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Permanent tsb chief wants bank to be 'socially useful'

I became Group Chief Executive of the Permanent TSB Group just about a year and a half ago. I took up the job knowing there was a strong appetite among the public to punish banks for the huge mistakes they made, with others, before the financial crisis.

I know these mistakes have cost the Irish taxpayer a lot of money. I had never lived or worked in Ireland before joining Permanent tsb, but it did not take me long to grasp why Irish people were so angry with banks and bankers.

The contribution my new team and I want to make is to begin repaying the Irish people for the support they have given Permanent tsb. We will leave the job of apportioning blame for past mistakes to others.

Instead, we want to create an asset for Ireland – something that will be of real value. We want Permanent tsb to become an institution that makes money for the shareholder (the Minister for Finance) and helps recoup the huge support provided by the taxpayer in recent years.

However, importantly, we want Permanent tsb to be what other countries call "socially useful" – a bank that is good for the society and the economy in which it operates.

We want to be socially useful by providing a safe home for hard-earned cash and a source of loans and mortgages for credit-worthy borrowers. We want to be socially useful by providing real competition and consumer choice in the retail banking market. We want to be socially useful by supporting distressed borrowers through the credit-repair cycle.

We believe the best way to do this is to return the bank to a simple, transparent business model that served it well for decades, before we, along with many other banks in Ireland and overseas, lost our way.

Some may call it old-fashioned banking. Some may call it 'simple'. Sadly, some may call it 'unambitious'. I would argue that post-crisis, most personal customers are looking for a 'back to basics' bank that serves existing customers well and attracts new customers with straightforward, responsible products and services. Indeed, I suggest that any relationship where a bond of trust has been broken should return to its roots; in the case of banking, this means taking in deposits at the right price, lending sensibly at a price that reflects the underlying risk and providing a service underpinned by respect for those who pay the wages (customers). This model worked well in the past and it will work well in the future.

But repairing a bank is a huge challenge. Broken banks don't get fixed without a lot of hard work and the right attitude.

Of course, bankers should not hide from the criticism that has come their way. However, it is also important to remember there are a lot of people working in banking today who share my goal of repairing the damage that has been done.

We should want our bankers to build banks that will be sustainable for the long term, underpinned by the foundations of good governance, good controls and good management. We should want them to act responsibly and we should want them to put the interests of the taxpayer and the customer at the heart of what they do.

All this is achievable. What banks need are good people, who understand the responsibilities of leadership, who thrive on the challenge of change and who have the courage to say 'I am proud to work in a bank'.

In Permanent tsb we have good people who are working very hard to rebuild their bank. We have good people who are making real sacrifices to rebuild their bank. We've set out a clear strategy about what we're going to do – and made clear choices about what we're not going to do.

We will excel in our core business of managing deposits and lending responsibly. We will manage the legacy problems that we inherited. That means dealing with loans that people cannot repay and managing these customers fairly. It means putting in place appropriate arrangements for customers who are struggling to meet their obligations or struggling to get back on their feet. We will manage the capital that the Irish taxpayer has provided to us and ensure that we always act in the best interest of the taxpayer. We will rebuild.

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We're committed to being as transparent as we can. We've split the Permanent tsb Group into three segments – Permanent tsb, a 'good bank' that will provide the full range of retail banking products to customers; an Asset Management Unit to handle problem loans; and a Non-Core division of UK and commercial property loans that we will manage efficiently and run down over time.

We'll report the performance of each segment separately, so taxpayers can see for themselves how each segment is dealing with its specific set of challenges.

For taxpayers, we're working to return as much of the group to private ownership as we can – and the sooner the better.

For our customers, we're working hard to deliver choice in the banking market. We want to provide products that people want and be as socially useful as we can be.

And for our 2,200 employees, we want to make the group a great place to work. We want to provide jobs that are rewarding, jobs that will allow them to contribute to repairing the group and jobs that are respected.

We will create an asset that Ireland can be proud to have – a viable, competitive, socially useful bank.

Jeremy Masding is Group Chief Executive of the Permanent tsb Group.

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