Permanent TSB, the State-owned lender which has received a €2.7 billion bailout from the taxpayer, has asked Deutsche Bank to test the capital markets for interest in taking a stake in the bank. This is regarded as the first tentative step by the bank in returning to private ownership.
The move comes after Permanent TSB reported in August that it had narrowed its first-half losses by 62 per cent to €171 million, down from €449 million in the same period in 2013.
This was driven by a significant improvement in impairments as the Irish property market and economy recovers, greatly improving international appetite for investing here. Its retail arm is also once again lending and gaining market share.
Deutsche Bank has engaged with potential investors in Permanent TSB with the goal of trying to return the maximum capital possible to the taxpayer while ensuring stability for its borrowers.
Potential investors
It is understood to have held meetings with key potential investors who could take a stake in the bank or buy it outright. in a process not expected to conclude this year. The bank is still waiting for approval from the
European Commission
on its restructuring plan under state aid rules unlike
Bank of Ireland
and
AIB
.
“Deutsche Bank is advising the group on capital markets in general and on developing relationships with the international investment community in line with the stated aim of the Group and key stakeholders to return it to private ownership at some point in the future,” Permanent TSB said.
Financial advisers
“Permanent TSB Group has a range of financial advisers working on various projects from loan sales to capital market issues including
Morgan Stanley
,
Citi
, Davy and Deutsche Bank.”
Deutsche Bank is understood to have advised Permanent TSB about the possibility of merging with Ulster Bank at the start of the year.
However, with strong indications recently that Royal Bank of Scotland intends to commit itself fully to Ulster Bank, and the greatly improved appetite for investing in Ireland by private equity funds and other international investors, the German investment bank is now pursuing a different strategy.
PTSB is 99.2 per cent State-owned and has a market value on the Irish Stock Exchange of under €3 billion.
