Mr. Jeremy Masding:

Good morning, Chairman and members of the committee. On behalf of my colleagues and myself, I thank the committee for the invitation to meet and update it on our progress on relevant matters. As the Chairman detailed, I am joined by Mr. Stephen Groarke, head of financial reporting and planning, Mr. Shane O'Sullivan, managing director of the asset management unit, and Mr. Ger Mitchell, director of mortgage and consumer finance.

I would like to keep these opening remarks very brief as I am sure it would be a better use of the members' time to focus on questions and answers, but I would like to make a small number of points. The past 12 months have been transformative for the Permanent TSB Group. A year ago the bank was marking the end of the first phase of our recovery programme. We had completed the stabilisation of the bank after the crisis. We had put in place the new architecture of the group that was suited for our journey to recovery. The asset management unit, our specialist unit to support and assist our customers with troubled loans, had commenced its work. We were making the first tentative step to re-engage with the market and our customers and begin competing with other banks in what I might call the normal thrust of business.

During the past 12 months we have made further significant progress on all fronts. Much of the attention at this meeting will be on the critically important issue of mortgage arrears, and today we report that we have comfortably exceeded the targets set down for us by the Central Bank of Ireland in respect of putting in place long-term solutions for our customers in arrears. In respect of the targets required us by the end of December last, to have offered long-term treatment arrangements to 50% of our customers who were in arrears, we had in fact offered such solutions for 61% of those customers.

The bank has made very significant progress on re-entering the retail market. We have just ended quarter one of 2014, and during that quarter the bank lent €105 million in mortgages. Twelve months ago, the comparable figure for the first quarter of 2013 was just €14 million. That is almost an eight-fold increase in 12 months. At the end of 2012 and start of 2013, we accounted for just 4% of the mortgage approvals that were given in the market. At the end of January last, we accounted for 20% of those approvals. That is real progress. We have made huge progress also on current accounts. A year ago we effectively challenged the approach taken by every other bank for current accounts by launching an account which has no fees or transaction charges for the vast majority of users. The response has been excellent and we have recruited some 60,000 new customers during the past year. I can confirm that even with no fees or charges for most customers, this is a valuable product for us as well as an important product for our customers.

We have made very important progress in other areas too. We have reduced our loan to deposit ratio from 191% in 2012 to 150% in 2013. We increased our net interest margin from 72 basis points in 2012 to 82 basis points in 2013. We have reduced our cost-income ratio from 144% in 2012 to 119% in 2013. Importantly, we have reduced our ECB borrowings from almost €11 billion in 2012 to less than €7 billion in 2013, and this was down to €6.5 billion at the end of last week.

I am not naive and I do not for a moment underestimate the challenges still ahead of us, or for all the other banks in this market, but I believe the progress we have made is very important and gives us great confidence in our ability to meet whatever challenges lie ahead. We will return to our traditional role of being a relevant and innovative force in retail banking in Ireland. In that context, I note the recent very strong statement of support for the bank from the Minister for Finance who described Permanent TSB as a "genuine and important competitor in the retail banking market" and who stated he would continue to support the board and management of the bank in the delivery of our strategy to rebuild it. That concludes my opening remarks and my colleagues and I will be happy to take any questions.