Standing TSB in a potential Ulster bank loan deal

0
43

[ad_1]

Permanent TSB is up more than 16% today after it announced a potential around € 7.6bn deal to buy some elements of Ulster Bank’s business here.

The lender stated that it has entered into a non-binding Memorandum of Understanding with the owner of Ulster Bank NatWest regarding a potential acquisition involving certain elements of retail and small and medium-sized businesses of Ulster Bank in Ireland.

Assets include Ulster Bank’s active mortgage book without tracking, its operating SME / Business Direct business, Lombard Asset Finance Ulster Bank’s lending business and 25 branches in the Ulster Bank network

Earlier this year Ulster Bank announced a phased withdrawal from Ireland in the coming years this will be done “in an orderly and thoughtful manner.”

The bank, owned by UK lender NatWest, has 1.1 million customers and 2,800 employees in 88 branches nationwide.

It is expected that from 400 to 500 Ulster Bank employees who are fully or mainly involved in the acquired retail and SME loans, will transfer to the Permanent TSB.

As part of today’s potential deal, it is assumed that NatWest Group will become a shareholder of Permanent TSB and receive up to 20% of the lender’s shares.

Eamonn Crowley, CEO of PTSB Holdings, said today’s potential deal complements the bank’s growth strategy and accelerates Permanent TSB’s ambition to become Ireland’s best bank for individuals and small businesses.

We need your consent to download this content rte-playerWe use rte-player to manage additional content that can set cookies on your device and collect data about your actions. View their details and accept them to download content.Settings management

“We see this as a unique opportunity to accelerate the growth of an Irish bank with a strong community and customer service ideal that has evolved over its 200-year history. He also supports the investment we are making in transformation. our domestic and digital banking services, “he added.

Permanent CEO of TSB Eamonn Crowley

Speaking at Morning Ireland, Eamonn Crowley said the Ulster Bank deal will be self-financing with a 20% stake NatWest is acquiring in PTSB and cash that PTSB will pay.

As a result, he said, the bank does not intend to raise funds from existing shareholders, including the state, which owns 75% of the bank.

At the end of 2020, PTSB had mostly € 14 billion in mortgages and now has 76 branches across the country.

Ulster Bank said in a statement that there are other customers and customer products not covered by today’s announcement and it will update them as needed.

“While tracking mortgage loans is not part of today’s MOU, Ulster Bank and NatWest Group are working on a similar approach for these clients with strategic banking counterparties. We will inform about this in due course, ”the bank added.

Ulster Bank said that while there are no changes for customers today, it will make a number of changes for its customers in the coming months as it implements phased withdrawals.

The lender said it will proactively contact customers when they need to move a bank or close accounts, adding that this will provide customers with sufficient time or notice periods and the support they need to complete the process.

“As part of this, we remain committed to not closing any branches in 2021, and we do not expect to close any branches in the first half of 2022,” it said.

“Branches will continue to play an important role, and in the second half of 2022 we will begin to phase out traditional metering / cash services to focus on personal support when moving a bank and / or closing accounts,” it added.

Jane Howard, CEO of Ulster Bank

Jane Howard, Chief Executive Officer of Ulster Bank, said the bank today announced a significant update to its phased withdrawal process.

“Our agreement is subject to further due diligence, assessment and approvals and may not lead to a transaction,” added Ms Howard.

“Today’s agreement with PTSB will provide a good solution for these clients and colleagues, based on our recently announced agreement with AIB. We are continuing negotiations to find a similar design solution for our effective mortgage tracker portfolio, ”she said.

“We expect to keep our customers and colleagues informed of progress in the coming months, including other products and services not included in today’s announcement,” she added.

Last month, Ulster Bank agreed to sell most of its commercial loan portfolio to Ireland for a total of € 4.2 billion to AIB.

AIB’s main rival Bank of Ireland is in talks to buy most of the Irish assets of the Belgian bank KBC, a move that could leave the country with just three retail banks.

The governments of Ireland and the United Kingdom will effectively be shareholders of the PTSB upon completion, as 62% of NatWest remains taxpayer-owned, a legacy of the financial crisis a decade ago.

Ulster Bank deal will enhance PTSB’s role in the market – Donoho

Finance Minister Pashal Donoho said that while he acknowledged that significant additional work is required to negotiate the final deal, he believes that successfully completing a deal on the scale described in today’s announcement will be a very positive development for both PTSB and customer staff. Ulster Bank.

“Successful completion of the deal, as described in the PTSB announcement, would be a very positive outcome, providing a significant number of Ulster Bank customers with confidence in the purpose of their loans, as well as a large number of employees who will feel comfortable in terms of job security. “, – said Pascal Donoho.

“However, I understand that any transaction requires a routine due diligence, further negotiation and agreement on the final terms, as well as obtaining the appropriate permits,” he added.

Pashal Donoho said that for Permanent TSB, the acquisition of these loan portfolios would provide the bank with additional scale, further strengthening its role in the market.

“With Ulster Bank and KBC leaving the market, the increased PTSB is playing a more important role than ever in providing meaningful competition for consumers, both in terms of product selection and pricing,” he said.

“I hope that these discussions will lead to a successful outcome and retain the bank’s support as a shareholder,” he added.

FSU welcomes today’s Memorandum of Understanding as a “positive development”

The Financial Services Union described today’s Memorandum of Understanding as a positive development and a step forward.

Secretary General John O’Connell welcomed the commitment to move a significant number of employees to PTSB from Ulster Bank and to maintain the current conditions.

He also noted that some branches will also be transferred to PTSB.

“The departure of Ulster Bank from the Irish banking market has caused great concern among employees and customers,” he said.

“This announcement gives some clarity and confidence to the staff,” he added.

However, Mr. O’Connell said many questions remain unanswered, and as a result, the union demanded a formal meeting with the heads of both banks.

He also drew attention to the problem of 600 employees based in Northern Ireland, and said that the union is now seeking job security guarantees for Ulster Bank employees based in Belfast.

Stocks in Permanent TSB jumped Dublin Trade today.



[ad_2]

Source link