Sunday 17 December 2017

Permanent TSB sells last of UK loan book to Cerberus affiliate

Permanent TSB boss Jeremy Masding
Permanent TSB boss Jeremy Masding
Michael Cogley

Michael Cogley

Permanent tsb has completed the "milestone" sale of its remaining loan book in the UK as the bank finishes its deleveraging programme.

The deal will allow the bank, in which the Government has a 75pc stake, to focus on the Irish retail and SME market. The deleveraging programme was a core condition of the bank's Restructuring Plan agreed for the group by the European Commission.

Ptsb is selling £2.29bn (€2.56bn) worth of loans, which were held by its UK subsidiary Lansdowne 199, to an affiliate of Cerberus Capital Management.

Last year a Cerberus affiliate acquired around half of the CHL loan portfolio as well as the associated legal entity, Capital Home Loans Ltd.

The agreement comprises the total balance of the residual book of the bank's former UK subsidiary, Capital Home Loans.

The European Commission had set a deadline for the process to be completed in June, however it is understood the sales process was suspended due to Brexit. It is believed the bank informed the Commission that it would miss its deadline near the end of June.

After completing the deal for half the portfolio last year, the Cerberus affiliate was long-touted as the front runner to complete a deal for the remaining 50pc. Morgan Stanley advised on the deal, which is set to net Ptsb around £1.95bn in proceeds from the sale.

The bank said the profit from the sale will be used to reduce its debt.

Ptsb chief executive Jeremy Masding described the deal as a "milestone event" for the group. "Its completion in the coming weeks will conclude the very ambitious deleveraging programme of some €8.4bn which was set out for the group under the restructuring plan agreed with the European authorities," he said.

"Perhaps most importantly, it will complete our pivot to the Irish retail marketplace and allow us to focus exclusively on growing our commercial position in key segments of the market here.

"That is now our overriding priority, as Ireland's only pure domestic retail and SME bank," Mr Masding said.

The news comes after the bank announced it would acquire up to €100m of performing mortgages that originally came from GE Capital's old Irish portfolio of sub-prime loans. Ptsb chairman Alan Cook also announced he would be retiring from the board in March, bringing his six-year term at the bank to a close.

Irish Independent

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