Friday 19 January 2018

PTSB shirks sale of non-performing loans

The speculation about PTSB's decision to hold fire on further portfolio sales comes as the lender prepares to unveil its interim results later this month. Photo: Collins
The speculation about PTSB's decision to hold fire on further portfolio sales comes as the lender prepares to unveil its interim results later this month. Photo: Collins

Gretchen Friemann

Permanent TSB is unlikely to sell non-performing loans this year despite the increasingly onerous regulatory pressure on lenders burdened by soured debt portfolios.

The Irish Independent understands PTSB, which is 75pc owned by the taxpayer, has yet to engage an adviser to oversee a sales process of legacy-era mortgages. After a string of disposals over the past two years - culminating in the sale of its £2.3bn CHL mortgage book in the UK to credit investor Cerberus Capital - PTSB looks set to shirk any further portfolio deals, at least until next year.

According to sources, Danske's move to offload its €2bn retail book - a process overseen by Morgan Stanley - and AIB's planned Project Redmond sale, which is under the guidance of KPMG, are the only major loan sales in the offing for the remainder of 2017. And AIB's deal may not conclude until next year.

The speculation about PTSB's decision to hold fire on further portfolio sales comes as the lender prepares to unveil its interim results later this month.

In a research note published yesterday by Davy's lead banking analyst, Emer Lang, the broker predicted the bank will report €300m new mortgages for the first half of the 2017 financial year - an increase of 42pc on the previous period. Davy also anticipates a recovery in the PTSB's net interest margin to 1.82pc from 1.43pc in the first half of 2016.

But Ms Lang highlighted the rising pressure on banks to reduce NPLs - PTSB's burden stands at 27pc of its book - "will erode expectations for future write-backs or possibly lead to provision top-ups". She warned "some acceleration" in the reduction of the NPLs "would be desirable...to drive the bank's recovery."

Irish Independent

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