Wednesday, 2 July 2014

Questions (65)

Stephen Donnelly

Question:

65. Deputy Stephen S. Donnelly asked the Minister for Finance further to the statement in the IMF staff report on Ireland published on 18 June 2014 (details supplied) if a decision on the Permanent TSB restructuring is not now expected until the end of 2014, when the ECB will have completed its stress testing-capital assessments of Irish banks. [28621/14]

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Written answers (Question to Finance)

As the Deputy is aware, the ECB Comprehensive Assessment is currently underway. Work will be ongoing over the coming months with the final results due for publication in late 2014.

With regard to Permanent TSB, a way forward for was agreed with the Troika in April 2012 which envisaged it playing an important role in the future of Irish retail banking, being a more focused retail bank bringing an element of competition to the marketplace which has consolidated significantly since 2008.  In this regard Permanent TSB prepared a Restructuring Plan, which the Department of Finance submitted to the European Commission ("the Commission") in June 2012.  As requested by the Commission an updated version of the plan was submitted in August 2013 which is broadly in line with the June 2012 plan.

While no restructuring plan has been approved, Permanent TSB has made significant progress in delivering key elements of the Restructuring Plan and the business is being managed structurally in the way envisaged in the plan. Permanent TSB continues to work to enhance the value of our investments through the continued delivery of the Restructuring Plan, which will, if delivered, provide the State with more optionality regarding the future structure of Permanent TSB.

During 2013 Permanent TSB grew its presence and activity in the retail market in general and in the current account and deposit markets in particular, as well as in mortgages and term lending; and it launched several new products during the year.  Permanent TSB has also made material progress in relation to managing its portfolio of mortgages in arrears.

Discussions are ongoing at a technical level in relation to the restructuring plan, details of which are confidential between the parties and commercially sensitive. I do not intend to speculate on when that process might be concluded.

The current strategy is for Permanent TSB to be an independent bank, competing within targeted segments of the retail banking market, and I will continue to support the board and management in the delivery of that strategy.