PERMANENT TSB HAS signed an agreement to acquire €7.6 billion of assets from Ulster Bank.

The assets include €7 billion of 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. 

The PTSB deal still remains subject to obtaining the required regulatory approvals from the Competition & Consumer Protection Commission (CCPC) and the Central Bank of Ireland and approval by Permanent TSB shareholders. 

PTSB said subject to receiving all necessary approvals, it is working towards completing the acquisition of residential mortgages in the last quarter of 2022. Acquisition of Business Direct and Lombard businesses is anticipated to be completed shortly after that.

Impacted customers do not need to take any action, PTSB said today. They will be provided with at least 60 days’ notice prior to the transfer and all legal and regulatory protections will transfer with the loans. 

The assets being acquired will increase PTSB’s mortgage book by around 40% from its end-2020 level and its branch network by 30%. The bank said its business lending will triple in size relative to its end-2020 level when incorporating the SME loans and the established Asset Finance business being acquired.  

“This is a decisive step in transforming Permanent TSB to be Ireland’s best personal and small business bank,” PTSB chief executive Eamonn Crowley said.

“It will give us much greater scale and business model diversification, along with, many more customers and branches to fuel our ambition to grow and build a sustainable organisation for the future.

Reaching a binding agreement is a significant step forward and supports our strategy of growing organically while embracing this once in a generation opportunity to fast-track the growth of Permanent TSB.

Finance Minister Paschal Donohoe welcomed the decision, describing it as a very positive development for PTSB that “represents a significant opportunity for the bank, its stakeholders and its customers to consolidate its position in the Irish banking market and position itself for future growth”.

“With the withdrawal of Ulster Bank and KBC from the Irish market, a PTSB with greater scale has a more important role than ever in providing meaningful competition for consumers in terms of both product choice and pricing,” he said.

“For these Ulster Bank borrowers, it provides them with certainty as to the destination of their loans, while depositors will have a choice to move their business to PTSB next year. The transaction also provides a large number of Ulster Bank staff with comfort in terms of job security.”