Watchdog escalates probe into banks with AIB and Ulster deal under full scrutiny

Mortgage brokers and consumer advocates have long warned about the dominance of a few lenders in banking in the Republic

The competition watchdog has escalated its investigations into the state of competition in Irish banking by announcing a full-scale probe of plans by AIB to take €4.2bn in loans from Ulster Bank, when the third-largest lender completes its retreat from the Republic.

It is the third major or so-called Phase 2 banking investigation to be announced by the Competition and Consumer Protection Commission (CCPC) and reflects widespread concerns that customers will be the big losers when the existing lenders carve out billions worth of loans from Ulster and KBC Bank, which also has plans to withdraw.