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Friday 1 December 2023 Dublin: -2°C
Mark Stedman/Photocall Ireland
Stress Test

Report card in... Permanent TSB has an €855m shortfall

The group confirmed that it has already “provided for” over 80% of the shortfall .

PERMANENT TSB HAS confirmed today that it has failed the latest European Central Bank (ECB) stress test.

An €855 million shortfall has been identified in the Irish bank. It is the only Irish bank out of the 25 eurozone banks that failed.

In a statment this morning, the bank siad that it is finalising plans to raise capital from international investors to support the maintenance of prudent capital buffers and profitable growth. 

The group confirmed that it has already “provided for” over 80% of the shortfall identified in ECB tests on the back of both progress made in 2014 and the Group’s existing Contingent Convertible notes.

They said that they are in advanced planning with international investment bank, Deutsche Bank, to raise capital from international investors in the coming months.

Group Chief Executive Jeremy Masding said the Group has already addressed over 80% of the €855 million shortfall that the ECB said identified.

Masding said:

The tests were based on our position at the end of December last and we’ve made huge progress since then on a number of fronts so we’ve already provided for over 80% of the shortfall that the ECB identified.  We look forward to bringing international investors on board now to raise the remaining amount which will leave the bank fully in line with the ECB requirements.

On customers, Masding said: “Customers are unaffected by these tests are are not required to do anything as a result of today’s news.”

Gordon MRM Video Channel / YouTube

PTSB now has two weeks to submit capital plans to the ECB.

The Central Bank of Ireland said the results of the stress scenario show all Irish based institutions meet the ECB requirements to have, under the baseline scenario, at least 8% common equity tier one capital through to end-2016.

In the adverse scenario, which requires banks to hold 5.5% common equity tier one capital, AIB, Bank of Ireland, Merrill Lynch and Ulster Bank meet the requirements.

“PTSB balance sheet does not meet the threshold set in the adverse scenario. PTSB has outlined its capital plan to the ECB and Central Bank. This includes a set of actions it intends to undertake to address the shortfall arising in this hypothetical adverse scenario,” said the Central Bank.

The  ECB audit shows 25 banks failed capital requirements and that banks’ assets must be adjusted by €48 billion. The ECB says the banking audit should “boost confidence”.

Originally posted 11:23am.

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