The Group Chief Executive of permanent tsb, Jeremy Masding, has announced plans to increase significantly the bank’s lending capacity this year for key product areas including Mortgages, Personal Loans (including car loans) and Credit Cards.
The plans are based on projected lending of approximately €450 million in the current year – a five-fold increase from less than €90 million lent out in 2012. Further increases are scheduled for future years.
Included in the plans are mortgages of up to 90% Loan to Value (LTV) and mortgage rates from 3.69% (details in editors note), very competitively priced car loans (from 9.1% APR) for both new and second hand cars and, for Credit Card customers, 0% finance on transferring balances for 6 months.
Speaking today, Mr. Masding said that bank’s ability to finance new lending followed from its success in doubling the size of its deposit book to approximately €12 billion in the past few years and making significant progress on its restructuring plans over the past twelve months:
We will continue to increase our provisions linked to historic lending but they are in line with the scenario laid out in our Restructuring Plan and we’re making great progress on implementing that plan. We’ve reduced our cost base. We’ve established the Asset Management Unit to manage problem loans. The new Management Team is now in place and the strategy has been agreed; all this means that we have a strong foundation from which to build out the new permanent tsb bank and recommence lending to Irish customers.
Mr. Masding said that while it would take many years for the bank to work through the impaired loan accounts which have arisen through the crash, the bank’s Restructuring Plan ensured that it would not have to wait for those issues to be resolved before returning to lending;
Our Restructuring Plan is based on a twin track approach whereby we return to lending into the Irish economy at the same time as we continue to work through the legacy issues of impaired loans and arrears.
Mr. Masding said that the new lending for 2013 was an integral part of the bank’s Restructuring Plan:
Bank’s make money by lending so it’s imperative that we return to sustainable, sensible and profitable lending as soon as practicable and we are committed to doing so this year. Our key aims are to re-establish permanent tsb as a significant third player in the Irish banking market and to return to profitability in 2016. We are well on our way to achieving those targets.
Mr. Masding said the aim was to regain a “meaningful and profitable” market share in core lending markets. But he warned against simply chasing market share:
We want to lend responsibly, at the right price for the underlying risk. We think that by returning to basic banking principles – with proper credit risk analysis - we can rebuild trust with customers who want and deserve access to credit. We have a national presence, staffed by committed people who are proud of their profession and who want to re-connect with their customers.
As part of the new drive, permanent tsb intends to lend approximately €350m into the mortgage market, €100m into personal lending (including car finance) and €5m in new Credit Card finance.