PTSB to sell €76m worth of non-performing loans to Mars Capital

All the loans are classed as non-performing, PTSB said, with around 55% related to tracker loans.

Permanent TSB has agreed to sell a tranche of soured loans to a unit of Mars Capital.

The transaction will see the lender offload the loans, worth €76m in gross balance sheet value, to Mars as part of a consortium arrangement with Mars Capital and “certain funds managed or sub-advised by Apollo," the bank said on Friday.

The deal will see Mars take control of about 490 loans secured against 455 properties, which are linked to 410 borrowers. 

All the loans are classed as non-performing, PTSB said, with around 55% related to tracker loans. Around 35% are on variable interest rates, with the remaining 10% being fixed rates the lender confirmed.

This is the latest loan sale by PTSB, and comes days after the bank formally put itself up for sale. 

PTSB said the sale of non-performing loans is not related to the sale of the lender itself.

The bank said customers whose loans are included in this transaction will continue to have the same regulatory protections under the Consumer Protection Code (CPC) and the Code of Conduct on Mortgage Arrears (CCMA) after the sale.

The loans within the Portfolio will continue to be serviced by PTSB for a period of up to six months. 

While the loans are being serviced by PTSB, customers will continue to have the right to avail of PTSB’s mortgage products, interest rates and services subject to applicability and/or terms and conditions. 

At the end of this period, legal title and loan account servicing will transfer to Mars Capital, which is regulated by the Central Bank of Ireland.

"This transaction will increase the Bank’s Total Capital Ratio by around 10 basis points once fully completed," PTSB said on Friday. 

"This transaction also alleviates the negative capital impact of regulatory calendar provisioning associated with this Portfolio, which based on existing risk weights and capital requirements is equivalent €500m of new lending."

PTSB said it does not currently envisage any further loan sales in the near future.

The lender said will write to customers impacted by this deal “in the coming days,” adding that customers will retain any terms and conditions already in place.