AIB HAS BEEN AUTHORIZED to acquire €4.2bn of Ulster Bank’s commercial loan portfolio as Ulster Bank withdraws from Ireland.
Ulster Bank is set to withdraw all of its banking services from Ireland, which, along with the planned exit of KBC Bank, is creating gaps in the financial landscape.
The Competition and Consumer Protection Commission (CCPC) has cleared the proposed acquisition of Ulster Bank’s corporate loans by AIB.
In addition, some Ulster Bank employees will transfer to AIB.
AIB agreed to the €4.2bn deal with Ulster Bank to take over its outstanding corporate and commercial loans last June, a few months after its parent company announced plans to wind up Ulster Bank’s operations in Ireland.
After reviewing the available evidence, the JPAC has accepted the argument of both banks that Ulster Bank will stop making the relevant loans to companies in Ireland, regardless of whether the sale to AIB proceeds.
In a statement, the CCPC said international evidence shows that increased concentration in banking services is likely to have a detrimental effect on competition, which in turn leads to lower prices, innovation and service for commercial borrowers.
“This is corroborated by some of the business customers contacted by JPAC, who indicated they had concerns with Ulster Bank leaving the state,” the commission said.
No news is bad news
Support the journal
Their contributions will help us continue to deliver the stories that matter to you
support us now
He said that “while the CCPC does not have a role in approving or reversing a company’s decision to leave the state, it does have a duty to highlight competition issues that arise as a result of leaving and are likely to harm business. customers and the Irish economy in general”.
“JPAC notes that the Department of Finance’s current review of retail banking will consider (among other things) the structure of the banking industry, competition in the banking services market, and the availability of credit to SMEs.
“JPAC sees your concerns regarding the competitive landscape of the Irish banking services market as highly relevant to all of these issues and will continue to work with all stakeholders to consider how to ensure the market is open and competitive to the benefit of all. ”