Ulster Bank is still building its headcount, but can it last?

Royal Bank of Scotland has published its gargantuan Q3 results report this morning and, as has been the case for some time now, Ulster Bank remains in the red.

It slipped to a 219m loss in the third quarter, down from 176m in the red during the same period in 2010, and has posted a 786m loss for the first nine months of this year.

What's more, its impairment losses continued to increase - 327m for Q3 and nearly 1.1bn so far in 2011, compared to 286m and 785m for the respective periods last year.

Ulster Bank's "financial performance continues to be overshadowed by the challenging economic climate in Ireland", says RBS.

Yet, one thing continues to look positively buoyant - staff numbers. We've previously flagged Ulster Bank as being among the most active recruiters in Ireland this year and headcount figures reflect this.

It added 100 people in the first six months of 2011, and another 100 staff in the last quarter alone. Employee numbers at 30 September stood at 4,400, compared to 4,200 at the end of 2010. Despite this, staff costs have only increased by around 2% year-on-year to 585m.

So, where are these jobs? We understand that it's been hiring for strategic positions in its retail business as it looks to compete more with Bank of Ireland and AIB on the high street, as well as risk, finance, compliance and relationship management roles related to its commercial business.

However, it's also having to take on loan workout specialists to tackle these troublesome Irish debts, and predominantly these roles are long-term contracts. While there's still, obviously, plenty of work to be done in this area, these jobs are inevitably finite.

Moreover, aside from the impairments on its Irish loan book, RBS has other problems to deal with - not least plummeting revenues in its investment bank and a 63% haircut on its exposure to Greece - which could impact hiring plans across the group going forward.

RBS also ominously suggested that the increased employee numbers was a temporary phenomenon because it "primarily reflects project staff employed to meet the short-term demands of the group's chance and customer service programmes".

Headcount will decrease in the fourth quarter and going into 2012, it says, due to the ongoing cost-cutting programme.