Your MoneyQ&A

PTSB is looking to buy back father’s shares but he’s dead

Bank’s odd-lot offer aims to provide an exit to pre-financial crash shareholders whose shares are worth less than the cost of selling them

PTSB is buying back all the shares held by people with fewer than 100 shares, unless they opt out by an October deadline. Photograph: Alan Betson
PTSB is buying back all the shares held by people with fewer than 100 shares, unless they opt out by an October deadline. Photograph: Alan Betson
Dominic Coyle's picture
Dominic Coyle
Sun Sept 15 2024 - 19:54

My father had a few shares in Permanent TSB. When he died, these were left to me but we never got around to changing the names on the shares even though we did go through probate.

Now the bank wants to sell the shares. I don’t mind that but will it be a problem if they are still in my father’s name? If so, what do I have to do? And will I have time to do it before this offer closes? The money involved is very small but it would just help tidy up another little bit of his affairs.

Ms S.B.

PTSB, as they are now known, is one of two lenders looking to tidy up their shareholder register. It also gives shareholders the chance to close the door on what has been a disastrous investment.

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The so-called “odd-lot” offer will see PTSB automatically purchase the holdings of any shareholder who has fewer than 100 shares in the company. This will affect more investors than people might imagine as a reorganisation of the company’s stock back in 2015 means shareholders now hold just one share for every 100 shares they held before that date.

That reorganisation was required as the value of investor holdings fell dramatically in the wake of the financial crash and the Government’s subsequent €4 billion bailout of PTSB.

It means you could have held up to 9,900 Permanent TSB shares in 2015 and still qualify for this offer, as you will have just 99 now.

It will be of particular relevance to those who were members of the old Irish Permanent Building Society. When the society demutualised 30 years ago in 1994, members were granted a number of shares in the newly listed business. Depending on the accounts they held with the building society at the time, they would have got 300, 315 or 330 free shares in the business.

Following the 2015 reorganisation, those early investors were left with just three or four shares in the bank.

And that’s the problem. At the end of last week, shares in PTSB were trading at €1.66. A holding of three or four shares is worth €4.98 or €6.64. I suspect from your letter that you are one of these.

That means thousands of small shareholders have effectively been locked into their holdings whether they wish to be or not, as it would cost multiples of those sums in trading costs to get rid of the shares through a stockbroker.

PTSB noted that it has 129,000 shareholders on its share register. That is an inordinately large number for a business of its size and is due entirely to its history as a mutual and the shares it handed out when it demutualised.

Of these, more than 128,000 have fewer than 100 shares. So 99.5 per cent of the shareholder base owns just 0.12 per cent of the bank.

Apart from releasing these small shareholders from their bondage, the odd-lot offer is expected to reduce the administrative costs the bank incurs dealing with so many small shareholders – even down to little things such as posting out tens of thousands of annual reports and voting forms.

So what happens now? Well, unless you opt out of the offer before it closes at noon on October 4th – and I would not advise you to do that – the bank will automatically buy back your shares at a price of €1.74 a share with no stockbroking costs.

For those with three or four shares, this means a payment of either €5.22 or €6.96

Why €1.74? That is the 5 per cent premium promised by the bank and is measured against the average price of the shares of the five days of trading up to September 6th.

As the “windfall” will hardly buy a pint, the clear benefit here is the lack of broking charges.

The money you are due will be sent out by cheque in the post. But here’s the rub. If the shares are in your father’s name, the cheque will be addressed to him and will be sent to the last address the share registrar has for him.

To stop that happening, you need to contact Link Registrars, which is the company that manages the PTSB share register, to have the shares transferred to your name.

You can call them at 01 5260116 or, much better all round, write to them at enquiries@linkgroup.ie, making sure you put the words PTSB Odd-Lot Offer in the subject line of the email.

Ultimately, to have the details changed, you will need a copy of your father’s death certificate as well as a copy of probate.

If you cannot get this sorted before the cheques are due to be issued (October 21st), the bank says it will reissue the cheque in the correct name at no additional cost when the paperwork is complete.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice

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