The Irish Bank Officials Association, which represents staff at First Active and Ulster Bank has warned Royal Bank of Scotland that there could be no compulsory redundancies as a result of the deal.
"IBOA members were astounded to hear vague talk of job losses emanating as a result of the bid," its general secretary, Mr Larry Broderick said yesterday.
"In a financial institutions as large and profitable as Royal Bank of Scotland, there is simply no business rationale for any compulsory redundancies."
Hundreds of jobs will be cut if the takeover succceeds. Royal Bank chief executive, Mr Fred Goodwin, signalled job cuts in areas such as the banks' head offices and in back office and support areas.
The only reassurance Royal Bank has given to the First Active board regarding its staff was that their employment rights, including pension rights will be safeguarded.
Mr Goodwin would not specify the extent of such costs savings other that to say they were "not large in the context of the Royal Bank group, but significant in the context of the transaction."
A new management team, from First Active and Ulster Bank will be assembled. First Active chief executive, Mr Cormac McCarthy and finance director, Mr Michael Torpey, will join the Ulster Bank board together with two other unnamed colleagues.
Mr McCarthy will remain as chief executive of First Active. Yesterday he said he was "very happy" with this arrangement.Ulster Bank's chief executive is Mr Martin Wilson. Mr Goodwin said it had still to decide who would run its Irish operations.
The cash deal has been structured specifically to cope with the huge number of small shareholders at First Active.
Some 95 per cent of First Active's 145,000 shareholders received free shares at the time of the flotation and most still hold them.
Instead of requiring the approval of more than 80 per cent of them, the bank now only needs 70 per cent of the proxies cast by the investment institutions together with those cast at an extraordinary general meeting to seal it.
The structure and conditions of the scheme must be approved by the High Court and First Active will issue circulars to shareholders within 28 days. An EGM will then be called to approve the takeover which will be finalised in January. The cash payments will be distributed to shareholders then.
Mr Goodwin said it had bought a very dynamic business in Ireland and signalled its intention to aggressively grow its revenues here.
"We are here to grow and that's going to come at the expense of someone. I would imagine it will be at the expense of the competitors. There are plenty of banks, there is plenty of choice for customers and it is in that environment in which we will grow our business."
One London-based analyst, said First Active was probably a second-best purchase and Royal Bank would ideally have gone for either Bank of Ireland or Allied Irish Banks.
"Politically, such a deal would have been impossible. But this acquisition is still good for the group. The Irish economy is still strong and the growth rates over there are better than here in Britain," the analyst said.
Mr Martin Cross, an analyst at brokerage Teather & Greenwood, said the key to the deal was to bolt First Active onto Ulster Bank "because in most mergers the opportunities are in cost reduction."
