The owner of Ulster Bank can receive a permanent TSB share in the lending transaction

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British banking giant NatWest The Group may acquire a significant minority stake in Permanent TSB (PTSB) in a deal to sell a significant portion of the loans and other assets of its Ulster Bank division to an Irish government lender, according to sources familiar with the discussion.

The PTSB is estimated to be interested in approximately € 9 billion from Ulster Bank’s € 20 billion loan portfolio, including untracked mortgages, as well as small business and consumer loans, as well as deposits and part of the UK bank’s branch network.

Analysts estimate that PTSB will need to raise more than € 500 million in additional capital to support such a transaction, which is close to the bank’s current market value of around € 540 million.

In February, the PTSB said it was in talks to buy certain assets and liabilities of Ulster Bank after NatWest confirmed it was downsizing its Republic unit as it struggles to make sufficient profits.

Eamonn CrowleyThe head of the PTSB told reporters last month that the bank will turn to both stock market investors and the government, which owns 75 percent of the group, for cash if it needs to raise capital to buy loans from Ulster Bank.

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