Permanent TSB (PTSB) has agreed to buy around €7.6 billion of assets from Ulster Bank, which had previously announced its plans to withdraw from the banking market in the Republic of Ireland.

The deal includes Ulster Bank’s €7 billion book of performing non-tracker mortgages, and the bank’s performing small-business loan book.

PTSB will also take over the entire Lombard Asset Finance business, and will acquire 25 of Ulster Bank’s branches.

As part of the agreement, around 450 Ulster Bank staff will be entitled to transfer to PTSB.

‘Greater scale’

The deal is subject to regulatory approval from both the Competition & Consumer Protection Commission (CCPC) and the Central Bank.

It must also be backed by a majority of PTSB shareholders at an extraordinary general meeting (EGM) that is expected to be held before the end of June next year.

Minister for Finance Paschal Donohoe has welcomed the plans, describing them as a “significant opportunity” for PTSB to consolidate its position in the Irish banking market.

“With the withdrawal of Ulster Bank and KBC from the Irish market, a PTSB with greater scale has a more important role than ever in providing meaningful competition for consumers in terms of both product choice and pricing,” he said.

The State continues to hold a significant stake in PTSB. As part of the deal announced today (17 December), Ulster Bank’s parent company NatWest Group will also receive shares in PTSB, equivalent to a stake of just under 16.7%.