Ulster Bank's owner sets out timelines for its loan transfers to AIB and Permanent TSB

NatWest says it has started transferring some of €4.2bn in Ulster commercial loans, and a further €2.8bn of commercial loans that have not been drawn down

The timelines for the transfer of Ulster Bank Ireland’s business are laid out in NatWest’s latest earnings statement covering the three months to the end of September. File picture: Brian Lawless

Ulster Bank-owner NatWest expects to have completed the transfer of billions of euro in loans in the first half of the next year, as it disclosed a loss of €652m in the quarter linked to the exit plans from the Republic.

The timelines of NatWest’s deal-making with AIB and Permanent TSB — over both mortgages and commercial loans — were laid out in the banking group’s latest earnings statement covering the three months to the end of September.

The bulk of the €652m loss in the quarter at Ulster Bank was linked to a reclassification of Ulster mortgages on the books.

NatWest said it expects to start the transfer of €7.6bn of performing non-tracker loans to Permanent TSB by the end of December.

Under the same deal with Permanent TSB, its small business and micro-business loans, the Ulster Bank asset finance business, including a part of the Lombard business, and 25 Ulster Bank branches, is expected to be done in the first half of 2023.

Under the deals it struck with AIB, NatWest said it has started transferring some of €4.2bn in Ulster commercial loans, and a further €2.8bn of commercial loans that have not been drawn down. It expects to have completed the process in the first half of 2023.

The transfer of €6bn in tracker mortgages to AIB “is still on track for delivery” in the second quarter next year.

That deal is still subject to review by the Competition and Consumer Protection Commission.

“The results for the quarter have been impacted by a significant loss in Ulster Bank RoI as we continue our withdrawal from the Republic of Ireland,” NatWest said, adding that returns in other parts of its business was strong.

Meanwhile, in a trading update, AIB said its gross loans had increased in the quarter as it benefited from the exits of rivals Ulster and KBC from its main market.

The latest quarter featured “strong profitability” and a 25% increase in net new lending, AIB said.

“Notwithstanding the global macroeconomic uncertainty and volatility, the Irish economy is demonstrating resilience supported by growth, record levels of employment and low leverage,” said CEO Colin Hunt.

“Against this backdrop, AIB recorded robust new lending of €9bn to September and as two banks exit the Irish market, we are welcoming new customers with an 82% increase in the number of accounts opened,” he said.