Ulster Bank agrees 4% pay increase ahead of redundancies

Ulster Bank has agreed to pay a 4 per cent salary increase for most of its employees, according to the Financial Services Union (FSU), even as the lender prepares for waves of redundancies as it retreats from the Irish market in the coming years.

The agreement, subject to approval by a ballot among union members in the bank, will mean a 6.5 per cent increase for low-paid staff and introduce a new entry-level rate of €30,015 for new starters in the bank. The FSU said that the entry-level salary would be the best in the sector in Ireland.

Hike

The FSU publicly set its sights in November on achieving a 6 per cent pay hike for staff across the industry to help them deal with soaring living costs. The labour organisation said on Wednesday that it is in negotiations with AIB and PTSB on pay and is preparing to attend the Workplace Relations Commission with Bank of Ireland after agreement could not be reached with that lender on a new pay deal.

Ulster Bank saw almost 300 staff depart from the time it announced in February that it was quitting the Irish market and early December, said a spokeswoman last month. That reduced those employed to 2,530.

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The lender, a unit of UK banking giant NatWest Group, has said it does not plan to close any branches or launch a company-wide redundancy scheme until at least after the first half of next year.

Meanwhile, about 280 Ulster Bank staff are on track to transfer to AIB with the planned sale of a €4.2 billion corporate loan book. Some 450 are set to move to Permanent TSB, as the latter takes over an estimated €6.8 billion of the departing bank's mortgages and other small business loans.

Approval

More staff may shift with a deal on Ulster Bank’s €6.5 billion tracker mortgage book, with AIB vying with two overseas investment giants for the low-profit loan book. All the loan sales are subject to regulatory approval.

Ulster Bank also prepared the groundwork for inevitable rounds of redundancies in the coming years when it agreed last June to severance terms with the FSU. The accord will mean exiting staff receive five weeks’ pay for each year of service, inclusive of statutory entitlements, or four weeks per year, plus statutory, dependent on which is greater.

Previously, it offered four weeks’ pay per year, inclusive of statutory entitlements.

Redundancy packages will be capped at 104 weeks and a monetary amount of £300,000, which equates to €349,640. A minimum payment has been set at 20 weeks, regardless of service.