PTSB ready to sell €6.9bn UK loan book

Permanent TSB is likely to sell its €6.9 billion UK residential mortgage book – comprising mostly buy-to-let loans – in tranches over a period beginning some time next year, according to sources with knowledge of the bank's thinking.

The sales will form part of the bank’s plan to get rid of a number of business units, including some commercial property loans, and the bank’s subprime business in the Republic, Springboard, which it closed to new business in 2008.

The bank plan to return to its core retail banking business in this jurisdiction is currently awaiting approval from European Union authorities but it has meanwhile begun to prepare for the selling of its UK loan book in discrete tranches.

Sustainable future
An earlier plan to sell the UK business, Capital Home Loans, in one sale, was stopped some time ago and the bank now intends to sell the UK assets in lots, or tranches.

Exactly how long it will take to sell the assets will depend on how matters unfold. Meanwhile the bank continues to wait for the decision of the Government and other authorities as to how exactly it will proceed towards its ultimate objective of putting in place a smaller bank that has a sustainable future in Irish retail banking.

PTSB was Ireland’s largest mortgage lender at the peak of the boom and as a result required a €4 billion bailout from the public purse. How the exchequer can best go about recouping some of that money while securing some future for the bank is currently a subject of discussion between troika officials and the Government.

A spokesman for the bank said it was continuing to await the outcome of the consideration of its restructuring plan and that it would not be appropriate to comment in the circumstances. A spokesman for the Department of Finance said it had no comment.

Earlier this month PTSB chief executive Jeremy Masding said he expected the "good bank" part of the financial institution to make a profit in 2014.

This was in response to negative comments in an International Monetary Fund’s mission report on Ireland. It said PTSB’s return to profitability was being “unduly prolonged” and a “timely solution” was needed to “ensure it can contribute to economic recovery” in Ireland.

The IMF noted that PTSB recorded an operating loss of €449 million in the first half of this year, which was “little improved”on the same period of 2012.

'Good bank'
PTSB has been broken into three parts. The "good bank" that Mr Masding has referred to is back lending in the market via online and its branch network. It has approved €170 million worth of mortgages so far this year, three times the level of 2012.

The future of an asset management unit that is working through its mortgage loan arrears, as well as that of other non-core elements, including the UK-based buy-to-let business Capital Home Loans, is being directed by the authorities.