The British owners of Ulster Bank are considering closing it down.
A shutdown would put the jobs of 2,500 people at risk and see the closure of its 88 branches.
It is thought the run-down of the loss-making bank would take six years, but would be a massive blow to banking competition in this country. Parent company NatWest is also considering merging Ulster Bank with another bank here, but that outcome is said to be less likely.
NatWest, which was called Royal Bank of Scotland until recently, is more inclined to shut down its banking operation in the State.
No final decision has been made but any closure would mean current account customers and savers having to find another bank. Its mortgage book would likely be sold off.
The story was first reported in the Irish Times, but there was no comment from Ulster Bank or NatWest spokespersons last night.
The Financial Services Union (FSU) said it was shocked at the revelation that the closure of the bank was being considered and called on the bank to immediately reassure staff and the union that NatWest is committed to its future.
FSU general secretary John O’Connell said: “If this story is substantiated, we are shocked and angry at how the bank is treating staff.
“We have been engaged in good faith in a restructure process over the last number of weeks to secure jobs and minimise redundancies and the bank reassured us of the commitment from NatWest to Ulster Bank.”
It is understood there are no plans to shut the Northern Irish operation.
In August, NatWest chief executive Alison Rose said all options were being considered for Ulster Bank.
She pointed out Covid-19 was proving to be a huge challenge.
Ms Rose said at the time: “Our strategy was and is to grow that business organically and safely and we have been successful in growing both the person[al] mortgage and some of the commercial share in 2019.
“That strategy hasn’t changed. Clearly Covid-19 presents different challenges to the economy and we will continue to consider all strategic options in relation to that business.”
Run by Jane Howard, Ulster Bank made a loss of €276m for the first half of the year.
It has struggled to gain market share because of its small scale.
Ulster Bank got a bailout of €15bn (€16bn) from its British parent after the financial crash more than a decade ago. Much of this money came from British taxpayers.
It has since sold a number of mortgage accounts that are in arrears, cut jobs and has closed branches. Despite this, its owners are understood to have lost patience with it, particularly as the pandemic has made returning a profit in banking a massive challenge.
The Edinburgh-headquartered NatWest split Ulster Bank’s operation in this country from Ulster Bank Northern Ireland in 2015.
The operation in the North has a greater presence in its market and is not under threat of closure.
It is understood a strategic review of the bank’s future in the Republic is at an advanced stage.
The news broke within hours of Ulster Bank naming insurance and banking industry veteran Ruairí O’Flynn as its new chairman.
He will now potentially face overseeing the complex task of dismantling, selling off and shutting down one of the country’s oldest and biggest financial institutions.
Earlier this month Ulster Bank said it was to lay off 266 staff as the pandemic pushes more transactions online and lenders seek to cut costs in an era of ultra-low interest rates.
The bank said the reductions would be achieved through voluntary redundancies, where possible.
In June it suspended its search for a new headquarters and is reassessing its need for a major office campus in the wake of Covid-19.