DUBLIN, Jan 29 (Reuters) - Permanent tsb (PTSB) has retained investment bank Morgan Stanley to advise on a potential bid for Ulster Bank’s Irish small-to medium-sized business loan portfolio if its larger rival decides to exit the market, the Irish Times reported. Ulster Bank, the Irish unit of Britain’s NatWest Group , is conducting a strategic review of its operations in Ireland. Citing unidentified sources, the Irish Times said it was not clear how much of Ulster’s SME franchise PTSB would consider bidding for. Analysts at Davy Stockbrokers said Ulster Bank’s underlying SME portfolio amounted to about 2- 2.5 billion euros. Mortgage lender PTSB’s SME book stood at just 47 million euros at the end of 2019. However, Chief Executive Eamonn Crowley said the bank wanted to increase its presence in the business lending market. A spokeswoman for PTSB, which is 75% owned by the Irish state, declined to comment on the report. In a note, the Davy analysts said an acquisition would have a transformative impact on the earnings profile at PTSB, the smallest of Ireland’s three domestically-owned banks, and ease concerns about an Ulster Bank Ireland exit from the market from a competition perspective. (Reporting by Padraic Halpin. Editing by Mark Potter)