Bank to increase lending five-fold

Permanent TSB is planning to increase the amount of money it lends for mortgages, personal loans and credit cards five-fold in the coming year.

Last year the bank lent less than €90m but it has now factored lending of €450m into its plans for the current year.

The bank’s new-found largesse is based on a growth in deposits and progress on restructuring how it operates, including the closure of many branches.

Its group chief executive Jeremy Masding said that the bank’s ability to finance new lending followed from its success in doubling the size of its deposit book to approximately €12bn and making significant progress on its restructuring plans over the last year.

“We will continue to increase our provisions linked to historic lending but they are in line with the scenario laid out in our restructuring plan and we’re making great progress on implementing that plan,” he said.

“We’ve reduced our cost base. We’ve established the Asset Management Unit to manage problem loans. The new management team is now in place and the strategy has been agreed; all this means that we have a strong foundation from which to build out the new Permanent TSB bank and recommence lending to Irish customers,” he added.

The bank plans to offer mortgages of up to 90% loan to value ratio at rates of 3.69%. It will also offer personal loans, including car loans, from 9.1% APR for both new and second-hand cars, and for credit card customers 0% finance on transferring balances for six months.

The bank has earmarked €350m for the mortgage market, €100m for personal lending and car finance, as well as a further €5m in new credit card finance.

Mr Masding said that the bank wanted to re-establish itself as the third pillar bank in Ireland by focusing on lending.

“Banks make money by lending so it’s imperative that we return to sustainable, sensible and profitable lending as soon as practicable and we are committed to doing so this year. Our key aims are to re-establish Permanent TSB as a significant third player in the Irish banking market and to return to profitability in 2016,” he said.