A memorandum of understanding has been agreed between Permanent TSB and Ulster Bank with regard to assets and loans of the latter.
Ulster Bank announced the news as it confirmed more details on its phased withdrawal process from the Irish market.
Both banks have agreed a non-binding MOU for the proposed sale of a perimeter comprising performing non-tracker mortgages; performing loans in Ulster Bank's micro-SME business; Ulster Bank’s Lombard Asset Finance business, including the Lombard digital platform and a subset of Ulster Bank branch locations.
It will also include a total of approximately €7.6bn gross performing loans as of March 31, 2021, the majority relating to non-tracker mortgages and PTSB are designated to acquire 25 of Ulster Bank’s 88 branch locations. Ulster Bank had more than 80 branches nationwide.
This non-binding MOU is subject to further due diligence, the negotiation and completion of a final binding agreement and the obtaining of regulatory approvals and satisfying other conditions.
It is proposed that approximately 400-500 Ulster Bank employees will transfer to Permanent TSB in the deal once relevant approvals are obtained.
As part of the consideration for the proposed transaction, it is proposed that NatWest Group (Ulster Bank) would receive a minority non-consolidating equity stake in Permanent TSB.
While performing tracker mortgages are not part of today’s MOU, Ulster Bank and NatWest Group are working on a similar pathway for these customers with strategic banking counterparties.
"While there is no change for customers today, over the coming months we will make a series of changes for our customers as we implement our phased withdrawal. We will proactively contact customers when they need to move bank and/ or close accounts. We will ensure that customers have ample time/ notice periods as well as the support they need to complete the process.," Ulster Bank said in a statement.
"We understand that choosing and moving to a new bank is a process that customers may wish to commence now and we are already talking to customers who are considering their options. We are ready to help those who have chosen their new bank, our branch and telephony teams are ready to support customers with the move and/ or close process."
Ulster Bank Chief Executive Jane Howard said: “Today we announce a significant update to our phased withdrawal process. We have advanced negotiations to a non-binding MOU with Permanent TSB for the proposed sale of a c€7.6bn perimeter of performing non-tracker mortgages and the performing loans in our micro-SME business and Ulster Bank’s Lombard Asset Finance business, including the Lombard digital platform and 25 Ulster Bank branch locations.
“Our agreement includes the proposed right to transfer under TUPE of c400-500 colleagues, those wholly or mainly assigned to the perimeter, including the colleagues associated with the 25 branches. The final, exact roles cannot be confirmed until the transaction progresses further, but we will continue to work with our colleagues and their representatives to manage this process in a fair and responsible manner. Our agreement remains subject to further due diligence, assessment and relevant approvals and may not result in a transaction.
“Today’s agreement with PTSB, will provide a good solution for these customers and colleagues, building on our recently announced agreement with AIB. We remain in talks to find a similar constructive solution for our performing tracker mortgage portfolio. We expect, in the coming months to have further updates to make to customers and colleagues on progress including on other products and services which are not covered by today’s announcement. In the meantime, I would like to recognise and thank colleagues for their continued support of each other and dedication to our customers.”
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