(Sharecast News) - NatWest will take a minority stake in Permanent TSB Group (PTSB) in a potential deal to sell €7.6bn of assets to the Irish lender.
According to a statement by PTSB, the banks have signed a non-binding memorandum of understanding to work on an agreement that would see the Irish bank take over much of NatWest's Ulster Bank Ireland unit. This would include some performing mortgages and micro-SME loans, as well as the Lombard Asset Finance business and 25 Ulster Bank branches.
"As part of the consideration for the perimeter transferring to Permanent TSB, NatWest will become a shareholder with up to 20% of the enlarged share capital of PTSB Holdings, together with PTSB Holdings paying NatWest an additional cash consideration," PTSB said.
The transaction is expected to be accretive to return on tangible equity and PTSB would maintain a long-term pro forma management CET1 Ratio of more than 14%.
PTSB chief executive Eamonn Crowley CEO said: "This potential transaction complements our growth strategy and will accelerate the delivery of Permanent TSB's ambition of becoming Ireland's best personal and small business bank.
"We see this as a once in a generation opportunity to fast-track the growth of an Irish bank with a strong community and customer service ethos that has evolved over its 200-year history. It also supports the investments we are making in the transformation of our in-branch and digital banking services."
Crowley said that while there is still "significant" work to be done to agree legally binding agreements later this year, the bank is optimistic it can work with all parties to create an enlarged Permanent TSB "with an increased national footprint that will provide enhanced products and services to our present and future customers".
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