PERMANENT TSB HAS announced a potential deal to buy about €7.6 billion worth of assets from Ulster Bank. 

The bank has said it has entered into a non-binding Memorandum of Understanding with Ulster Bank’s owner NatWest Group Plc regarding a potential acquisition involving certain elements of Ulster Bank Retail and SME business in the Republic of Ireland. 

The assets include Ulster Bank’s performing non-tracker mortgage book, its performing Micro-SME/Business Direct, the Lombard Asset Finance loan business of Ulster Bank and 25 branch locations in Ulster Bank’s network. 

In February, Ulster Bank announced it would be implementing a “phased withdrawal” from markets within the Republic of Ireland. 

The move came after a strategic review from its parent company Natwest.

Ulster Bank has over one million customers, along with 2,800 staff and 88 branches across the country. 

It is expected that around 400 to 500 Ulster Bank employees, who are wholly or mainly assigned to the retail and SME permitre that is being acquired, will transfer to Permanent TSB. 

As part of the potential deal, NatWest will become a shareholder of Permanent TSB with up to a 20% stake in the bank. 

PTSB Holdings CEO Eamonn Crowley said the potential transaction “complements the bank’s growth strategy and will accelerate the delivery of Permanent TSB’s ambition of becoming Ireland’s best personal and small business bank”. 

“We see this as a once in a generation opportunity to fast-track the growth of an Irish bank with a strong community and customer service ethos that has evolved over its 200-year history,” Crowley said. 

“It also supports the investments we are making in the transformation of our in-branch and digital banking services,” he said. 

In a statement, Ulster Bank said there are other customers and customer products which are not covered by today’s announcement and the bank will update on those as appropriate. 

“While performing tracker mortgages are not part of today’s MOU, Ulster Bank and NatWest Group are working on a similar pathway for these customers with strategic banking counterparties. We will update in due course on this,” the bank said. 

Ulster Bank said that while there is no change for customers today, over the coming months it will make a series of changes for its customers as it implements its phased withdrawal. 

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The bank said it will “proactively contact customers when they need to move bank and/or close accounts”. 

“We will ensure that customers have ample time/notice periods as well as the support they need to complete the process,” Ulster Bank said. 

The bank said it will not close any branches this year. 

“We understand that choosing and moving to a new bank is a process that customers may wish to commence now and we are already talking to customers who are considering their options,” Ulster Bank said. 

“We are ready to help those who have chosen their new bank, our branch and telephone teams are ready to support customers with the move and/or close process,” it said. 

The parties involved in the potential transaction will work together over the next few months with a view to entering into legally binding agreements in Quarter 4 of this year.