Ireland Said to Near Approval on Permanent TSB Loans Split
Ireland’s bailout partners are nearing agreement to allow state-owned Irish Life & Permanent Plc (IPM) to move some of its loss-making home loans into a so-called bad bank unit, according to two people familiar with the matter.
The transfer would mark a first step toward reorganizing the Dublin-based bank, Permanent TSB, once the country’s biggest mortgage lender, according to the people, who declined to be named as the talks are not yet complete. Finance Minister Michael Noonan may announce an accord as soon as tomorrow as European and International Monetary Fund officials complete their latest Irish aid program review.
“The authorities will agree a way forward for PTSB by the end of April 2012,” the Finance Ministry said in an e-mailed response to questions. “The 6th review of the program will conclude tomorrow and a press conference will be held and the changes agreed” to the program will be outlined.
Irish authorities are seeking to strip out distressed and loss-making mortgages from Permanent TSB and Allied Irish Banks Plc (ALBK) to clean up their balance sheets and ultimately help sell them. Irish Bank Resolution Corp. Chief Executive Officer Mike Aynsley said last month he is in talks that may lead to the company taking on residential mortgages from other banks.
Some 25 percent of Permanent TSB’s 25.4 billion-euro ($33.6 billion) Irish residential mortgage book was classified as either in arrears or impaired, according to its annual report, published April 2.
The state took control of Irish Life & Permanent after injecting 2.7 billion euros into the company in July to help Permanent TSB meet regulatory capital requirements.
Irish Life spokesman Ray Gordon and Central Bank spokesman Peadar Hayes declined to comment on the discussions.
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