* Ulster Bank is third largest lender in tight market
* Government, regulators concerned over lending impact
* NatWest to announce full-year results on Friday
(Releads on comments from source, adds details)
By Padraic Halpin
DUBLIN, Feb 18 (Reuters) - NatWest is poised to make
a decision on withdrawing from the Irish market, a source
familiar with the matter said on Thursday, as Ireland's deputy
prime minister described the potential exit "as a matter of real
concern".
The British bank is Ireland's third largest lender with an
estimated 15% share of the mortgage market, 10% share of the SME
market and a 20 billion euro ($24.2 billion) loan book.
Its Northern Irish unit, which also uses the Ulster Bank
name, is not part of a strategic review launched last year.
The Irish Times reported on Wednesday that the NatWest board
was set to decide on Thursday on a proposal to wind down its
operations in the Republic of Ireland. The Financial Times also
reported it was preparing to start a phased withdrawal, citing
sources familiar with its plans.
A source told Reuters that a decision on withdrawing was
imminent, without giving further details.
"It is a matter of real concern and one the government is
taking very seriously," Deputy Prime Minister Leo Varadkar told
parliament.
The bank and its Irish unit, which employs 2,800 people and
has 88 branches, declined to comment on the reports. It
publishes full-year results on Friday.
The move is the latest by NatWest Chief Executive Alison
Rose to strip out costs and simplify the lender since taking the
helm in late 2019, after cutting back investment bank NatWest
Markets and axing digital venture Bó just months after its
launch.
The lender is also selling part of Adam & Co, a private bank
founded in 1984 and named after prominent Scottish economist
Adam Smith, a source familiar with the matter said. Sky News
first reported the plans.
The exit by a string of foreign banks a decade ago following
Ireland's banking crash has left the market shy of competition.
The central bank has raised particular concerns on lending to
small- to medium-sized enterprises (SMEs), where Ulster is one
of just three lenders of scale.
The Irish Times reported last month that Irish mortgage
lender permanent tsb had hired investment bank Morgan
Stanley to advise on a potential bid for Ulster's Irish small-
to medium-sized business loan portfolio.
Allied Irish Banks, one of Ireland's two dominant
banks, the small local non-bank lender Dilosk and investment
firms Cerberus and Lone Star have also been reported to be
interested in parts of the loan book.
($1 = 0.8280 euros)
(Additional reporting by Iain Withers in London; Editing by
Edmund Blair and Jan Harvey)
Natwest (NWG)
