Permanent TSB Said to Plan U.K. Loan Portfolio Sales Next YearJoe Brennan
Permanent TSB Group Holdings Plc, the Irish state-owned lender, plans to start selling its 6.9 billion euro ($9.5 billion) U.K. residential mortgage loans next year, according to two people with knowledge of the matter.
The bank also intends to begin disposing of other parts of its 10 billion-euro non-core unit, including its Irish subprime mortgages and commercial real-estate loans, next year, said the people, who asked not to be identified as the matter is private.
The sales are part of a restructuring proposal the bank submitted to European Union antitrust authorities in August. Ireland’s largest mortgage lender at the peak of the nation’s real-estate bubble, the bank needed a 4 billion-euro taxpayer bailout in 2011. Chief Executive Officer Jeremy Masding, who took over in 2012, is still awaiting a verdict from European officials on his plans.
The government will push EU officials for progress on the blueprint before its final international bailout review is complete next week, the people said. Permanent TSB’s restructuring will be discussed as part of the review, according to the Finance Ministry, declining to comment further. Bank officials declined to comment on details of its restructuring proposals.
Antoine Colombani, spokesman for Joaquin Almunia, the EU’s antitrust chief, declined to comment on the specifics of the restructuring.
The bank scrapped the sale of its U.K. mortgage unit before Masding took over, as it viewed offers for the mainly buy-to-let portfolio as too low. The bank is seeking to sell parts of the U.K. loan book in batches over the next three years, according to one of people.
Masding also wants to sell the infrastructure supporting the mortgage unit in the U.K. and outsource loan servicing to the new owner, said the person. This was first reported by the Irish Times earlier this month.
While the bank seeks to tackle non-performing and low-yielding loans in its 9 billion-euro internal bad-bank unit, the government wants to ultimately sell the good bank, currently with 15 billion euros of mainly Irish mortgages, according to a person with knowledge of the matter. Permanent TSB may start marketing the good bank in the second half of next year, said one of the people.
Masding said on Aug. 29, as the lender posted a 449 million-euro first-half operating loss, that he’s optimistic the EU will back his restructuring plan by the end of the year. While the CEO examined closing the bank as its loan losses soared, “any reasonable man would now say it’s still the least worst alternative to keep this going,” he said.