'Good bank, bad bank' plan mooted for Permanent TSB
26 April 2012
FACTS: A report in The Irish Independent (April 26th) suggests that Permanent TSB has secured backing for its independence as a retail bank.
ANALYSIS: The report says that the EU/IMF 'troika' had endorsed management's plans to divide Permanent TSB into a 'good bank' that will hold its healthier loans, and a 'bad bank', that will include some tracker mortgages and its UK assets. Overall, 68% of Permanent TSB's €33.7bn mortgage book (includes UK) consist of trackers. The 'good bank' will reportedly be a mainstream retail lender, focusing on residential mortgages and other consumer loans. The fate of the 'bad bank' is unclear but it presumably entails selling/running down the assets.
DAVY VIEW: The report notes that some of the finer details of Permanent TSB's plan have yet to be worked out but predicts an announcement today.