THE IRISH Bank Officials Association (IBOA) has called on Ulster Bank chief executive Cormac McCarthy to reassure staff their jobs and pay are secure following the announcement by the bank's parent company, Royal Bank of Scotland (RBS), that it is to seek a record £12 billion sterling (€15 million) from shareholders.
RBS said the rights issue would cover a potential £5.9 billion writedown in the value of assets linked to the subprime meltdown.
The capital shortage comes six months after the bank's €72 billion takeover of ABN Amro with Banco Santander and Fortis, completed at the height of the bull market.
RBS also plans to raise £4 billion from selling assets, and would consider selling its insurance brands Direct Line and Churchill.
The IBOA wants Ulster Bank to guarantee that staff conditions will be maintained, and has asked for "immediate clarification" on the status of Ulster Bank within RBS.
In an internal Ulster Bank memo issued yesterday, Mr McCarthy gave instructions to staff on how they should respond to queries from customers about the rights issue. He told staff they should "continue to assure them that the Ulster Bank Group is very much open for business as usual".
He said the regional markets division of RBS, which includes Ulster Bank, was "in a relatively strong position, with a number of profitable growth opportunities in front of us".
RBS fell 3.9 per cent to 358p in London trading yesterday.
Bank of Ireland said it had "a strong and improving capital base", and had "no plans to raise capital at this time". Anglo Irish Bank has also maintained it has a strong liquidity and capital base.
A spokesman for Irish Life & Permanent said the financial services group had dismissed rumours about it seeking a rights issue at its 2007 results announcement in February, and that position had not changed.
