Irish bank, Permanent TSB (PTSB) has announced that it has agreed to sell a 1.3 billion euro portfolio of problem mortgage loans in a securitisation deal, to help reduce its bad debt level to below 10 percent.

PTSB has been trying to reduce its exposure to non-performing loans (NPLs) and focus on providing services for consumers and small and medium-sized enterprises (SMEs).

CEO Jeremy Masding said the securitisation deal “reduces the NPL ratio to less than 10 percent thereby enabling PTSB to continue to compete in the Irish retail and SME banking market.”

The bad loan ratio was about 26 percent on Jan. 1 this year. Irish banks are under pressure from the European Central Bank to reduce bad loans which ballooned after Ireland’s property crash. PTSB is 75 percent state-owned.

Most of the 6,272 mortgages in the sale were restructured but are classified as non-performing loans (NPLs), the bank said. They include 4,046 “split” mortgages, where repayments on a portion of the loans are frozen until a future date.

The bank would continue as the contact point for customers affected by the transaction for six months, at which point loan outsourcing company Pepper Finance Corporation will take over legal title to the loans.

Source: Reuters