AIB cleared to acquire €4.2 billion loan book from Ulster Bank
AIB HAS BEEN CLEARED to acquire Ulster Bank’s commercial loan portfolio worth €4.2 billion as the latter bank withdraws from Ireland.
Ulster Bank is set to withdraw all its banking services from Ireland which, alongside the planned departure of KBC Bank, is creating gaps in the financial landscape.
The Competition and Consumer Protection Commission (CCPC) has cleared the proposed acquisition of Ulster Bank’s corporate loans by AIB.
In addition, some Ulster Bank employees will be transferred to AIB.
AIB reached the €4.2bn deal with Ulster Bank to resume its lending to performing businesses and businesses last June, months after its parent company announced plans to wind down Ulster operations Bank in Ireland.
After reviewing the available evidence, the CCPC accepted the two banks’ argument that Ulster Bank will stop making the relevant loans to businesses in Ireland whether or not the sale to AIB goes through.
In a statement, the CCPC said that international evidence shows that higher concentration in banking services is likely to have an adverse effect on competition, which in turn leads to higher pricing, innovation and service. low for commercial borrowers.
“This is corroborated by some of the commercial clients contacted by the CCPC, who indicated that they had concerns about Ulster Bank exiting the state,” the commission said.
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He said that “although the CCPC does not have the role of approving or reversing a company’s decision to leave the state, it does have a duty to highlight competition concerns that arise at the following the exit and which are likely to harm customers’ business and the wider Irish economy”.
“The CCPC notes that the retail banking review currently being conducted by the Ministry of Finance will take into account (among other things) the structure of the banking sector, competition in the banking services market and the availability of credit for SME.
“The CCPC considers its concerns about the competitive landscape of the Irish banking services market to be highly relevant to all of these issues and will continue to work with all stakeholders to determine how to ensure the market is open and competitive for the benefit of all. ”