Wednesday, 2 July 2014

Questions (63)

Stephen Donnelly


63. Deputy Stephen S. Donnelly asked the Minister for Finance further to the announcement that Permanent TSB has engaged Morgan Stanley to provide advice on the sale of a commercial real estate and subprime mortgage book, if he will confirm the par value and provisioning on the subprime mortgage book at the end of 2013; his views on the provisioning at the end of 2012 which indicates that PTSB values the subprime mortgage book at 68c in the euro; if PTSB’s provisioning is reflective of provisioning in other Irish banks; and if he will make a statement on the matter. [28619/14]

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Written answers (Question to Finance)

Permanent TSB have informed me that as per the 2013 published annual accounts, the gross book value of the commercial real estate book as at the end of 2013 is €2.1bn. The total provisions on this portfolio are €0.9bn, giving a net book value of €1.2bn. Details regarding the Springboard portfolio are not separately disclosed. 

With regard to provisioning, as the Deputy will be aware, the Central Bank undertook the Balance Sheet Assessment (BSA) on a comparable basis for all covered banks in 2013 in accordance with a framework and requirements agreed with the Troika as part of the exit of the Programme. In their annual results for 2013 Permanent TSB confirmed that they had taken additional provisions on their loan portfolio as a result of the BSA and other factors.     

In common with all other significant banks in the Eurozone, the Irish banks are required to undergo a Comprehensive Assessment (CA) prior to the ECB assuming responsibility as the competent supervisory authority in November this year (2014). The CA has a number of components including an Asset Quality Review (AQR) and a Stress Test. The SSM AQR is similar to the CBI BSA exercise conducted in 2013 and will therefore review provisioning of the loan portfolios you refer to.