The acquisition is expected to increase PTSB’s mortgage book by approximately 40%. Credit: Towfiqu barbhuiya on Unsplash.

Irish banking group Permanent TSB (PTSB) has completed the acquisition of €6.2bn performing non-tracker residential mortgage business from Ulster Bank.

The mortgage portfolio worth around €5.2bn has been migrated to PTSB and the remaining €1bn is expected to migrate in the second quarter of 2023.

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Through the acquisition, PTSB has onboarded 56,000 residential mortgage customers connected to around 36,000 accounts increasing its mortgage book by approximately 40%.

For the first tranche of the mortgage portfolio, PTSB paid approximately €4.8bn in cash and issued 90.9 million new ordinary shares to NatWest, Ulster Bank’s parent, giving it a 16.66% stake in PTSB.

Ulster Bank’s 113 employees assigned to the residential mortgage portfolio have also been transferred. 

The deal, first announced in July 2021, also includes Ulster Bank’s SME and asset finance businesses and 25 of its branches, which will close in January 2023 and re-open as PTSB branches in later January 2023 and February. 

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As per the terms of the agreement, a further 230 employees to these branches, asset finance business and SME operations will be retained by PTSB.

PTSB expects to complete the acquisition of 25 branches, SME, and asset finance businesses in the first quarter of 2023, but no later than 30 June 2023. 

Through these assets, PTSB hopes to increase its branch footprint by around 30% and SME lending activities by approximately 200%.

Permanent TSB CEO Eamonn Crowley 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 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.”