ptsb at the Oireachtas Finance Committee

[Brendan Burgess]

Masding's opening statement

1,979 accounts impacted

96% have been paid. 4% have asked not to be paid.

The Central Bank review is ongoing.

14,000 owners in arrears have returned to performing status.

Split mortgages are still categorised as non performing.

539 repossessed houses have been sold so far this year.

500 borrowers have been identified who might avail of Mortgage to Rent.

Central Bank is still insisting that we deal with NPLs.

 

[Brendan Burgess]

Michael McGrath

Are there no further outstanding issues?

Masding: Yes. Subject to independent assurance by the CB

McGrath: Has the CB signed off on the prevailing rate issue

Masding: We have made our view clear and we are waiting their response. I have no formal note that they disagree.

McGrath: On the Discounted Tracker issue. People got .2% discount for year one.

It seems to me that those customers had a legitimate expectation of a lower rate.

Masding: We have made our position clear and we await feedback from the Central Bank.

McGrath: On the Managed Variable Rate. the bank allows customers to sign up to this only once. When their LTV improves, they are stuck in the band they signed up to.

Masding
1) We underwrite a mortgage based on risk at a point in time for the foreseeable future.
2) Switching is switching
3) Retention is important

We undertook to look at fixed rates. That is under review.

We will not be looking at allowing people get a lower rate when their LTV improves.

McGrath: But the risk reduces over time as the security improves.

Masding: But if the property price falls we don't push up the rate band.

The focus of our retention strategy is on fixed rates

McGrath : Repeats the point

Masding: I have said what I want to say.

McGrath: You are exploiting people's inertia and the fact that they are trapped.

You have 57,000 customers on 4.5% SVR.(46,500 accounts?)
What is your blended cost of funds?

Masding: It's not just the cost of funds, the following are all higher in Ireland:
The credit risk
The liquidity costs
The capital costs
The regulatory costs

The blended cost of funds is 46 basis points

McGrath

8 customers are paying 9.1% fixed rate. Could they break out of that without incurring a penalty?

On the split mortgages - how are you proposing to deal with them? Is it securitisation?

 

[Brendan Burgess]

Pearse Doherty
ptsb's mortgages are classified as non-performing, but AIBs splits are classified as performing.

Masding
We are looking at ways of classifying them as performing.

Back in 2012, we could not have anticipated the SSM's thinking on the matter.

Splits form 1/6th of our treatment. In AIB it's 6%.
The average amount warehoused is 50% and up to 80%. In AIB it's around 20%,