ptsb's cost of funds is 0.55%

My point is that if we are prepared to tolerate high level of non-performing mortgages then we have to be prepared to tolerate high mortgage rates.

The "who caused the bubble" line is not relevant in this regard.

Sarenco said:

My point is that if we are prepared to tolerate high level of non-performing mortgages then we have to be prepared to tolerate high mortgage rates.

The "who caused the bubble" line is not relevant in this regard.

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It's relevant to me as I'm unfairly paying for this failure in the system. I know I'm probably being naieve here as we know only 2 well the banks can do what they like and I'm sure if u you dig deep enough you'll find something that has it in my contract. I certainly didn't sign it to cover up for defaulting mortgages or banks. I agree with you that it is a huge factor and the regime re defaults does need to be changed so as the good payers are not allowed to be screwed to the extent that we are. It's something that needs to be highlighted a lot more in the media especially in what's now looking like the upcoming election campaign.

It's not really a "failure in the system" - facilitating and encouraging forbearance and debt forgiveness are conscious government policies.

The necessary consequence of these policies is higher mortgage rates.

No issue with policies that help genuine people who are in genuine trouble and who wish to make a real attempt to pay down their responsibilities, the issue here are the people who can pay and won't. The extent of this I don't know but I am aware this is something that exists and needs to be dealt with as the good customers are suffering and not getting anything. As I said in a previous posting if it were a business it would fail as no returns are forthcoming and I'm getting quite sick of doing state service by just doing what I'm supposed to do. I just wish there were enough of us around to highlight this and impress this on those in positions to do something. A new election which is looking more and more inevitable might give us another chance to impress this on who are as otherwise we'll just have to keep biting our lips off like we've been doing for the last few years.

Sarenco said:

In that case I'm at a complete loss as to how PTSB's cost of funds could now be 15bps lower than BoI's equivalent figure. It was certainly higher in H2 2015 so that's a pretty dramatic turnaround over one quarter.

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Mainly cause PTSB gets near 20% of its funding from the ECB at 5bps while the other Banks have been nearly fully weaned off ECB funding.

Andy836 said:

Mainly cause PTSB gets near 20% of its funding from the ECB at 5bps while the other Banks have been nearly fully weaned off ECB funding.

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Understood Andy but I guess that was also the case in H2 2015 when PTSB's cost of funds averaged 0.88% (versus 0.80% for BoI).

I wonder is PTSB's "free" current account offering starting to flatter their CoF figure?

Sarenco said:

Understood Andy but I guess that was also the case in H2 2015 when PTSB's cost of funds averaged 0.88% (versus 0.80% for BoI).

I wonder is PTSB's "free" current account offering starting to flatter their CoF figure?

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I'm surprised at the 55bps quoted by Brendan/Irish Times (perhaps management were including equity at 0% in that calculation which they don't include it in their normal publicly published calculations). That's a big drop and would've had to come from wholesale funding & customer deposit rates as the 5bps drop in ECB funding would have only impacted their COF by about 1bps.

ptsb has issued a trading update

"
Key Points:

• The Group was profitable (on a pre- and post-tax basis) in Q1 and traded in line with Management expectations
• The Group NIM (excluding ELG fees) increased to 1.47% (Core Bank: 1.75%). The Group remains on track to reach its medium term target NIM of 1.70%
• The Group Cost of Funds reduced to 0.77%; however, the outlook is for this to increase over 2016 due to the requirement to hold the residual UK mortgage book for longer and a continued reduction in ECB funding which reflects the Group’s return to a more normalised market funding structure.
• The Group Underlying Cost of Risk continues to be in line with expectations and is on-track to stabilise at 40bps or less"

So they appear to have a higher cost of funds in the UK.

The Underlying Cost of Risk is 40 bps or less.

So why are the rates around 1.5% higher than the rates across the eurozone?

Cost of funds: 0.77
Cost of risk: 0.4
Total cost before admin: 1.17%
Rate on 90% LTV: 4.2%

Margin for admin costs and return on capital: 3%

OK, the cost of risk is higher for 90% LTVs, but the margin is still close to 3%.

Brendan

The markets really didn't like PTSB's trading update - their share price took a plunge today.

Clonback said:

Sarenco

I get a BOI statement every quarter which shows their cost of funds as my loan is COF + margin

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Hi Clonback,

I would love to know if the cost of funds shown on your statement is the same as the figure shown in communications with investors?

Just got my quarterly update from BOI which shows no change in cost of funds over the last 3 months i.e.0.7%