Permanent TSB seeks investment of €200m

Chief executive of Permanent TSB Jeremy Masding will tell the Oireachtas finance committee today there has been "real interest" in the PTSB story from investor roadshows in London, New York and Boston since publication of stress test results late last month.

The European Central Bank’s tests identified a capital shortfall at PTSB of €855 million based on its 2013 accounts. PTSB said more than 80 per cent of this figure has been accounted for and it is engaged in so-called non-deal roadshows to drum up interest from external sources in providing about €200 million in return for an equity stake.

Mr Masding will tell the committee there has been significant interest in PTSB’s profitable growth potential “although much remains to be done”. PTSB has nine months to raise the funding and submitted its capital plan last week to the ECB.

Stress test results

In a lengthy questionnaire, the committee has also been told the stress test results will have no impact “positive or negative” on PTSB’s lending facilities or daily operations.

Mr Masding will also tell the committee PTSB is targeting a return on equity of above 10 per cent for the core bank by 2018, and it continues to make progress on mortgage arrears. Arrears of over 90 days at the end of August were down 21 per cent on the 2013 year end.

PTSB answered 42 questions submitted by committee members. The bank said there has been a slow take-up in its tracker portability mortgage. This allows customers to move house but keep their tracker with the addition of 1 per cent on their rate.

The product has been available since mid-2014 and so far PTSB has completed 97 mortgages totalling €15.4 million.

PTSB has 56,900 customers on tracker mortgages, which represents 40 per cent of its book. In value terms, the tracker book is worth circa €15 billion or €13 billion net of provisions. Its non-tracker book is valued at €7.5 billion.

Tracker mortgages

As to whether the bank had plans to sell its tracker mortgages to the ECB, PTSB said it had “no current plans”.

The bank said it has “no immediate plans” to reduce its variable mortgage interest rates. It told the committee its average rate for new mortgages for owner-occupied homes was 4.3 per cent.

The bank has executed 17 orders for repossession of owner-occupied properties this year and six for buy-to-let units. The total was 57 across both categories in 2013 and 29 the previous year.

In terms of remuneration, 148 employees earn €100,000-€200,000. Another 20 earn above €200,000, with Mr Masding being the highest earner at €457,000.