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STATE-OWNED PERMANENT TSB has signalled it has no plans to answer criticism of Irish banks’ high variable mortgage rates by reducing what it charges borrowers.
The bank instead said it planned to nearly double the amount it was making on its loans within the next three years.
The statement came as the lender fleshed out its plans to return to public ownership, which included listings on the main Dublin and London stock exchanges.
Permanent TSB (PTSB) said it plans to raise €400 million selling shares to institutional investors and another €125 million from new borrowing.
The money will be used to buy back €400 million in government-owned convertible notes. These have been returning the exchequer 10% interest a year and were due to be repaid next year regardless.
PTSB said the remaining funds were needed to provide for the losses it expected as it unwound its “non-core businesses”.
The bank plans to sell its UK buy-to-let operations and Irish commercial property loans to focus exclusively on retail banking and lending in Ireland.
Then-Irish Life and Permanent was given a €4 billion taxpayer bailout during the banking crisis, €1.3 billion of which the state got back from the sale of Irish Life.
In return, the government took a 99.2% stake in the bank – however this share is expected to be diluted to about 75% after the share sale.
The €400 million repayment will take the amount of the bailout money still owing to the taxpayer to €2.3 billion – a sum PTSB’s chief executive Jeremy Masding has conceded is unlikely to ever be repaid in full.
But he said the money-raising exercise was the first step in returning the bank to private ownership and it had been encouraged by the interest it had received from investors so far.
Higher margins
In its announcement today, the bank also said it wanted to lift its net interest margin – the amount of profit it makes on its loans – to 1.7% by 2018. The average figure for 2014 was 0.9%.
That comes despite it and other lenders coming under pressure to cut their variable interest rates – particularly for existing mortgage holders – as Irish borrowing costs move further out of step with those in other eurozone countries.
“There continues to be both political and regulatory focus on the pricing of variable rate mortgages with significant pressure both to align front and back pricing levels, and to bring pricing in line with selected European mortgage markets,” PTSB’s statement said.
However, while the group is fully cognisant that its mortgage pricing decision framework should take account of all stakeholders, it will continue to review its pricing and product strategies on a commercial basis with full consideration of long-term sustainable shareholder value creation.”
Finance Minister Michael Noonan recently met with Central Bank officials over the issue as figures showed the gap between interest rates charged in Ireland and elsewhere in the eurozone widening.
The average rate on new, variable loans – including renegotiations of existing deals – was 3.38% in the Republic, compared to an equivalent rate of 2.09% across the currency bloc.
The figure was even higher at 4.2% for new loans when renegotiations were left out of the equation.
PTSB cut its variable mortgage charges for new customers in January, with the rates ranging from 3.7% to 4.2% depending on the sizes of borrowers’ deposits. It didn’t pass on any reductions to existing borrowers on standard variable rates.
First published 10.16am
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The world is going to wait until it’s too late to tackle this maniac.
Something tells me that the international community doesn’t believe he is capable of what he says he is
No oil so…..
It has nothing to do with oil. America already sacrificed thousands of their own to protect South Korea. The issue is China and the fact that they’ve shown to be willing to fight to protect the North and their egomaniac leaders.
@Jason Culligan: You are correct the North has China behind them but you still aren’t seeing the US doing much about the WOMD that the North has but it invaded Iraqi with obvious no proof of any WOMD but plenty of oil.
2nd lad in, first row from left. foot too low. Family shot.
He’s obviously spent the army’s rifle money on nukes then.
Under normal conditions I’d say that they’re parade rifles, much like the Americans who still use M1 and M14 rifles for marching. In North Korea though, where they have 1 million more soldiers than rifles, you’re probably spot on.
Delighted, just the news we were waiting for
Look at all those robots dressed up as soldiers,wow.
I’d say they all blink in unison.
He’s only a mount like his auld fella
Another loony state supported by SF/IRA.
@Paddy Lions: Why do you stick SF and IRA into everything you don’t like? If you hated Guinness, do you put SF or IRA into that as well?
@Paddy Lions: It’s 2017, make a resolution to grow up, PLEASE
In 1986, the Sinn Fein Foreign Affairs Bureau sent a message of solidarity to the North Korean regime. The message, signed by Sile ni Dhara, stated clearly: “We offer our support to the Workers’ Party of Korea in its fight for the establishment of the Democratic Confederated Republic of Korea.” (“Sinn Fein Letter to Korea,” Ireland’s War, issue 18 (June 1986) p.7). Also, during a visit to Scandinavian countries in 1987, Gerry Adams attended a reception at the embassy of the Democratic People’s Republic of Korea on the occasion of the 75th birthday of Kim Il Sung. (“Gerry Adams visits Scandinavia”, Ireland’s War, issue 23 (July 1987), p.7) In 1989, an official Sinn Fein delegation including Gerry MacLochlainn, Sheena Campbell (later murdered in 1992 by loyalists) and John Doyle attended the World Youth Festival in Pyongyang (cfr “Sinn Fein Delegation at World Youth Festival”, An Phoblacht-Republican News, (vol.11 number 26), 29 June 1989 p.14).Alois Irlmaier:
DPRK is the perfect socialist state form which we can learn
Yep. Were the masses starve, are interned or executed while the leader gourges on cheese, meat and booze
Kim has nukes on the brain,the poor lad. That’s what must have caused the hair loss.
Why do I think the Yanks must have this guy covered?…Can China pull Kim’s chain in at any moment but use him as a counter against the yanks especially since Trump is sabre rattling over Taiwan.
Kim has nukes on the brain,the poor lad. I bet that’s what caused his catastrophic hair loss.
Kim is storing his farts now to power it? That is why it is taking so long?
No harm. The threat of mutual annihilation seems to be the best way to stop the deployment of nuclear weapons. Let’s hope Iran gets there too asap to negate the imbalance created by Israeli nuclear capability. Maybe then they will start to act like a civilised nation
The problem is that North Korea seem incapable of understanding that point. They already picked a fight with the US once when America had nukes and their guardian angels the Chinese still hadn’t developed nuclear weapons of their own. North Korea is also constantly close to collapsing in on itself. The last thing you want is a civil war in a nuclear capable state.
Some jowls on him the little fooker . Destroyed with the gout at this stage . Him and Donald J Trump be arm and arm skipping down the yellow brick road shortly .. soon as Donald builds one
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