Permanent TSB has agreed to buy the deposit business of Northern Rock Ireland, the company announced today.

The retail banking arm of Irish Life & Permanent is to buy €650m of deposits from Northern Rock’s Irish business which currently has 17,000 customers.

This is the second major acquisition of deposits by Permanent TSB bank in the past six months. The bank successfully acquired €3.6bn in deposits from Irish Nationwide Building Society in February.

“This is a very significant transaction for Permanent TSB bank and is an important strategic step for the bank as deposits are critical for all Irish banks going forward,” David Guinane, chief executive of Permanent TSB said today.

Permanent TSB said there would be no impact on customer accounts and all normal customer channels would remain available.

The sale is expected to complete by the end of 2011, subject to approval from the Minister for Finance.