The acquisition of a €7.6 billion Ulster Bank loan portfolio by Permanent TSB (PTSB) has been approved by the Competition and Consumer Protection Commission (CCPC).
In February 2021 Ulster Bank announced its intention to withdraw all of its banking services in the State. PTSB reached agreement with Ulster Bank to buy the portfolio 10 months later, while its shareholders approved the move last month.
The assets consist of Ulster Bank’s performing non-tracker mortgage loans; a subset of its non-performing non-tracker mortgage loans; and its entire performing micro-SME business direct loan book.
Ulster Bank said the subset of non-performing non-tracker loans are not in arrears, are meeting their mortgage contractual payments, but are in a probationary period. The majority of accounts will transfer before the end of 2022 or in early 2023.
The deal also includes the sale of 25 properties in the Ulster Bank branch network, as well as Ulster Bank’s asset finance loan business. The branches are expected to close as Ulster Bank-branded branches in early 2023, reopening as Permanent TSB branches soon after.
Ulster Bank said it would write to customers of those branches to advise them of the specific timeline for their own branch.
The CCPC said it had carried out a preliminary investigation of the acquisition by PTSB before a full investigation commenced in May to establish if it could lead to a substantial lessening of competition in the State.
Based on a review of the evidence available to it, the CCPC accepted the argument of the parties that Ulster Bank would have exited the State irrespective of whether or not the sale of the assets proceeded.
The CCPC considered whether the acquisition would result in a substantial lessening of competition, compared with the alternative scenario of a sale of Ulster Bank’s mortgage and micro SME lending assets to an alternative purchaser, and found it would not.
PTSB said all parties were working towards completing the acquisition of the performing non-tracker residential mortgage business of Ulster Bank in the final quarter of 2022.
About 400-450 Ulster Bank employees who are wholly or mainly assigned to the retail, SME or asset finance businesses that are being acquired will be entitled to transfer to Permanent TSB.
The final number of employees transferring will be confirmed as the transaction completes.
PTSB chief executive Eamonn Crowley said: “Following the recent approval of our own shareholders, today we have reached another significant milestone on our transformation journey.
“Additionally as part of this transaction, Permanent TSB will be expanding our nationwide branch network in 25 locations, further reinforcing our commitment to communities across Ireland.
“We are working closely with Ulster Bank to ensure a smooth transition for Ulster Bank customers and colleagues to Permanent TSB, which will begin in the fourth quarter of this year, subject to regulatory approval.
“We look forward to welcoming them to a bank with a deep community heritage and customer service ethos.”
Ulster Bank chief executive Jane Howard welcomed the approval. “Ulster Bank notes and welcomes the CCPC’s decision on the portfolio sale to Permanent TSB,” she said.
“This is a significant step forward in the progress of our withdrawal, and our next steps, over the coming weeks and months, will be to communicate with colleagues who will transfer and to communicate with customers who are expected to migrate to Permanent TSB.”
