LONDON - The Royal Bank of Scotland said Tuesday that it planned to cut as many as 1,800 jobs at its Ulster Bank Group unit in Ireland as it aims to make the business profitable again by 2016.
Ulster Bank, which has been weighing on Royal Bank of Scotland’s earnings since the financial crisis and the collapse of the Irish real estate market, is in the process of closing 63 branches by the end of next year. It plans to reduce the number of jobs to as little as 4,000 in 2016 from about 5,800 last year, Ulster Bank said in a presentation to investors.
“Investor confidence in Ireland is returning,†Jim Brown, chief executive of Ulster Bank Group, said, adding that the economic environment in Ireland also showed improvement.
The Ulster Group had to be rescued with £14.3 billion ($22 bilion) worth of capital injections from its parent Royal Bank of Scotland, which itself was bailed out by the British government during the financial crisis in 2008. R.B.S. bought Ulster Bank in 2000, before the Irish property boom peaked in 2007. But home prices in the country dropped more than 45 percent since and the unit’s loan book became a drag on R.B.S.’s efforts to return to profitability.
The British government last month said it would start an urgent review into whether to split R.B.S. in order to separate the bad assets found mainly within Ulster Bank and its commercial real estate unit. R.B.S. is still majority owned by the government, which is eager to start selling parts of the stake.
