AIB acquires €5.7bn of Ulster Bank's tracker mortgages

AIB has confirmed that it has acquired around €5.7 billion of Ulster Bank's performing tracker mortgages.

Back in April, the bank started exclusive discussions with NatWest.

This evening, it said it has entered into a binding agreement to buy the portfolio which consists of around 47,000 Ulster Bank customers, for a consideration of €5.4 billion.

AIB said it plans to engage a third party service provider to administer the portfolio on its behalf.

"This servicing arrangement will have no impact on customers who will retain their existing terms and conditions," it said in a statement.

"The transaction remains subject to obtaining any necessary customary regulatory approvals," it added.

AIB said it will acquire an economic interest in the mortgage portfolio in the second half of this year, with formal completion expected in 2023.

Ulster Bank said customers do not need to take any action on the back of today's announcement.

"We will be in contact with potentially impacted customers in the coming weeks and months," it said in a statement.

It said 90% of the mortgages relate to private dwelling homes with 10% related to buy to let properties.

The average remaining term duration is approximately 13 years, it said.

"Today's announcement is another significant step in Ulster Bank's orderly, phased withdrawal from the market," said Jane Howard, Chief Executive of Ulster Bank.

"I am pleased that AIB will be acquiring this portfolio, subject to any relevant regulatory approvals.

"The most important message today is to confirm to potentially impacted Ulster Bank tracker mortgage customers that their tracker mortgage product and their legal and regulatory protections do not change, as a consequence of this transaction," she added.

Ms Howard said they want to reassure customers that they will continue to retain their tracker mortgage in line with their mortgage documentation.

"We will be communicating with potentially impacted mortgage customers over the coming weeks and months to keep them appraised of this progress.

"Following any relevant approvals, we will work closely with AIB to ensure that the transfer of the portfolio is as smooth as possible," Ms Howard said.