IT’S BEGINNING TO look a lot like Ireland will be getting its bailout funds back from Permanent TSB (PTSB), heretofore the banking black sheep of the Irish recovery.
PTSB has had more than its fair share of negative headlines in recent times. It was the only Irish bank to fail the ECB’s stress tests last year, it has (until now) refused to lower its variable mortgage rates, and recently it came to light that the bank has been refusing twice as many insolvency applications as the other pillar lending institutions.
So the idea that the state may actually recoup, not just some, but all of its bailout investment is particularly welcome news.
Speaking to RTE news, finance minister Michael Noonan said he’s now confident the state’s bailout injection into the fallen bank will be recovered “in due course”.
The move to the main markets on both the Irish Stock Exchange and the London Stock Exchange is a positive for the Bank and allows the State additional flexibility and liquidity to manage its sell down of PTSB in the future.
The news comes after the bank raised €525 million yesterday through the sale of shares and the actioning of a debt instrument.
€411 million of the funds raised will be used to pay back the taxpayer while the remainder will be used to shore up the bank’s capital base which saw it coming up short on the ECB’s stress tests last October.
This, along with the sale of €98 million of the government’s own shares in the bank, will see Ireland’s stake in PTSB fall from 99.2% to 75%, or €1.5 billion.
Most of the investors behind the funds raised are overseas, indicating a heightened level of interest from abroad in the resurrected Irish banks.
The state injected €2.7 billion into the lender to keep it afloat during the financial crisis.
Meanwhile, PTSB chief executive Jeremy Masding told the Irish Times that based on “what I’ve seen in the past couple of months” recouping the state’s bailout costs is now “a much more realistic objective” than when he joined the bank in 2012.
Masding is even happy to put a timeline on the recovery, with the bank expected to return to full private ownership with the taxpayer’s €2.7 billion paid back in full towards the end of 2017 or mid-2018.
Returning the bank to private ownership is my goal and, based on the business plan presented to investors, that timeframe is a realistic objective.
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