Asked if it could attract private equity investment for Ulster, RBS CEO Ross McEwan said: "It's one of the options we're exploring. I know there's been a lot of speculation on that, and it's interesting how many people want to buy into Ireland at the moment."

The Sunday Times newspaper has said Warburg Pincus, CVC, KKR and Permira were among private equity groups examining a plan to invest in Ulster.

"Right now we're doing a lot of work inside Ulster to see what opportunities we've got, and how that business can position itself. That's going reasonably well and we'll be talking more about that probably in the next two or three months," McEwan told reporters on a conference call after reporting strong second quarter profits.

(Reporting by Steve Slater; Editing by Matt Scuffham)