Competition authority launches full investigation into permanent TSB’s €7.6bn Ulster Bank deal

Ireland’s consumer protection and competition watchdog has launched a full ‘Phase 2’ competition investigation into Permanent TSB’s planned €7.6 billion acquisition of Ulster Bank’s assets.

The investigation by the Commission for the Defense of Competition and the Consumer (CCPC) will determine whether the proposed acquisition of Permanente TSB could lead to a substantial decrease in competition in the State.

With the NatWest-owned lender planning to exit the Irish market, the permanent TSB signed a deal last December to buy €7.6bn of mortgages, SME loans and other retail assets from Ulster Bank.

Announcing the investigation today, the JPAC said it follows the conclusion of its preliminary ‘Phase 1’ investigation, details of which will be presented to the two banks in the next 60 days.

Separately, the watchdog is also conducting a full investigation into the Bank of Ireland’s plan to acquire €8.8bn in outstanding mortgages, €100m in commercial and consumer loans worth €100m, €4.4bn million euros in deposits and around 300 million euros in arrears. loans from KBC Bank Ireland.

A decision is expected this month.

The Belgian-owned lender also announced plans to leave the Irish market last year and will begin writing to current account customers in June, giving them six months’ notice to switch service providers.

In February, the CCPC expressed concern about the deal’s impact on competition levels within the sector, setting out its views in its preliminary assessment of the deal between the two banks.

In a statement to the market at the time, the Bank of Ireland said: “The bank notes that the JPAC’s preliminary view, at this stage of the process, is that the proposed transaction is likely to result in a material lessening of competition. in relation to the market for the provision of mortgages in the State and that this is not JPAC’s final determination”.

It added: “In accordance with normal practice, the Bank of Ireland will prepare a detailed response to the assessment that will seek to address the concerns raised by JPAC.”

Last month, the watchdog signed off on AIB’s takeover of Ulster Bank’s outstanding commercial loan portfolio, worth €4.2bn following a full Phase 2 investigation.

The Commission concluded that the sale in itself would not lead to a substantial lessening of competition. However, he generally cautioned about levels of competition within Ireland’s shrinking banking sector.

In a statement at the time, the CCPC said international evidence shows that further concentration in banking services is likely to have a “harmful effect on competition, leading to worse outcomes for commercial borrowers in terms of prices, innovation and service.

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