PTSB likely to snub call to explain loan sale before Oireachtas committee

Irish lender to cite confidentiality agreements as reason why it can’t attend

Oireachtas finance committee chairman John McGuinness intends to call PTSB and other lenders to appear before the committee.  Photograph: Alan Betson/The Irish Times

Oireachtas finance committee chairman John McGuinness intends to call PTSB and other lenders to appear before the committee. Photograph: Alan Betson/The Irish Times

 

Permanent TSB is likely to decline any invitation to appear before the Oireachtas finance committee to discuss its sale of €3.7 billion worth of residential mortgage loans, most likely to a private equity fund.

The news comes as AIB has come under political pressure to reveal more details about its loan portfolio sale known as Project Redwood, which is thought to have a face value of €3.75 billion.

Fianna Fáil TD John McGuinness, who is chairman of the Oireachtas finance committee, has said he intends to call PTSB and other lenders to appear before the committee.

This follows concerns that PTSB, which is 75 per cent State-owned, may sell its €3.7 billion Project Glas portfolio to an unregulated, so-called vulture fund.

The portfolio comprises €2.7 billion of owner-occupier mortgages, and €1 billion of investor buy-to-lets. Some 18,000 properties are affected, including 14,000 private dwelling homes.

PTSB is set to decline any invitation by the committee to discuss the loan sale on the basis that it is engaged in a “live” transaction and is bound by various confidentiality agreements that restrict it from providing certain details on the loan books or indicating the identify of potential purchasers.

Separately, AIB is now under pressure to reveal more about its €3.75 billion Project Redwood portfolio, which has reportedly attracted initial bids from Goldman Sachs, Lone Star, Cerberus, and Pimco.

A spokesman for AIB said that while it continues to review all options in relation to reducing its level of impaired loans, “it has no plans” to outline details in relation to disposing of the portfolio at this stage due to commercial reasons.

“AIB has reduced its impaired loans to €7.3 billion from a peak of €29 billion over the past three years,” a spokesman said. “During this period some impaired portfolios were sold and case-by-case restructurings continued.”

Speaking to The Irish Times, Mr McGuinness said he and other members of the finance committee wanted to see representatives from PTSB appearing before it “as soon as possible”.

“In relation to bundles of properties from other lenders, if they consist of residential mortgages then those banks will also be asked to appear before the committee to give a detailed breakdown of the figures and to explain what actions they have taken to date with borrowers.

“We would be explaining the fear that individual borrowers have expressed to members of the committee about vulture funds.”