PTSB to Buy Northern Rock Irish Deposits

Permanent TSB has agreed to buy the deposit business of Northern Rock Ireland, the company announced today.

The retail banking arm of Irish Life & Permanent is to buy €650m of deposits from Northern Rock’s Irish business, which currently has 17,000 customers.

This is the second major acquisition of deposits by Permanent TSB Bank in the past six months. The bank acquired €3.6bn in deposits from the Irish Nationwide Building Society in February.

“This is a very significant transaction for Permanent TSB bank and is an important strategic step for the bank as deposits are critical for all Irish banks going forward,” David Guinane, chief executive of Permanent TSB, said today.

Permanent TSB said there would be no impact on customer accounts, and all normal customer channels would remain available.

The sale is expected to complete by the end of 2011, subject to approval from the Minister for Finance.

About Permanent TSB Bank

Permanent TSB, historically known as the Irish Permanent Building Society, is one of Ireland’s most enduring banking institutions. Established in 1884, its origins trace back to the movement to encourage home ownership among the country’s working class. It was primarily involved in mortgage lending for decades, becoming one of the country’s most famous building societies.

In 1994, it merged with the Irish Trustee Savings Bank (TSB), a similar institution that began as a savings bank in 1816. The merger resulted in a new entity, Permanent TSB, which became one of the largest financial services groups in Ireland.

However, the 2008 global financial crisis hit Permanent TSB hard. As the property bubble burst in Ireland, the bank was left with a significant portfolio of non-performing loans. This led to a government bailout in 2011, making the state the bank’s majority shareholder.

The subsequent years saw Permanent TSB undergoing rigorous restructuring and deleveraging efforts, which were partly successful. Still, the bank struggled with legacy issues and high non-performing loans. The attempt to return to profitability was a turbulent journey, which included controversial strategies like loan sales and mortgage rate hikes.

In recent years, Permanent TSB has shown signs of recovery. As of May 2023, the bank has made steady progress in reducing its stock of non-performing loans, improved its capital position, and begun to reintroduce dividends. Efforts to digitize the bank’s services have also accelerated, aimed at improving customer experience and efficiency. However, the bank continues to face significant challenges, including a low-interest-rate environment and intense competition in the Irish banking market.

Despite the challenges, Permanent TSB remains a key player in the Irish banking sector, providing a wide range of financial products and services, from mortgages and personal loans to various savings and investment products. With a history of over a century, the bank has remained resilient and is progressing toward regaining its footing in the evolving financial landscape.