing”.

The total number of people employed in Ulster Bank was 2,200, which was down from 2,400 the year before and 2,600 in 2020. Last year’s headcount includes 400 people employed in discontinued operations.

The accounts noted the agreement with Permanent TSB Group for the sale of performing non-tracker mortgages, the performing loans in the micro-SME business, the bank’s asset finance business, including its Lombard digital platform, and 25 branch locations.

They said €5 billion of performing non-tracker mortgages migrated to PTSB in November, with the remaining balances expected to migrate during the first half of this year.

In January, 25 branches transferred to PTSB. The remaining performing non-tracker mortgages, micro-SME loans, Lombard asset finance business and all remaining eligible staff who will move are also expected to transfer in 2023.

The accounts also showed an agreement with AIB for the transfer of performing commercial loans, noting the successful migration of a further two tranches of performing commercial loans was completed during the fourth quarter of 2022.

Some €2.1 billion of gross performing loans were fully migrated by year end. It is expected that remaining migrations of commercial customers will be completed in phases over the first half of 2023.

Staff who are wholly or mainly assigned to supporting this part of the business have continued to transfer to AIB. Losses on disposal of €123 million have been recognised in 2022, with €47 million in the last quarter in respect of the migrations completed to date.

The Competition and Consumer Protection Commission has granted approval on the portfolio sale of performing tracker and linked mortgages to AIB. Completion of this sale is expected to occur in the second quarter of this year.

The bank’s parent NatWest reported pretax profit up more than a third to £5.1 billion. The group’s chief executive, Alison Rose, described it as “a strong performance”.

“We made considerable progress against our strategic goals, maintained a well-balanced loan book and distributed significant capital to our shareholders, including the UK government,” she said.

“Despite not yet seeing significant signs of financial distress among our customers, we are acutely aware that many people and businesses are struggling right now and that many more are worried about what the future holds.

“Our robust balance sheet, responsible lending and continued capital generation allow us to proactively support those who need it, whilst helping others to get ahead of the challenges to come.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter