PTSB confirms higher provision for bad loans after review

Permanent TSB chief executive Jeremy Masding has confirmed to The Irish Times that the bank is taking extra provisions for bad loans on foot of the Central Bank of Ireland's recent balance-sheet assessments and asset-quality reviews.

These assessments tested the strength of the balance sheets of AIB, Bank of Ireland and PTSB, and were a requirement of Ireland's exit from the EU-IMF bailout programme.

“It was a rigorous process,” Mr Masding said. “There will be extra provisions put into the balance sheet at the year-end, but the phrase I’ve used both with my team, my board and, indeed, with the Central Bank is I think it’s prudence on prudence.”

Mr Masding declined to quantify the level of provision sought, saying the figure would be included in its 2013 full-year results, to be published in March.

It has taken about €3 billion in provisions already since the financial crash, and got a net €2.7 billion in State aid.

He said the figure was “absolutely within the bounds of reasonableness of what one would accept from your regulator”.

Bank of Ireland was the only institution to provide details last week of the provisions sought by the Central Bank. The figure was €1.3 billion, which the bank is disputing.

Declined to comment
AIB declined to comment yesterday on whether it would have to book the extra provisions.

PTSB’s statement on December 2nd in relation to the assessments said its capital position was “above minimum regulatory requirements” but gave no details on provisioning.

Mr Masding said PTSB "continues to deliver" on the restructuring plan submitted to the European Commission this year.

This involves a good bank, which is back lending in Ireland, an asset-management arm to deal with loan arrears here, and a UK loan book in run-down.

The plan is for the good bank to reach pre-provision profitability some time next year and the business as a whole to return to the black in 2017. “We’re on track,” Mr Masding said.

He expects “north of €250 million” worth of mortgages to have been approved or drawn down this year.

He rejected criticism of its decision to offer reduced interest rates on buy-to-let investment mortgages.