THE deadline for deciding the fate of Permanent TSB (PTSB) could be pushed out beyond the end of April if a broad banking restructuring package has not been agreed by then, the Irish Independent has learnt.
The Government set the 'end April' deadline after the last bailout review mission in January, with Finance Minister Michael Noonan saying the bank could be sold, merged or made independently viable.
Talks around the future of PTSB, which is 99.8pc owned by the State, ultimately became part of wider discussions about a 'banking enhancement package' that also involves changes to the €30bn IOU used to rescue Anglo.
The main PTSB part of the package involves taking more than €10bn of tracker mortgages from the lender and transferring them into Irish Bank Resolution Corporation (IBRC, formerly Anglo).
The Irish Independent has learnt that if those broad banking talks aren't sufficiently far advanced by the end of April, the EC/ECB/IMF troika is open to deferring a decision on PTSB.
Sources said that it would "make no sense" to take a decision on PTSB if there was still significant uncertainty about whether billions of the bank's mortgages would be transferred out under the main banking plan.
A full deal on the broad package does not have to be agreed by the end of April, but there has to be agreement on the core elements, and it has to be clear that they are achievable, the Irish Independent understands.
Asked about a deadline extension, a Finance Department spokesman said there had been "no change" to what was agreed in January. "We are working with Permanent TSB on preparations for the April mission, after which we expect to agree a way forward for Permanent TSB."
Management at Permanent TSB are set to make their pitch for the bank's future when they meet with officials from the EC/ECB/IMF over the coming weeks. They are likely to argue for Permanent TSB's survival as an independent entity.
They are also likely to argue that the bank needs to keep at least some of its tracker mortgages so it will have a 'critical mass' to cover its cost base. They will also be expected to deliver a timetable for returning the bank to profitability and for maintaining its funding.
PTSB spent the first three years of the crisis as the only domestic bank that didn't have to be rescued by the State, largely because it had stayed away from land and development lending. Last year's stress tests left the bank with a €4bn capital demand, that was met first by a €2.7bn injection from the State last summer, and then by the sale of the group's life insurance arm Irish Life.