Mr. Jeremy Masding:

I have just acknowledged that what the Deputy stated is in the prospectus. That is a fact. I apologise if I misunderstood the point he was making. The Deputy challenged me, quite correctly, on those customers who I said in my opening remarks had engaged with us and feel let down by Permanent TSB. I empathise with why the Deputy made that statement. The bank has a 6% non-performing loan ratio, split mortgages and part-capital and part-interest mortgages with bullet repayments, which are non-performing loans as defined by the rules.

As I assured the committee at my previous appearance, we were looking at all the alternatives to reduce the non-performing ratio and this was in our opinion the least worst alternative. Why? It was because we found investors who matched the duration of the mortgages, the long-term treatments transfer in full to the vehicle and their protections are maintained and, to the best of our ability, we find a servicer of that vehicle which is experienced in the Irish market.

To sum up, Deputy Doherty's comments around the section 110 tax status in the prospectus are correct. I want to bifurcate any perception that McKinsey might have that the bank took the 5% to take advantage of that which was not the case. It has to take the 5% in order for the vehicle to be valid. While we will have to agree to disagree, that is the bank's perspective on why this transaction happened in order to reduce its non-performing ratio to a level that makes it an institution that can compete into the future.