18 Jul 2012 14:30
Statement by permanent tsb Group Holdings p.l.c.
(permanent tsb p.l.c. is the retail banking subsidiary of permanent tsb Group Holdings plc)
Chief Executive of permanent tsb bank addresses Oireachtas Joint Committee on Finance, Public Expenditure and Reform.
Bank to announce a restructuring plan within the next week which will include branch closures and other changes
Embargo: 2.30pm Wednesday 18th July 2012. Jeremy Masding, the new Chief Executive of permanent tsb bank, has told an Oireachtas Committee that the bank will announce a restructuring plan within the next week which will:
·; reduce the number of branches from the current 92
·; Reorganise the Head Office function and
·; Reduce Operation Expenses
Mr. Masding, who was appointed Chief Executive in late February, was speaking to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. Mr. Masding stressed that the changes would not unduly impact on customer service and that the bank was committed to maintaining a comprehensive, nationwide service through branches and other channels including internet and phone banking; "Customer impact will be minimised."
According to Mr. Masding the restructuring plan was necessary to secure the future of the bank and progress will be reviewed by the Troika in early October. Mr. Masding said that the Troika "had made it very clear that time is of the essence and that they will be reviewing progress on this plan when we next meet them in October."
Mr. Masding told the Committee that his objective at permanent tsb bank was to create a viable, customer focussed and competitive bank which will benefit customers. He said that the plan to rebuild the bank would require the separation of a "new" ptsb from an Asset Management Unit where the bank's uneconomic loans would be managed. He said; "we are working with the authorities to separate the new ptsb from the Asset Management Unit."
Mr. Masding said his three priorities since taking over the bank in February were:
1. Developing a restructuring plan
2. Reducing the bank's comparatively high variable rate mortgages
3. Reengineering the bank's collections function in order to reduce rising arrears
On the issue of mortgage rates, Mr. Masding said that with cuts of 85 basis points in the last two months, the bank had significantly improved its position vis-à-vis its competitors and ended its "outlier" status in respect of variable rates. He did not rule out further rate cuts but said that they would be dependent on the bank's ability to reduce the costs the bank faced particularly in respect of funding; "the cost of deposits in this market is expensive. If it reduces, and I hope it does, I believe we'll be able to reduce our variable rates further. That's how a rational banking system works. We won't proactively chase down mortgage rates."
Mr. Masding said that Ireland faced an important choice in respect of banks which have been supported by the taxpayer;
"The choice we face is -
[1] Whether we want to persist with an emasculated banking system which is forever reliant on taxpayer support, lives the lie of artificial pricing and which is incapable of normal business; or
[2] whether we want to take the difficult decisions necessary to restore strength and vigour to our banks so that they can be weaned off taxpayer support and, ultimately, return to the normal business of banking; the raising of money from deposits at reasonable rates, supplemented by selective levels of wholesale funding, funds that are then lent to borrowers at reasonable rates."
Mr. Masding stressed the appreciation of the bank - and his own appreciation - for the support of the Irish Government during the financial crisis and emphasised the bank's commitment to protecting the investment which the taxpayer has made in the bank.
Issued by
Ciarán Long
Group Secretary
Further Information
Ray Gordon
Gordon MRM
Ph: + 353 1 6650452
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