Full investigation announced for AIB-Ulster Bank loan book deal

The Competition and Consumer Protection Commission (CCPC) will carry out a full phase two investigation to see if AIB’s planned €4.2 billion deal to buy Ulster Bank’s corporate and commercial loan book could substantially lessen competition.

AIB announced an agreement with Ulster Bank and its parent NatWest Holdings for the loan book in June, following the announcement a few months earlier that Ulster Bank was to withdraw from the Irish market. Under the terms of the proposed deal, about 280 Ulster Bank staff who are involved in the servicing of the loan book would transfer to AIB.

CCPC’s announcement comes following a preliminary investigation by the regulator, which in October also launched a full phase two investigation into Bank of Ireland’s planned purchase of KBC Bank Ireland’s mortgage-focused €9 billion of performing loans.

AIB is to acquire the Ulster Bank portfolio for the equivalent of 97.63 per cent of par value, payable in cash from its existing resources. The exact size of the portfolio and consideration payable will depend on movements in the portfolio up to completion.

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AIB is also known to be in talks to acquire Ulster Bank’s €6.5 billion of tracker mortgages, where customers’ borrowing costs are linked to the European Central Bank’s main rate.