Permanent TSB rules out debt forgiveness for mortgage holders


There will be no debt forgiveness for holders of Permanent TSB mortgages, an Oireachtas committee was told yesterday by the bank’s public interest directors.

“There is terrible pain out there. [But] there will be no debt forgiveness. None,” said Ray MacSharry, who has been a PTSB director for four years.

“We will not be writing off or forgiving debt,” Mr MacSharry said, adding that the bank would do its “utmost” to ensure borrowers were able to retain their homes.

This led to a testy exchange with Sinn Féin finance spokesman Pearse Doherty, who questioned how this could be the case in light of the impending implementation of the Personal Insolvency Bill, which is designed to give people solutions to resolve their debt problems.

“Whenever the legislation is published, we will deal with that,” Mr MacSharry told the committee on finance, public expenditure and reform.


Margaret Hayes, the other PTSB public interest director at yesterday’s meeting, then clarified the position by acknowledging that write-downs might be required in some cases at some point in the future.

“We accept that at the end of it, it probably won’t be possible for everyone to remain in their home,” she said.

She added that this would be dealt with on a case-by-case basis.

The directors said 20 per cent of PTSB’s residential mortgages are in arrears while one-third of residential investment property loans are “in distress”.

PTSB, which is 99.2 per cent owned by the State, has 174,000 mortgages on its books.

Mr MacSharry said PTSB was employing 300 staff to deal with arrears.

Arrears strategy

Ms Hayes said PTSB’s new chief executive, Jeremy Masding, had made it a priority for the bank to “work out a strategy for dealing with arrears”.

In 2011 PTSB received €4 billion in capital from the exchequer to meet capital ratios set down by the Central Bank.

It subsequently sold Irish Life to the State for €1.3 billion, which led to the break-up of the former Irish Life Permanent financial group.

“The Minister intends to sell that business [Irish Life] on to the private sector and I believe he will recoup that amount in full at that time,” Mr MacSharry said.

The directors said PTSB’s standard variable interest rate for mortgages has come down from 5.19 per cent to 4.34 per cent. It has issued just “€70 million-plus” in mortgages this year but Mr MacSharry said it would “unveil significant lending targets” in each of its key product lines for 2013.