Permanent TSB has pressed the start button on the sale of a portfolio of loans, known as Project Glas, as it seeks to lower its level of non-performing mortgages.
The Irish Times reported last September that the 75 per cent State-owned lender had selected accountancy and consultancy firm EY to advise on loan sales as it prepares to move decisively on its €2.68 billion of worst-performing mortgages.
PTSB has the highest ratio of non-performing loans (NPLs) among Ireland's bailed-out banks, at 28 per cent of its portfolio at the end of June, even as the group and wider industry have cut arrears at pace from their 2013 peak. The European Central Bank, in charge of supervising euro zone lenders for almost three years, is piling pressure on lenders with high levels of NPLs to come up with credible strategies to reduce them over time.
In a statement on Tuesday, PTSB said that it has instructed EY to begin the formal sales process of Project Glas.
“The Irish and European banking regulators are very clear that all banks in the euro zone need to reduce significantly the percentage of non-performing loans on their balance sheets,” PTSB said. “The bank will use various approaches including voluntary surrenders /[of properties/], mortgage to rent, loan sales and, where appropriate, legal action to progress this agenda.”
The bank said that about 1,200 buy-to-let properties have been surrendered by troubled borrowers under an initiative started last year where borrowers would have any shortfall on mortgage following the sale of the asset written off.
Minister for Finance Paschal Donohoe is understood to have told fellow members of cabinet that one of the banks was preparing to sell a portfolio. A spokeswoman for the minister declined to comment when contacted.
