PTSB's average cost of funds is between 1.8% and 2.6%

Brendan Burgess

Brendan Burgess

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I have just come across this table from page 25 of the announcement of the preliminary results for 2010.

It is likely that the figures are very similar for 2011 as the ECB rate is the same. It may have actually fallen as there has been a reduction in customer accounts and an increase in ECB funding.

cost of funds|book|cost
|%|%
Customer accounts|35|2.1
Long-term|26|2.1
ECB|32|1.0
Short term|7|2.4
|100|1.8

The yield on RoI mortgages was 2.7% - the same as the yield on its total book.
 
The Central Bank has produced a [broken link removed] as of November 2011
which estimates that the cost of funds for all the banks is 2.6% ( 2.2% + 0.4% for the government guarantee)

So the margins on SVRs are still good 2.6% (5.2% - 2.6%)

Brendan
 
Brendan Burgess said:
They are making a pretty good margin on SVR loans.

5.2% - 1.8% = 3.4%
Click to expand...

Isn't this good that they are making profits and not running at a loss and getting up and running in business again so that we have a functioning bank? That will require less tax payers money.
 
I agree fully that the banks should aim for profitability. But the losses on the tracker books and bad loans should be separated out.

No one is asking for the PTSB or any other bank to provide mortgage products at a loss. But they should not be burdening one group of captive consumers with costs of covering their losses on the rest of the book.

Imagine what the AIB SVR would be if they raised it to cover the costs of their losses on loans to property developers.
 
Brendan Burgess said:
No one is asking for the PTSB or any other bank to provide mortgage products at a loss. But they should not be burdening one group of captive consumers with costs of covering their losses on the rest of the book.
.
Click to expand...

Brendan,

You are of course correct in stating that no-one is asking for them to offer porducts at a loss, and nor should they be seeking to balance the books by imposing higher margins on those with varialble rate products.

These are unfortunately seperate matters, but related matters. For the trackers, the crux of the matter is one of contract law. It must be recalled that when the offer was made, the institutions were making money on the trackers. No one forced them to offer such small margins. Subsequently, if the market changes, and erodes the margin-the bank are stuck with them, in the same way that the customer is stuck with the contract if they fall on hard times.

Its not that long ago that we were seeing the tv ads with the people on the bus-and one proclaiming 'I dont know what a tracker mortgage is' Well we all know now!

A successful public awareness campaign by the financial regulator or who ever was behind it.

I am particularally interested in the buy to let tracker issue with PTSB, and I certainly take issue with the attempts of PTSB to force me and others off the trackers if we cannot make capital payments. PTSB only assessed borrowers on the basis of interest only payments for the term of the loan.

If they had assessed capital and interest repayments, in most cases they would not have advanced the funds and by consequence, would not be where they are now. I for one would not have drawn down the funds from PTSB-but there is nothing I can do to undo this.

That they now realise that what they offered was wrong or no longe working for them, does not mean that they can seek to impose a different schedule of repayments than what was offered. That is an abuse of dominant position-and that is not correct behaviour, and to give balance, what PTSB are doing with those on Variable rates is also wrong.
 
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