A shock review that could result in the winding down of Ulster Bank in the Republic has been described as "unprecedented in Irish banking" by the head of the Financial Services Union.
FSU general secretary John O'Connell said that, if substantiated, any move by Ulster Bank's owner, the NatWest Group, should be opposed by the Irish Government.
“We are looking for the Government to immediately get in touch with NatWest and seek assurances about the future of Ulster Bank in the Republic,” said Mr O’Connell.
NatWest, formerly called RBS, is actively considering winding down Ulster in the Republic, sources have confirmed.
Ulster Bank employs around 2,800 people and has 88 branches in the Republic.
Ulster Bank accumulated major losses during the financial crash 10 years ago and required a huge bailout from the British parent. It now faces new struggles arising from the fallout of the Covid-19 economic crisis.
In July, Ulster Bank said it had slumped to an operating loss of €276m, compared with an operating profit of €26m in the same period a year earlier, as net impairment charges on loans soared to €278m.
The bank’s net loans to customers in the Republic had also decreased to €20.5bn.
Any winding down of Ulster would likely have a significant effect on personal and corporate customers across all Irish banks.
Irish banks already charge among the highest costs in Europe for their mortgages and loans to small firms, and any reduction in competition will likely make matters worse.
The news will also raise significant challenges for regulators and the Government who, before the Covid-19 crisis, had long pinned their hopes on new entrants introducing competition to Irish banking.
The Government owns 71% of AIB, has a stake of 14% in Bank of Ireland, and also controls 75% of Permanent TSB.
In July, Ulster Bank chief executive Jane Howard said that its first-half loss marked “a considerable reversal” from the first half performance in 2019, amid the Covid-19 crisis.
“This is attributable mainly to a €278m net impairment charge, reflecting the likely impacts of the deterioration in our economy,” said Ms Howard.
“We have supported our personal and business customers with over 16,800 payment breaks since the outset of the pandemic.
"During this period, we have also seen a sharp decline in demand for new lending, which is demonstrated by a fall in net loans to customers compared to H1 2019, due mainly to decreased business activity and increased impairment charges, while customer deposits have increased.”