Allied Irish Banks (AIB) is reportedly planning to sell its roughly £1bn UK SME business loan book to Allica Bank.
AIB, which had put up the loan book for sale earlier this year, has selected a small-business challenger bank for the deal, which could be announced soon, The Irish Times has reported.
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The deal will see AIB exit the UK SME loan market, which has been offering low returns for the Irish lender.
“Our plans to exit the GB SME market are progressing well with a sales process significantly advanced and we have moved to preferred bidder stage,” AIB’s spokesperson was quoted by the publication as saying.
The suitor for AIB’s SME loan book Allica received its banking licence from the Prudential Regulation Authority (PRA) in September 2019.
AIB’s decision to exit the labour-intensive SME lending market of the UK is expected to save the bank €35m in coming years.
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By GlobalDataIn July this year, the Irish lender announced plans to shutter 15 branches in Ireland after an increase in demand for digital banking.
The announcement came shortly after AIB revealed plans to close eight branches in Northern Ireland.
Meanwhile, Danske Bank and Bank of Ireland have also announced that they will reduce the number of their branches in Northern Ireland.
Danske Bank plans to shutter four branches, while Bank of Ireland will close 15 of its 28 branches.
