By Sabela Ojea

NatWest Group PLC said Monday that it has signed a binding memorandum with Ulster Bank in the Republic of Ireland to sell the majority of its commercial lending to Allied Irish Banks PLC as the bank proceeds further with its withdrawal from the country.

The U.K. bank said that AIB will acquire the portfolio for a total consideration of 4.2 billion euros ($5.83 billion) gross performing commercial lending and associated undrawn exposures of around EUR2.8 billion.

The transaction is expected to be accretive to earnings in 2023, AIB said, adding that it anticipates customer loan net interest income of around EUR100 million and some incremental fee income per year.

Operational costs are also anticipated to be around EUR30 million a year as a result of the transaction, AIB said.

"On completion, it is estimated that a small gain on disposal will be recognized, based on the net carrying value of the lending as at Dec. 31, 2020. The exact impacts of disposal will depend on movements in the book between now and transfer, the timing of which remains uncertain," the company said.

The FTSE 100-listed bank also said around 280 employees are expected to transfer from Ulster Bank in the Republic of Ireland to AIB as part of the transaction.

Ulster Bank is a subsidiary of AIB.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

06-28-21 0245ET