Competition Authority opens formal process to review AIB / Ulster Bank deal


The proposed acquisition by AIB of the 4.2 billion euros of commercial loans from Ulster Bank has been officially notified to the Competition and Consumer Protection Commission, the start of its regulatory approval process.

The notification does not include any reference to a mock sale of Ulster Bank’s tracker mortgages to AIB. Talks on this agreement are said to be at an earlier stage.

The commercial loan purchase agreement was first announced as a potential acquisition by AIB and Ulster Bank owner NatWest in February, when the two banks announced they had signed a memorandum of understanding. The non-binding agreement along with the permanent PTSB said it would buy the bulk of Ulster’s retail loans.

This agreement involves the sale of a portfolio of approximately 4.2 billion euros of performing commercial loans, plus up to 2.8 billion euros of unused exposures.

In June, AIB and NatWest took matters even further by signing a legally binding agreement for commercial loans and this agreement was notified to the CCPC last Friday.

Any third party with opinions on the deal has until August 16 to raise them with the competition authority, which can open a second phase of investigation if there are any issues to resolve.

About 280 employees who are directly involved in the management of Ulster Bank’s loan portfolio will be transferred to AIB under the transfer of liabilities legislation, if the transaction goes as planned.

Bank consolidation is proceeding at a breakneck pace in Ireland this year.

The CCPC is also currently studying the plan to take over KBC’s activities by Bank of Ireland in that country, which together with the AIB / Ulster Bank and the planned Permanent TSB / Ulster Bank agreements will reduce the number of retail banks here by five. at three. Meanwhile, AIB has obtained competition approval for its takeover of Goodbody Stockbrokers, which suggests that Bank of Ireland’s planned takeover of Davy Stockbrokers will be treated the same.

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