Bank loans

Watchdog reviewing plan to buy Ulster Bank loans from PTSB

The state’s competition watchdog has launched a thorough assessment of Permanent TSB’s (PTSB) plan to buy £6.8bn of loans from Ulster Bank, in line with the in-depth review that it applies to transactions resulting from the exit of the British bank and competitor of KBC Bank Ireland on the Irish market.

The Competition and Consumer Protection Commission (CCPC) said in a statement on its website on Tuesday afternoon that it had decided to conduct a so-called phase two investigation into the proposed deal, which would increase the PTSB’s loan portfolio by more than 40 percent. hundred.

The agreed transaction also involves PTSB taking over Ulster Bank’s 88 branches and NatWest, Ulster Bank’s parent company, accepting a 16.7% stake in the state-controlled lender in partial payment.

“Following a Phase 1 thorough investigation, the CCPC has determined that a full investigation is necessary in order to establish whether the proposed transaction could result in a substantial lessening of competition in the state,” the statement said. authority, as she called interested parties. to submit submissions by email by May 30.

The commission signaled last year that it would apply a rigorous test to plans by the state’s three remaining retail banks to split the lending books of Ulster Bank and KBC Bank Ireland, as the two foreign lenders withdraw from the market.

Outbound lenders accounted for around 25% of mortgage lending in 2020, while Ulster Bank is believed to have had a stable share of around 20% of the SME market in recent years.

BIA scheme

Almost two weeks ago, the Competition Commission cleared AIB’s plan to acquire €3.7 billion from Ulster Bank doing business and corporate lending, after a similar phase two investigation , although she pointed out that consolation from the banking sector could hurt consumers.

“The CCPC’s role is not to approve or reverse a company’s decision to leave the state, it has a duty to highlight competitive issues that arise as a result of the exit that are likely to harm business customers and the wider Irish economy,” he said at the time.

The CCPC also warned in February of its concerns that Bank of Ireland’s plan to buy €9bn of performing loans from KBC Bank Ireland, as the Belgian lender also pulls out of the market, ” is likely to result in a substantial lessening of competition in the market for the granting of mortgage loans in the State”. Its in-depth assessment of this agreement is ongoing.

It is also likely that AIB’s plans to buy around €6 billion of tracker mortgages from Ulster Bank, subject to the signing of a binding agreement in the coming months, will be subject to a similar examination.