ULSTER Bank owner NatWest has said plans to wind down its operation in the Republic remain “on track”.
The taxpayer-backed group, which is 59.8 per cent owned by the UK Government, confirmed plans to exit the market in February this year.
Around 600 people in Belfast are directly employed in roles servicing the Ulster Bank operation across the border.
Banking union the FSU last week told a Stormont committee that the jobs are ‘salvageable if NatWest transfers their functions over time.
Announcing its first quarter results on Thursday, NatWest said "constructive discussions" were ongoing with AIB regarding the sale of Ulster Bank’s €4 billion portfolio of performing commercial loans in the Republic.
The group said talks remain ongoing with Permanent TSB and "other strategic banking counterparties" about their potential interest in other parts of the bank.
NatWest posted pre-tax operating profits of £946 million for the first three months of 2021 against £519m a year earlier.
It represented an 82 per cent surge in first-quarter profits, with the banking group joining rivals in cutting reserves for debts that may turn sour due to the pandemic.
NatWest said it had released £102m of cash put aside for loans that may not be repaid as a result of the coronavirus crisis.
A year earlier, it put by £802m for loan losses and took a mammoth hit of £3.2m for these provisions over 2020 as a whole.
Profits across the sector are surging as banks begin to cut their reserves for loan losses thanks to a brighter economic outlook for the UK due to the vaccination programme and lifting of lockdown restrictions.
NatWest reported that Ulster Bank recorded an £11m operating profit across the border in the first quarter of 2021, with money again freed up that was previously set aside to cover bad loans.
It compared to an operating loss of £21m in the first quarter of 2020.
But NatWest - rebranded from Royal Bank of Scotland last year - has not changed its outlook for the full year as it remains cautious amid ongoing economic uncertainty and with Covid-19 business loans becoming due for repayment.
Chief executive Alison Rose said: "Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.
"However, there is continuing uncertainty for our economy and for many of our customers as a result of Covid-19."
The group saw gross new mortgage lending soar to £9.6bn, up from £8.4bn in the previous three months, as it benefited from the housing market boom spurred on by the stamp duty holiday.
Retail bank customer deposits also surged by £7.3bn, or 4.2 per cent, to £179.1m since the end of 2020 as spending slumped and savings increased in lockdown.
The first-quarter figures mark a significant improvement on last year, when the group slumped to a £351m loss against operating profits of £4.2bn in 2019.
But the group is facing a court case next month after the Financial Conduct Authority (FCA) launched criminal proceedings in March against the bank for alleged failures under money-laundering rules.
The City watchdog claims that NatWest's systems and controls failed to properly monitor and scrutinise suspicious activity, which took place between November 11 2011 and October 19 2016.
The case is due to be heard at Westminster Magistrates' Court on May 26.
