The Competition and Consumer Protection Commission (CCPC) has given the green light to AIB’s proposed purchase of Ulster Bank’s €4.2bn outstanding commercial loan portfolio.

But he has also sounded a warning about the impact of Ulster Bank’s departure on broader competition in the banking market.

JPAC said its investigation had looked at whether the planned AIB and Ulster Bank deal would lead to a substantial lessening of competition, but concluded that it would not.

“On the basis of a review of the evidence before it, the JPAC accepted the parties’ argument that Ulster Bank would stop providing commercial loans to SOEs with a turnover of more than €2 million, regardless of that the sale of its commercial loan portfolio to AIB proceeded,” it said in a statement.

“JPAC considered whether the Proposed Acquisition would cause a material lessening of competition, compared to the alternative scenario of an exit from Ulster Bank through the liquidation of its commercial loans or (in the case of commercial real estate loans) a sale of the loans. to an alternative buyer, and found out he wouldn’t.

But the commission also said Ulster Bank’s exit from the market means only two full-service banks will remain in the state to serve the needs of businesses with turnover between €2m and €250m.

“International evidence shows that further concentration in banking services is likely to have a detrimental effect on competition, leading to worse outcomes for commercial borrowers in terms of pricing, innovation and service,” the CCPC said.

“This is corroborated by some of the business clients contacted by JPAC, who indicated that they had concerns with Ulster Bank leaving the State.”

The CCPC said it cannot approve or reverse a company’s decision to leave the Irish market, but has a responsibility to highlight “competition issues that arise as a result of exit and are likely to harm business customers and the Irish market.” usually”. economy.”

He added that his concerns about the competitive banking landscape are highly relevant to the Department of Finance’s ongoing review of the sector and he will continue to work with stakeholders to consider how the market can remain open and competitive.

AIB said it welcomed JPAC’s approval, adding that customers will be contacted in due course.

Ulster Bank also welcomed the decision that will see around 280 of its staff transfer to AIB as part of the deal.

“This is an important step forward in the progress of our recall and our next steps, beginning today and over the coming weeks and months, will be to reach out to colleagues who will be moving to AIB as part of the TUPE element and to reach out to those affected …customers that will migrate as part of this,” he said.

“Our website will be updated with information for customers in the coming days.”

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