PTSB reassures Ulster customers but banking industry concerns remain over huge switch

Permanent TSB said it is setting up mobile facilities, “pop-up” banks, and is placing its own staff in the 25 Ulster Bank branches

The bank is also setting up facilities in Permanent TSB branches and will have 700 customer advisers as well as 230 call centre staff to help people joining the bank from Ulster and KBC Bank.

Bosses at Permanent TSB have pledged to do all they can to help the many thousands of customers who will need to switch all their banking out of Ulster Bank, even as questions remain about the enormity of the challenge facing the banking industry. 

Permanent TSB said it is setting up mobile facilities in Mahon in Cork and on Grafton Street in Dublin, will establish other “pop-up” banks, and is placing its own staff in the 25 Ulster Bank branches which it plans to take on as part of the huge “transformational” deal struck with the NatWest owner that is closing Ulster Bank in the Republic.

Chief executive Eamonn Crowley and retail banking director Patrick Farrell told reporters it is also setting up facilities in Permanent TSB branches and will have 700 customer advisers as well as 230 call centre staff to help people joining the bank from Ulster and KBC Bank, which is also closing its doors. It will absorb €75m in one-off spending linked to taking on the loan books and new customers through the end of the year.

The bank said that it was gearing up because “the peak is still to come” in terms of the flood of customers it expects by the end of the year. Mr Crowley said the bank understood the huge challenges facing all customers, that the bank may look at weekend openings, but it was confident the huge project would be completed.  

However, banking industry experts continue to voice concerns about the scale of the challenge for customers and the banking industry to switch utility bills and source pension authorities in Britain and elsewhere. 

Permanent TSB said it is placing its own staff in the 25 Ulster Bank branches which it plans to take on as part of the huge “transformational” deal struck with the NatWest owner that is closing Ulster Bank in the Republic.

Seamus Boland, chief executive of the Irish Rural Link, an advocate for people living in rural Ireland, said the closures were worrying many people. 

Mr Boland said Irish Rural Link had been approached for advice by concerned people to help them transfer their accounts but there was little it could do by itself. There was “a lot of people out there who need help,” Mr Boland said. 

Permanent TSB said it hopes to complete the acquisition of mortgage loans from Ulster Bank by the end of this year and to secure 25 branches as part of that deal in early 2023, but for the overall transaction to be done by “no later” than next summer.

The lender also posted pre-tax losses of €36m for the six months to the end of June that were linked to the costs it has taken on to absorb the mortgage loans and branches from Ulster. 

The competition watchdog last week approved the €7.6bn plan by Permanent TSB to acquire a huge chunk of the non-tracker mortgage loan book from Ulster, part of a trio of banking deals involving Ulster Bank as well as KBC Ireland that will change the landscape of Irish banking forever.

Permanent TSB was also given the green light to secure 25 branches from Ulster Bank, including the Wilton branch in Cork, Shannon in Co. Clare, and Thurles in Co. Tipperary. 

Permanent TSB lending

Mr Crowley on Wednesday also said it had increased its lending for home mortgages and to small firms, with its mortgage market share unchanged at around 16% at the half-way stage. However, its share of new mortgages, at 16.3%, compares with a share of 17.5% a year earlier. 

The lender also said it was in good shape to increase new lending through the rest of the year, despite the threat of the cost-of-living crisis. Irish house prices will continue to rise this year “but at a slower rate than the prior year” amid continuing strong demand for housing, according to its forecasts. 

It reiterated it will boost its profitability once the Ulster deal is completed. “The Irish economy and operating environment for banks has remained positive in the first half of the year, notwithstanding the near-term headwinds which are beginning to manifest in the form of high levels of inflation driven primarily by rising energy and fuel costs,” the bank said.

Regulatory hurdles

The decision last week by the Competition and Consumer Protection Commission, or CCPC, completes most of the regulatory hurdles for the dominant players Permanent TSB, AIB, and Bank of Ireland to carve out the loan books from Ulster Bank and KBC Bank. NatWest-owned Ulster Bank will continue to operate in the North.

Following in-depth probes, the CCPC had already approved, in May, the plan by Bank of Ireland to secure €9bn mortgage loans from KBC, and in April, the plan of AIB to acquire €3.7bn in commercial loans from Ulster.

There will likely be a fourth deal that will require a watchdog investigation in the coming weeks after AIB doubled down to also propose to acquire €6bn in tracker loans from Ulster Bank.

The deals mark the biggest shake-up in Irish banking for household and business customers since the hugely expensive banking bailouts were forced on the State to save the banking system from collapse over a decade ago. 

In regard to Permanent TSB, the CCPC last week said it had no influence over plans by any bank to pull out of the market in the Republic, noting it had "previously highlighted its concerns in relation to competition in the banking sector".