Investors vent anger at PTSB variable interest rate

The yellow ambulance parked opposite the door hinted there might be some blood spilt at Permanent TSB’s annual general meeting yesterday in the Ballsbridge Hotel.

The crowd was smaller than in recent years but chairman Alan Cook still took some heavy blows from investors angry at what they consider to be rip-off variable mortgage rates and at the legality of the State's 99.2 per cent shareholding in the bank, which left them out of pocket four years ago.

4.5% rate

Consumer advocate

Brendan Burgess

questioned why PTSB’s standard variable rate (SVR) is 4.5 per cent at a time when the European Central Bank’s main rate is a mere 0.05 per cent and the average mortgage rate for the euro zone was just 2.09 per cent.

It was an “outrageous margin”, he told Cook, who responded by reminding shareholders that its cost of capital was high due to historical lending issues, including its loss-making tracker book.

And the bank as a whole is still loss-making. While the group always monitors the market, chief executive Jeremy Masding indicated there would be no movement on the interest rate until after its €525 million capital-raising plan was done and dusted in July.

Sara Hogan and Conor McNally each expressed their anger at the high SVR being charged by the bank.

Former non-executive director Piotr Skoczylas was toublemaker-in-chief, alongside a posse of disgruntled shareholders who have taken their cause to the European Court of Justice in relation to the manner in which the State took control of the bank in 2011. Time and again they accused Cook and his board of flouting the law by the manner in which they are approaching their €525 million capital-raising and the terms of the four special resolutions put forward to facilitate this plan. "Follow the law," Skoczylas and others shouted from the floor.

One elderly woman, who had risen at 5am and driven 120 miles to attend the meeting, said PTSB's shareholders had been "fleeced" in 2011 by the State when it recapitalised the then Irish Life & Permanent group. Irish Life was subsequently sold for €1.3 billion and "left us with the junk".

"All I can say is Permanent TSB, my arse," she roared in a Father Ted-like moment.

More than 19 million votes were cast against all of the motions but the results were already decided given the State’s shareholding.

Taxpayers’ bailout

Cook and Masding will press ahead with their capital-raising plan. Some €125 million will be used to fill the capital hole identified by the ECB’s stress tests last October, with €400 million used to repurchase the State’s contingent capital notes in the first return to taxpayers of their €2.7 billion bailout .

Skoczylas might yet have the last say if the ECJ agrees with his group’s legal argument. Yesterday, Cook gave off a confident if slightly jaded air, after two hot-and-heavy hours.

A slug of oxygen from the paramedics outside mightn’t have gone amiss.