# How much will this cost ptsb?



## Brendan Burgess (29 Jul 2015)

Various figures have floated around. And it's very hard to estimate the compensation people will get beyond the €3,200.

Jeremy Masding refused to quantify the figure at the press conference yesterday. In the results for Half Year 1 published  yesterday, they said "The Group has made a provision for this in its financial statements and the Board considers the level of provision to be appropriate".

However, according to the Irish Times

_Mr Noonan said, adding that he understands that PTSB has already made a provision in its accounts for both the cost of the redress, at € 76m, and a potential maximum fine of € 20m._

So that's a total cost of €96m. 

A different Irish Times article says: 
_State-controlled [broken link removed] is facing fines of up to €20 million from the Central Bank and compensation payments to customers of more than €35 million following a “serious failure” in how it managed interest rates on 1,372 mortgage accounts._



Here is my initial estimate






In cases of Loss of Ownership, they are writing off any outstanding debt, but that would have been written off anyway, so I don't see that as an additional cost.

They will be compensating for any uplift in value of the property since loss of ownership occurred. As most were in massive negative equity, the increase would not match the amount already written off, so I doubt that will cost much.


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## Brendan Burgess (29 Jul 2015)

Of course, they now have 1,360 trackers on their books so they will have an ongoing reduction in profits every year. 

Average loan: €200,000
Average reduction in interest rate: c. 2% 
Interest lost: €4,000
Number of cases: 1,360 

So about €5m a year in the early years, but reducing after that as capital is paid off and as variable mortgage rates come down.


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## Brendan Burgess (29 Jul 2015)

I am watching the webcast of the ptsb results, and he has simply repeated "The Group has made a provision for this in its financial statements and the Board considers the level of provision to be appropriate".

It will be interesting to see what questions the analysts ask.


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## Bronte (29 Jul 2015)

Brendan Burgess said:


> In cases of Loss of Ownership, they are writing off any outstanding debt, but that would have been written off anyway, so I don't see that as an additional cost.
> 
> .


 
So are you saying they are massaging the figures.


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## Brendan Burgess (29 Jul 2015)

Bronte said:


> So are you saying they are massaging the figures.



No. I am just estimating the cost.


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## Brendan Burgess (29 Jul 2015)

Brendan Burgess said:


> It will be interesting to see what questions the analysts ask.



A room full of analysts and others on the phone, and none of them asked about the cost of the redress programme!  

Brendan


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## Fella (29 Jul 2015)

Should I withdraw my savings from PTSB? Are they safe ?


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## Bronte (29 Jul 2015)

Fella said:


> Should I withdraw my savings from PTSB? Are they safe ?


 
Of course they are safe, it's now a state bank in any case.


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## Fella (29 Jul 2015)

Bronte said:


> Of course they are safe, it's now a state bank in any case.



Thank you good sir , no immediate action needed so.


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## L John (29 Jul 2015)

It's not rocket science for the central Bank to get to the bottom of this issue.

'Technical glitch' ???

Call centre reps in open 24 will have been working to a script as all call centers do.

Who wrote the script and what line manager signed it off. 

When it was 'discovered' that the line manager made a 'mistake' and cost the bank millions in unredeemed breakage fees, what action was taken? 

Where are the minutes of the board meeting where the issue of these lost millions was discussed?

'Technical glitch' my eye


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