ULSTER Bank has a clear development strategy. It wants to achieve vigorous growth and increase its market share. But chairman Sir George Quigley says it will not do so at the expense of the quality of its customer base or loan portfolio. Ulster will continue to develop its branch structure - currently 111 in the Republic and 89 in Northern Ireland - with four new branches to be opened this year. The bank is expanding capability in the branch network to service small and medium-sized business customers.

Ulster is interested in acquisitions but only "at the right price". It remains interested in TSB Bank which it considers a good fit geographically ash it would add 72 branches in areas where Ulster is not well represented.

But with TSB considered unlikely to come on the market in the near future, Ulster is looking at other possible acquisition targets. It has not ruled out adding Woodchester to its instalment credit and leasing portfolio.

The bank will continue to focus on cost control in an environment where competition in core lending and deposit markets means relentless downward pressure on margins and where competitors with much lower cost bases are entering traditional banking markets. Ulster has set a cost income ratio target of 55 per cent by the year 2000 through income growth and cost control. The aim is to keep the ratio moving downwards but it will be affected by extent of spending on the branch network.

European Monetary Union will depress profits in the short term but Ulster is committed to Ireland being a first round member. It will cost the bank about £10 million over next 2 1/2 years to prepare for EMU. As long as entry rules and conditions are clear Irish membership will bring benefits for retail and business customer through lower interest rates.

"What is important is the way EMU is set up. That is not an argument for not going in but for careful consideration of the measures which must be set in place to ensure it works", Sir George said. The bank intends to find new income streams to replace income lost from foreign exchange business.