Ulster Bank, a subsidiary of the Royal Bank of Scotland, put in a strong performance last year with pretax profits up 20 per cent to £200 million (#254 million) compared with £166 million in 1999. The bank, which has been involved in a bitter dispute with its staff over restructuring plans, managed to reduce its cost base and grow its business last year, with the Republic performing particularly well.
Ulster Bank chief executive Mr Martin Wilson said the good results were a testament to the loyalty and commitment of its staff and customers. He said discussions with the Irish Bank Officials' Association (IBOA) on its Horizon restructuring plan were continuing in a positive manner. "I am cautiously optimistic that progress can be made."
IBOA assistant general secretary Mr Larry Broderick said the strong out-turn vindicated everything it had been saying about the bank. "Ulster Bank is a very effective and profitable bank. It's a shame it had to upset employees but we believe our members should continue to benefit from the bank's strong profit growth." Ulster Bank staff in Northern Ireland have voted to accept the recommendations of an independent tribunal that vetoed the bank's plans for pay and job cuts. Staff in the Republic will be balloted shortly. Meanwhile, the dispute involving porters and cleaners at the bank, who were seeking a "Dublin allowance" payment equivalent to the £2,000 paid to IBOA members, is also said to be reaching a conclusion. A payment of close to £2,000 is expected to be offered.
Staff will also benefit from the £150 million sterling (#230 million) to be distributed under the Royal Bank of Scotland profitsharing scheme. Ulster Bank staff are estimated to qualify to share around £7.5 million of that amount, which can be taken up in Royal Bank of Scotland shares up to a maximum of 10 per cent of their basic salary. Despite difficulties on the industrial relations front, the bank's retail, corporate banking and treasury operations achieved good growth in 2000.
Loans to new customers increased by 20 per cent to £7.6 billion with most of the expansion in the Republic. Average customer account balances were also ahead at £524 million, up 9 per cent.
This pushed the bank's net interest income to £294 million, an increase of 9 per cent on 1999. Other income generated from fees and commissions earned on other activities was also up, rising by 17 per cent to £172 million from £147 million.
Staff costs were higher, climbing to £144 million from £135 million. Provisions for bad debts rose to £19 million from £17 million. However, overall, the bank's cost/income ratio has been brought into line with that achieved across the Royal Bank of Scotland group, falling to 53 per cent from 56.1 per cent.
Staff numbers at the bank declined from 4,500 to 4,400 at year-end, some of which was due to the sale of Ulster Bank's investment management and investment services business last year. Mr Wilson insisted no compulsory redundancies would be sought at the bank and that staff numbers would increase. By 2004, it expected to employ 4,900 staff in the Republic and North of Ireland.
