# Lump sum deposit with PTSB



## Ludi (23 Oct 2011)

Hi folks

just looking for peoples opinion. We have €20000 (all the family savings) to put away. We are thinking of going for PTSB 10% 26 month account. What do people think of PTSBs future. Would it be a complete gamble to deposit there or do they have a future

thanks in advance


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## Lightning (23 Oct 2011)

Does PTSB have a future? Probably no is the answer, well certainly not as a stand-alone entity. 

PTSB is 99% government owned, with a 200%+ loans to deposits ratio, well capatilsed if IRL Stress Tests II had the correct variables, dealing with growing mortgage arrears, making huge losses, has 10 billion Euro+ of emergency liquidity from the ECB/CBI and has a highly uncertain future. 

PTSB will either be (1) merged into AIB, (2) merged into BoI, (3) Sold, (4) closed down or (5) worse if default occurs. 

Either way it is highly uncertain as to what shape PTSB will be in when your 2 years and 2 months term deposit matures.


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## guest1 (23 Oct 2011)

Jaysus Ciaran, you never mentioned how unstable PTSB were in another similar thread I had up here. I just put 30k into them 2 mth fixed!!!


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## Ludi (23 Oct 2011)

Thanks Ciaran. Reckon I'll go with BOI double your interest, 3% first 12 month term and 6% for second 12 month term. Won't be much in the difference other than when they raise DIRT in the budget.


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## kamakaze J (24 Oct 2011)

CiaranT said:


> PTSB will either be (1) merged into AIB, (2) merged into BoI, (3) Sold, (4) closed down or (5) worse if default occurs.
> 
> Either way it is highly uncertain as to what shape PTSB will be in when your 2 years and 2 months term deposit matures.



Ciaran,

You might clear something up for me.

I moved most of my money out of Irish guaranteed banks and into UK guaranteed banks last year because of the concern that Ireland may default. 

After doing so I found out that as Nationwide UK Ireland, Rabo, Investec, Ulster Bank in ROI, etc have offices in this jurisdiction, that should a default occur and we returned to the punt our government could access this money and devalue it. I believe this is still true.

If so to me it would seem that having money in PTSB is no risker than any bank with an ROI branch as even if 1,2,3 or 4 above occurs you would still get your money. 

If 5 happens then the government freeze all banks with ROI branches yes? Then change to the punt and devalue. 

So unless you are comparing PTSB to banks outside Ireland I don't see why anyone would pick a different bank?

P.S. I don't have any money in PTSB (Yet)


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## Jim2007 (24 Oct 2011)

CiaranT said:


> Does PTSB have a future? Probably no is the answer, well certainly not as a stand-alone entity.
> 
> PTSB is 99% government owned, with a 200%+ loans to deposits ratio, well capatilsed if IRL Stress Tests II had the correct variables, dealing with growing mortgage arrears, making huge losses, has 10 billion Euro+ of emergency liquidity from the ECB/CBI and has a highly uncertain future.
> 
> ...



The OP is asking about a deposit  with the bank, not investing in the bank!  A merger or acquisition is not going to impact the customers deposits, nor the agreements they have entered into.

The fact that it is almost fully owned by the government means that the risk of a default is negligible to say the least.  At this point in time the last thing that anyone from the IMF down can afford is for a bank that passed the stress tests so easily to suddenly fail.  So I'd say default is a very long shot!


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## The Ghoul (24 Oct 2011)

Jim2007 said:


> The fact that it is almost fully owned by the government means that the risk of a default is negligible to say the least. At this point in time the last thing that anyone from the IMF down can afford is for a bank that passed the stress tests so easily to suddenly fail. So I'd say default is a very long shot!


Agreed, and 4.91% AER is very good compared to what most others are offering. Also, as this is an interest first account, does that mean that it cannot be affected by any DIRT increases in the budget?


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## Lightning (24 Oct 2011)

All - I was asked about the future of PTSB as an institution over a 2 year horizon.  I gave my comments about that company over that horizon.  



MoMoney said:


> Jaysus Ciaran, you never mentioned how unstable PTSB were in another similar thread I had up here. I just put 30k into them 2 mth fixed!!!



Your money will be fine, the risk is very low. I know a few people with this product, there is very little to worry about. 



kamakaze J said:


> So unless you are comparing PTSB to banks outside Ireland I don't see why anyone would pick a different bank?



Totally agreed, the risk is similar with all Irish banks.



Jim2007 said:


> The fact that it is almost fully owned by the government means that the risk of a default is negligible to say the least.  At this point in time the last thing that anyone from the IMF down can afford is for a bank that passed the stress tests so easily to suddenly fail.  So I'd say default is a very long shot!



The market has priced in a greater than 50% chance of an Irish default over the next 5 years based on *todays* CDS market. It has happened in Greece, with their looming 60% default haircut and can happen here. The fact that PTSB is tied to the state adds to the risk. The risk is far from negligible.  

Having said that I agree that it is unlikely that anything will happen in the short term and depositors may never be effected. 



The Ghoul said:


> Agreed, and 4.91% AER is very good compared to what most others are offering. Also, as this is an interest first account, does that mean that it cannot be affected by any DIRT increases in the budget?



Yeah, 4.91% AER is a great return for your money. It is one of the best returns offered by any bank in Ireland for years. You are not effected by any DIRT increase in the budget with this account as DIRT is based on the pay date of the interest rather than accrual periods. The only issue is who knows where/which bank your capital will be in when your deposit matures in December 2013.


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## seantheman (25 Oct 2011)

MoMoney said:


> Jaysus Ciaran, you never mentioned how unstable PTSB were in another similar thread I had up here. I just put 30k into them 2 mth fixed!!!


 Did ye do that on the sayso of a guy on a forum that ye know nothing about?


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## seantheman (25 Oct 2011)

CiaranT said:


> Your money will be fine, the risk is very low. I know a few people with this product, there is very little to worry about.


Does the fact that you know a few people with this product make it a safer place for others to invest?


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