NatWest Group PLC takes Permanent TSB stake through Irish loans sale

Natwest Group PLC is to take a 16.7% stake in Irish lender Permanent TSB under the terms of a deal to transfer a big chunk of the UK’s banks Irish loan book.

The deal, which was flagged in June, will see around €6.8bn worth of mortgages and business loans switch from Natwest’s Ulster Bank arm to PTSB. The book is slightly less than the €7.6bn originally indicated due to repayments and disposals.

PSTB is paying €6.4bn cash plus 90.9mln of new shares in the Irish group for the loans.

Some 25 Ulster Bank branches in the Republic are also switching to PTSB ownership as part of the deal with around 450 Ulster Bank employees also transferring.

In a statement, NatWest said: “When combined with the previously announced agreement to sell the majority of its commercial lending to Allied Irish Banks, UBIDAC now has binding agreements in place for around 58% of its total gross lending portfolio and an estimate of c.65% of credit RWA as at 30 June 2021.

NatWest added that an additional 280 staff will move to AIB, another Irish bank, as part of a disposal of €4.2bn of corporate loans.

Reports in Ireland have also suggested AIB is also in talks to buy Ulster Bank’s €6.5bn tracker mortgage portfolio.

Alison Rose NatWest’s chief executive, added: “Today’s announcement is a key milestone in our phased withdrawal from the Republic of Ireland.”