Paschal Donohoe defends mortgage sell-off decision
Mr Donohoe said the future health of PTSB, the third largest bank in the country, is “vital” to the economy, with deposits of over €17bn and 2,000 staff.
He acknowledged the “worry and concern” caused by the bank’s announcement to sell off €3.7bn of loans, which include 14,000 family homes.
The Department of Finance says it cannot interfere with commercial banks and how they sell their loans, despite the fact PTSB is 75% State-owned.
Mr Donohoe met with Fianna Fáil finance spokesman Michael McGrath in Leinster House yesterday to discuss a bill which would ensure that vulture funds are subject to the same regulation as other financial institutions.
Fianna Fáil is calling for further restrictions to prevent the sale of family homes to vulture funds.
Mr Donohoe said: “I have always indicated I will keep the legislation into these matters under review, today I will be asking for the Central Bank for any further views they may have in relation to legal and regulatory views they may have.”
He said that much of what could happen to the mortgages is dependent on the sale process but that he is confident that the legal rights of any current homeowner will be maintained.
Turning to PTSB, Mr Donohoe said that with 28% of loans it has non-performing, this must be addressed so the bank can lend to companies and individuals and can protect deposits.
“It’s very important across the coming period that the issue of non-performing loans in that bank be addressed, and the regulator — who is an independent regulator of any government — has indicated that level of non-performing loan has to come down.
“We have just gone through a very difficult journey where we didn’t have regulation we thought was as strong as needed to be with our banks. And the regulator for PTSB is very clear that level of non-performing loan needs to come down.”
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