Update on Mortgage Arrears Performance

 permanent tsb Group reports continued improvement in reducing mortgage arrears

· 21% fall since start of year in number of homeloan mortgages in arrears of more than 90 days

· 25,000 borrowers in arrears now offered restructuring arrangements

Thursday 18th September 2014. permanent tsb Group has reported continued progress on reducing mortgage arrears in its Asset Management Unit (AMU) through to the end of August. Shane O'Sullivan, Managing Director of the AMU, said that it had seen improvements in key indicators in recent months which continued the strong improvements seen across the portfolio of mortgages earlier this year. O'Sullivan was speaking at a media briefing on the AMU.

Since inception of the Unit in 2012, the AMU has enhanced its process, procedures and treatments on a continuous basis to address customers in arrears. The AMU will continue to make further enhancements to capitalise on experience gained to date.

21% drop in Homeloan Customers in arrears of over 90 days:

O'Sullivan said there were 4,357 fewer homeloan (HL) customers in arrears of over 90 days at the end of August than was the case at the start of the year (a fall of 21%). The percentage and numbers of arrears over 90 days in the bank's key mortgage portfolios as at end August were:

*Buy to Let.

The AMU received 27,500 completed Standard Financial Statements (SFS) between January 2013 and the end of August 2014. Approximately 300 completed SFSs are now being received each week, down from highs of 600 to 700. On average the AMU proposes a solution to customers within just 10 days of receipt of a completed SFS.

O'Sullivan also noted that to the end of August, the AMU had proposed 25,000 restructure offers across the mortgage portfolio. As proposed restructures are trialled and completed arrears numbers will fall further.

O'Sullivan said that the solutions being agreed with customers were pragmatic, are being well received and have low re-default rates to date; "we are proposing solutions which the vast majority of customers are accepting and which we believe they will be able to abide by over the long term. We believe we are striking the right balance between recovering the bank's capital over time and a customer's monthly repayment capacity."

Split Mortgages:

Of the solutions agreed with homeloan customers O'Sullivan said that split mortgages accounted for 26% of the proposed solutions; "the split mortgage is a key offering and our experience is that home loan customers are very positive about the arrangement. We charge 0% interest on the warehoused section of the mortgage and we review a customer's circumstances - typically every 3 years - with a view to ultimately eliminating the warehoused amount."

Voluntary Sale:

O'Sullivan also confirmed that in cases where customers in arrears agree to co-operate with the sale of the property, permanent tsb Group will agree up-front on how much of any outstanding debt must be repaid by the customer after the sale is completed; "we take this matter very seriously and discuss the issue on a case-by-case basis but it is important to give the customer certainty over how any shortfall in mortgage debt will be managed by the bank if they co-operate with the sale of a property. We sit down with each customer to make objective, equitable decisions based on their particular financial circumstances. The key is to have full transparency over a customer's ability to repay so we can ensure that the bank and the taxpayer is no worse off by making the decision before the sale than if the decision was taken after the sale had taken place, as would otherwise happen."

Engagement by customers is key:

O'Sullivan said the AMU experience to date had demonstrated the benefits to customers of engaging with the bank. He said; "our experience is very clear on this; when customers engage with the bank on their arrears they are receiving practical and workable restructurings which they understand and which they can live with. Repossession of properties is a last resort and the vast majority of our proposals see customers remain in their homes - once they engage with us on their situation."

Survey:

In this regard, O'Sullivan cited recently commissioned research (Rigney Dolphin) which measured the experience of a sample of customers who had recently been through the MARS process with permanent tsb. Of the sample of 117 customers, 84% described themselves as either Very Satisfied (62%) or Somewhat Satisfied (22%) with the treatment they were offered by the bank. 84% agreed that the new arrangement offered suited their current financial circumstances (55% agreed strongly, 29% simply agreed). O'Sullivan said that while the sample was relatively small it should encourage people that engaging with their bank was in their own best interests and was not as daunting a process as they might believe."

Issued for and on behalf of permanent tsb Group Holdings plc.

Ciarán long, Group Secretary

Further Information:

Gordon MRM

[email protected]

Ray Gordon 087 2417373