Permanent TSB Group Holdings PLC Sale of Buy To Let Loan Portfolio (2738D)
October 27 2020 - 2:00AM
UK Regulatory
TIDMIL0A TIDM73HR
RNS Number : 2738D
Permanent TSB Group Holdings PLC
27 October 2020
27 October 2020
This announcement contains inside information under Article 17
of Regulation (EU) 596/2014.
PERMANENT TSB GROUP HOLDINGS PLC
SALE OF BUY TO LET LOAN PORTFOLIO
Permanent TSB plc ("PTSB", the "Bank"), a wholly owned
subsidiary of Permanent TSB Group Holdings plc has agreed the sale
of a portfolio of performing Buy-To-Let ("BTL") originated loan
accounts (the "Portfolio") to Citibank NA London. Citibank NA
London is a UK branch of Citibank NA ("Citi"), an entity
incorporated in the U.S and regulated by the Office of the
Comptroller of the Currency. Citi intend to syndicate the Portfolio
via securitisation following completion of the acquisition. The
securitisation of the Portfolio will have no impact on customers.
The terms and conditions of individual loan accounts are unaffected
by this transaction, and will continue to apply.
Citi has a significant presence in Ireland spanning 55 years. It
is a major employer in the Irish Financial Services industry with a
total of c. 2,500 staff.
The Portfolio will continue to be serviced by PTSB for a period
of up to six months. At the end of this period, legal title and
loan account servicing will transfer to Pepper Finance Corporation
(Ireland) DAC trading as Pepper Asset Servicing ("Pepper").
Details of the Portfolio and Transaction:
The transaction involves the sale of a pool of c. 3,700 BTL loan
accounts. The loan accounts are linked to c. 3,400 borrowing
relationships (a borrowing relationship can be a single borrower or
two or more joint borrowers). All loans originated as loans secured
on BTL properties; predominately consisting of Interest Only
repayment terms, have an average balance of c. EUR375k, are
classified as performing from a regulatory perspective and have an
average remaining term of 10 years. No loan accounts having
received a payment moratorium due to Covid 19 are included in the
transaction.
The Portfolio has a gross balance sheet value of c. EUR1.4
billion, a net book value of c. EUR1.2 billion and an overall risk
weight intensity of c. 80%. In the year to December 2019, the
Portfolio generated gross interest income of c. EUR15 million and
an operating profit(1) of c. EUR2m. At completion, PTSB will
receive a consideration of c. EUR1.2 billion. The proceeds will be
used for general corporate purposes.
This transaction will increase the Bank's transitional Common
Equity Tier 1 (CET1) Ratio by c. 190 basis points (Fully loaded: c.
150 basis points) and the transitional Total Capital Ratio by c.
210 basis points (Fully loaded: c. 170 basis points). The
transaction will see an increase in the Bank's NPL Ratio from c. 7%
to c. 7.7%.
(1) (Operating profit defined as gross interest income less cost
of funds and operating costs.)
Comment By Permanent TSB Chief Executive Eamonn Crowley:
" This transaction will increase the Bank's transitional Total
Capital Ratio by 2.1%, strengthen the balance sheet and provide us
with resources to compete in our core markets of personal
mortgages, personal lending and SME lending . All applicable terms
and conditions continue to apply, meaning that customers will be
afforded the same consumer protections upon completion of the
transfer. Like Permanent TSB, Pepper is regulated by the Central
Bank of Ireland and is required to comply with consumer protection
legislation when dealing with customers."
Post Transaction Loan Servicing:
The terms and conditions of individual loan accounts are
unaffected by this transaction, and will continue to apply post the
transfer to Pepper. The Bank is today writing to all customers,
whose loans are included in the transaction, to inform them of this
development.
Permanent TSB was advised on the transaction by KPMG, Mason
Hayes & Curran and Clifford Chance.
Ends
For further information, please contact:
Declan Dolan Nicola O'Brien Leontia Fannin
Group Treasurer Head of External Head of Corporate Affairs
declan.dolan@permanenttsb.ie Reporting & Investor & Communications
+353 1 2462404 Relations leontia.fannin@permanenttsb.ie
Nicola.OBrien@permanenttsb.ie +353 87 973 3143
+353 1 669 5283
Note on forward-looking information:
This Announcement contains forward-looking statements, which are
subject to risks and uncertainties because they relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends, and similar expressions concerning
matters that are not historical facts. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of the Group or the industry in which it operates, to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. The forward-looking statements referred to in this
paragraph speak only as at the date of this Announcement. The Group
undertakes no obligation to release publicly any revision or
updates to these forward-looking statements to reflect future
events, circumstances, unanticipated events, new information or
otherwise except as required by law or by any appropriate
regulatory authority.
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