January 26, 2009 / 12:01 PM / 10 years ago

UPDATE 2-Royal Bank of Scotland to cut 750 Irish jobs

* Ulster Bank to merge with First Active

* To amalgamate 60 branches

* Merger to complete towards end-2009

* 550 jobs to go in Irish Republic, 200 in Northern Ireland

* RBS stock up 13.2 pct

(Adds details, updates share price)

By Kevin Smith

DUBLIN, Jan 26 (Reuters) - Royal Bank of Scotland’s (RBS) (RBS.L) Irish unit, Ulster Bank, said on Monday it was merging with its sister lender First Active resulting in the loss of up to 750 jobs.

Ulster Bank said the move to amalgamate 60 branches of mortgage provider First Active would mean the reduction of up to 550 staff in the Irish Republic and some 200 across the Irish border in the UK province of Northern Ireland.

“These actions will result in a leaner, more cost efficient organisation, well placed to continue to meet the needs of the changed marketplace,” Ulster Bank said in a statement.

A voluntary severance package would be available, it added.

The merger, to be completed towards the end of the year, would result in an organisation with more than 1.8 million customers, 295 branches and an ATM network of more than 1,250 across the island of Ireland, it said.

Shares in RBS — which this month posted Britain’s biggest corporate loss and has begun a revamp of its operations worldwide — were up 22.3 percent at 14.8 pence by 1115 GMT.

Customers of First Active — the first lender in Ireland to offer 100 percent mortgages — will automatically be transferred to Ulster Bank and the First Active brand dropped.

Ulster Bank acquired First Active in 2004 and between them the two subsidiaries employ around 7,000 people.

Ireland’s banking sector has come under intense pressure as recession squeezes the one-time “Celtic Tiger” economy and the housing market crumbles.

Last week rating agency Moody’s downgraded Ulster Bank, saying its relatively large exposure to the Irish property and construction sector would dent profitability over the next couple of years. Moody’s also cut parent RBS’ rating. The latest job loss news adds to a lengthening list of redundancy announcements in Ireland by companies including PC-maker Dell DELL.O, British drinks firm Britvic (BVIC.L), and Irish-owned supermarket chain Superquinn.

Editing by Simon Jessop/Elizabeth Fullerton

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