PTSB in €287m Deutsche deal
State-owned Permanent TSB has signed a €287m deal to sell its car loans, consumer loans and some business loans. The buyer is understood to be Deutsche Bank.
The bank has also agreed to hand over the business units that look after, or service, the loans to a new company set up by managers of the bank's former personal finance unit.
They have been given the new contract to manage the book on behalf of its new German owners.
The servicing business has been sold for a nominal amount, probably no more than €1.
It's to be renamed First Citizen Finance and all staff connected to the car and personal loans are expected to transfer to the new company.
The price agreed for the loans themselves is almost 20pc below the €351m that the loans were being accounted for in the bank's financial accounts.
The deal was announced in a notice to the stock market yesterday. PTSB has been effectively taken into State control, but a small proportion of the lender is still traded on the Irish Stock Exchange.
The car loans and consumer loans are being sold to a newly created company called Consumer Auto Receivables Finance. It is understood to be controlled by global banking giant Deutsche Bank.
The sale will also include a separate "small portfolio of largely corporate loans".
Sales of "non-core" loans and business are now common practice for Irish banks.
"The proceeds from the sale will be used to further reduce the group's funding requirements" and will have a "broadly neutral impact" on its core Tier 1 capital reserves, it said.
The car loans being sold were issued by Permanent tsb Finance Limited through car dealerships.
The personal loans were from Blue Cube Personal, which has not advanced any new loans since 2008.
The sale is expected to complete by the end of this year. Davy advised on the sale.