Private homes make up over 75% of PTSB’s €3.7bn Project Glas portfolio
Bank says that, on average, loans are three and a half years in arrears
PTSB said many of these loans are owned by customers who have not engaged with the banks, whose mortgages are unsustainable, or who have been unable to meet terms
Private homes account for more than three-quarters of Project Glas, the controversial €3.7billion property portfolio being put up for sale by Permanent TSB.
The bank said many of the affected loans were with customers who had not engaged with PTSB in a number of years.
“Some account holders have not engaged with the bank for over seven years and, on average, the loans are over 3.5 years in arrears,” PTSB said in a statement. “Many have made no payments at all for years.”
The decision to sell off the non-performing loans has come under fire over concerns that they could be sold to so-called “vulture funds”, many of which are not regulated in the Republic.
The bank said on Tuesday that 14,000 of the 18,000 properties included in Project Glas are private homes. It said the total face value of all loans included in Project Glas is approximately €3.7 billion, of which about €2.7 billion relates to private residences.
PTSB said that €2 billion of these loans are owned by customers who have not engaged with the banks, whose mortgages are unsustainable, or who have been unable to meet terms.
The bank added that some loans are also currently subject to agreed forbearance measures, but remain categorised as non-performing loans.
“It is important to note that, in preparing this loan book for sale, the bank did exclude a significant number of customers who will be resolved through other means,” it said.
The overall size of the planned sales is equivalent to almost a fifth of the bank’s current total loan book. About €1 billion in non-performing loans included in Project Glas relate to investment properties.
PTSB last week announced the proposed sale of the portfolio. It said it is not alone among euro zone banks in having to deal with non-performing loans.
“The bank believes that now is an appropriate time to implement measures that are considered part of normal banking practices in the UK and other European countries,” it said.
It added that a failure to deal with non-performing loans impacted on a new generation of home buyers who “need to be able to engage with healthy, competitive banks who can finance and purchase homes”.
“The banks themselves need to ensure they are strong, profitable and capable of withstanding potential future shocks,” the bank concluded.