PTSB to write off debt for select mortgage arrears customers

Finance Correspondent

Permanent TSB is working with 500 mortgage arrears customers on "assisted" sales of their properties with a view to writing off up to 80 per cent of the residual debt that will be owed to the bank when the disposal is concluded. This emerged yesterday from the bank's appearance in front of the Oireachtas committee on finance.

Shane O’Sullivan, who heads PTSB’s arrears unit, said such deals are considered for customers who have no realistic prospect of repaying their mortgage and assist the bank in securing the “best price” for their property. However, the customers will still have to to repay 20 per cent or more of the residual debt.

“If we work together to sell the property for the best price possible and there is a shortfall [in the price achieved versus what’s owed on the mortgage], if you are prepared to commit to repaying 20-plus per cent of that shortfall, we’ll commit to writing off up to 80 per cent of the remainder,” Mr O’Sullivan told the committee. “We’ll do that over time; for some people that could be months, for other people that could be years.”

Mr O’Sullivan said while such write-offs will be considered, “unilateral forgiveness of debt upfront” would not be offered to mortgage customers in arrears.

On why the entire residual debt is not written off, given the trauma involved for a customer, Mr O'Sullivan said PTSB believes the repayment of 20 per cent-plus was "right". "We believe there's a balance of fairness to be struck," he told committee chairman Liam Twomey.

Earlier, PTSB chief executive Jeremy Masding told the committee he expects the bank to return to profit at the "back end of 2016". Replying to a question from Fianna Fáil finance spokesman Michael McGrath, Mr Masding said it could be "earlier if the economy keeps growing at the rate it is".

Mr Masding attended the meeting having earlier in the day arrived from the US where he conducted a "pre-deal" roadshow with investors in advance of seeking to raise €200 million to help close the capital gap identified in stress tests results published on October 26th by the European Central Bank.

The Irish Times has learned PTSB met 45 investors on its roadshows in London, New York and Boston in recent days.