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PTSB agrees to mortgage business sale

State owned lender Permanent-TSB has agreed to sell its sub-prime Springboard mortgage business.

The bailed-out bank is selling so called non-core assets as management seek to return the lender to profit following the financial crash.

The Springboard sale includes loans with a face value - the amount owed - of €468m, and €350m of these are non-performing.

The loans are reckoned to have been sold for around €250m.

UK-based Mars Capital, to whom the loans have been sold, has previously acquired mortgages from IBRC, and will abide by the Central Bank's code of conduct on how best to deal with borrowers in arrears. In Britain a unit of Mars Capital called Magellan Homeloans last year became one of the first new "non-conforming" or subprime mortgage lenders to emerge there since the financial downturn.

It markets itself as a "credit repair" lender, providing finance to borrowers who have previously been through financial difficulties, including bankruptcy.

"This transaction completes an important part of our planned deleveraging programme and, importantly, it also confirms the adequacy of our provisioning methodology," Permanent-TSB's group chief executive, Jeremy Masding, commented.

"Non-conforming lending does have a limited role to play in a mature mortgage market, but it was not appropriate for us as at this time as we focus on our rebuilding task," Mr Masding added. PTSB said that Mars Capital will comply with the terms of the Central Bank's Code of Conduct on Mortgage Arrears. The proceeds from the sale will be used to reduce PTSB's funding requirements.