Sunday 17 November 2019

No need for further taxpayer bailouts for Permanent TSB - EU competition bosses

A Permanent TSB branch on St. Stephens Green.
A Permanent TSB branch on St. Stephens Green.

Donal O’Donovan

No further tax payer bailouts will be needed for Permanent TSB, according to European competition authorities

A restructure plan for the bailed out lender has now been formally approved by the European Commission. Regulators in Brussels said the bailout support granted to the bank by taxpayers is in line with EU State Aid rules. Formal endorsement of the bank’s plan to return to viability follows approval in principal which was granted in March.

Permanent TSB is currently seeking to raise €525m on the markets to bolster its capital, in line with demands set by European regulators and to repay a €400m bailout loan owed to the State. 

According to the European Commission, the restructuring plan set out the path for Permanent TSB can see bank can return to viability without further state support, while ensuring it – and its owners contribute to the cost of restructuring without distortions competition in the market.

Permanent TSB is the last of Ireland’s bailed out banks to have its restructuring plan approved by Brussels.

Those plans needed to be endorsed because taxpayer funds were used to finance the bank bailouts, something seen as potentially anti-competitive and possibly breaching State Aid rules.

"Today, we close the book on open restructuring cases of banks in Ireland by approving the state aid to Permanent TSB. The restructuring plan sets out a clear path for the bank's long-term viability without further state support. It also confirms the effectiveness of EU state aid rules, which allowed the Commission and Irish authorities to work together successfully to strengthen confidence in the Irish banking sector in order to return it to normality," Commissioner Margrethe Vestager said.

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