Ulster Bank has increased headcount by 500 this year as losses rise

In January, Ulster Bank announced that it was cutting 950 jobs. So far this year, however, staff numbers have actually increased by 500.

RBS has released its Q3 results today and, in line with its ongoing cost-cutting, employee numbers have decreased by over 6,000. Ulster Bank has not performed well this year; it’s now £797m in the red, largely thanks to over £1bn in impairment losses on non-performing loans (NPLs), compared to £751m for the first nine months last year.

Not surprisingly, redundancies have been announced at Ulster Bank, and yet headcount is on the up. It now employs 4,700 people, up from 4,200 people at the end of 2011. Logic suggests that, like most Irish banks, it needs restructuring specialists to try and workout the underwater property loans.

According to a research note from Deutsche Bank, RBS has €56.8bn in Irish loans and, in the first half of 2012, 38% of these were non-performing. This doesn’t look bad compared to other banks (particularly Lloyds Banking Group which has 67% NPLs), but the proportion of has been increasing over time. In 2009, 16% of RBS’s loans were NPLs, which rose to 27% in 2010 and 36% last year.

Ulster Bank is making redundancies, largely at a retail level, but is undoubtedly stocking up on workout specialists to help it with its property portfolio. However, of the 12 jobs it currently has in Ireland, the roles in Dublin are for change management professionals, a quant analyst and a PnL forecasting specialist.

There's also the fact that Ulster Bank was fined £18m for its IT meltdown during the summer, so it's possible that it could have been bolstering technology headcount.

And, despite the increase in headcount, staff costs are going down. The bank spent £157m on its employees, down from £168m for the first nine months of 2011.This works out as £33.4k per employee.