Buy to Let

PTSB may launch €1bn loan sale as early as the end of this year

The retail and SME-focused lender faced a market backlash yesterday after results that showed non-performing loans remained static despite the improving economy. CEO Jeremy Masding told the Irish Independent earlier this week that it is “unlikely” any sale would be launched in 2017.

However it is understood the bank is weighing a near-€1bn portfolio sale at the end of the year amid keen demand for the assets among distressed debt funds and private equity firms.

If PTSB, which notched up a profit of €53m before exceptional items and tax as new lending rose by more than 60pc, pulls the trigger on a sooner than anticipated sale it will pitch the bank up against AIB’s expected Project Redwood deal.

AIB yesterday reported a 23pc increase in operating income yesterday to €1.53bn while impaired loans dropped to €7.8bn, or 12pc of the total loan book, from €9.1bn at the end of 2016.

Yet the bank is also racing to reduce its soured debts amid rising regulatory costs and shareholder pressure for dividends and special payouts. Project Redwood is also likely to be marketed towards the end of 2017. KPMG is advising on the sale of the portfolio, which is likely to also contain a high number of buy-to-let mortgages.

As this newspaper has reported in the past, distressed debt funds have registered interest in the PTSB portfolio. However, it was thought that the bank would wait until AIB had advanced Project Redwood before approaching the market.

But the intense pressure to demonstrate progress on NPLs, which stand at 28pc of PTSB’s total loan book, means the bank may be forced to launch a sale sooner rather than later.

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