Royal Bank of Scotland is considering merging its troubled Ulster Bank business with Irish rivals. According to a report, the bank is mulling a tie-up of Ulster with other lenders to strip out costs at the loss-making division and help boost its position in the Irish market. The possible candidates for the merger cited are Permanent TSB and Irish subsidiaries of Danske Banke or KBC. RBS revealed mounting losses at Ulster with the business slipping deeper into the red with operating losses of £1.5 billion in 2013 against £1 billion in 2012. RBS is now said to be holding discussions with private equity firms over providing backing for a scheme to merge Ulster with competitors. Such a deal could see RBS reduce its stake in Ulster to less than 50%, which would help remove losses from its balance sheet. RBS which acquired Ulster when it bought NatWest in 2000, has been under pressure to hive off the bank as its woes have added to the wider problems at the part-nationalised lender.
