4,000 Ulster Bank mortgages bought up by non-bank lender

The book is of around 4,000 prime residential home loans of former so-called “off-set” mortgages, a structure that allowed borrowers to have lower interest bills off-setting against their savings with the bank.

It was among the very last elements of Ulster Bank assets here. Ulster Bank said it will be communicating with customers over the coming months to keep them appraised of progress.

The off-set structure made the mortgages challenging to sell until Ulster Bank unpicked those contracts over the past year by making a one-off payment to borrowers who agreed to exit that element of the contract.

The former offset mortgage will be renamed a “Flexible Mortgage” from May 23 and will retain some features such as an ECB-linked tracker rate and Pay and Redraw facility, that can reduce the amount of interest customers pay on their mortgage, Ulster bank said.

Dilosk DAC, which trades as Dilosk and ICS Mortgages, raised €400m on the bond market earlier this year, in a deal that heralded the revival of non-banks as players in the mortgage market after the sector was largely sidelined by the ECB-driven spike in interest rates.

The mortgages acquired from ­Ulster Bank will be integrated into the existing ICS Mortgages business, ensuring continuity of service and terms for all transferring customers, Dilosk said.

The legal and regulatory protections attached to these mortgages will not change as a consequence of this sale.

“Dilosk prioritises customer satisfaction and is dedicated to maintaining the highest standards of service,” the group said in a statement announcing the deal.

The sale remains subject to regulatory approval and is expected to complete over the coming months.

Fergal McGrath, chief executive of Dilosk, said the agreement was a significant milestone for the lender.

“This acquisition marks a significant milestone for Dilosk and ICS Mortgages as we increase our mortgages under management to circa €2bn,” he said.

“ICS Mortgages is one of the oldest mortgage-lending brands in the Irish market, and we pride ourselves on our profound understanding of the residential mortgage business and our insight into the needs and expectations of our customers as our business is solely focused on the mortgage business.

“We will be communicating to all our new customers over the coming months and ensuring that the transfer is as smooth as possible.”

Ulster Bank chief executive Jane Howard said the sale was significant.

“Today is a significant milestone of our phased withdrawal from the Republic of Ireland as we announce our final loan sale. I am delighted we have reached an agreement with established Irish mortgage provider Dilosk, that will allow customers to avail of the unique features of the Flexible Mortgage product. I would like to extend my thanks to these customers for their custom over the years and for their patience while we worked on a solution for their product.”