Pearse Doherty (Donegal South West, Sinn Fein)
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Question 62: To ask the Minister for Finance following the decision by the European Central Bank on 5 July 2012 to reduce its main interest rate by 0.25%, if he will set out the impact this will have on the tracker mortgage portfolio held by Irish Life and Permanent, and specifically if it may give rise to additional capital needs to be footed by the State. [33792/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised that the reduction in interest income on annual basis from the 0.25% reduction would be in the order of €40 million, which would reduce the net interest income of PTSB by circa €12 million assuming the current level of ECB funding remained in place and the cost of other funding to PTSB remained static. In order to mitigate the impact of the interest income reduction, PTSB will seek to reduce the cost of funding where possible, including a reduction in the price of deposit products. At the present time, and based on forecasts provided, it is not anticipated that additional capital is required for PTSB. PTSB is currently well capitalized with a core tier 1 ratio at 31 December 2011 of 17.9% (pro-forma for Irish Life sale was 26.4%).