NatWest’s Ulster Bank to sell commercial lending to AIB

NatWest Group’s Ulster Bank has agreed to sell the majority of its commercial lending to Allied Irish Banks (AIB.)

In February, NatWest announced it would begin a phased withdrawal from the Republic of Ireland as it could no longer generate sustainable long term returns for its shareholders in the region.

The move came after the bank reported an operating loss of £351 million in 2020 after being hit hard by the coronavirus pandemic.

Ulster Bank and NatWest have entered into a binding agreement with AIB for the sale of €4.2 billion (£3.6 billion) worth of gross performing commercial lending and associated undrawn exposures of €2.8 billion (£2.4 billion.)

Ulster Bank said that on competition it is estimated that are small gain on disposal will be recognised, based on the net carrying value of the lending as of 31 December 2020. The exact impacts of disposal will depend on movements in the book between now and the transfer, the timing of which remains uncertain.

The transaction is still subject to regulatory approvals.

It is anticipated that approximately 280 colleagues will transfer from Ulster Bank to AIB with the final number of roles confirmed as the deal completes.

“In line with our strategy of a phased withdrawal from the Republic of Ireland, I am pleased that we have now reached agreement with AIB on the sale of the majority of Ulster Bank’s performing commercial lending portfolio,” said Alison Rose, chief executive of NatWest Group. “Our priority remains to support our customers and colleagues through this period.”

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