AIB has officially applied for the approval of the Competition and Consumer Protection Commission (CCPC) to acquire Ulster Bank’s powerful Tracker mortgage book.
The deal agreed on June 1 for the $5.7 billion loan portfolio
It follows the CCPC’s approval of AIB’s purchase of Ulster Bank’s €4.2bn corporate and commercial lending business in April, one of several big deals AIB CEO Colin Hunt has pulled through in the last two years .
The mortgages, which are 1 percent above the ECB interest rate and purchased at a small discount to face value, will contribute €90 million to AIB’s revenues from next year, according to the bank.
AIB said it intends to hire a third party to manage the portfolio of 47,000 loans. The service agreement will have no impact on customers, who will keep their existing terms and conditions, the bank said.
The CCPC has reviewed several large transactions in the banking sector over the last year as AIB, Bank of Ireland and Permanent TSB all took over the best parts of Ulster Bank and KBC.
In May, after a lengthy review, the regulator gave conditional approval to Bank of Ireland’s €9 billion takeover of KBC’s mortgage book.
As part of the agreement, BOI must provide lines of financing to non-bank mortgage lenders as an antitrust remedy. This deal is still awaiting approval from Treasury Secretary Paschal Donohoe.
The permanent TSB’s purchase of €7.6 billion of small business loans from the Ulster Bank was approved last month and is also on the Minister’s desk.
The billions of dollars in wealth transfers will leave Ireland with a highly concentrated retail banking market with only three major players as the last two foreign banks exit the market.
The CCPC said in April that international studies have shown that less banking competition leads to poorer outcomes for borrowers in terms of pricing, innovation and service.”
https://www.independent.ie/business/irish/aib-seeks-competition-approval-for-final-ulster-bank-loan-book-deal-41937365.html AIB seeks approval of competition for definitive loan agreement with Ulster Bank