PTSB below limit for mortgage deposit exemptions

Permanent TSB did not use the full 15 per cent exemption available to it under the Central Bank of Ireland's rules on loan-to-value (LTV) ratios for house lending last year.

This has emerged in an answer from Minister for Finance Michael Noonan to a parliamentary question from Sinn Féin's Pearse Doherty.

PTSB said about 11 per cent of its €459 million in new mortgages last year were issued as LTV exemptions under the Central Bank’s macroprudential rules.

Mr Doherty said the PTSB figure has cast doubt on the narrative from the banks about the impact of the new rules on their lending.

“We had been led to believe that it was the Central Bank’s rules that were preventing people, especially young families, from accessing mortgage credit,” Mr Doherty said.

“The PTSB figure raises two possibilities, either they are not offering as much credit as they could, or the impact of the rules is not as severe as some believe.

“Either way, the PTSB figure changes the narrative. If it is reflective of the other banks’ approach then we are in a very different situation than has been put abroad by some commentators.

“It is imperative now that the other banks release their own figures so the true picture can be seen. Until they do, we are operating without vital evidence as to the real impact of these rules.”

Mr Doherty also sought figures for AIB and Bank of Ireland but neither would release them.

AIB said it approved €2 billion of mortgages in Ireland last year and had drawdowns of €1.7billion, adding it had complied with the Central Bank’s LTV rules.

Bank of Ireland said only that its new mortgage lending volumes amounted to €1.4 billion in the Republic.

The Central Bank is conducting a review of the rules, with the outcome to be announced in November.

Mr Doherty plans to write to the Central Bank to request that the other banks publish their information in advance of the review so “informed commentary and submissions” can be made to the regulator.

“The banks cannot be allowed to get away with hiding behind rules they are not fully utilising to lend to potential homeowners,” he said.

PTSB said it was happy it had operated withing the Central Bank’s guidelines.

“The 15 per cent figure is a limit not a target so it would be a surprise if the actual figure recorded for a period was actually nudging at that 15 per cent limit.”