By Pádraig Hoare
Permanent TSB’s current level of non-performing loans is “really, really dangerous for Ireland” and could cost the taxpayer significantly if there is a shock to the economy, the bank’s chief has warned.
Jeremy Masding told TDs and senators of the Oireachtas Finance Committee that the bank, which is 75%-owned by the State, “ran out of options” as he defended the sale of more than 10,000 mortgages to a so-called vulture fund.
Project Glas, which was agreed in July, will see €2.1bn loans made up of owner-occupied homes and buy-to-lets transferred to Start Mortgages, an affiliate of US private equity fund Lone Star, in November.
Permanent TSB came in for trenchant criticism from committee members, who accused the bank’s bosses of selling family homes even where customers were fully compliant in keeping up repayments.
Mr Masding staunchly defended the bank’s position, saying the mortgages would retain the same protections from the Central Bank once the sale went through.
The sale will reduce Permanent TSB’s NPL ratio from 25% to 16% — a figure that was still much too high compared to the European average of 5%.
“Our NPL ratio is really, really dangerous...we have run out of options,” he told the committee.