Ulster Bank is to pay its second dividend since the financial crash to Royal Bank of Scotland, its parent group, at the end of the month.
The lender will make a €1.5 billion dividend payment to NatWest Holdings Limited, its immediate parent company and itself a subsidiary of RBS.
Gerry Mallon, the chief executive at Ulster Bank, said he was pleased that it was in a position to return capital to RBS for the second time since the financial crash.
“The payment of this dividend is further evidence of our strong balance sheet and capital position. We look forward to making further payments in the future, with the permission of our regulator,” Mr Mallon said.
Ulster Bank paid its maiden dividend in November 2016, also of €1.5 billion. Ulster Bank will continue to have a “strong capital position” after the payment of the dividend significantly above regulatory capital minimums, it added. Post-dividend it will have a Common Equity Tier 1 (CET1) ratio excess of 22 per cent.
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Owen Callan, a banking analyst at Investec Ireland, said the dividend payment marked another step in Ulster normalising its capital structure.
“The dividend payment will equate to an approximate 7.3 per cent CET1 reduction, underlining the significance of the distribution in proportional terms,” he said.
Ulster Bank received about £15 billion from RBS to bail out its operations north and south of the border during the downturn.
Bank of Ireland is expected to announce a dividend payment when it releases its full-year 2017 results next month.