Ulster Bank in the Republic of Ireland and NatWest Group plc have agreed a non-binding Memorandum of Understanding (MoU) with Permanent TSB plc for the proposed sale of some of its loan book.
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.
Now a MoU has been signed between Ulster Bank and Permanent TSB (PTSB) for the potential sale of a “perimeter comprising performing non-tracker mortgages; performing loans in our micro-SME business; Ulster Bank’s Lombard Asset Finance business, including the Lombard digital platform and a subset of Ulster Bank branch locations”.
What the Permanent TSB sale may include
In a statement to Agriland, Ulster Bank has said that the proposed perimeter will include a total of approximately €7.6 billion gross performing loans as at March 31, 2021.
The majority of those loans relate to non-tracker mortgages and PTSB is designated to acquire 25 of Ulster Bank’s 88 branch locations.
Ulster Bank said that the non-binding MOU is subject to further due diligence, the negotiation and completion of a final binding agreement and the obtaining of regulatory approvals.
It’s understood staff in the branch locations which are designated to be acquired, could be transferred to PTSB.
The bank added that a detailed assessment to identify colleagues anticipated to have a right to transfer will be completed, however it is proposed that approximately 400-500 colleagues will have a right to transfer.
As part of the consideration for the proposed transaction, it is proposed that NatWest Group would receive a minority non-consolidating equity stake in Permanent TSB.
Impact on Ulster Bank customers
While there is no change for customers today according to Ulster Bank, over the coming months the bank will make a series of changes for customers as it implements the phased withdrawal.
Ulster Bank said it will “proactively contact customers when they need to move bank and/or close accounts”.
In a statement, Ulster Bank said: “As part of this, our commitment remains that we will not close any branches in 2021, and we do not anticipate closing any branches in H1 2022.
“Branches will continue to play an important role and in H2, 2022 we will begin to phase out traditional counter / cash services to concentrate on in-person support to move bank and/or close accounts.”
Ulster Bank chief executive, Jane Howard, added:
“Our agreement includes the proposed right to transfer under TUPE of c400-500 colleagues, those wholly or mainly assigned to the perimeter, including the colleagues associated with the 25 branches.
“The final, exact roles cannot be confirmed until the transaction progresses further, but we will continue to work with our colleagues and their representatives to manage this process in a fair and responsible manner.
“Today’s agreement with PTSB, will provide a good solution for customers and colleagues, building on our recently announced agreement with AIB,” she added.
“We remain in talks to find a similar constructive solution for our performing tracker mortgage portfolio.”
Ulster Bank branches which may transfer to PTSB
| County | Branch |
|---|---|
| Cavan | Ballyconnell; Ballyjamesduff |
| Clare | Shannon |
| Cork | Wilton |
| Donegal | Ballybofey; Buncrana; Donegal town; Killybegs |
| Dublin | Blackrock; Blanchardstown; Lucan; Ranelagh; Rochestown Ave; Swords Pavilions |
| Galway | Athenry; Eyre Square; Tuam |
| Kildare | Celbridge; Kilcock |
| Louth | Ardee |
| Mayo | Belmullet; Westport |
| Meath | Trim |
| Tipperary | Thurles |
| Wexford | Enniscorthy |
Minister for Finance, Paschal Donohoe has also commented on the potential sale of some Ulster Bank loans to PTSB.
He said: “The successful conclusion of a transaction in line with that described in PTSB’s announcement would be a very positive outcome providing a significant number of Ulster Bank customers with certainty as to the destination of their loans, and a large number of staff with comfort in terms of job security.
“However, I appreciate that the conclusion of any transaction is subject to normal due diligence, further negotiation and agreement of final terms, as well as obtaining appropriate approvals.
“For PTSB, the acquisition of these loan portfolios would provide the bank with additional scale, further strengthening its role in the marketplace,” he added.
With the withdrawal of Ulster Bank and KBC from market, an enlarged PTSB has a more important role than ever in providing meaningful competition for consumers both in terms of product choice and pricing.”