RBS ‘considering’ sale of Eire branch of Ulster Bank

The asset is a stand-alone business after it was separated from the rest of Ulster Bank when 73 per cent state-owned RBS abandoned plans to sell the Belfast-based division last year.

While the Northern Ireland business is now to integrate it into the UK operation, the new reports suggest Edinburgh-based RBS is now ready to jettison the rest of the lender.

In September RBS chief executive Ross McEwan said Ulster Bank was showing “positive signs”, though costs were still unacceptably high.

RBS said the strategy for Ulster Bank “remains unchanged” and it was “pushing ahead with our strategy to create a strong challenger bank focused on our customers”.

Meanwhile, The RBS Shareholder Action Group, which is bringing a class action over the alleged misleading of shareholders during a 2008 rights issue immediately prior to the bank’s £45 billion government bailout, is preparing legal action against wealth managers Investec Wealth & Investment in order to recoup £200,000 in costs from unpaid subscription fees.

According to reports from Citywire, the shareholder action group also plans to take legal action against Lloyds to the tune of £1 million, with the total figure for both claims projected to be around £1.5 million, when legal costs are factored in.

The legal spat follows Investec and Lloyds’ decision to withdraw from the action group’s current litigation against RBS relating to what they allege to be the inflated price of its rights issues between April and June 2008.

Investec W&I and Lloyds’ clients were initially being represented by the RBS Shareholder Action Group but both companies recently decided to take their cases to law firm Mishcon de Reya.

Investec W&I declined to comment on the allegations of unpaid subscription fees, although both Investec W&I and Lloyds confirmed that they had left the action group and were pursuing litigation separately.

Investec W&I clients have the option of continuing to be represented by the action group or switch legal representation.

In a letter to Investec W&I clients, seen by Citywire, the RBS Shareholder Action Group expressed surprise at the wealth manager’s ‘inexplicable’ decision to quit the group. This was taken as a result of concerns about inadequate funding provision for the litigation and insufficient insurance cover.

Furthermore, the letter also informed shareholders that ‘Investec has paid nothing’ despite receiving a ‘full legal service’.

It continued: ‘Investec is obliged to indemnify immediately for any expenses that we have incurred on behalf.’

Investec W&I cited the ‘best interest’ of its clients as behind the decision to cease involvement with the action group, and assured investors that it would absorb any costs incurred in the subsequent case against RBS.

The original case put forward by Investec W&I against RBS included complaints against Fred Goodwin, who was the bank’s chief executive at the time of the right issues, and three members of its executive committee.

However, Citywire said that although both Investec W&I and Lloyds are committed to litigation against RBS, Goodwin and the other executives will no longer have cases brought against them.