Implications of ptsb sale for mortgage holders

Brendan Burgess

Brendan Burgess

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I have never been a fan of ptsb given their long track record of treating mortgage customers very badly.
  • Charging much higher rates than the other lenders when there was no switching market so customers were prisoners
  • Massive discrimination between new and existing customers e.g. offering new customers fixed rates but not offering them to existing customers
  • Scandalous tricks which many customers fell for - e.g. Offering a "one year discounted tracker" which was only a tracker for one year with the rate to be set by ptsb when the year was up.
But does the potential sale to a vulture fund make it better or worse?

www.irishtimes.com

John McManus: Harris should take the private equity money for PTSB and run

There is little evidence to suggest Austrian bank Bawag would be a good buyer for PTSB
www.irishtimes.com www.irishtimes.com

The purchaser will drive down costs and should be able to reduce rates accordingly. But vulture funds tend not to charge low rates. It will probably be different though if they are trying to attract new business.

Brendan
 
Brendan Burgess said:
The purchaser will drive down costs and should be able to reduce rates accordingly. But vulture funds tend not to charge low rates. It will probably be different though if they are trying to attract new business.
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I think this is the crux of it. If they buy it as a closed book of business then they will 'sweat' the loans for as much as they can. However, if they intend to stay open for NB then they have to be competitive, as there are more options now and switching is more prevalent.
 
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Most customers wont notice anything until they start closing branches etc.
As regards the mortgages that are in the MARPS process they will now be in bother as the banks had previously outsourced problems to the Vulture Funds now one of our High Street Banks will be the Vulture.

There is a case before the courts regarding a Vulture setting a different rate to PTSB which had been previously posted on here, but now if that loan is now transferred back into "PTSB" ownership by the Vulture that argument is now mute , they can and will set what ever rate they want .
We have previously seen PTSB/Springboard problems , now the Vulture will own the Bank .

We have non bank lenders in the country and their rates are not great , how low the "New PTSB" will set the rates will depend on how they source their money .

There will be people unaware of how precarious their position is now if a Vulture takes over PTSB .
Remember its not that long ago that Start closed up and sold everything to Mars , now the fund behind Start ( Lonestar) is in the mix to own a high street bank , whats their angle ????
 
FANTANA said:
Will the sale entitle you to break out of a fixed mortgage without a break fee?
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No. A break fee, or a lack of one, is a reflection of market rates available to your lender at the time you break versus when you fixed. No reason a change of ownership should impact this.
 
ClubMan said:
Surely we don't know that at this stage?
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The Irish Times article reports that the three bidders remaining in contention are investment funds, which are commonly known as vultures.

The question is not what they are called but how will they behave. Will they close the book and get as much interest as possible from the customers or will they try to build a profitable business by cutting costs?
 
CorkHome2022 said:
There is a case before the courts regarding a Vulture setting a different rate to PTSB which had been previously posted on here, but now if that loan is now transferred back into "PTSB" ownership by the Vulture that argument is now mute , they can and will set what ever rate they want .
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An interesting angle ok.
I have always argued that while ptsb has the right to sell on the mortgage, the new owner should make available to the borrowers the rates on offer by ptsb. This is the only way to protect the mortgage prisoners who can't switch.

Of course, if ptsb started charging vulture rates, then this would be of no benefit. We should worry about that when we see who buys ptsb and what rates they charge.
 
Bank management obligated (?) to get the highest price possible. Buyer wants to recover the money invested as quickly as possible. Buyer may also want top flip it when that recovery of money happens maybe by making it leaner on costs and/or increasing profitability per account by upping rates.

It's no different to what's happening to one of my favourite restaurants abroad - new owner - stop doing the 3 course special - reduce the number of meat pieces in the dish from 10 to 8 and increase the prices. Will he loose business? No, not unless folk stop eating out. Captive market and others in same type of restaurant business doing exact same things.

Similar in 'consolidation' of Life & Pension brokerages here. Buyer (probably) paying too much but confident that recovery can be quick if they keep the book, cross sell and the 'trend' is towards higher AMCs anyway in the advice market.

In none of these scenarios is the consumer to the fore. There's nothing 'extra' for the customer here and they just have to put the hand that bit deeper into the pocket.
 
Bawag are a bank so hopefully this is a good thing for existing customers, better than an investment/vulture fund buying PTSB anyway. They also own MoCo, so it'll be interesting if they keep that as a separate entity or merge it into PTSB. MoCo's current mortgage rates aren't overly competitive, about 0.45% higher than PTSB's current best rates so hopefully they won't move PTSB's rates in that direction.
 
The media seem to love putting a bad news spin on things...
www.independent.ie

Government backs sale of PTSB for €1.6bn, shares drop sharply

The board of PTSB has agreed a deal with Austria’s Bawag to support a sale of the bank for €1.619bn in cash. Minister for Finance Simon Harris, who controls a 57.5pc stake on behalf of taxpayers, has backed the deal, the banks said.
www.independent.ie www.independent.ie
The price is well below most estimates when the sale process was launched last year.
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And yet, late last year...
www.businesspost.ie

PTSB will ‘struggle to find buyer willing to pay more than €1.1bn’, UK analysts warn

www.businesspost.ie www.businesspost.ie
 
From the Irish Times article quoted at start of this thread .
Be careful what you wish for .

Bawag’s growth strategy seems to consist of doing to other European banks what Cerberus did to it. It bought Dutch bank Knab in 2024 and Barclays Consumer Bank Europe in February 2025. Both have been restructured in an effort to match their new parent’s market beating cost-to-income ratio of 33 per cent. PTSB has a cost-to-income ratio of 77 per cent. It would be a bloodbath if Bawag got its hands on the Irish bank.
 
Sarah Ryan said:
Another good reason to fix in a nice rate now??
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I'm thinking along the same lines. Perhaps I'm sceptical but usually nothing good comes from a bank getting sold.
I went through closure of Halifax, Ulster Bank and now PTSB certainly there was no benefit for regular customers involved in the process.
 
Pawel Nowak said:
I'm thinking along the same lines. Perhaps I'm sceptical but usually nothing good comes from a bank getting sold.
I went through closure of Halifax, Ulster Bank and now PTSB certainly there was no benefit for regular customers involved in the process.
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Halifax and Ulster Bank weren't sold like PTSB though. They closed down.
 
Connard said:
Halifax and Ulster Bank weren't sold like PTSB though. They closed down.
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Point taken but halifax sold their loan book to several other companies, Ulster Bank followed a similar path. As I mentioned it's doubtful this development will benefit regular customers.
 
My break fee turned out to be 0, it was 5 or 6k a few months ago, I'm guessing it's zero now due to the Iran war and the market now expecting inflation and ECB rates to increase.

It won't be the same for everyone depending on when you fixed and for how long but FYI for anyone that's currently fixed with PTSB it may be worth checking your break fee and either breaking and re-fixing at a better rate or longer term, or just switching bank altogether.
 
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