Irish bank permanent tsb (PTSB) has announced that it has agreed to sell a Non-Performing Loan (NPL/) portfolio to retail credit firm Start Mortgages DAC supported by LSF Irish Holdings 97 DAC, both affiliates of the Lone Star Funds.
Start Mortgages has been authorised by the Central Bank of Ireland since November 2008 and will become the servicer of the loans when the transaction completes later this year. The portfolio has a gross balance sheet value of €2.1 billion and a net book value of c.€1.3 billion. In the year to December 2017, this loan portfolio generated an operating income of c.€8 million. At completion, PTSB will receive cash consideration of c.€1.3 billion. The proceeds will be used for general corporate purposes.

Jeremy Masding, Chief Executive of PTSB said that protections which exist for homeowners transfer with a loan when it is sold. “Customers will continue to be afforded the protection of existing regulatory protections after the transfer. The Bank remains committed to reducing its NPL ratio to single digits in the near term, reducing NPLs is a necessary step for us to take to complete the rebuilding of PTSB as a viable, competitive lender.”

Th portfolio consists of:

  • Contains non-performing loans linked to a total of c.10,700 properties made up of 3,300 Buy-To-Let Properties and 7,400 Private Dwelling Houses (‘PDHs’). PDHs are primarily made up of:
    • 2,500 classified as accounts deemed “Not Co-Operating”
    • 3,850 classified as accounts which have refused treatments or where the account has failed to operate in line with the agreed ‘Treatment’
  • Average arrears time of loans in the portfolio is 3.5 years (days past due)
  • Average arrears value of loans in the portfolio is €28,800
  • Average value of a loan in the portfolio is approximately €175,000