Permanent TSB issues ‘full and frank apology’ to shareholders

Permanent TSB's share of new mortgages has been boosted by its recent 2 per cent cashback offer to customers, the lender's chairman Alan Cook has said.

Addressing the media on Wednesday after the bank’s annual general meeting in Ballsbridge, Mr Cook said: “We’ve improved the offer this year and the performance has spiked up quite markedly.”

PTSB’s share of mortgages in 2015 was 9.5 per cent, below the double-digit figure it had targeted. Mr Cook said the bank couldn’t afford the cashback offer last year and so lost share to competitors.

Chief executive Jeremy Masding said the current offer was proving to be an "attractive option" to customers. On its likely market share for 2016, he said: "If we can get back into low double digits I'll be pleased with that."

Mr Masding confirmed that talks are underway with the European Commission to extend the mid-year deadline set under its restructuring plan to dispose of its non-core CHL business in the UK.

The delay is due to uncertainty caused by the Brexit referendum. “We just need an extension for a period of time to allow for Brexit to settle down and then look at the disposal in the second half of the year.”

He said PTSB had sought approval from the SSM in Frankfurt to appoint a new chief financial officer but declined to say if it was an internal or external candidate. “It’s in the system,” he added.

PTSB’s share price closed up in Dublin on Wednesday by 2.6 per cent but was 39 per cent lower than the €4.50 pricing at the time of its IPO a year ago.

In spite of this decline, Mr Masding said there had been “hardly any churn” among the institutional investors who bought the stock in the IPO, which reduced the State’s holding to 75 per cent.

Commenting on the share price fall, Mr Cook said: “Yes, I’m disappointed but it’s part of a wider phenomenon.”

Mr Masding cited poor market sentiment for bank stocks this year along with the long term nature of PTSB’s recovery as part reasons for the price decline.

“At no stage did we say that dividends would be imminent or that our financial performance would turn [quickly],” he said. “I am pleased with the stability of the shareholder register and …the support for this management team and the transformation [plan].”

PTSB is due to issue a trading update on May 11th.

Earlier, Mr Alan Cook had issued a “full and frank apology” to shareholders for the “serious failures” that emerged last year in how 1,372 tracker mortgage customers were treated by the company.

“The key mistakes which were made in this matter were made many years ago,” he said. “But the board fully accepts that those errors were compounded by the manner in which the group handled events subsequently and, for that, I personally apologise.”

“Regrettably…. we let customers down and we made mistakes, which had very serious consequences. I sincerely apologise for that and I reiterate our determination now to fix this situation for those customers, to learn what we can from what happened, and to make sure that we never make such mistakes again.”

This issue involved PTSB failing to inform certain customers of the consequences of breaking early from a fixed-rate or discounted tracker period. These incidents occurred largely between 2006 and 2011.

Mr Cook said the bank was making “good progress” in terms of its mortgage redress programme with 90 per cent of affected customers offered a solution.

It has also put in place a “comprehensive and independent” appeals process for customers. Some 100 appeals have so far been lodged while more than 30 cases taken to court.