Ulster Bank group chief executive Mr Cormac McCarthy has signalled that the bank intends to rapidly capture a larger share of the Irish banking market and will not settle for being the number three player.

The group, which includes First Active, is owned by Royal Bank of Scotland (RBoS).

Addressing the Institute of Directors in Dublin yesterday, Mr McCarthy asked: "When has the RBoS Group ever been satisfied with being third?"

RBoS purchased First Active last year for €887 million and has integrated its operations with Ulster Bank but has retained both brands. Mr McCarthy said: "RBoS likes Ireland - the economy, the people, the opportunities - and our business continues to be very pro-actively supported by our parent."

RBoS is the world's fourth-largest banking group, but in Ireland it has been "the best kept secret", according to Mr McCarthy, who says the public regularly confuse it with the other Scottish bank, Bank of Scotland.

Bank of Scotland Ireland, headed by Mr Mark Duffy, is part of the Halifax Bank of Scotland group and has built its brand on the back of its entry into the mortgage market some years ago.

Meanwhile RBoS chief executive Sir Fred Goodwin has signalled that the bank is ready to consider big cross-border European banking deals.

In an interview with French daily Les Echos, Sir Goodwin said consolidation of the European banking sector will accelerate in the coming years as US banks begin looking to expand in Europe.

He said RBoS will take a proactive role in this consolidation but added that he does not believe that hostile takeovers lead to sufficient value creation. He said the group aims to expand its business in China, but will avoid Latin America or Africa, as those markets were "too volatile".

He refused to comment on whether RBoS was looking for a new partner in Spain following the merger of Banco Santander Central Hispano, which holds just over 5 per cent of RBoS, with Abbey National.