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The Big Bank Switch

Competition watchdog green lights Permanent TSB's €7.6 billion deal with Ulster Bank

The deal includes 25 of Ulster Bank’s branches.

THE COMPETITION AND Consumer Protection Commission (CCPC) has approved a €7.6 billion deal between Permanent TSB and Ulster Bank as the latter withdraws from Ireland.

Permanent TSB intends to acquire particular assets held by Ulster Bank, which is quitting the Irish market over the coming months.

The deal includes:

  • Ulster Bank’s performing non-tracker mortgage loans,
  • a subset of Ulster Bank’s non-performing non-tracker mortgage loans,
  • Ulster Bank’s entire performing micro-SME business direct loan book,
  • 25 branches,
  • and Ulster Bank’s asset finance loan business.

In May, the CCPC launched a full ‘Phase 2′ investigation into the planned aquisition to determine whether it could substantially lessen competition.

The watchdog announced today that on reviewing the evidence, it accepted the parties’ arguments that Ulster Bank would have exited the State irrespective of whether or not the sale of the assets proceeded.

It found that the sale would not lead to a substantial lessening of competition compared to the alternative scenario of Ulster Bank’s mortgage and micro SME lending assets being sold to a different purchaser.

“The CCPC does not have a role in approving or reversing the decision of a company to exit the State and it has previously highlighted its concerns in relation to competition in the banking sector,” it said in a statement.

“The CCPC will continue to engage with stakeholders, including the Department of Finance as part of its retail banking review to consider how to ensure the sector is open and competitive for the benefit of everyone.”

Around 400 to 450 Ulster Bank employees will transfer to Permanent TSB.

Permanent TSB Chief Executive Eamonn Crowley said that “following the recent approval of our own shareholders, today we have reached another significant milestone on our transformation journey with clearance from the Competition and Consumer Protection Commission for our proposed acquisition of certain elements of the Ulster Bank business”.

“Additionally as part of this transaction, Permanent TSB will be expanding our nationwide branch network in 25 locations, further reinforcing our commitment to communities across Ireland,” Crowley said.

“We are working closely with Ulster Bank to ensure a smooth transition for Ulster Bank customers and colleagues to Permanent TSB, which will begin in Q4 of this year, subject to regulatory approval. We look forward to welcoming them to a Bank with a deep community heritage and customer service ethos.”

AIB received approval in April to acquire Ulster Bank’s performing commercial loan book, worth €4.2 billion.

The CCPC found the sale itself would not substantially lessen competition but warned that Ireland’s level of competition generally in the shrinking banking sector was at risk.

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