Permanent TSB urged 1,000 customers in arrears to sell
Bank urged ‘assisted voluntary sale’ on customers in mortgage arrears
About 9,000 Permanent TSB customers have been placed on long-term solutions, including 3,500 on split mortgages. This involves up to 45 per cent of the current value of the home being warehoused interest free for repayment at a later date. The balance continues to be repaid at the current interest rate.
Permanent TSB, which is 99.2 per cent owned by the State, told 1,000 of its mortgage arrears customers in July and August that the best solution to their debt problem would be an “assisted voluntary sale” of their property.
This emerged yesterday at a presentation given by PTSB executives to a meeting of the joint Oireachtas committee on finance.
The presentation showed that by September 3rd, 2,000 of its customers had been offered the choice of an assisted voluntary sale as the solution to their arrears with the bank. This was exactly double the total at the end of June.
This was from a total of 21,600 solutions that the bank has offered to customers in arrears.
The quickening in the pace of assisted voluntary sales was criticised by a number of committee members. Fine Gael’s Kieran O’Donnell claimed that they were effectively “repossessions” by another name and questioned why so many were issued over the two-month period.
Shane O’Sullivan, who leads PTSB’s asset management unit, said they were deemed as the best solution for the customers, many of whom had been on temporary treatments of one sort or another for some time.
“Continuing the short-term treatment is not a sustainable answer,” Mr O’Sullivan said.
PTSB also told committee members that it has also initiated legal proceedings against 1,600 of its mortgage account holders and has written off €11 million in bad home loans.
Of the other solutions provided, 200 included customers switching from a mortgage to a rental arrangement, while 400 account holders were told they could afford their repayments.
About 9,000 customers have been placed on long-term solutions, including 3,500 on split mortgages. This involves up to 45 per cent of the current value of the home being warehoused interest free for repayment at a later date. The balance continues to be repaid at the current interest rate.
PTSB has 10,000 customers on short-term arrangements, which include a moratorium on repayments and interest-only arrangements. PTSB is the smallest of the banks in which the State has a stake and has been split into a good bank and bad bank.
It recorded an underlying loss of €449 million in the first half of this year.
Fianna Fáil’s finance spokesman Michael McGrath asked chief executive Jeremy Masding if the bank had a viable future.
“I am confident that over time we will build a business model that is attractive to investors,” Mr Masding replied.
Mr McGrath also asked why the bank had decided to wind up its defined benefit pension scheme and what financial impact it would have on staff.
Mr Masding said the scheme’s trustees had advised it that the funding needed this year would have needed to treble to €55 million.
“That’s not a test I can pass,” he explained, adding that the deficit in the scheme was €311 million. He said the trustees would determine what this will mean in financial terms for the scheme members.