As Current Account wrote a couple of weeks ago, the splitting of Ulster Bank and the separate sale of the operations in the North and the South now looks on the cards. While final decisions remain to be made, the issue is purely financial for the boys in NatWest.
Having milked Ulster Bank for all the profits it could get in recent years, NatWest now wants to get the best sale price. It is likely to do this by getting the likes of Irish Life & Permanent to pay top dollar for the branches in the Republic and getting another buyer - such as Bank of Ireland - to cough up for the Northern operation.
In one sense it will be a pity to see an end to one of the genuine all-Ireland businesses if Ulster is split and sold. But some kind of move had become inevitable. NatWest had given Ulster the green light to buy NCB a few years back, but has not made any subsequent purchases and was not, for example, a bidder for ICC.
Without the support of its parent for expansion here, the future of Ulster was always open to question and now the Bank of Scotland bid has forced the hand of NatWest management.
Very interesting now will be whether National Australia bids for the operations in the Republic. (It already owns Northern Bank so competition considerations would appear to rule out a bid for the operations north of the Border.) If it is serious about developing into a player in the Republic then a bid for Ulster from NAB would appear inevitable. If not it might as well fold up its tent and leave.
