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Permanent TSB reports losses of €424million

The bank warned of a “significant deterioration” in the number of borrowers in arrears.

Image: James Horan/Photocall Ireland

PERMANENT TSB HAS reported annual losses of €424million for 2011.

The after-tax loss is an increase of more than €100million on the previous year, when the retail bank lost €321million.

The figures emerged in the bank’s annual report as the lender warned of a “further significant deterioration” in the number of borrowers in arrears. It set aside €1.4billion to cover losses on mortgages – more than three times the figure for 2010.

Before impairment charges and other adjustments, the bank had an operating loss of €65million. In 2010 it ran an operating profit of €51million.

The lender – part of Irish Life and Permanent plc – said the decline in results was due to increased costs of €76million from the bank guarantee, and restructuring costs.

It reduced its loan-to-deposit ratio significantly since 2010, from 249 per cent to 227 per cent.

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Chairman Alan Cook said the bank had made “considerable progress in preparing the business for the future”. He continued:

A key challenge for the business and for our customers is arrears and we are working hard to manage this situation with our customers and with other stakeholders.

Cook said Permanent TSB was “strongly capitalised”, and he was confident the bank “will return to sustainable levels of profitability over the coming years”.

More: Government granted High Court order for €1.3bn Irish Life takeover>

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Michael Freeman

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