PTSB to be sold to Austria's BAWAG Group for €1.6 billion

PTSB is to be sold to Austria's BAWAG Group for €1.6 billion.

This morning the Government agreed to sell its stake of 57.5% in the bank for €931 million.

Minister for Finance Simon Harris briefed his Cabinet colleagues this morning.

PTSB has more than 2,900 employees.

It sold its stakes in AIB and Bank of Ireland over recent years.

PTSB was put up for sale by its board in October of last year.

Vienna-based BAWAG has operations Austria, Germany, Netherlands, Ireland, Switzerland, the UK and the US.

It has four million customers and mainly focuses on retail banking and lending to small and medium companies.

The Government was advised by Rothchilds & Co and PTSB was advised by Goldman Sachs.

During the financial crisis, taxpayers had bailed out PTSB to the tune of €3.9 billion.

PTSB significantly increased the size of its balance sheet in recent years with the acquisition of €6.8 billion in loans from Ulster Bank.

The bank said that customers are not impacted by today's announcement, and PTSB will continue to support and service customers as normal.

Julie O'Neill, Chair of PTSB, said the PTSB Board's decision followed a thorough evaluation of value, certainty, stakeholder considerations and long-term strategic fit.

"We are confident BAWAG brings the long-term ambition, capability and capital to accelerate PTSB's growth and strengthen competition for customers in the Irish market," she said.

"This acquisition has the potential to deliver significant benefits for customers, combining BAWAG's scale and expertise with PTSB's deep roots in Irish communities to deliver an even stronger customer experience through greater choice, improved service and continued innovation," Ms O'Neill said.

BAWAG said it was confident that the combination announced today would create a highly credible competitor to the two major Irish banks, with a strong foundation of a larger banking group with deep expertise that is well experienced in retail and SME banking.

The CSO said that Ireland represents a very attractive market for BAWAG, underpinned by a strong macroeconomic backdrop, a robust banking sector, and solid long-term fundamentals.

Tánaiste and Minister for Finance Simon Harris said today's announcement by PTSB and BAWAG represents the most significant development in the Irish retail banking market in over a decade.

Mr Harris he was pleased that the sale of PTSB, which attracted a significant level of buyer interest, has concluded in finding a new owner for the bank who has a long-term vision for and commitment to PTSB and the Irish economy.

"PTSB has made great progress in building a strong competitive franchise in the market and BAWAG's demonstrated deep knowledge of the European and Irish banking sector can propel PTSB to an even more competitive position in the market, with the benefits of this to be seen by Irish consumers, businesses and the Irish economy more generally," he said.

He said the sale of the State's investment in PTSB is consistent with the objectives of recovering taxpayer funds that were used to rescue the Irish banks and deploying these to more productive purposes.

"PTSB is an important pillar of the retail banking sector and wider Irish economy, and it has made great progress in strengthening its continued sustainable growth to enhance competition in the market and provide choice to consumers," Mr Harris said.

"The State has and continues to be very supportive of PTSB, and the Government believes that it is in the long-term interests of PTSB and citizens in general that the bank be returned to full private ownership and begin the next phase of growth," he added.