Performing Ulster Bank tracker will they give a discount for early repayment?

Brendan Burgess

Brendan Burgess

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Ulster Bank is reported to be selling its performing tracker mortgages to AIB.

Presumably AIB will pay about 90% of the par value. But they might try to get them for 80%.

Though I suspect that if they were selling them at 80%, permanent tsb would have bought them.

It might be worth offering to switch your mortgage from Ulster for a discount.

Brendan
 
Sorry to be negative here Mr. Burgess, but based on what we've seen in the marketplace to date, I seriously doubt that anyone with a performing Tracker will get a discount.

Also, why suggest they might be sold at 90 cents on the Euro?

Do I not recall some discussion on other Tracker mortgage portfolios being sold in the mid to high 90s?

With low LTVs, all loans performing, and negative interest rates likely to remain a feature for a few years to come, I could see a Fund paying close to par value for this portfolio.

Perhaps that's the thing for us all to consider here - do UB need to sell this portfio to another Bank, because if they don't, then they'll likely get a higher price for the portfolio (which in turn probably reduces the chances of individual negotiation even further) ?
 
. The pair are understood to have offered close to 95c in the euro for the loans. Danske retail's book holds €2bn of mortgages but its principal value - meaning the amount of money outstanding on the loans - is €1.8bn.

The portfolio's large volume of low-growth tracker mortgages deterred some Irish bidders, most notably AIB which did not even submit an offer.

But now AIB is bidding for the UB book.

And the Irish Times says that permanent tsb got a discount on the non-tracker book?

Interesting.
 
I had to ring the mortgage dept about something else and I thought I'd ask even though I don't actually have the money. I've been over paying the mortgage when I've been able to so I didn't think it was very likely they would do a deal. The woman I spoke to said that there would be no deals at that stage. That was a few months ago though so no harm to keep asking I suppose.
 
Brendan Burgess said:
... And the Irish Times says that permanent tsb got a discount on the non-tracker book?

Interesting.
Click to expand...

The variable rate loans are most likely newer loans, with higher LTVs, so there's potentially a higher risk profile to that portfolio, and hence, it sold at a deeper discount to face value.

With regards to why the PTSB didn't buy the tracker portfolio, my guess is twofold:

1. It would drag down the PTSB's NIM

2. The PTSB don't have any money, their deal is being financed by shares - which are going to NatWest, in return for the UB and Lombard clients. They did well to get NatWest to accept shares in the PTSB, but I'm sure there was a limit to how much of the PTSB NatWest wanted to end up owning (keeping in mind that they want out of Ireland, but could have bought the Permo over the years, if they ever actually wanted it).

In my view, our Finance Minister has done a really good job behind the scenes, with regards to helping manage NatWest's exit from Ireland. There's no doubt in my mind, that he's the one who has put the deals togeather with both AIB, and PTSB, having engaged with both NatWest, and the British Chancellor (as majority shareholder in NatWest), from an early stage.
 
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