PTSB chief defends bank's plans to offload owner-occupier loans to third party investors
Permanent TSB's chief executive Jeremy Masding mounted another defence this morning of the bank's plans to offload owner-occupier loans to third party investors, insisting existing legislation offers sufficiently robust protections to consumers.
The State-backed bank has come under fire recently for its decision to launch a €3.7bn loan portfolio sale that includes the sale of 14,000 owner-occupier mortgages.
In arguments extensively rehearsed at the bank's recently released annual results, Mr Masding stressed PTSB needs to reduce its stack of non-performing loans "dramatically and quickly" if it is to prosper and "support the ongoing economic development of the country".
He said the ECB's stance on non-performing loans (NPLs) is clear and said its guidance makes a "loan sale inevitable".
PTSB's soured exposures remain close to five times the recommended level set by Brussels, at 26pc of the overall loan book.
Mr Masding pointed out taxpayers did not bail out the bank to "support a blanket debt forgiveness approach."
He also emphasised that many lenders have resorted to loan portfolio sales and argued the strategy is "characteristic of a functioning mortgage market and can facilitate greater flexibility in dealing with customers in arrears."
He said that since the launch of bank's mega home loan sale, known as Project Glas, "much of the commentary has focused on customer protection when their loans are sold.
But he pointed out "the Governor of the Central Bank of Ireland has confirmed in recent weeks that where a loan is sold, the protections "travel with the loan" and that "borrowers are protected in accordance with the consumer protection framework."