Ulster Bank executives confirmed on Tuesday that the bank's 88-strong branch network in the Republic forms part of discussions with Permanent TSB, which is looking to acquire a large part of the exiting bank's assets.
Sources said on Friday that PTSB is in talks to acquire much of Ulster Bank’s €14 billion mortgage book and up to €700 million of small business loans in a deal that could almost double its assets and potentially require a capital injection from the Government. PTSB is 75 per cent State-owned.
A potential deal with PTSB may also involve the bank taking over a portion of Ulster Bank’s €22 billion deposit book, employees and an amalgamation of and slimming down of the groups’ combined branch networks, sources said at the time.
Ulster Bank has 88 branches and PTSB has 76 locations, with the latter holding a greater footprint in the middle and southern parts of the State.
Ulster Bank chief executive Jane Howard told an Oireachtas finance committee hearing on the lender's plans to withdraw from the market on a phased basis over a number of years that branches, current accounts and other parts of the retail bank are subject of the talks with PTSB and other potential acquirers.
Ms Howard reiterated that the bank, which also plans to sell about €4 billion of commercial loans to AIB, is mainly interested in selling assets to existing banks in the Irish market.
Work with borrowers
While committee members asked the CEO to rule out the sale of loans to overseas debt investment firms, time ran out on the session before this matter was addressed.
During the hearing, Ms Howard reiterated that the bank would complete the mortgage process with customers that have been engaged with the bank on securing a home loan.
She also said that the lender will continue to work with borrowers who face financial difficulty.
“Where we’re able to engage with customers, in four out of five cases we can find a solution that works for that customers. We’re keen to continue to do that,” she said, highlighting that the bank’s planned withdrawal will be over a number of years.
When asked by committee members whether she agreed with the decision of Ulster Bank's UK parent, NatWest, to exit the Irish market, she said that she "understands" the reason.
“I’ve been here two-and-a-half years. The team here have worked hard and we have made some progress,” she said. “Unfortunately, despite the progress that we have made, it has become clear we are unable to generate sustainable returns over the long term for our shareholders.”
Ulster Bank chief financial officer Paul Stanley noted that the high levels of capital that Irish banks must hold against their mortgages, compared to the UK or countries within the EU, had a negative impact on the company's returns.