(Adds details, analyst quotes)
LONDON, July 23 (Reuters) - Britain's NatWest Group
agreed to sell assets from its Irish arm to Permanent TSB
, a move the mortgage lender and analysts described as a
"once in a generation opportunity" for PTSB to compete with
Ireland's two dominant banks.
The deal includes 25 Ulster Bank branches and 7.6 billion
euros ($8.94 billion) of gross performing loans, the majority
relating to non-tracker mortgages, as well as performing
micro-SME loans and Ulster Bank's asset finance business, the
group said on Friday.
As part of the deal, NatWest will become a shareholder with
up to 20% of the enlarged share capital of PTSB, together with
PTSB paying NatWest an additional cash consideration.
PTSB, which will also take on 400-500 of Ulster Bank's 2,800
employees, said it does not envisage requiring additional new
equity capital to complete the deal, meaning the 75% state-owned
bank will not need to tap the government for additional funds.
"The transaction represents a once in a generation
opportunity to add scale, substantially increasing earnings and
returns to merit a re-evaluation of the investment case," Davy
Stockbrokers analyst Diarmaid Sheridan wrote in a note.
NatWest said in February that it was to wind down its Irish
arm as Chief Executive Alison Rose slashes underperforming parts
of the state-owned lender after it swung to a loss in 2020.
It agreed last month to sell most of its Irish commercial
loan book, totaling 4.2 billion euros, to Allied Irish Banks
, one of Ireland's two main lenders, which is seeking to
strengthen their grip on the market after Ulster's exit.
AIB's chief rival Bank of Ireland is in talks to
buy the bulk of Belgian bank KBC's Irish assets, a move
that could leave the country with just three retail banks.
($1 = 0.8500 euros)
(Reporting by Anna Irrera in London and Padraic Halpin in
Dublin; editing by Rachel Armstrong and Jason Neely)
Natwest (NWG)
