AIB Group plc said that its subsidiary Allied Irish Banks has signed a binding agreement with NatWest Group and Ulster Bank Ireland DAC for acquiring a €6 billion performing Ulster Bank tracker mortgage portfolio.

According to AIB Group, Allied Irish Banks will buy the portfolio consisting of nearly 47,000 Ulster Bank customers for €5.4 billion. The actual consideration to be paid will be based on movements in the portfolio up to the closing of the deal.

AIB Group plans to rope in a third party service provider for administering the tracker mortgage portfolio on its behalf. The Irish consumer lending company said that the servicing arrangement will have no effect on customers who will retain their current terms and conditions.

Colin Hunt — AIB Group Chief Executive said: “We are delighted to have reached agreement with NatWest and Ulster Bank on another loan book acquisition and look forward to welcoming these customers to AIB. This acquisition further adds to our growing balance sheet and progress towards our strategic targets.

“Our strong capital position, which is well ahead of our medium-term target of >13.5%, enables us to invest in our business, pursue RoTE accretive inorganic opportunities and make distributions to shareholders.”

The sale of the Ulster Bank performing tracker mortgage portfolio is part of NatWest Group’s phased pull out from Ireland.

Alison Rose — NatWest Group CEO said: “Our priority remains to support our customers and colleagues through this transition and we will be working closely with AIB to ensure the successful completion of this transaction.”

The deal will be subject to the receipt of any required customary regulatory approvals.

AIB Group will buy an economic interest in the mortgage portfolio in the latter half of this year with formal completion expected to take place next year.

  AIB Group, Alison Rose, Colin Hunt, mortgage, NatWest Group, Ulster Bank, Ulster Bank Ireland