PTSB directors buy first shares since financial crisis

Shares in the bank have fallen by 75% since sale of a 25% stake on stock market in 2015

PTSB CEO Jeremy Masding appealed for time to give his best shot at increasing the earnings and value of  bailed-out bank

PTSB CEO Jeremy Masding appealed for time to give his best shot at increasing the earnings and value of bailed-out bank

 

Permanent TSB chairman Robert Elliott and chief executive Jeremy Masding have become the last of the senior directors of bailed-out banks to buy stock in their institution since the onset of the financial crisis.

PTSB said on Monday that Mr Elliott and Mr Masding bought about €36,260 of shares between them on Friday, a day after the group reported first-half results. The banks shares have fallen by 75 per cent since the government and bank sold a combined 25 per cent stake to stock market investors four years’ ago

Mr Elliott, chairman for the past two years, bought €19,800 worth of shares and Mr Masding, who has led PTSB since 2012, spent the equivalent of €16,460 buying stock in sterling, according to the statement.

Senior directors had a policy of not buying shares in recent years as PTSB went through deep restructuring, including the sales of its UK loan book and €3.4 billion of non-performing Irish mortgages. As such, they would have been privy to share-price sensitive information during much of the period.

“Under internal governance protocols, there was effectively no ‘window’ during which it would have been deemed appropriate to give permission to a director seeking to acquire shares,” a spokesman for the bank said.

However, as the bank is “returning to a more normalised and stable environment” directors are currently free to buy shares, he said.

The stock is currently trading at less than 30 per cent of the value that PTSB places on its assets, compared to a European average of 75 per cent. It is expected that other PTSB directors will buy stock in the current period.

Incentive

While senior directors in Bank of Ireland and AIB have bought shares in institutions in recent years, they have often been criticised by shareholders for having small holdings, or not enough “skin in the game”. Low executive director holdings also reflect the fact that long-term incentive plans have essentially been banned across rescued Irish banks for the past decade.

Last Thursday, Mr Masding appealed for time to give his best shot at increasing the earnings and value of the bailed-out bank, before facing possible talks with his board and the Government about taking part in an industry merger.

The bank, which required a €4 billion bailout, has been subject of tie-up speculation for the past decade.

“I would now like to give it my best shot with my [executive committee] to see what is the best we can do,” Mr Masding told reporters.

“The sceptics would say: ‘Even doing your best might not get there.’ That might be true. But what I do know is that we’ve not maxed out yet.”