Britain’s NatWest Group agreed to sell assets from its Irish arm to Permanent TSB (PTSB), a move the mortgage lender and analysts described as a “once in a generation opportunity” for PTSB to compete with Ireland’s two dominant banks.
The deal includes 25 Ulster Bank branches and €7.6 billion of gross performing loans, the majority relating to non-tracker mortgages, as well as performing micro-SME loans and Ulster Bank’s asset finance business, the group said on Friday.
As part of the deal, NatWest will become a shareholder with up to 20 per cent of the enlarged share capital of PTSB, together with PTSB paying NatWest an additional cash consideration.
PTSB, which will also take on 400-500 of Ulster Bank’s 2,800 employees, said it does not envisage requiring additional new equity capital to complete the deal, meaning the 75 per cent State-owned bank will not need to tap the Government for additional funds.
‘Once in a generation’
“The transaction represents a once in a generation opportunity to add scale, substantially increasing earnings and returns to merit a re-evaluation of the investment case,” Davy Stockbrokers analyst Diarmaid Sheridan wrote in a note.
NatWest said in February that it was to wind down its Irish arm as chief executive Alison Rose slashes underperforming parts of the state-owned lender after it swung to a loss in 2020.
It agreed last month to sell most of its Irish commercial loan book, totalling €4.2 billion, to Allied Irish Banks (AIB), one of Ireland’s two main lenders, which is seeking to strengthen its grip on the market after Ulster’s exit.
AIB’s chief rival Bank of Ireland is in talks to buy the bulk of Belgian bank KBC’s Irish assets, a move that could leave the country with just three retail banks.