Ulster Bank tracker loan sale talks ‘ongoing’ as wind-down gathers pace

While Ulster said no action is currently required by customers, before early 2022, it is “encouraging” customers to consider their options, avail of supports and “get ready to choose a new banking provider, particularly for customers’ current and deposit accounts.”

Talks surrounding the sale of Ulster Bank’s tracker mortgage book remain “ongoing” ahead of the lender’s exit from the Republic.

Parent company NatWest said Ulster Bank’s phased withdrawal from the Republic continues, with progress having been made on sales of differing aspects of its loan book to AIB and Permanent TSB (PTSB) in recent months.

In June, Ulster agreed a legally binding deal with AIB for the sale of around €4.2bn worth of commercial loans. A non-binding deal has been reached with PTSB over the sale of SME loans and non-tracker retail loans. 

Earlier this week, PTSB said talks with NatWest are ongoing, with a view to entering into legally binding agreements “over the coming months”. In its latest quarterly update, NatWest said “discussions are ongoing with other counterparts about their potential interest in other parts of the bank”.

That is understood to relate to Ulster Bank’s tracker mortgage book in the Republic. While not confirmed, it is generally believed that AIB is in talks with NatWest over buying Ulster’s €6.5bn tracker loan book in the Republic.

NatWest’s latest financial figures show that Ulster Bank generated an operating profit of €46m in the third quarter of the year, compared to a €20m loss for the second quarter. Total income increased by nearly 18% - or €26m – to €171m.

Net lending decreased by €4.1bn – or 21.1% - on the previous quarter, mainly due to the reclassification of €3.7bn worth of loans agreed to be sold to AIB. Ulster Bank has also told customers to “get ready” to change bank and for further changes as it winds down its business ahead of exiting the Republic.

While Ulster said no action is currently required by customers, before early 2022, it is “encouraging” customers to consider their options, avail of supports and “get ready to choose a new banking provider, particularly for customers’ current and deposit accounts.”

The bank has now formally ceased accepting new personal banking business. In an update on its gradual wind-down here, Ulster Bank said it will start to directly contact customers early next year, when it plans to begin to serve formal account closure notice to current account and deposit account holders.

While account holders are not obliged to do anything until the new year, Ulster said it is encouraging customers – if they are ready to do so – to start reviewing their accounts.

“We committed to giving customers up to six months’ notice to facilitate key changes for them,” said Ulster Bank chief executive Jane Howard.

“While right now, customers may not have noticed many changes, we expect this to change over the coming months," she said.

Meanwhile, NatWest's profit tripled in the third quarter, but its margins contracted in a sign of potentially tougher times ahead. The UK State-backed bank reported a pre-tax profit of £1.1bn (€1.3bn), up from £355m a year ago.

The profit came despite a £294m litigation and conduct charge, which includes a provision for a fine after NatWest pleaded guilty this month to failing to prevent money-laundering.

- additional reporting Reuters