Mr. Jeremy Masding:

I am joined this morning by my colleagues, Mr. Eamonn Crowley, chief financial officer; Mr. Shane O'Sullivan, group director of operations; and Mr. Stephen Groarke, chief risk officer.

We welcome the opportunity to speak before the committee. Indeed, this is our third attendance before the committee this year, with our most recent meeting being just over two months ago. I understand this morning the committee will wish to discuss progress in respect of the tracker mortgage issue and the proposed sale of non-performing loans, and we look forward to answering those questions in a few moments. Perhaps I may begin by updating the committee on developments on these matters since we last met.

In January we gave the committee a detailed report on the progress we had made in respect of the tracker mortgage issue. At that time, we explained we had completed our review of mortgage accounts and we had identified 1,979 accounts that we deemed impacted and stated that all account holders had been offered redress and compensation. By the end of May, 96% of impacted customers had received their redress and compensation payments; a small number of account holders have instructed us not to make payments pending decisions they wish to make. That remains the position. However, as we have always pointed out, it is not for us to declare this exercise to be concluded. Ultimately, the Central Bank of Ireland has oversight of this redress programme in each of the participating banks. Its review of our work is ongoing and we continue to engage with it.

At our meeting in March we gave considerable detail about the progress we had made in dealing with arrears management and non-performing loans, NPLs, at the bank since the financial crisis. We outlined how we had reached out to the owners of 35,000 properties, how we had helped the owners of almost 14,000 properties to return their loans to performing status and how we had dramatically slowed the flow of new arrears cases. In addition, we outlined the tension between long-term arrears management, as mandated by the troika in 2012, and non-performing loans management, as mandated by the European Central Bank in 2017. At our meeting in March, the committee was particularly anxious about the inclusion of long-term treatments, known as split mortgages, in the proposed Project Glas loan sale. This was as a result of their continued classification by the regulator as non-performing, and this is a real example of the tension described earlier. However, in May we announced our decision to remove these split mortgages from the Project Glas sale and we continue to review how we might approach these loans in a way that will meet the objectives of our regulators in respect of non-performing loans. Let all of us be in no doubt that split mortgages are classified as NPLs that need to be managed carefully.

A second issue discussed with the committee in May related to the steps being taken to return properties to market which had been surrendered to the bank. I am happy to confirm that so far this year, we have reached "sale agreed" in respect of 539 of these properties.

We have also been in discussion with the Housing Agency on the use of properties in our possession and we have offered it 400 such properties. We have also identified approximately 500 borrowers whom, we believe, may meet the necessary criteria to allow them to avail of mortgage-to-rent and we are in contact with them to see if we can progress the matter.

In the weeks since we last met there have been a number of important interventions on the issue of NPLs by the Central Bank of Ireland. It has now been made clear that banks need to move quickly to deal with the high percentage of NPLs on their balance sheets if we are to protect the banking system and the wider community from any downturn in the economy, and that the sale of NPLs to third party funds neither dilutes nor weakens the extensive protections that mortgage account holders have when it comes to their loans and their homes. I trust that these interventions will have reassured the members of the committee and the public on this issue.

I am happy to report that Permanent TSB is continuing to make progress on its recovery from the crisis. Our business and financial performance is trending positively, our lending volumes are up strongly year-on-year, and our customer deposits remain stable. We are on the way to fixing the bank which will be of enormous benefit to taxpayers, customers and thousands of PTSB staff.

That brings me to the end of my opening remarks and we look forward to answering members' questions.