PTSB loan sale may be to regulated banker, says Taoiseach

Permanent TSB's non-performing mortgage loans may be sold to a regulated bank or another institution, Taoiseach Leo Varadkar has said.

He told the Dáil on Tuesday the bank had not yet sold any of the loans and had not identified a prospective buyer. It was an assumption by some people that the buyer would be an unregulated, so-called vulture fund, he added.

"I think distressed mortgage holders are under enough stress and we should not add to that unnecessarily by causing them undue concern," Mr Varadkar said, adding that the bank would have to consult with Minister for Finance Paschal Donohoe on any advanced sale proposal.

“No such proposal yet exists and the Government, absolutely, will give open and constructive consideration to any proposals for additional protections that may be necessary so we ensure the rights and freedoms of borrowers and mortgage holders are protected.”

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Fianna Fáil leader Micheál Martin said there were many thousands of people living in fear because of the anticipated sale.

Anxiety

There was a considerable degre of anxiety following the news that PTSB was about to offload some 20,000 mortgages to unregulated loan owners, or vulture funds as they were commonly called.

“With one decision or one stroke, this will double the amount of such loans under the ownership of vulture funds currently,” Mr Martin said.

It was not an everyday, ordinary business decision by a bank, so it was open to the Minister for Finance to respond, he added.

“By any definition, this is a step change in behaviour by a majority State-owned bank, which will have severe repercussions,” he said. “Other banks will follow, such as with AIB’s project redwood.”

Sinn Féin leader Mary Lou McDonald said those affected should not be put under further stress and, perhaps, made homeless. She said PTSB was a State-owned bank and the Minister for Finance was the majority shareholder.

“Let us not make any bones about it: these vulture funds are prepared to pick the bones of mortgage-holders as and when it suits them,” she added.

“Their interest in the acquisition of these assets is purely short-term and focused on turning a quick buck.”

Not governed

She said they were unregulated, not governed by the Central Bank nor accountable to the Oireachtas.

“I do not know how the Taoiseach would feel if his home was turned over to a financial firm that does not have to abide by any rules,’’ she added.

Labour leader Brendan Howlin said 75 per cent of the bank was owned by the State. "It is a bank and, God knows, the people of Ireland have contributed significantly towards it, but it still has many issues to overcome," he said.

“However, instead of doing the hard work itself, it now appears to be outsourcing that difficult job to get that off its balance sheet.’’

Mr Howlin said there was no point in the House saying “calm words’’ , if it did not give real reassurance to the people who feared the sale might be to a vulture fund.