The Competition and Consumer Protection Commission (CCPC) has approved Permanent TSB's €7.6bn acquisition of Ulster Bank's retail, SME and asset finance business, announced last December, ahead of the NatWest-owned lender's planned exit

PTSB will take over the Ulster Banks's portfolio of performing non-tracker mortgages and a subset of its non-performing non-tracker mortgages, in addition to its entire performing business loan book, and its asset finance loan business, Lombard Asset Finance.

The lender will also take over 25 Ulster Bank branches as part of the deal, with 400-450 staff entitled to transfer to PTSB under the terms of the transaction, although the final number of employees making the switch will only be confirmed at completion of the acquisition.

"Based on a review of the evidence available to it, the CCPC accepted the argument of the parties that Ulster Bank would have exited the State irrespective of whether or not the sale of the Target Assets proceeded," the CCPC said in a statement.

"The CCPC considered whether the proposed acquisition would result in a substantial lessening of competition, when compared to the alternative scenario of a sale of Ulster Bank’s mortgage and micro SME lending assets to an alternative purchaser, and found that it would not.

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"The CCPC does not have a role in approving or reversing the decision of a company to exit the state and it has previously highlighted its concerns in relation to competition in the banking sector."

Eamonn Crowley, CEO of PTSB, said the decision was a "significant milestone" and that adding the 25 Ulster Bank branches would reinforce its "commitment to communities across Ireland.

"We are working closely with Ulster Bank to ensure a smooth transition for Ulster Bank customers and colleagues to Permanent TSB, which will begin in Q4 of this year, subject to regulatory approval.

"We look forward to welcoming them to a bank with a deep community heritage and customer service ethos."

Jane Howard, CEO of Ulster Bank, also welcomed the decision, describing it as a  "significant step forward in the progress of our withdrawal."

She added that the bank would, in the coming weeks and months, "communicate with colleagues who will transfer and to communicate with customers who are expected to migrate to Permanent TSB as part of this transaction."

The transaction is comprised of approximately €7bn in performing non-tracker residential mortgage, €230m in performing micro-SME loans, and €400m in loans managed by Lombard Asset Finance as well as the 25 branches.

Based on an expected portfolio size of c.€6.75bn at completion. PTSB is prepared to pay c.€6.4bn in cash, plus 91m new shares in PTSB issued to the vendor.

PTSB’s mortgage book will increase by c.40% from its end-2020 level and its branch network by c.30%.

The bank's business lending will triple in size relative to its end-2020 level when incorporating the micro-SME loans and the established Asset Finance business being acquired.

(Pic: Leah Farrell/RollingNews.ie)