Competition regulators have opened a so-called Phase 2 investigation to determine whether Ulster Bank’s proposed sale of mortgage and other retail lending assets to permanent TSB could significantly reduce competition.
The Competition and Consumer Protection Commission (CCPC) has already told the Bank of Ireland (BOI) and KBC that their deal to move €9bn in demonstrative properties could substantially reduce competition in the mortgage market and both banks Consideration has been sought on possible measures. The final decision on the proposed KBC deal is to be taken this month.
The CCPC now says it has decided to conduct a full Phase 2 investigation into the permanent TSB’s proposed acquisition of Ulster Bank properties, after a preliminary review that a full investigation is needed to determine whether the proposed transaction may be substantial. Whether or not there is less competition.
The CCPC will publish its Phase 1 determination no later than 60 business days after the date of the determination and after giving the parties an opportunity to request that the Confidential Information be removed from the published version.
The second phase includes an open call for submissions to be made via email by Monday 30 May 2022.
The CCPC is currently assessing several consolidation proposals in the banking sector as Ulster Bank and KBC withdrew from the Irish market in at least one of the biggest setbacks since the global financial crisis.
Permanent TSB last July agreed to acquire Ulster Bank’s assets for €7.6 billion in a deal that would make British state-controlled bank NatWest a major shareholder in the Irish lender.
AIB is acquiring Ulster Bank’s €4.1bn corporate and commercial loan portfolio and is in talks to buy approximately €6bn of Tracker Mortgage from a UK bank. AIB has also acquired Goodbody Stockbrokers and has established a joint venture with Great-West Lifeco to provide investment products to its clients.
Meanwhile, the Bank of Ireland, headed by outgoing CEO Francesca McDonagh, has bought Dewey Stockbrokers as well as struck a deal to buy KBC’s Irish portfolio on Train.
The National Treasury Management Agency (NTMA) is in the process of settling the state’s minority stake in the Bank of Ireland, which is now down 4 pc, according to a stock market filing on May 10.
The bank is likely to be fully privatized by July, which is currently at around 1 pc per month.