Seen & Heard: Government support for plan to split Permanent TSB into good and bad banks

Reported plan would see good bank with assets of €22 billion

The strategy of splitting Permanent TSB into a good bank/bad bank is getting Government support, according to the Sunday Times.

The paper reports that Minister for Finance Michael Noonan has given a firm commitment to underwrite the legal separation of the bank into three units by a date in 2016.

The reported plan would see a good bank with assets of €22 billion. The other units would be the group’s British buy-to-let business, CHL, and an asset management unit, or bad bank. This final unit would comprise €6.7 billion in non-performing loans and unprofitable tracker mortgages. The Government would take on the toxic or non-performing units, possibly managed through the NTMA or Nama.

NTR has gone back to the Revenue Commissioners for a second time to seek a better deal for hundreds of small shareholders who fear a hefty tax bill when the utility group completes a €100 million share buy-back, the Sunday Independent reports.

The Sunday Business Post reports that this week shareholders will be asked to approve the buyback, which involves a total capital reduction of €180 million in the company. The distribution will also require High Court approval, the paper reports.

The consultation with the Revenue follows investor concern about the potential tax treatment of the deal. It is unclear whether the distribution will attract capital gains tax or income tax.

Two-thirds of borrowers who took out mortgages between 2005 and 2012 are now in negative equity, owing more than their houses are worth, according to a working paper reported on in the Sunday Times.

The paper, by David Duffy of the Economic and Social Research Institute and Niall O'Hanlon of the Central Statistics Office, estimates that a total of 214,000 mortgages in Ireland are in negative equity, representing 37 per cent of all households with a mortgage. That is more severe than in other countries that experienced a recent property crash. The IMF reports that the proportion of mortgages in negative equity in the US at the end of 2011 was 22.8 per cent, and in the UK at the start of last year it was 8 per cent.

The McCambridge family has bought back control of the bread business it founded in 1945, taking out the 60 per cent stake held by Barclays bank since 2009, according to the Sunday Times.

The firm, which has one-third of the market and also comprises Gill's Bakery and Cookes Bakery, completed a deal last week. It has been bought by individual McCambridge family members and a Cayman Islands-registered family vehicle.

Regeneron Pharmaceuticals has confirmed via an SEC filing that it intends to invest hundreds of millions in Limerick by taking over Dell's former manufacturing facility. The Sunday Independent reports that if the investment gets final agreement it could mean hundreds of jobs for the mid-west.