Why Irish banks are now looking beyond vulture funds on problem loans

Lenders will look increasingly to pull whatever levers they can to boost returns

Permanent TSB’s Jeremy Masding, group chief executive, at the press conference held by Permanent TSB on the Mortgage Redress Programme. Photograph: Eric Luke/The Irish Times

Permanent TSB’s Jeremy Masding, group chief executive, at the press conference held by Permanent TSB on the Mortgage Redress Programme. Photograph: Eric Luke/The Irish Times

Having gotten rid of €3.4 billion of distressed loans from its balance sheet over the past 18 months, Permanent TSB’s (PTSB) soon-to-depart chief executive Jeremy Masding has turned his focus to a bunch of loans that threaten to give problems in the future.

The State’s former top mortgage lender highlighted this week, as it reported its full-year results, that 17 per cent of its performing mortgage book – equating to about €2.6 billion – is made up of loans doled out during the boom years where borrowers only have to meet interest payments until the loan period comes to an end. At that point, the principal falls due at once.

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