Sam Boal
The Banks

Competition authority launches full probe into Permanent TSB's €7.6 billion Ulster Bank deal

The investigation will determine whether the proposed acquisition could lead to a substantial lessening of competition in the State.

IRELAND’S COMPETITION AND consumer protection watchdog has launched a full ‘Phase 2′ competition investigation into Permanent TSB’s planned acquisition of Ulster Bank assets, worth €7.6 billion.

The Competition and Consumer Protection Commission (CCPC) probe will determine whether Permanent TSB’s proposed acquisition could lead to a substantial lessening of competition in the State. 

With the NatWest-owned lender planning to exit the Irish market, Permanent TSB inked a deal last December to buy €7.6 billion of performing Ulster Bank mortgages, SME loans and other retail assets.

Announcing the investigation today, the CCPC said it follows the conclusion of its preliminary ‘Phase 1′ investigation, the details of which will be presented to the two banks in the next 60 days.

Separately, the watchdog is also carrying out a full investigation of Bank of Ireland’s plan to acquire  €8.8 billion worth of performing mortgages, €100 million worth of performing commercial and consumer loans, €4.4 billion of deposits and around €300m of non-performing loans from KBC Bank Ireland.

A decision is expected this month.

The Belgian-owned lender also announced plans to leave the Irish market last year and will begin writing to current account customers in June, giving them six months’ notice to switch service providers.

In February, the CCPC expressed concerns about the impact of the agreement on competition levels within the sector, setting out its views in its preliminary assessment of the agreement between the two banks.

In a statement to the market at the time, Bank of Ireland said, “The bank notes the CCPC’s preliminary view, at this stage of the process, is that the proposed transaction is likely to give rise to a substantial lessening of competition in relation to the market for the provision of mortgages in the State and that this is not the final determination by the CCPC.”

It added, “In line with normal practice, Bank of Ireland will prepare a detailed response to the assessment which will seek to address the concerns raised by the CCPC.”

Last month, the watchdog signed off on AIB’s acquisition of Ulster Bank’s performing commercial loan book, worth €4.2 billion following a full Phase 2 probe.

The Commission found that the sale would not itself lead to a substantial lessening of competition. However, it warned generally about competition levels within Ireland’s shrinking banking sector.

In a statement at the time, the CCPC said that international evidence shows that a higher concentration in banking services is likely to have a ”detrimental effect on competition, leading to poorer outcomes for business borrowers in terms of pricing, innovation and service” 

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