Shortlist of buyers for IL&P €500m mortgage book in weeks
Published 11/10/2011 | 05:00
IRISH Life & Permanent has hired KPMG to sell off its €500m subprime mortgage book and hopes to have a shortlist of four bidders within weeks.
The news comes as the bancassurer continues to work on the €1bn sale of its life insurance subsidiary and the disposal of its £6.8bn UK loan book.
The sales are designed to meet the terms of the plc's €2.7bn bailout and to improve Permanent TSB's loan-to-deposit ratio to the level demanded by the Central Bank.
The sale of the subprime business, know as Springboard Mortgages, is expected to attract "expressions of interest" from seven or eight parties by the end of this week.
Irish Life & Permanent will work with advisers KPMG to whittle that list down to about four imminently, the Irish Independent understands.
A spokesman for Irish Life & Permanent declined to comment on the timeframe for the sale, or on the identity of any potential bidders.
Springboard was established by Irish Life and Merrill Lynch in January 2007 to offer mortgages to "near prime" customers who didn't have long enough credit histories or regular enough incomes to get traditional home loans.
The business was bought out by Irish Life & Permanent in mid-2008, and ceased writing new loans a year later, citing "challenging" funding conditions.
The latest figures filed by Springboard with the Companies Office show an €11m charge for "bad and doubtful debts" in 2009, up from a charge of just €3m in 2008.
In their report, Springboard's directors said they expected bad debts to "peak" in 2010, citing the unemployment and economic conditions that prevailed heading into that year.
The subprime lender employed an average of 26 full-time staff and two part-timers in 2009. It is understood that those numbers have fallen to less than 20. The staff will transfer to Springboard's new owners under their existing terms and conditions, as governed by the TUPE legislation. (Additional reporting Bloomberg)