Paschal Donohoe: Ulster Bank closure 'very difficult day for Irish banking'

Finance Minister said there are now "a number of possibilities" for other retail banks to step in to buy the financial institution

Minister for Finance Paschal Donohoe warned that any transactions hammered out by AIB and Permanent TSB with Ulster Bank could take years. Picture: Julien Behal

The closure of Ulster Bank is "a very difficult day for Irish banking" the Finance Minister Paschal Donohoe has said.

However, Paschal Donohoe has said there are now "a number of possibilities" for other retail banks to step in to buy the financial institution.

Mr Donohoe also warned that any transactions hammered out by AIB and Permanent TSB with the bank could take years.

Some 2,800 jobs in the Republic and 600 further jobs in Northern Ireland are now at stake after Ulster Bank announced that it would be exiting the Irish market.

Asked about a possible carve-up of the bank, Mr Donohoe said: "I cannot mandate another bank, even banks that we have a sharehold in, to step in and perform in a certain way."

Going down that path offers even more difficult days ahead for existing banks that are staying here in Ireland.

He said banks must make commercial decisions and have "duties" to their own staff and customers.

However, Mr Donohoe described the fact that Ulster Bank now wants to talk with AIB and Permanent TSB as an "important development".

"There is potential for the further strengthening of a number of Irish banks here," he said.

Asked if the Government must now move to make repossessions easier given the fact that banks need to keep high levels of capital in reserve compared to other jurisdictions, Mr Donohoe said the reasons why the bank came to this decision needs to be looked on "another day".

"Today isn't the day for those reflections."

He said he has no plans to change protections for homeowners who are experiencing "difficulties".

"There are things that we do need to reflect on regarding why a bank that has been present in Ireland for so long has decided to go.

"Today is for acknowledging the difficulty, but also acknowledging the role that a number of other large banks may be playing in the future," Mr Donohoe told Newstalk Breakfast.