Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

A way forward for Permanent TSB 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 in June 2012. As requested by the Commission, an updated version of the plan was submitted on 15 August 2013 which was broadly in line with the June 2012 plan. Discussions on the plan are ongoing at a technical level involving the Commission, the Department and Permanent TSB.

As I informed Deputy Michael McGrath in response to a parliamentary question, there is no formal deadline in place for the Commission to respond to the updated version of the plan. However, the Deputy may have noted that Permanent TSB, at its interim results presentation on 29 August, stated it was aiming for approval before year end and I have no reason at this point to believe otherwise. The Deputy may also be aware that AIB is in discussions with the Department and the Commission on its restructuring plan and currently expects approval of the plan during the second half of 2013.

While discussions on Permanent TSB's restructuring plan are ongoing with the Commission, Permanent TSB has made significant progress in delivering key elements of the plan in the past year. It continues to work to enhance the value of investments through the continued delivery of the restructuring plan which will, if delivered, provide the State with more options regarding its future structure.

As the Deputy will be aware, the banking sector is extremely concentrated with AIB and Bank of Ireland controlling the vast majority, in particular key products such as mortgages and SME lending. Nevertheless, Permanent TSB has a significant presence in the Irish market, particularly in certain segments such as mortgages and deposits. The Deputy may have observed from Permanent TSB's interim report, published on 29 August, that its gross Irish residential mortgages at the end of June totalled €24.2 billion and that it held €11.6 billion of retail deposits also at the end of June. Permanent TSB also holds UK mortgages via its CHL subsidiary. It holds other assets such as commercial real estate and consumer finance loans and has a sizeable corporate and institutional deposit base.

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The Deputy will note that Permanent TSB has returned to the new lending market in a meaningful way this year and has approved €170 million of mortgage loans in the year to date, almost three times the figure for the same period in 2012, thereby contributing to competition in the Irish banking market. I welcome this development which should be of assistance to the wider economy.

The Deputy may also be interested to note that as of 30 June, Permanent TSB's total balance sheet exceeded €30 billion. It would, therefore, meet one of the criteria for entry into the Single Supervisory Mechanism.

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