Permanent TSB (PTSB) has announced today (December, 17) that it has signed binding legal agreements with NatWest Group plc to acquire around €7.6 billion of Ulster Bank assets.
The deal will see a significant part of the Ulster Bank’s retail and SME business in the Republic of Ireland being takeover by PTSB.
The agreement will include €7 billion worth of performing non-tracker residential mortgage loans and €230 million in performing SME loans.
As part of the transaction, NatWest will acquire 16.66% of the Permanent TSB Group Holdings plc shareholding, along with the €400 million Lombard Asset Finance loan business.
25 branches in the Ulster Bank network are also included in the deal:
450 staff will be given the option to transfer to PTSB under the agreement.
In a statement, PTSB said Ulster Bank personal and business customers, whose loans will be transferred do not need to take any action now.
“These customers will be provided with at least 60 days’ notice prior to the transfer being completed,” the bank said.
PTSB said it is working towards acquiring the performing non-tracker residential mortgage in the final quarter of 2022, with SME loans after this; all transfers are earmarked for completion by the end of June 2023.
Ulster Bank
Earlier this year, Ulster Bank announced a phased withdrawal from the Irish market and a binding agreement with AIB.
Ulster Bank Ltd.’s banking business in Northern Ireland was to be unaffected by the withdrawal.
As part of the phased withdrawal, agreement was subsequently reached that AIB would purchase approximately €4.2 billion of performing commercial loans.
In July, the bank and its owner, NatWest Group, announced a non-binding Memorandum of Understanding (MoU) with Permanent TSB plc for the proposed sale of some of its loan book.
The Minister for Finance, Paschal Donohoe, has welcomed today’s deal:
“This transaction is a very positive development for PTSB and represents a significant opportunity for the bank, its stakeholders and its customers to consolidate its position in the Irish banking market and position itself for future growth.
“With the withdrawal of Ulster Bank and KBC from the Irish market, a PTSB with greater scale has a more important role than ever in providing meaningful competition for consumers in terms of both product choice and pricing.
“For these Ulster Bank borrowers, it provides them with certainty as to the destination of their loans, while depositors will have a choice to move their business to PTSB next year,” the minister said.
The minister said the deal will also give the comfort of job security to staff affected.
The transaction will now be subject to an approval process by the Competition and Consumer Protection Commission and the Central Bank of Ireland.