REG - Permanent TSB Group Permanent TSB PLC NatWest Group plc - Ulster Bank Retail Business: Acquisition Completed

NatwestAnnouncement

07/11/2022 07:30

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RNS Number : 5060F  Permanent TSB Group Holdings PLC  07 November 2022

07 November 2022

 

PERMANENT TSB GROUP HOLDINGS PLC

 

COMPLETION OF THE ACQUISITION OF THE ULSTER BANK RETAIL BUSINESS

 

 

Permanent TSB Group Holdings plc (the "Group" or "PTSBGH") today announces
that Permanent TSB plc (the "Bank" or "PTSB"), a wholly owned subsidiary of
the Group, has materially completed the acquisition of the performing
non-tracker residential mortgage business (the "Residential Portfolio") of
Ulster Bank Ireland DAC ("Ulster Bank") ("Completion").

 

The Residential Portfolio being acquired currently comprises loans with a
value of €6.2 billion. Of this, c. €5.2bn is being migrated today and the
remaining c. €1bn is expected to migrate in Q2 2023 but no later than Q4
2023. As a result of the acquisition, PTSB is today welcoming approximately
56,000 residential mortgage customers connected to the c. 36,000 accounts
migrating to the Group.

 

PTSB will honour all the existing terms and conditions of their loans and is
writing to all of these customers to provide them with comprehensive
information about the transfer.

 

The transaction has increased the size of PTSB's mortgage book by
approximately 40%.

 

PTSB has acquired today's tranche of the Residential Portfolio for c. €4.8bn
of cash consideration funded from internal resources and existing funding
sources, in addition to the issue of 90,893,627 PTSBGH ordinary shares of
€0.50 each (the "Subscription Shares") to a subsidiary of NatWest Group plc
("NatWest") so that they hold 16.66% of the enlarged share capital of PTSBGH
as of Completion. The issued share capital of PTSBGH following the admission
of the Subscription Shares will be 545,589,119 ordinary shares of €0.50
each.

 

Admission of the Subscription Shares

 

Applications have been made for admission of the Subscription Shares to (a)
the premium listing segment of the Official List of Euronext Dublin and to
trading on its main market; and (b) the standard listing segment of the
Official List of the Financial Conduct Authority of the United Kingdom and to
trading on the London Stock Exchange plc's main market. It is expected that
admission will become effective and that dealings will commence in the
Subscription Shares at 8.00 a.m. on 8 November 2022.

 

Employees

 

113 Ulster Bank employees who were assigned to the Residential Portfolio that
has been acquired by the Bank have now transferred to either the Bank or its
service partner (Pepper Finance Corporation (Ireland) DAC) under the Transfer
of Undertakings Regulations or terms agreed between the Bank and the employees
concerned.

 

Approximately 230 additional Ulster Bank employees who are wholly or mainly
assigned to the branches, the SME and Asset Finance businesses that are being
acquired will be entitled to transfer to PTSB under the Transfer of
Undertakings regulations. The final number of employees transferring will be
confirmed as this element of the Transaction completes.

 

 

 

Customers

 

PTSB will write to the mortgage customers connected to the migrating
Residential Portfolio in the coming weeks to provide them with comprehensive
information about the transfer. PTSB has also created a dedicated customer hub
www.permanenttsb.ie/ulsterbank (http://www.permanenttsb.ie/ulsterbank) to
support these customers as they transition to PTSB.

 

PTSB has partnered with Pepper Finance Corporation (Ireland) DAC trading as
Pepper Asset Servicing ("Pepper") to support the servicing of the Residential
Portfolio. This servicing arrangement has no impact on customers.

 

Customers of the 25 branches PTSB is acquiring are encouraged to take action
now to open a new account with PTSB ahead of these branches closing (as Ulster
Bank branches) in early January 2023 and re-opening as PTSB branches in late
January and February 2023. Customers can open an account online via the
Permanent TSB app or make an appointment in one of PTSB's 75 locations
nationwide.

 

Shareholder Co-Operation Agreement

 

On Completion, PTSBGH entered into a shareholder co-operation agreement with
NatWest and the Minister for Finance of Ireland (the "Minister") in relation
to a number of matters including orderly sale arrangements in relation to both
the shares held by the Minister and the Subscription Shares issued to NatWest.

 

Completion of Acquisition of Business Direct, Asset Finance and the Branches

 

It is currently anticipated that the acquisition of the 25 branches, Business
Direct (micro-SME) and Lombard (Asset Finance) businesses will complete in Q1
2023, but in all cases no later than 30(th) June 2023. This will increase the
Group's branch footprint by approximately 30% and its SME lending activities
by approximately 200%.

 

Current Account Switching

 

In addition to the acquisition of certain Ulster Bank assets, PTSB has now
opened over 100,000 new current accounts so far in 2022, a 250% increase on
the same period last year. The Bank has also opened over 35,000 new deposit
accounts year to date, an increase of 80% year-on-year.

 

PTSB has invested heavily in attracting both switching and other categories of
new customers through a range of initiatives including its market leading,
award winning current account which facilitates a fast and easy digital
account opening process.

 

Chief Executive Comment

 

Eamonn Crowley, Permanent TSB Chief Executive, said:

 

"This is a transformational day for Permanent TSB as we work towards our
ambition of being Ireland's best personal and small business bank.

 

We extend a warm welcome to the 56,000 mortgage customers and our new
colleagues who are joining us today and we want to assure them that we will
give them a best-in-class mortgage offering and colleague experience,
underpinned by a high-quality service and great people.

 

Today is a step-change for the Bank because we are growing our mortgage book
by approximately 40%. Together with our imminent acquisitions of Ulster Bank's
SME and asset finance businesses and 25 of its branches, we are generating
greater scale and becoming a much stronger competitive force in Irish retail
banking, with many more personal and SME customers, a branch presence in even
more communities nationwide, and a significantly larger platform for future
growth.

 

We will use this greater scale to bring even better offerings to our personal
and business customers, winning new business with competitive, innovative,
customer-friendly products and services, and fulfilling our purpose of
building trust with both new and existing customers every day.

 

I want to acknowledge the huge efforts put in by so many people throughout
Permanent TSB in making this transaction a reality. In addition, I thank the
Minister for Finance and his officials; our wider shareholder base; Ulster
Bank and its parent NatWest; and the regulatory and competition authorities
for the support they have shown for the transaction."

 

 

 

 

 

 

For further information, please contact:

 

 

Denis McGoldrick

Investor Relations Manager

Denis.McGoldrick@permanenttsb.ie

+353 87 928 5645

 

Leontia Fannin

Head of Corporate Affairs & Communications

leontia.fannin@permanenttsb.ie

+353 87 973 3143

 

Note on forward-looking information:

This Announcement contains forward-looking statements, which are subject to
risks and uncertainties because they relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends, and
similar expressions concerning matters that are not historical facts. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or achievements
of the Group or the industry in which it operates, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. The forward-looking statements referred to in
this paragraph speak only as at the date of this Announcement. The Bank
undertakes no obligation to release publicly any revision or updates to these
forward-looking statements to reflect future events, circumstances,
unanticipated events, new information or otherwise except as required by law
or by any appropriate regulatory authority.

 

 

 

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