More Ulster Bank headaches for RBS

Royal Bank of Scotland Group, Britain’s largest state-controlled lender, may need to set aside additional provisions to cover rising mortgage losses at Ulster Bank over the next two years, according to Espirito Santo Investment Bank.

The investment bank increased its Irish residential mortgage provisions forecast for RBS by £147m (€182.7m), or 27%, for this year and by £370m, or 107%, for 2013, London- based analyst Shailesh Raikundlia said in a note yesterday.

While Lloyds Banking Group’s Irish mortgage arrears have been “consistently 1.6 times” that of the local banking industry in recent years, its loss provisions are already “conservative,” he said.