THE prospect of Royal Bank of Scotland retaining its Ulster Bank division has heightened in light of the improving Irish economy.

RBS has been reviewing its Irish business since the start of the year, amid speculation it could be sold or seek private-equity investment. However, the recovery in Ireland, which this year has helped Ulster Bank make its first profits since the global crash of 2008, has raised the prospect of RBS retaining the bank.

Chief executive Ross McEwan, who has signalled a preference to retain the business if it can be made to work for shareholders, is tipped to update investors when RBS unveils quarterly results on Friday. RBS declined to comment.