The number of Permanent TSB mortgage holders who will face repossession is set to increase in the coming years, the bank’s head of asset management confirmed yesterday.
PTSB asset management unit managing director, Shane O’Sullivan made the announcement yesterday at an appearance of the bank’s top level executives in front of the Oireachtas Finance Committee.
Mr O’Sullivan stressed, however, that the rise would be coming from a very low base with 23 repossessions executed to date this year — the vast majority of which involved vacant properties.
“I think it’s correct to say that the number of repossessions will increase. A number of points I would make about that though: they will increase from a very low base... so far this year we have had 23 repossessions, that’s 0.01% of our stock of properties. Each day myself and my team look to see if we can find solutions for customers... in 12,351 cases we have found solutions.
“However, you are correct that there are a significant number of court cases where we have commenced legal proceedings,” Mr O’Sullivan told the committee in response to a question from People Before Profit TD, Richard Boyd-Barrett.
Mr O’Sullivan, who was joined at the review by PTSB chief executive, Jeremy Masding, defended the bank’s position saying that at times no solutions could be found and in those cases to do nothing would only worsen the situation.
“Sometimes we find from a company perspective, unfortunately, it actually takes the commencement of the legal process to actually get proper engagement, so in those legal numbers at present we have a very significant number of people who are not paying anything towards their mortgage; not a cent,” added Mr O’Sullivan.
At the end of October, the 99.2% state-owned bank failed one facet of the ECB’s stress tests which exposed a capital shortfall in the event of an “adverse scenario” of just under €855m.
Mr Masding explained that when €400m of contingent convertible capital notes, or CoCos as they are known, are taken into account this shortfall stands at approximately €450m — 80% of which has already been provided for.
Mr Masding also revealed that he expects to have secured investment to make up the remaining €100m — €150m finalised by the end of Q1 2015 but would not disclose the stake the bank is looking to dispose of or any details of a potential deal.
He later added that the there is a possibility that the whole bank could be sold but stressed that it was a “remote and hypothetical” possibility.
The PTSB chief executive also told the committee that he expects the bank to return to profitability “at the back end of 2016” or perhaps earlier if the economy continues to grow at its current rate.
He expressed his belief the bank’s third restructuring proposal — which is to be submitted in the coming weeks — stood a strong chance of being passed.
On the sale of sub-prime lender Springboard to Mars Capital last month, PTSB officials confirmed they had an agreement from Mars as a condition of the sale that it would honour the code of Conduct on Mortgage Arrears which protects consumers. However, it conceded that it did not yet have a legal standing as legislation to deal with such circumstances had not yet been finalised.
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