Ulster Bank, the troubled Irish business unit of Royal Bank of Scotland , is readying itself to sell off assets worth 1 billion euros (833 million pounds) according to a source close to the situation.

This could see Ulster Bank competing against the state-run National Asset Management Association (NAMA) in trying to offload property portfolios in Ireland.

Ulster Bank, which operates in Northern Ireland and the Republic of Ireland, has approached agents. They are believed to have until the end of the week to respond with their proposals.

The source said the deal related to asset sales, not loan sales.

A report on a prominent Irish blog said Ulster Bank had approached four agents about a 1-billion euro sale of commercial property loans.

Property consultant CBRE said last week new properties are expected to come to market in coming months in Ireland, as banks, receivers and NAMA look to offload sites.

Demand for properties, transactions and general activity across all sectors was buoyant in the first two months of the year, it added, lifting hopes of a revival in the battered commercial property sector at the heart of the country's economic and banking woes.

The move by Ulster Bank will be keenly watched to see what level of pricing can be achieved for such assets.

Irish commercial property prices have fallen around 65 percent since their peak in 2007

Ireland's state-run agency NAMA expects commercial property prices to stabilise this year as it prepares to package assets into investment funds to tap growing interest from foreign investors, its chairman said this month.

NAMA, one of the world's largest property groups, was created to purge Irish banks of 74 billion euros of risky land and development loans. It has approved asset sales of 7 billion euros since being launched in March 2010.

RBS bought Ulster in 2000 and expanded its Irish operations three years later through the acquisition of building society First Active.

RBS lent aggressively during Ireland's ill-fated property boom and has been saddled with big losses on the loans, including impairments of 1.1 billion pounds in the first nine months of last year.

RBS, 83 percent owned by the British government, declined to comment.

(Editing by David Hulmes)