National Australia Bank is not believed to be among the institutions which have lodged indicative bids for Ulster Bank by yesterday's closing deadline.
As well as a joint bid from Irish Life & Permanent and Bank of Ireland, Ireland's biggest banking group, AIB, is believed to have submitted an indicative offer.
The extent of overseas interest in Ulster Bank remains unclear, with reports from London only saying that NatWest had received a "number" of bids for Ulster. NatWest has said that it will sell or float Ulster Bank, as part of its defence against a hostile bid from Bank of Scotland. Bank of Ireland and Irish Life & Permanent have already confirmed that they have lodged a joint bid, with Bank of Ireland interested in Ulster's operations in the North and Irish Life & Permanent wanting to acquire its business in the Republic. The size of their bid is not known - Ulster is believed to be worth in the region of £2 billion. AIB is also thought to have expressed an interest through lodging an indicative bid. However, it is unclear whether the bank is confident that it could overcome the competition constraints which could face it in the event of a takeover. In the Republic, AIB is the largest player in retail banking and Ulster is the third, while in the North AIB has a substantial business in First Trust. Ulster Bank is number two in the market.
There had been intense speculation that National Australia Bank - which owns National Irish Bank in the Republic and Northern Bank in the North - would enter the race. This followed indications from its corporate headquarters that it was interested in acquiring further businesses in this part of the world. However, reports from Australia suggest that NAB is targeting the UK and US markets and that its acquisitions are unlikely to be in purchasing further branch networks.
The likely interest of overseas institutions in Ulster Bank is hard to gauge. A number with existing interests in Ireland - including ABN-AMRO and Belgian Bank KBC - which owns Irish Intercontinental Bank - are not thought to be among the bidders. Analysts believe that an overseas bidder is likely to pay less than a player with substantial existing Irish operations, as the latter would benefit from synergies and savings from merging with existing operations in Ireland. It is unclear how rapidly the sale process will now move. NatWest and its advisors are currently preparing a second defence document to try to fend off the Bank of Scotland bid. With the future ownership of NatWest unclear - and the possibility of other bidders entering the contest - it may be some time before the future of Ulster Bank is clear. NatWest is keeping open the option of floating Ulster Bank off on the stock market, although this is thought unlikely to happen unless it is unhappy with the money on offer from a sale. Meanwhile, NatWest has recruited Mr Alastair Lyons, former chief executive of National & Provincial Building Society and then of NPI, the mutual insurer, to help restructure its businesses.
Mr Ron Sandler, NatWest's chief operating officer, said Mr Lyons would lead projects to streamline retail and wealth management businesses within the bank, as part of its strategy to fight the Bank of Scotland bid.
