# KPMG: Doubt over PTSBs ability to continue as a going concern



## EsterCaloPoE (26 Mar 2011)

I am quite worried about the Irish Times piece that says KPMG said that  the IL&P accounts  “may cast doubt upon the group’s ability to  continue as a going concern”.  

I have all my savings in PTSB as I thought that they were the safest Irish Bank ???  Are KPMG correct? Could Permo shut down? I am taking my money out of Permo on Monday and moving it to KBC.


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## Lightning (26 Mar 2011)

The article is [broken link removed].



> Accountants KPMG inserted “an emphasis of matter” clause in its auditor’s report.
> 
> Such a clause is included where there is “significant uncertainty” around certain issues that merit a particular mention in the report.
> 
> ...



It has been reported, in the Sunday Business Post, that some banks will wind down or be merged after the stress tests. PTSB may be one of those. 



> I have all my savings in PTSB as I thought that they were the safest Irish Bank ???



PTSB have significant difficulties:
A 200%+ loans to deposits ratio that needs to be reduced to 122%. 
A huge loss making tracker mortgage base. 
Questionable mortgage bad debt provisions.
Growing mortgage arrears. 
Billions of emergency liquidity from the ECB and CBI. 
Heavily loss making.

PTSB need to be shut down or merged into a new banking entity. The stress tests may shed further light on the situation at PTSB/IL&P.


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## Tweety (27 Mar 2011)

What would happen mortgages with PTSB if they were to shut down or merge? Would people lose their trackers and be forced on to variable mortgages?


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## Lightning (27 Mar 2011)

Tweety said:


> What would happen mortgages with PTSB if they were to shut down or merge? Would people lose their trackers and be forced on to variable mortgages?



No, your conditions would have to be honoured by whoever purchases the PTSB stressed mortgage pool.


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## W200 (27 Mar 2011)

Do you think there will be any impact on the Irish Life Section.
I have some investment in the Scope fund and I am a little conserned.


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## Brendan Burgess (27 Mar 2011)

While PTSB have problems, they have the least problems of all the Irish financial institutions. 

They have no lending to property developers.
They have needed no money from NAMA. 
They have had no money input from the State. 

Their sister company Irish Life is still profit making. 

I am not saying that there is no risk, but there is less risk than all the other Irish ownded institutions.

brendan


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## Bronte (28 Mar 2011)

EsterCaloPoE said:


> ? I am taking my money out of Permo on Monday and moving it to KBC.


 

Why is there a need for you to do this when there is a government guarantee?


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## kdoc (28 Mar 2011)

Bronte said:


> Why is there a need for you to do this when there is a government guarantee?


 
Yep. it seems to me to be tweedle dum or tweedle dee. KBC is covered by the Irish Deposit Protection Scheme. The foreign based banks have to play by the Irish rules. Some diversification is sensible. But, with all the hoppin' & trottin' with deposits, it's probably only a matter of time before someone suggests putting your dosh in a robust Argentinian bank.


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## Godfather (28 Mar 2011)

Scary stuff! 

Who's moving the remaining of their savings abroad? 

Me not yet...


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## coin (29 Mar 2011)

> THE GOVERNMENT may be forced to take a large stake in Irish Life  & Permanent (IL&P), the only lender to have so far avoided  taking State capital, as a result of the severity of this week’s bank  stress tests.
> 
> The move would give the Government part or majority  ownership of a sixth and last privately owned Irish bank, and may lead  to the effective nationalisation of the domestic banking sector.
> 
> ...


[broken link removed]


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## coin (29 Mar 2011)

Guys, what do you make of this. I've been considering opening a Ulster bank account now seeing as I still have savings in AIB and PTSB. 

My other half of savings are in US shares and Nationwide UK (Ireland). 

I've already given notice for my 35 day notice account with PTSB as the interest rate reduced to 2.5% last year. Should I move these to a safer financial institution? I will be phasing out savings on AIB soon into and easy access account with Nationwide UK


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## Godfather (29 Mar 2011)

Not sure about AIB but if I compare the quality of service of PTSB with UB, then PTSB would win by a long distance... Expecially with their open 24 service...

Even if I still have a c/a with UB I keep PTSB and transfer to Rabo as soon as my salary gets in...

Talking about savings I've already moved away from every irish bank sorry and I love my Rabo, NIB esaver and Nationwide UK-Ireland deposits...


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## Lightning (29 Mar 2011)

*RTE: Irish State Likely to Take Full Control of IL&P*

http://www.rte.ie/news/2011/0329/irishlife.html



> The State is now likely to take majority ownership and full control of Irish Life & Permanent following the stress tests of banks.
> It is understood that the amount of capital required for the group's bank PermanentTSB is likely to be in the region of €600m to €1bn.
> This afternoon, shares in Irish Life and Permanent are down 46%.
> Earlier today, the company was valued at €200m so the scale of capital injection which would be required by the State is likely to force the organisation into State control.


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## Lightning (29 Mar 2011)

coin said:


> I've already given notice for my 35 day notice account with PTSB as the interest rate reduced to 2.5% last year. Should I move these to a safer financial institution?



Why not move it to NUK, get a higher return and the UK guarantee.


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## Godfather (30 Mar 2011)

Today I asked my employer to credit my salary on the rabo account, not anymore on PTSB... 

I'm so much hoping that the EU could finally give a strong answer to Moody's and Co. that would make them shut up once for all... 

Thinking that they were the ones rating "Lehmann Brothers" as supersecure before the bad day in 2008!!!  It's so unfair...


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## Lightning (30 Mar 2011)

Godfather said:


> Today I asked my employer to credit my salary on the rabo account, not anymore on PTSB...



Will they let you do this? Normally salaries have to paid into a current account?


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## Knuttell (30 Mar 2011)

CiaranT said:


> Will they let you do this? Normally salaries have to paid into a current account.



No requirement that the account be a current a/c Ciaran,my wife works for a semi state and her salary is paid into an UB Dual a/c.


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## Lightning (30 Mar 2011)

Knuttell said:


> No requirement that the account be a current a/c Ciaran,my wife works for a semi state and her salary is paid into an UB Dual a/c.



Fair enough, no issue so.


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## Godfather (31 Mar 2011)

I confirm. Up to 2008 my salary used to be paid on my previous rabo account before I went to Australia for a while and that was when I reswitched to PTSB.


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## theresa1 (31 Mar 2011)

PTSB future is still far from clear - are BOI getting it or AIB? Is it being sold like EBS - well at one time it was up for sale? Still so many questions after today's event's.


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## kdoc (1 Apr 2011)

From Simon Carswll's piece in today's IT:

"Irish Life and Permanent, the biggest mortgage lender during the boom, will be broken up, and its profitable pensions and investments business Irish Life sold to help cover the cost of its bank, Permanent TSB.
The bank may still be merged into Bank of Ireland but Irish Life must first be sold."


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## Lightning (5 Apr 2011)

S&P have cut IL&P to junk rated:

[broken link removed]


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## Godfather (6 Apr 2011)

Oh Dear...  That's very sad news!


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## DTJAE (5 Jul 2011)

*penalised for moratorium*

Hi everyone,

I'm new to the site but have been visiting for quiet some time now and have found you all quiet helpful. 

Can anyone tell me if this sounds right? My mortgage (capital) was 382k before i asked for a three month payment freeze. Now the payments are due and my capital has gone upto 388k?? The lady told me that this was the interest adding up but i thought that it all froze. They penalised me by increasing my mortgage capital by 6k in just three months?? How is this helping customers. Of course it is ptsb, the most unhelpful and money grabbing bank in the country.


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## Panacea (5 Jul 2011)

DTJAE said:


> The lady told me that this was the interest adding up but i thought that it all froze. They penalised me by increasing my mortgage capital by 6k in just three months??


 
DTJAE the interest is still charged when you take a payment holiday. This amount is added to the capital outstanding on your mortgage and spread over the remaining life of the mortgage.

Do you know what rate of interest are you paying on the loan? 

I think the PTSB Variable Rate is in excess of 5.44% (or it was back in April) in which case then three months interest on a mortgage of €382,000 would be in the region of €5,200.


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## DTJAE (5 Jul 2011)

Panacea said:


> DTJAE the interest is still charged when you take a payment holiday. This amount is added to the capital outstanding on your mortgage and spread over the remaining life of the mortgage.
> 
> Do you know what rate of interest are you paying on the loan?
> 
> I think the PTSB Variable Rate is in excess of 5.44% (or it was back in April) in which case then three months interest on a mortgage of €382,000 would be in the region of €5,200.


 

Thanks for that Panacea. It is unfortunate that nobody told me this because had i known i would never have taken the break. Would you know if i had scope for taking the bank on for reckless lending? Partner remortgaged our principal residence in 2009. He was self employed but his company was 60k overdrawn he personally guarnteed. His company was fully reliant on the construction industry for survival but all the bank looked for was 2yrs accounts from sept06-aug07 & sept07-aug08 just as the industry was dying. His income in this period would have been enough to do so. but 5months prior to application he didn't pay himself a wage because he couldn't afford to and his biggest client went into receivership. but even with the outstanding balances owed he would not have cleard the 60k. They didn't look for any company bank statements. We also had two other mortgages with another llender on interest only repayments and the ptsb would have been acutely aware of impending intersest hikes leaving it less likely to repay these mortgages, also the rental income had declined several months prior to application. The only positive part of the applciation was our home was at a 45%ltv. they didn't look at CURRENT capacity to repay. the reason we gave for needing the mortgage was to build a house on the site (one of the mortgages) when property prices were plumeting. We are not looking to get away with paying our mortgage as we take full responsibilty for taking the money  but they should never have offered it at the time given our then financial situation.


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## DTJAE (5 Jul 2011)

Panacea said:


> DTJAE the interest is still charged when you take a payment holiday. This amount is added to the capital outstanding on your mortgage and spread over the remaining life of the mortgage.
> 
> Do you know what rate of interest are you paying on the loan?
> 
> I think the PTSB Variable Rate is in excess of 5.44% (or it was back in April) in which case then three months interest on a mortgage of €382,000 would be in the region of €5,200.


 

Thanks for that Panacea. It is unfortunate that nobody told me this because had i known i would never have taken the break.


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## millieforbes (6 Jul 2011)

This sounds a little like reckless borrowing... Was the home loan really to dig the business out of trouble ?


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## wbbs (6 Jul 2011)

There must be something in whatever paperwork you signed for the break regarding the interest accumulating?


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## DTJAE (6 Jul 2011)

No, they posted me a form and i signed it and sent it back. No one informed me my capital would increase by doing this.


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## DTJAE (6 Jul 2011)

millieforbes, what would the point be in digging the buisness out? that is why the overdraft was increased and look what good that did! The construction industry was on its knees and there was no work out there. the money waas to build the house on the site. I have not doubt that the banking sector will continue to get away with ruinning peoples lives with their reckless lending and bad banking practices, leaving the tax payer to pick up the bill while they walk around scott free regardless of their obvious inability to run a bank and make proper and good decisions as to wether or not an applicant is suitable for a loan required. Do you think a doctor would get away with removing a healthy organ because they didn't do their homework. There not giving out mortgages now because they fear inability to repay so what is the differnce between then and now.......to little to late but they should be held accountable.


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## millieforbes (7 Jul 2011)

Ok, I was confused by your comment "the reason we gave for needing a mortgage was building a house". Given your previous statements about how the business was struggling and there was no way it could repay the overdraft and that you seem fully aware of your poor financial prospects I though you were distinguishing between the reason you gave the bank and the real reason.

I appreciate that the bank don't seem to have done their checks, but can you honestly say you accurately presented your financial position to them? Given that your partner had taken no wage for 5 months, how were you intending to pay a mortgage?

I find your logic a little confusing, but that may be because hindsight is confusing things


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## DTJAE (7 Jul 2011)

We did it through a broker and have everything bit of info d bank ask for. We didn't hide anything, they didn't require any further info. Every other bank turned us down just because of the reliance of the construction industry for an income. People do stupid thing when desperat, are the banks not supposed to confirm suitability of an applicant before proceeding (due care). The're doing it now so what's the differance between then and now?


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## millieforbes (7 Jul 2011)

Did you build the house?


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## Complainer (7 Jul 2011)

DTJAE said:


> Every other bank turned us down just because of the reliance of the construction industry for an income. People do stupid thing when desperat,


It sounds like you had a pretty good indication from the other banks that this project wasn't a good idea, but you went ahead anyway. And now you expect the bank to bail you out?



DTJAE said:


> what's the differance between then and now?


About €80 billion of taxpayers money that has gone into keeping them afloat.


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## Compass (9 Jul 2011)

DTJAE said:


> People do stupid thing(s) when desperat(e),


 
Precisely, I heard a woman last year on the radio who had run up financial problems and opined, 'sure, we didn't think beyond the end of our noses' or words to that effect..

Hey, it's a 'free' world - do stupid things, don't think beyond the end of your nose .... but do expect to live by the consequences.


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## Godfather (13 Jul 2011)

EsterCaloPoE said:


> I have all my savings in PTSB as I thought that they were the safest Irish Bank ???  Are KPMG correct? Could Permo shut down? I am taking my money out of Permo on Monday and moving it to KBC.



You need to diversify, diversification is the key nowadays. You shouldn't be loyal to any bank... Expecially banks...


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## DTJAE (19 Jul 2011)

Complainer,
 I don't expect to be bailed out, i take full responsibiltiy for taking the money but the fact remains that the bank should never have given us the money in the first place ie they did not do their jobs and now we are left with the consequences of that. How can you type words that sound like you agree with the bankers or irelands banks, are you a banker??? All i want is for the bank to take responsibility for not doing the job they are paid very well to do. Many people are refused for loan applications by other institutions and one or two will offer the money. We were not aware all other institutions refused until after we were told about ptsb approval as the broker did not contact us every time he got a refusal letter. Please, have you every applied for a loan or been pushed into a corner?? obviously not!


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## Sunny (19 Jul 2011)

DTJAE said:


> Complainer,
> I don't expect to be bailed out, i take full responsibiltiy for taking the money but the fact remains that the bank should never have given us the money in the first place ie they did not do their jobs and now we are left with the consequences of that. *How can you type words that sound like you agree with the bankers or irelands banks*, *are you a banker*??? All i want is for the bank to take responsibility for not doing the job they are paid very well to do. Many people are refused for loan applications by other institutions and one or two will offer the money. We were not aware all other institutions refused until after we were told about ptsb approval as the broker did not contact us every time he got a refusal letter. Please, have you every applied for a loan or been pushed into a corner?? obviously not!


 
Never thought I would see someone ask Complainer that!


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## DB74 (19 Jul 2011)

DTJAE said:


> All i want is for the bank to take responsibility for not doing the job they are paid very well to do.



How should they take responsibility and what difference will it make to your situation exactly?


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## SoylentGreen (19 Jul 2011)

Did PTSB come in the top ten good banks in the latest stress tests?


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## Brendan Burgess (19 Jul 2011)

They had reserves of 20% around twice the next best.

However, 65% of the mortgage book is comprised of loss making trackers, so they expect to lose money for some time.

Also, they have to "waste" €2.4 billion on a firesale of the UK mortgage book so that will dramatically reduce the 20%


Brendan


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## Complainer (19 Jul 2011)

DTJAE said:


> Complainer,
> I don't expect to be bailed out, i take full responsibiltiy for taking the money but the fact remains that the bank should never have given us the money in the first place ie they did not do their jobs and now we are left with the consequences of that. How can you type words that sound like you agree with the bankers or irelands banks, are you a banker??? All i want is for the bank to take responsibility for not doing the job they are paid very well to do. Many people are refused for loan applications by other institutions and one or two will offer the money. We were not aware all other institutions refused until after we were told about ptsb approval as the broker did not contact us every time he got a refusal letter. Please, have you every applied for a loan or been pushed into a corner?? obviously not!


Just for the record, No, I'm not a banker, Yes, I have applied for a loan, and Yes, I have been 'pushed into a corner' (i.e. refused loan by one party and approved by other).


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## millieforbes (19 Jul 2011)

DTJAE said:


> Complainer,
> We were not aware all other institutions refused until after we were told about ptsb approval as the broker did not contact us every time he got a refusal letter. Please, have you every applied for a loan or been pushed into a corner?? obviously not!



I think your story is quite tangled and confusing. From some of your posts it seems that you may have gone out of your way to mislead the bank at the outset. I think that may be why you are not getting a lot of support for the idea that the bank is to blame.


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