Permanent TSB to raise €525m to bolster balance sheet

Permanent TSB plans to raise €525m of capital to bolster its balance sheet after failing European stress tests last year.

The mortgage lender will seek €400m of equity to repay and replace the same amount of contingent convertible notes that the State bought in 2011 as part of a bailout, it said in a statement yesterday. It also plans to raise €125m of additional Tier 1 capital.

The lender, which is 99% state-owned after receiving a net €2.7bn bailout in 2011, said its pretax loss narrowed to €48m last year from €668m in 2013.