Sale of bank for 324m

ROYAL Bank of Scotland Group, Britain’s second-largest bank, agreed to buy the Swiss private banking unit of HVB Group for 324.5 million, its second foreign acquisition move this week.

Royal Bank of Scotland has spent more than $5 billion on purchases in the past two years.

It offered 0.877bn for Dublin-based mortgage lender First Active Plc this week.

In June, it bought Credit Suisse Group’s Churchill insurance unit.

But its Irish plans hit slight problems yesterday when trade union SIPTU threatened strike unless it received assurances on job security and working conditions.

RBOS chief executive Fred Goodwin has warned of job losses in the low hundreds shared between First Active and Ulster Bank if the deal goes through.

SIPTU, which represents 400 First Active staff, said union members were “shocked” at the news and the threatened job losses.

SIPTU insurance and finance branch secretary John Swift said the union had written to First Active demanding an immediate written assurance there would be no redundancies and no worsening of terms or conditions of employment in the event of a takeover.

“In the absence of those assurances, we will have no choice but to ballot for industrial action,” he said.

The IBOA, which represents staff at Ulster Bank, insists there should be no compulsory redundancies as a result of the deal.

Meanwhile, the purchase of Bank von Ernst & Cie will boost assets under management at Royal Bank’s Zurich-based private banking Coutts unit to 26bn from 17.5bn.

It will add to earnings from 2004, the Edinburgh-based lender said.

“Royal Bank is paying a reasonably full price but there will be cost savings in compliance and information technology as they add it to Coutts,” WestLB Panmure analyst James Hamilton said in an interview in London.

Swiss private banks have cut jobs, merged or sold businesses after being hurt by a three-year market decline