Permanent TSB seeks tenders for loan books sale

Permanent TSB has in recent days invited corporate advisers to pitch to sell two of its loan books with a face value of €2.5 billion. It has invited tenders from accounting firms and corporate advisers to sell its €2.1 billion Irish commercial real estate (CRE) book and its €465 million Springboard Mortgages subprime portfolio.

In March, State-owned Permanent TSB said its strategy was to sell the two businesses either this year or in early 2015.

The decision to appoint advisers signals it has accelerated its sale process as international appetite for Irish loan books remains strong.

Just 31 per cent of the CRE book is performing and the bank has taken a provision of €900 million on these loans. Certus, a loan-outsourcing specialist, manages this book.

Springboard compromises 2,200 mortgages which are generally performing poorly. Permanent TSB effectively shut this business down in terms of new lending some years ago and it has been hoping to sell it.

The business was originally a joint venture between Irish Life & Permanent and US investment bank Merrill Lynch to sell mortgages in 2007 to what it called "near-prime" customers – or people without long credit histories.

PTSB was earlier this year expected to sell its UK Capital Home Loans and Isle of Man businesses, but the improved market for Irish assets internationally prompted it to sell the two Irish loan books first..

In March, it reported reduced after-tax losses of €261 million in 2013, compared with a deficit of €996 million the previous year. However, this result was improved by a €329 million gain from the winding-up of its defined-benefit pension scheme. It also benefited from a €407 million credit from deferred tax assets.

Overall its operating loss before exceptional items was unchanged at €977 million. The long-term future for Permanent TSB remains unclear. There is speculation Edinburgh-based RBS might consider merging part of Ulster Bank with it in a major restructuring.

In April, mortgage holders with Permanent TSB were allowed by the bank move home but still hang on to the bulk of their tracker rate.