Full investigation announced for AIB-Ulster Bank loan portfolio deal
The Competition and Consumer Protection Commission (CCPC) will conduct a full phase two investigation to see if AIB’s planned € 4.2 billion deal to purchase the business and business loan portfolio of ‘Ulster Bank could significantly reduce competition.
AIB announced an agreement with Ulster Bank and its parent company NatWest Holdings for the loan portfolio in June, following the announcement a few months earlier that Ulster Bank was withdrawing from the Irish market. Under the proposed agreement, approximately 280 Ulster Bank employees involved in managing the loan portfolio would be transferred to AIB.
CCPC’s announcement follows a preliminary investigation by the regulator, which also launched in October a full phase two investigation into the proposed purchase by Bank of Ireland of the € 9 billion in performing loans from KBC Bank Ireland.
AIB will acquire the Ulster Bank portfolio for the equivalent of 97.63 percent of face value, payable in cash from its existing resources. The exact size of the portfolio and the consideration payable will depend on movements in the portfolio until completion.
AIB is also known to be in talks to acquire the € 6.5 billion in track mortgages from Ulster Bank, where customers’ borrowing costs are tied to the European Central Bank’s prime rate.