PTSB Offloads €76 Million in Bad Loans to Mars Capital
Permanent TSB (PTSB) has taken a significant step by offloading €76 million in non-performing loans to Mars Capital. This transaction is backed by private equity giant Apollo and marks the second sale of problem loans by PTSB to Mars. Last year, PTSB sold a larger tranche valued at €348 million under similar backing.
Details of the Loan Sale
The latest transaction involves around 490 loans secured against approximately 455 properties. According to PTSB, these loans are linked to about 410 borrowing relationships, which may involve individual borrowers or multiple joint borrowers.
- Loan Classification: All loans are categorized as non-performing.
- Type Distribution:
- 55% are tracker mortgages
- 10% are fixed-rate
- 35% are variable rate
Previous Loan Sale
The first tranche of loans sold last year consisted of 1,244 accounts secured over 1,489 properties. Following the latest sale, PTSB will service the sold loans for up to six months before transferring legal title to Mars Capital.
Customer Protections and Impact
PTSB emphasizes that customers associated with these loans will retain access to their mortgage products, interest rates, and services throughout the servicing period. After the transfer, they will continue to receive the same regulatory protections under the Consumer Protection Code and the Code of Conduct on Mortgage Arrears.
This sale is expected to enhance PTSB’s total capital ratio by approximately 10 basis points. Additionally, it addresses regulatory calendar provisioning impacts related to the loan portfolio, estimated to equate to about €500 million in new lending. As a result, PTSB’s non-performing loan ratio is projected to decrease to around 1.4% on a pro forma basis for the first half of the year.
PTSB’s Position and Future Plans
Last month, PTSB announced it is up for sale, seeking a new owner to support its future growth plans. The current CEO, Eamonn Crowley, is steering these changes as the bank navigates its next steps in a competitive market.
