PTSB's new owner promises investment but says it is 'premature' to talk about redundancies

BAWAG deputy CEO Sat Shah and PTSB CEO  Eamonn Crowley. Picture: Fennell Photography

PTSB’s proposed new owner has promised to invest in the bank, modernise its branch network, as well as expand product offerings but said it was “little bit premature” to talk about job numbers and potential redundancies.

On Tuesday, it was announced that Austrian bank BAWAG has won the race to acquire PTSB in an all cash transaction valued at just over €1.6bn. PTSB put itself up for sale in October last year.

The sale price equates to €2.97 per share and with the Government still owning 57.5% of PTSB, it stands to receive around €931m from this transaction.

Speaking to reporters on Tuesday, chief executive of PTSB Eamonn Crowley said that earlier this year, the bank had received six non-binding proposals about the sale of the bank with four parties progressing to the next phase.

In March, he said that they received three revised proposals and concluded that BAWAG’s “proposal was the most attractive in terms of value, certainty and strategic alignment”.

"BAWAG has stated its intention to operate PTSB with a clear, long term ownership mindset and to build and maintain within the wider BAWAG Group, a strong, resilient and competitive PTSB business,” Mr Crowley said.

“BAWAG has also stated that it intends to invest meaningfully in PTSB to further strengthen its competitiveness and sustainability in Ireland.” Deputy chief executive of BAWAG Sat Shah said as part of the acquisition they have committed to invest in PTSB and “grow the franchise”.

"We are big believers that as it comes under the greater group, we will be able to invest in various areas in order to drive that growth.

We are big believers in having a physical footprint throughout Ireland and one of the things we will do is we will invest in the modernization of the branch network.

"We will look to transition from more transactional banking in the branch network to becoming more advisory focused in the branch network,” he said, adding that they will also be expanding the product offerings to customers.

However, when asked if there are any plans for redundancies, Mr Shah said it's a” little bit premature to talk about the jobs and the numbers right now”.

“There's still a lot of work that will go on from now until closing the transaction.” 

The deal is still subject to shareholder and regulatory approval with the expectation the deal will be closed by the end of this year or early next year.

BAWAG already had a presence in Ireland as it already owned mortgage provider MoCo.

The announcement was welcomed by finance minister Simon Harris who said it “represents the most significant development in the Irish retail banking market in over a decade”.

“Through a combination of fees, dividend income, the bank levy and disposal proceeds the State has recovered circa €4.0bn from its investment in PTSB,” Mr Harris added.

The proceeds from this transaction will be held within the Exchequer while Mr Harris examines how best to use them for the benefit of the State.

Shares in PTSB were down over 4.6% following the announcement of the deal.

Mr Crowley said that the current share price is not representative as it has been involved in the sales process since October last year.

“What I use as a benchmark is what our undisturbed share price was before we announced which was €2.35,” he said.