LONDON, UK: Permanent TSB has entered into binding agreements with NatWest Group and Ulster Bank Ireland for the acquisition of certain elements of the Ulster Bank Retail, SME and Asset Finance business in the Republic of Ireland.
As at 30 June 2021, the transaction includes approximately €7.6 billion of assets and consists of the following parts of the Ulster Bank business;
· The performing non-tracker residential mortgage book of Ulster Bank (approximately €7.0 billion);
· The performing micro-SME (Business Direct) loan book of Ulster Bank (approximately €230 million);
· The entire Lombard Asset Finance loan business of the Ulster Bank (approximately €400 million); and
· 25 branches in Ulster Bank’s branch network.
Based on an expected portfolio size of c.€6.75 billion at completion (anticipated range of €6.5bn – €7bn), the Permanent TSB will acquire the above portfolios for c.€6.4 billion of cash consideration funded from internal resources and existing funding sources, in addition to the issue of PTSBGH ordinary shares to NatWest so that they hold 16.66% of the enlarged share capital of PTSBGH at completion, expected to be c.90.89m ordinary shares.
Total consideration to be paid is equivalent to c.98% of par value and represents a discount to the fair value of the assets being acquired and is expected to result in the Bank recognising an accounting gain on the transaction at completion. The exact size of the portfolios and cash consideration payable will depend on movements in the portfolios up to completion.
The assets being acquired in the transaction will increase the Permanente TSB’s mortgage book by c.40% from its end-2020 level and its branch network by c.30%. The Bank’s business lending will triple in size relative to its end-2020 level when incorporating the micro-SME loans and the established Asset Finance business being acquired.
Eamonn Crowley, Permanent TSB Chief Executive, said: “This is a decisive step in transforming Permanent TSB to be Ireland’s best personal and small business bank. 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.
We are looking forward to beginning the integration of Ulster Bank’s businesses into our bank and to welcoming Ulster Bank customers to Permanent TSB – those whose loans are transferring as part of this transaction as well as Ulster Bank’s current and deposit account customers who will need a new banking relationship. We also look forward to welcoming new colleagues to the Bank, bringing with them expertise, commitment and customer focus that will be invaluable.
To all of these customers and to our new colleagues, we offer an Irish bank with a strong community and customer service ethos that has evolved over its 200-year history; one that is investing heavily in branch and digital banking services; one that is building trust with customers; and one that is committed to bringing the best products and services to its customers in a sustainable way.”
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