Ulster Bank has reported a loss of €259m for 2021, its likely penultimate year operating in the Republic of Ireland before its planned exit from the market.
The NatWest-owned lender saw revenue increase by €15m to €265m last year while operating expenses rose by €59m to €557m, bolstered slightly by a net impairment release of €33m, resulting in an operating loss of €259m, which was an improvement on the €405m loss in 2020.
The bank, which has agreed to sell its performing commercial loan book to AIB for €4.2bn and its its personal banking business and mortgage book to Permanent TSB for €7.6bn, saw improvements in mortgage (€607m) and commercial lending (€645m) last year.
Ulster Bank also reduced its balance of non-performing loans from €1.5bn to €990m, but saw income from interest fall 15% to €121m as a result of a reduction in asset volumes and shuttering parts of its business, while non-interest income was up €25m to €109m as it discontinued cash flow hedging in line with the terms of the AIB deal.
After announcing plans for its "phased withdrawal" from the Republic in February 2021, Ulster Bank stopped accepting applications from new customers in October, and the AIB and PTSB sales are expected to be finalised this year.
In Association with
The bank said profit from discontinued operations, the components of its business being sold to AIB and PTSB, increased from €131m to €312m, principally due to a €190m swing in impairments, from a €124m loss to a €66m release, as economic conditions improved in the second year of the pandemic and mortgage customers were more able to make repayments.
"The bank continues to explore opportunities with other counterparties about their potential interest in buying the remaining assets not yet agreed for sale. These discussions may or may not result in an agreement," Ulster Bank said in its results.
Customer deposits at Ulster Bank fell €1.4bn to €18.6bn as customers began to move their accounts to other banks, and the bank plans to write to its 1m customers to inform them of deadlines of six months to close their accounts with the bank.
In its own full-year results, parent company NatWest said it expected to incur €900m in withdrawal expenses and losses on loans sales with the closure of Ulster Bank in the Republic.
"We expect to incur disposal losses through income of around €300 million in 2022 and withdrawal related costs of around €600 million across 2022-24, with around €500 million incurred by the end of 2023,' NatWest said.
Elsewhere, the Competition and Consumer Protection Commission (CCPC) has completed its initial assessment of Bank of Ireland's proposed €5bn acquisition of KBC Bank Ireland's deposits, performing loan assets and a small number of non-performing loans to both parties.
Based on its preliminary investigation, the CCPC concluded that "a full investigation was required to establish if the proposed transaction could lead to a substantial lessening of competition in the state".
The banks have 15 working days to respond to the assessment, and the CCPC said it expects the investigation to conclude in May 2022.
(Pic: Getty Images)
