PTSB prioritises restructuring plan

Permanent TSB is set to survive and will become a more competitive bank, Irish Life & Permanent (IL&P) management said at the group’s annual general meeting yesterday.

The troika ultimately has the final call on Permanent TSB’s future, but the bank’s management held talks with representatives of Ireland’s bailout partners on their last visit here in April.

At yesterday’s meeting, IL&P chairman Alan Cook said those talks had been intensive but very positive and arrived at a skeleton plan that would see Permanent TSB finally split from the rest of Irish Life and progress as a smaller retail bank in Ireland, with an asset management unit and a buy-to-let mortgage book in Britain.

However, the bank’s top priority now is to flesh out its restructuring submission ahead of lodging it with the European Commission next month.

“We have looked at whether the bank can be fixed and our conclusion is yes it can. We’re trying to take this bank back to where it was, but it’s not an overnight job,” Mr Cook told shareholders.

“If we can’t make the right proposition to attract customers, then all the plans in the world won’t matter. The bank has to be competitive. While it’s too simplistic to say interest rates have to come down, the bank does have to be relevant.”

Despite yesterday’s AGM being largely academic IL&P is 99% state-owned — the meeting was still fractious. A number of shareholders and customers attacked management over Permanent TSB’s high mortgage interest rates — with the general consensus being that the recent 0.5% cut in its variable rate for new customers, has not brought the bank in line with other lenders.

One shareholder said existing customers were staying with the bank because they were effectively “prisoners”, while another accused the group’s board of being “morally bankrupt”. Another accused the bank of having become “predatory” and “punitive”, while one shareholder said he felt “trapped”.

“I don’t want write-offs or [debt] forgiveness, just a fair rate,” he added.

Mr Cook said the bank would continue to monitor its rates and admitted that PTSB cannot be competitive and mainstream, in the long-term, if it is charging two different variable mortgage rates to existing and new customers, as it is currently doing.

He said the 0.5% rate cut to 4.69% was “a gesture” and “an indication of our determination to put the bank back on an even keel”.

However, while PTSB’s new head, Jeremy Masding, said he was happy with how early arrears cases are being dealt with, management admitted very few new mortgages have been lent under the new, marginally lower, interest rate.

Mr Cook said the top priority for Permanent TSB was to now ensure that its restructuring plan is passed. This, he added, will likely result in job losses, but also investment which will see job enhancement in certain areas of the business: “It’s got to be a bank that is capable of washing its own face and one which is stable, profitable and viable.”


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