PERMANENT TSB has welcomed the government and Troika’s approval for its restructuring plan which will see its loan portfolio split and the creation of a separate Asset Management Unit.
Under the plan, which PTSB says it will submit to the European Commission by the end of June, the bank’s loan book will be divided into performing and non-performing loans.
The bank says it will ‘carve out’ a viable bank from its current business: “The plan will create a viable, customer focused and competitive retail bank capable of resuming normal lending into the Irish market.”
The group’s UK operation will continue as a stand-along unit within the overall group with a loan book of around €7.1 billion. PTSB’s loan book will be around €14.2 billion, and the new asset management wing AMU will have a book of around €12.5 billion.
‘Viable bank’
The bank’s chief executive Jeremy Masding said in a statement that it is “clear that within the current business, there is the potential to develop a customer focused, profitable and competitive player in the Irish market.”
Speaking about the latest Troika review of Ireland’s bailout agreement today, Finance Minister Michael Noonan said that PTSB has the makings of a sound, profitable, retail bank and it would be a tragedy if it is not made profitable again.
“The objective of this plan is to create a viable retail bank focused on lending into the Irish economy,” he said.
Fianna Fáil’s finance spokesperson Micheal McGrath TD said that the bank’s restructuring provides an opportunity to introduce a reduction in the interest rate the bank is charging on its standard variable rate mortgages.
“The penal interest rate being charged is crippling thousands of ordinary Permanent TSB customers around the country, who are effectively trapped because they can’t transfer their mortgage to other banks,” he said today.
“If Permanent TSB is to become a viable, retail bank meeting the needs of the economy, it will need the goodwill of its existing customers and of wider society. It is in the bank’s interest to address the anomaly of its standard variable rate and to give some much needed relief to hard pressed families.”
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