THE COMPETITION AND consumer watchdog has decided to open a full investigation into Bank of Ireland’s (BoI’s) proposed purchase of KBC Bank’s €9 billion performing loan book. 

The so-called ‘Phase 2′ probe was announced by the Competition and Consumer Protection Commission (CCPC) this afternoon after an extended preliminary — or ‘Phase 1′ — investigation had concluded.

After KBC signalled its intent to withdraw from the Irish market, it was announced in April that BoI had entered into a memorandum of understanding with the Belgian lender to purchase its entire performing loan book.

At the time, KBC said the sale purchase is “subject to customary due diligence, further negotiation and agreement of final terms and binding documentation”.

The decision came two months after Natwest Group announced its decision to wind down Ulster Bank in the Republic of Ireland over the coming years.

Taken together, the two exit announcements have prompted concern among policymakers and consumer groups about the level of competition in the Irish market, soon to be dominated by just three retail lenders — Bank of Ireland, AIB and Permanent TSB.

At the time, Sinn Féin finance spokesperson Pearse Doherty described the decision as a “body blow” for customers while Social Democrats co-leader said it was a “consumer nightmare“.

In a statement this afternoon, the CCPC confirmed that it has decided to launch a full investigation into the proposed acquisition.

“Following an extended preliminary investigation, the CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State,” the statement said.

The CCPC has invited anyone who wishes to send to send in a submission regarding the proposed sale of KBC to BoI to do so via email to mergers@ccpc.ie, by 4.30pm Wednesday 10 November 2021.