Austrian banking group Bawag signalled it does not currently plan to make “any material changes” to PTSB’s 98-strong branch network after agreeing to buy the State-owned lender for almost €1.62 billion.
“We’ve indicated we actually think that the branch network, the nationwide branch network, is a real asset,” Bawag chief executive Anas Abuzaakouk told analysts on a call on Tuesday afternoon, within hours of the deal being announced.
However, he said he sees PTSB’s branches shifting from being largely transactions-based towards advice, as it adds to the bank’s product suite for consumers and businesses.
Earlier, the Vienna-based said in a document issued jointly with PTSB that it “does not currently intend to make any material changes with respect to the redeployment of PTSB’s fixed asset base” – seen as a clear reference to the branch network.
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However, Bawag’s deputy chief executive Sat Shah told reporters on a call that it was “a little premature” to talk about potential job reductions, as the Austrian group is seen accelerating cost-cutting.
PTSB last month set a target for its cost-income ratio to fall below 60 per cent by the end of 2028 from 75 per cent last year. Rivals AIB and Bank of Ireland reported annual cost ratios of 44 per cent and 49 per cent, respectively, last year. Bawag’s was 36.1 per cent.
PTSB’s staff numbers fell by 329, or 10 per cent, to 2,918 last year, with a voluntary redundancy programme accounting for 240 of the exits.
Trade unions Unite, Financial Services Union (FSU) and Mandate, who represent PTSB staff, said they will be pushing for Bawag to commit to maintaining existing branch and staff levels.
The agreed price for PTSB amounts to €2.97 per share, in cash.
Austria’s fourth-largest bank by assets, which owns Irish mortgage start-up Moco, was hotly tipped by analysts and industry commentators from the moment PTSB put itself up for sale at the end of October.
While the agreed price is 9.5 per cent off the stock’s peak in early March, it marks a 26 per cent premium to where the stock was changing hands in late October, before PTSB was put on the market.
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Shares in PTSB fell as much as 5 per cent to €2.86. Traders and analysts said this is partly down to some concerns about the deal securing necessary 75 per cent support at an extraordinary general meeting during the summer, even if Bawag executives said that this risk was “limited”.
The drop was also reflected some investors deciding to take money off the table now, mindful that they will have to wait until the end of this year or early 2027 for the deal to close, they added.
PTSB chief executive Eamonn Crowley defended the agreed price, saying it was the highest offer from a competitive process that attracted six initial takeover proposals and three second-round bids.
Bawag shares soared as much as 8 per cent to a record high as management said that it expects the deal to boost group earnings per share by over 20 per cent after three years.
PTSB chair Julie O’Neill said that the transaction “has the potential to deliver significant benefits for customers, combining Bawag’s scale and expertise with PTSB’s deep roots in Irish communities to deliver an even stronger customer experience through greater choice, improved service and continued innovation”.
“The acquisition will also facilitate the exit of the State’s remaining shareholding in PTSB and the return of capital to the State and taxpayers. The PTSB Board recognises the State’s long-standing support and stewardship of PTSB and thanks the Irish Government and the people of Ireland for their support,” O’Neill added.
Texan funds giant Lone Star and a consortium involving New York-based Centerbridge and San Francisco investment firm Sixth Street were the two other bidders in the mix at the end of the process.
The final stage of the process has played out against the backdrop of the Iran war, which has whipsawed global equity markets since late February.
The deal, subject to shareholder approval, will see the Government receive €931 million for its stake, which would bring the total cash recovery on PTSB’s €4 billion crisis-era bailout to about €3.73 billion. The Government has committed to voting in favour of the takeover.
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Irish taxpayers will end up recouping €30.7 billion from the three surviving Irish banks on a cash-in, cash-out basis, following their combined €29.3 billion in bailouts between 2009 and 2011.
The Department of Finance has put a higher recovery of about €4 billion from PTSB, which includes bank levy payments and fees.
A €2 billion surplus generated by Bank of Ireland has more than offset small shortfalls at the other two banks. The Government sold its final AIB shares last year, while the last Bank of Ireland shares were disposed in 2022.
The cash recovery from the sector includes money made from share sales in the banks, redemption of bailout bonds, interest, guarantee fees and dividends over the past decade and a half.
PTSB has 1.3 million customers, 98 branches, over 2,900 employees, a mortgage-dominated loan book of €22.2 billion and total assets of €30.4 billion as of the end of last year. By contrast, Bank of Ireland’s total assets amounted to €165 billion, while AIB’s stood at €148 billion in December.
Bawag was previously best known in Irish financial circles for buying the remnants of Dublin-based Depfa Bank in 2021, and acquiring the company behind fledgling Irish mortgage lender MoCo three years ago.
It also recently held talks to buy nonbank lender Finance Ireland. However, The Irish Times reported last month that those discussions had come to an end without a deal.
