IL0A.L Regulatory News (IL0A)

27 October 2020

This announcement contains inside information under Article 17 of Regulation (EU) 596/2014.

PERMANENT TSB GROUP HOLDINGS PLC

SALE OF BUY TO LET LOAN PORTFOLIO

Permanent TSB plc ("PTSB", the "Bank"), a wholly owned subsidiary of Permanent TSB Group Holdings plc has agreed the sale of a portfolio of performing Buy-To-Let ("BTL") originated loan accounts (the "Portfolio") to Citibank NA London. Citibank NA London is a UK branch of Citibank NA ("Citi"), an entity incorporated in the U.S and regulated by the Office of the Comptroller of the Currency. Citi intend to syndicate the Portfolio via securitisation following completion of the acquisition. The securitisation of the Portfolio will have no impact on customers. The terms and conditions of individual loan accounts are unaffected by this transaction, and will continue to apply.

Citi has a significant presence in Ireland spanning 55 years. It is a major employer in the Irish Financial Services industry with a total of c. 2,500 staff.

The Portfolio will continue to be serviced by PTSB for a period of up to six months. At the end of this period, legal title and loan account servicing will transfer to Pepper Finance Corporation (Ireland) DAC trading as Pepper Asset Servicing ("Pepper").

Details of the Portfolio and Transaction:

The transaction involves the sale of a pool of c. 3,700 BTL loan accounts. The loan accounts are linked to c. 3,400 borrowing relationships (a borrowing relationship can be a single borrower or two or more joint borrowers). All loans originated as loans secured on BTL properties; predominately consisting of Interest Only repayment terms, have an average balance of c. €375k, are classified as performing from a regulatory perspective and have an average remaining term of 10 years. No loan accounts having received a payment moratorium due to Covid 19 are included in the transaction.

The Portfolio has a gross balance sheet value of c. €1.4 billion, a net book value of c. €1.2 billion and an overall risk weight intensity of c. 80%. In the year to December 2019, the Portfolio generated gross interest income of c. €15 million and an operating profit1 of c. €2m. At completion, PTSB will receive a consideration of c. €1.2 billion. The proceeds will be used for general corporate purposes.

This transaction will increase the Bank's transitional Common Equity Tier 1 (CET1) Ratio by c. 190 basis points (Fully loaded: c. 150 basis points) and the transitional Total Capital Ratio by c. 210 basis points (Fully loaded: c. 170 basis points). The transaction will see an increase in the Bank's NPL Ratio from c. 7% to c. 7.7%.

1 Operating profit defined as gross interest income less cost of funds and operating costs.

Comment By Permanent TSB Chief Executive Eamonn Crowley:

"This transaction will increase the Bank's transitional Total Capital Ratio by 2.1%, strengthen the balance sheet and provide us with resources to compete in our core markets of personal mortgages, personal lending and SME lending. All applicable terms and conditions continue to apply, meaning that customers will be afforded the same consumer protections upon completion of the transfer. Like Permanent TSB, Pepper is regulated by the Central Bank of Ireland and is required to comply with consumer protection legislation when dealing with customers."

Post Transaction Loan Servicing:

The terms and conditions of individual loan accounts are unaffected by this transaction, and will continue to apply post the transfer to Pepper. The Bank is today writing to all customers, whose loans are included in the transaction, to inform them of this development.

Permanent TSB was advised on the transaction by KPMG, Mason Hayes & Curran and Clifford Chance.

Ends

Note on forward-looking information:

This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. The Group undertakes no obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.