LONDON: Royal Bank of Scotland is working on a plan to salvage its troubled Irish business, Ulster Bank, by merging it with a number of rivals, the Sunday Times newspaper reported.
Attempts to find a buyer for the business have failed and a team inside RBS is looking at tie-ups between Ulster and other lenders, such as Permanent TSB or the Irish subsidiaries of Danske Bank or KBC, the newspaper reported.
Bolting the institutions together could allow the new Ulster Bank to strip out costs and mount a credible challenge to Ireland's top players, it said.
Ireland's finance minister Michael Noonan said on Saturday he would like a "significant" new bank with a big balance sheet to enter its lending market this year to drive competition in the diminished sector.
Ulster Bank has racked up losses of 2.5 billion pounds ($4.2 billion) over the past two years. It accounts for less than 4 percent of RBS's assets but was responsible for 20 percent of its bad debt charges last year.
The Sunday Times said RBS is in talks with a handful of private equity firms about providing tens of millions of pounds in backing for the venture.
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