Permanent TSB to raise interest rates

Re: permanent TSB increase Variable Interest Rates

Purple said:
I could be wrong but I thought the inter-bank lending rate was what mattered. That's running well ahead of the ECB rate. As the euro-zone comes out of recession the inter-bank rate should drop.
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No, the interbank rate (overnight euribor) is below the ECB rate at the moment. Running about 0.94% today I believe. The problem is there is a risk premium attached to all the Irish banks. Overnight/short-term repos are not covered in the guarantee nor should they be, as they are secured on assets. Unfortunately, those assets are 'worth' well below book value. So a lending bank charges more for the risk it is taking. Euribor is a reference rate. It is like saying the average wage is 43k, it doesn't mean that everyone earns it...

I don't see your logic with the eurozone coming out of recession. If the eurozone comes out of recession, ECB interest rates will rise and euribor rates will rise with them. Until the consumer debt burden in Ireland is reduced, Irish banks will still face the same premium on their interbank borrowings, i.e. they will continue to pay euribor+risk%

We are caught in the middle seat between a junkie in withdrawal and a neo-nazi skinhead on a non-stop flight to nowhere. If the eurozone economy doesn't recover we are stuffed (exports will start to dry up - the eurozone makes up 44% of our exports by value); if the eurozone economy does recover, interest rates will rise and people will go bust in large numbers.
 
This may be a silly question, but why are people on variable mortgages? Did they not have the opportunity to switch to tracker mortgage at some stage over the past few years? If people had an opportunity to switch to tracker mortgage was there some reason not to switch? I have five grown up children, all married, all with tracker mortgages. About three years ago one of them switched to tracker mortgage and advised the other four to do likewise. They have mortgages with different institutions but none with PTSB. So my question is, if people had the opportunity to switch to tracker mortgage, why didnt they do it?
 
Cant answer for anyone else but for me it was ignorance.

Hadn't a clue what was what.....i had a broker who got the mortgage for me and then a solicitor who had little stickers showing me when to sign.

If i knew then what i know now then i would of jumped on having a tracker mortgage....you live and learn.
 
It is genuinely difficult to understand the reaction here. Unless Permanent-tsb are a state company and I don't think they are, then surely the management is obliged to run the business on a commercial basis. You don't have to be a boffin to figure out that if a lot of mortgage holders are only paying 1.75% or 2% on their mortgage, and Perament-tsb have to pay 3% to get in deposits, then they are losing money. How can that be let continue?

The moaning about 'the banks' and how they all owe us seems to be misguided populist ranting. From what I know Permanent-tsb don't have any of the nasty nama stuff. The State hasn't put any money into Permanent-tsb, has it?

It was the same thing with the fixed rates. People suddenly became victims because they took out a fixed rate mortgage. So, they wanted protection against rates going up, but of course when rates then fell they wanted those aswell. You can't have it both ways people.

If Permanent-tsb customers don't like what they are doing, they can go elsewhere. That's the system. If you don't want to move, or can't move, stop blaming other people for that.
 
blaze1 said:
hello Guys....chill with all the radio and media attention I do not think this will go ahead at all... I am also a ptsb customers and with all that i have heard today it's unlikely to happen!!

so I'm not going to stess I think it will be ok!!

we will see!!
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its going ahead from this comming monday!
 
I really dont understand the uproar here, I heard on th radio that PTSB employees were spat at and are getting threatened in the branches! What is wrong with people today,these people in the branches are working on an average wage and are just doing their job.

And as 1 or 2 people have said I actually agree with the increase- they have to, look at the end of the day banks have to make a profit. Full Stop., No profit means no no growth for their business and reduced lending.

Savings rates are grossly overpaid in Ireland and mainly because retail funding is an easier way for banks to raise capital as opposed to the bond markets, but consumers are benefiting from high interest rates on their deposits and low rates on their mortgage, anyone with half a brain will see this is a loss leader for the bank and cant be sustained.

PTSB have no development finance, and therefore it appears not much to put into NAMA, they are paying several million euro to be in the Government Guarantee Scheme so i think they have the right to stay in the scheme considering they are paying for the right to be! And the government have not put a penny into them.

Personally I would rather pay an increased rate on my mortgage now if it meant I got more confidence that if the bank can actually make a profit, then they will be able to a)survive b)grow business c) in the long run assist Ireland to get out of the recession.
 
They want the State to bail them out of their fixed rates. They want the State to bail them out of their variable rates. Next they'll be looking for the State to change their nappies for them. Outrageous!
 
Bobby1 said:
PTSB employees were spat at and are getting threatened in the branches! What is wrong with people today,these people in the branches are working on an average wage and are just doing their job.
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I can't agree enough. These are just people doing there normal jobs and don't deserve this abuse. It's amazing how people don't care about getting ripped off and are all for the greater good when the cash is rolling in but when things turn it all comes back to number one.
 
We the Irish Taxpayer's are guarantor's for PTSB -that is why people are so fed up with this rise.
 
If i were a guarantor for someone i would be pleased to see the taking steps to avoid losses
 
Heraldo said:
ptsb has not passed on at least the last four ECB rate reductions totalling 1% to RIP holders and unbelivably is now going to apply an increase of 0.3% to such loans. Very hard to understand their thinking ?????????????
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PTsb has passed all the ECB rate reductions on all the ECB-tracker mortgages (RIP and Residential) that as you know are linked to the ECB rate fluctuations.
PTsb has no obligations to pass the ECB rate reductions on other mortgage products but it has done so for all Residential mortgages.

RIP stands for Residential Investment Property. RIP mortgages are taken by Investors with the intent of profit. RIP mortgages are not taken for family homes and are treated differently.
All the best,

nadnerB
 
Re: permanent TSB increase Variable Interest Rates

Purple said:
There is often a caveat on that in the small print.
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This is untrue, as long as you are on an ECB-tracker mortgage, your rate will be driven exclusively by the ECB rate.
If you have clear examples of small print that contradicts the above, please post them.

All The Best

nadnerB
 
Brendan said:
As I have pointed out in this thread, these criticisms of the permanent tsb damage the case for nationalising the banks.

As taxpayers, it is in our interest that the banks operate on a profitable basis. They cannot lend money to people at prices less than they pay on deposits.

So, as a taxpayer and effectively the owner of the banks, I am delighted to see them raising interest rates to more sustainable levels.

Brendan
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Hi Brendan,

I am not sure you are being completely truthful here. As taxpayer you are NOT the owner of the banks, or at least of all the banks.
As taxpayer you own Anglo Irish Bank that has been nationalised.

As regards PermanentTSB, you can say that they are part of the state deposit guarantee and they pay a premium for this privilege but this doesn't give taxpayer any sort of ownership, correct me if I'm wrong please.

I am sure you know that PermanentTSB has NOT received state money injections in any form unlike AIB and Bank Of Ireland. Furthermore PermanentTSB does not seem to have in its books any property that will go to NAMA unlike AIB and Bank Of Ireland. So you might want to clarify that taxpayers do not own PermanentTSB AT ALL unless they have shares in IL&P.

All The Best,

nadnerB
 
New Poster here. Not Irish but I have lived here for a long time. I state that in order to try and give what I consider to be a balanced view.

The radio tv and gereral media reaction to this 0.5% rate increase is quite stunning. Its is quite simply a commercial decision made to try and keep the PTSB in business and continuing to operate.
here are a few questions / issues that I would ask people to consider:

1. As Taxpayers we claim its our money propping up the Banks, if its our money. Have you ever tried to spend it ? in my mind I am not supporting the banks, no more than I am supporting the pertrol station when I fill my car with fuel, when I get my fuel my money is spent it then belongs to someone else. I view my tax money the same way. If I decide to move myself and family to another country, where exactly do I reclaim my share of this taxpayers money ??? Not being pedantic, but think about it.

2. The Guarantee that the sate provided is just an extesion of one that has been in place for many years and was overdue an overhaul anyway. The Banks are not getting this for free. Nor are they getting the capital injections for free.

3. Many many millions and Billions of "Taxpayers " money was wasted by Govt over the years on Tribunials and pie in the sky projects and overruns on capital expenditure. I dont recall such high level intense venom about that.

4. USA has rates close to 0% yet most homeowners have what are called ARMS. typically its a mortgage on your house that is negotiated and renewed every 1 3 or 5 years. Giving the Banks a chance to increase margins as they see fit. Most USA homeowners are comfortable with this and have no problem switching and dealing with this issue. (when I say problem I mean its an accepted behaviour). It seems here that this more simplified system will not tolerate behaviour like PTSBs, which like it or not is a neccessary move and likely to be the 1st of 2 or 3 such increases.

If we want a Banking system that works we have to balance control risk and commercial viability. Unless we favour central planning. The Business and Banking World is a tough place where tough decisions are made, we are moving into a new Banking era Worldwide. Things cannot be expected to stay the same as they have been.

5. People on Variable rates with PTSB are most likely paying approx 150E less per month than 18 months ago even after this hike. I know its not the point its the principle, however we havent attacked the Oil industry in the same way! Nor have we focussed on the Now non Irish Banks who are still charging more than PTSB for variable rates.
just a few points to consider
 
nadnerB said:
PTsb has passed all the ECB rate reductions on all the ECB-tracker mortgages (RIP and Residential) that as you know are linked to the ECB rate fluctuations.
PTsb has no obligations to pass the ECB rate reductions on other mortgage products but it has done so for all Residential mortgages.

RIP stands for Residential Investment Property. RIP mortgages are taken by Investors with the intent of profit. RIP mortgages are not taken for family homes and are treated differently.
All the best,

nadnerB
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They only recently passed on the last ecb rate reduction - as usual dragging it out as slow as possible. I bet come monday though I will have the letter in the post saying it will go back up!
 
I think selfish Ireland is at play here. If you have a variable mortgage in this country you are annoyed and disgusted by PTSB dicision to up interest rates however if you have a tracker or no mortgage you dont really give a dam and probably agree with the rise. Strange...
 
yankinlk said:
They only recently passed on the last ecb rate reduction - as usual dragging it out as slow as possible. I bet come monday though I will have the letter in the post saying it will go back up!
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And yet I take it you are still with them. You demand and expect every ECB and market reduction going, but the idea that a loss-making company might have to increase its prices is unacceptable to you? This is a free market - if you are not happy with the product you signed up for then head on to another company.
 
roland said:
and yet i take it you are still with them. You demand and expect every ecb and market reduction going, but the idea that a loss-making company might have to increase its prices is unacceptable to you? This is a free market - if you are not happy with the product you signed up for then head on to another company.
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+1!
 
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