Some 2,000 PTSB borrowers in arrears to sell property
Bank says 26 per cent of 25,000 in arrears have been ’offered treatments’
Permanent TSB chief executive Jeremy Masding and Shane O’Sullivan (right), Managing Director, Asset Management Uniit, on their way into today’s Oireachtas Finance Committee hearing. Photograph: Frank Miller / THE IRISH TIMES
Screen grab of today’s committee hearings.
Jeremny Masding, PTSB chief executive, addressing the committee.
Shane O’Sullivan, managing director of the PTSB asset management unit, addressing the committee
The bank’s “assisted voluntary sales” or closure solution meant the bank worked with the borrower to sell the property. This figure “doubled” to “roughly 2,000 from June to September, Shane O’Sullivan, head of the bank’s asset management unit said
Permanent TSB has “offered” solutions to 26 per cent of mortgage holders in arrears, ahead of a target of 20 per cent set by the Central Bank.
Document: PTSB presentation
However, a quarter of those treatments are legal cases taken against customers in arrears. The bank has just over 25,000 customers in arrears greater than 90 days, Shane O’Sullivan, head of the bank’s asset management unit said.
Mr O’Sullivan said it had “offered treatments” to 6,650 borrowers in the six months up to the end of June. This includes 1,500 short-term treatments (such as a moratorium or interest only mortgage), 2,750 long-term solutions (such as split mortgage or term extensions), 800 assisted voluntary sales and 1,600 legal cases in which a solicitor has been asked to secure a date.
The bank presented more recent figures up to September 3rd which included borrowers in arrears of less than 90 days and showed assisted voluntary sales of some 2,000. In “assisted voluntary sale” or “closure” the bank works with the borrower to sell the property, Mr O’Sullivan said.
This is when “despite everyting” there is “no affordability or sustanaiblity evident” and at the end of the term there is “no way” the borrower could pay the capital, he said.
Fine Gael TD Kieran O’Donnell questioned the escalation in assisted voluntary sales at the bank in the past two months which has more than doubled from 800 in late June to 2000 in early September and suggested that borrowers were not being given alternatives. “It appears to be escalating at a drastic level,” he said.
PTSB chief executive Jeremy Masding replied that the bank had been “playing catch-up” and had “no arrears management capability” when he started.
The bank is doing “write offs” for mortgages “at the end of a process” and it was some €11m so far this year, Mr Masding said.
Permanent TSB said it has € 1.7bn set aside in a stock of provisions for possible debt write downs of a € 17.7bn loan book (almost 10 per cent).
“It’s not for debt write downs. It’s a stock of provisions which I may or may not use. I will do everything I can not to use that stock of provisions,” Mr Masding said. In buy-to-let this was € 1.5bn or € 6.5bn (23 per cent). Sixty per cent of the total mortgage the book at the bank is tracker mortgages, Mr Masding said.
When legal cases are removed the bank still meets its 20 per cent Central Bank target, Mr Masding said. Mr O’Sullivan said many of the 1,600 legal cases started long ago and some had been held up because of the Dunne judgement. He would not estimate how many of these cases would end in repossession.
Permanent TSB said up to September 3rd it had offered 3,500 split mortgages, up from 1,500 at the end of June. Most of these mortgages see 30 and 45 per cent of the value of the property warehoused with no interest, Mr O’Sullivan said. These split mortgages are reviewed every three years to see if the customer’s circumstances have changed, Mr Masding said.