AIB's proposed acquisition of a €6bn portfolio of performing mortgages from Ulster Bank has been notified to the Competition and Consumer Protection Commission (CCPC).
It was announced in April that AIB and Ulster Bank parent NatWest had commenced exclusive discussions regarding the mortgages, and the banks entered into a binding purchase agreement in early June.
AIB agreed to buy c.47,000 Ulster Bank customer loans for €5.4bn, equivalent to 95.2% of par value, payable in cash funded from its existing resources. AIB said the exact consideration payable would depend on movements in the portfolio up to completion.
The average remaining term duration for the loans being sold is c.13 years. 90% of the mortgages relate to private dwelling homes and 10% relate to buy to let properties.
CCPC said the portfolio comprises of performing residential mortgage assets, predominantly tracker mortgages.
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"The most important message today is to confirm to impacted Ulster Bank tracker mortgage customers that their tracker mortgage product and their legal and regulatory protections do not change as a consequence of this transaction," Jane Howard, CEO of Ulster Bank, said upon announcement of the deal in June.
“We want to reassure customers that they will continue to retain their tracker mortgage in line with their mortgage documentation. Following any relevant approvals, we will work closely with AIB to ensure that the transfer of the portfolio is as smooth as possible.”
Submissions to the CCPC from third parties in relation to the deal are due by Wednesday, 7 September.
AIB expects to acquire an economic interest in the mortgage portfolio in the second half of 2022, with formal completion expected in Q2 2023.
Also commenting in June, AIB CEO Colin Hunt said: "We are delighted to have reached agreement with NatWest and Ulster Bank on another loan book acquisition, and look forward to welcoming these customers to AIB.
"This acquisition further adds to our growing balance sheet and progress towards our strategic targets. Our strong capital position enables us to invest in our business, pursue RoTE accretive inorganic opportunities and make distributions to shareholders.”
Talks between the banks regarding the performing mortgage portfolio commenced after the CCPC granted clearance for AIB's proposed purchase of Ulster Bank's €4.2bn performing commercial loan book.
Ulster Bank is currently in the midst of a phased withdrawal from the Republic of Ireland after announcing plans to exit the Irish market in February last year.
(Pic: Getty Images)
