Tuesday 12 November 2019

We don't do mortgage debt forgiveness, says PTSB boss

Permanent TSB says it will not give mortgage writedowns
Permanent TSB says it will not give mortgage writedowns
NEW BOY: Jeremy Masding, CEO of Permanent TSB, who had never lived or worked in Ireland prior to the financial crisis leaves the apportioning of blame to others. Photo: Damien Eagers

Sarah McCabe

PERMANENT TSB customers will receive no writedowns whatsoever, despite a surge in deals at other lenders, the bank has said.

Speaking at the release of the bank's 2013 results, chief executive Jeremy Masding told the Sunday Independent that the bank "did not do debt forgiveness". He said it was not feeling any increased pressure to do deals with distressed mortgage holders following revelations about a landmark write-off granted recently by AIB to a client of the Irish Mortgage Holders Association.

Banks and financial advisers have been inundated with distressed mortgage customers seeking debt deals in recent weeks, following revelations in the Irish Independent that a family got €150,000 forgiven from their mortgage.

Taoiseach Enda Kenny even commented on the deal, describing it as "good news" for the family concerned.

A PTSB spokesperson said the debt-forgiveness strategy carried significant risks and that Irish banks were not recapitalised sufficiently to allow them to forgive the debt of people having difficulties servicing their mortgages.

They were recapitalised based on the assumption that banks would apply normal protocols in terms of debt collection, the spokesperson said.

Solutions like split mortgages, which have been offered to 7,000 customers, will be put in place instead.

But the bank does recognise that some debt will not be recoverable, he added.

The lender is also ramping up its efforts to repossess properties, another senior executive indicated. The building society forcibly repossessed just 60 properties last year – but that number will "unfortunately but inevitably" grow this year, head of the bank's Asset Management Unit Shane O'Sullivan said.

His comments come just weeks after Ulster Bank chief executive Jim Brown issued a similar warning, stating that repossessions will rise further this year having already shot up by 60 per cent last year.

Mr Masding also gave his views on strategic defaulters. The AIB debt forgiveness deal has prompted speculation that more mortgage holders will opt to "strategically default", since the prospect of getting a write-down now seems more likely – but he said PTSB did not see that as a big issue.

Mr Masding also commented on the cap currently placed on the pay of senior executives at nationalised banks, set at €500,000.

This cap came under the spotlight earlier this year after Finance Minister Michael Noonan publicly poured cold water on AIB's attempts to have it removed.

PTSB will probably seek the abolition of the cap on bankers' pay when it returns to profitability, Mr Masding said.

The bank's asset management unit, which handles loan arrears, should become profitable in late 2015 or early 2016.

Sunday Indo Business

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