Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank the Deputy for raising this important topic. I am aware of the concerns of Deputy Cowen and other Deputies as Ulster Bank moves to implement the closure of a number of branches and sub offices around the country. Indeed, this was the subject of a previous topical issues debate last summer when the bank announced these closures. A number of representatives have been in contact with my officials about this important issue.

I must be very clear that this is a commercial and operational matter for the Ulster Bank, a wholly-owned subsidiary of the Royal Bank of Scotland group, and it would not be appropriate for me as Minister for Finance to become directly involved in the number of branches that the bank may decide to close or the selection of which branches are to close. That said, I fully understand the concerns of the bank's customers at the closures and the additional expenses that they will incur if they have to travel additional distances to avail of banking services. I also regret that there may be job losses involved. However, Ulster Bank has said that the redundancies will be volunteer-led and workers will be invited to redeploy to other areas within the bank.

As with other banks in Ireland reducing the number of branches, there are a variety of factors impacting on the selection of branches to close. In addition to income and costs, banks will also assess the level of usage of each branch and whether the premises are owned or leased in the decision making process. I should also point out that it has been public knowledge for quite a while that Ulster Bank is seeking to reduce costs across its network and that branch closures were on the cards. The bank had previously announced its intention to reduce its network and what is happening now is that a previously announced decision is being implemented. However, I also understand that Ulster Bank is in discussions with An Post in relation to a potential link-up to retain basic services in some locations. If this can be arranged, it would certainly be a positive development, ensuring that valuable financial services continue to be available at local level to personal customers and businesses.

Ulster Bank has said that it is reducing the number of branches in response to changing customer behaviours, in particular the use of mobile and online banking. This will hopefully lessen the burden for many people. On a more general point, Royal Bank of Scotland has publicly committed to building on Ulster Bank's current position to make it a compelling challenger bank to the main domestic banks and focus firmly on the customer and I have previously welcomed this. The continued presence of a viable and active Ulster Bank in the Irish market will be important in fostering competition for banking services. It is vital that businesses and consumers have a range of banking options available when using financial services and accessing credit, all of which will become increasingly important as the economy recovers.

I have previously said that I expected that the restructuring of the banking sector in Ireland and the recovery of the economy will present opportunities for the entry of new market participants. We have also said that competition is central to a functioning financial services market. Royal Bank of Scotland's commitment to Ireland can be seen as a recognition of the recovery of the Irish economy and a vote of confidence in the opportunities that supporting this recovery offers to the providers of financial services. The Deputy may also be aware that KBC is opening a number of branches around the country and this is very much to be welcomed. I also welcome the fact that Ulster Bank confirmed that it currently has no further plans to reduce its branch numbers in 2015.

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