Permanent TSB chief executive Jeremy Masding will be the last of the post-crash class of crisis managers, and by far the longest-serving head of an Irish bank, when he stands down next year.

The UK executive – brought up in England of Welsh extraction – joined the bailed-out lender in 2012 in the wake of the financial crash, as part of a radical management shake-up. The bank had been bailed out to the tune of €4bn, split from Irish Life and nationalised.

Please log in or register with Independent.ie for free access to this article.

Log In

New to Independent.ie? Create an account

Initially, Mr Masding’s task was to assess whether PTSB had any future at all, not least because its huge stock of so-called tracker mortgages was losing the lender money, even where borrowers were up to date on their debts.

Under the plain-talking Briton, the process of stabilising the bank accelerated – including rapidly selling off UK and non-core assets.

This process was crowned in April 2015 when he led a €500m stock market flotation – at a hefty €4.50 a share – that allowed the bank to raise funds to meet European capital requirements, and to also somewhat dilute the State’s stake in the lender.

It was a high water mark. Shares today trade at €1.23 each.

The stock market deal had put the bank on a reasonably secure financial footing, but the tracker issue and what would become ever tougher demands to shore up capital have continued to dog the lender.

Earlier this year, Permanent TSB was fined €21m for its role in the tracker mortgage scandal, having been found to wrongly have removed the option of taking up cheap lending rates from thousands of customers. The cost of redress, compensation and administration linked to the scandal dwarfed that fine.

The roots of the tracker issue pre-date Mr Masding’s tenure, but the bank’s resistance to customer claims continued on his watch, adding costs and complexity when PTSB was belatedly forced to reverse tack.

EU regulators’ toughening stance on loss-absorbing capital has also hindered PTSB’s attempts to shift up a gear from recovery mode.

Controversially, meeting the regulatory targets has meant the taxpayer-backed lender has sold off thousands of mortgages in the past 12 months of customers in arrears, effectively outsourcing recovery on the loans in order to shore up its own capital position.

Meanwhile, the existential question of whether PTSB has any real future remains unresolved.

Possible M&A options have been examined and ditched in the past eight years.

Lending growth at home is constrained, and the bank is too small and too weak to strike into new sectors or new markets.

Meanwhile, the European Central Bank’s commitment to ‘lower-for-longer’ interest rates puts a low ceiling on profitability well out into the future.

Yesterday, the chairman of Permanent TSB, Robert Elliott, paid tribute to Mr Masding’s work.

“Jeremy and his team oversaw a very complex and challenging turnaround, which has restored Permanent TSB to a position of significance in the Irish banking market,” he said.

It is hard to argue with the chairman’s view that Mr Masding leaves Permanent TSB in “an immeasurably stronger position than when he took up the role”.

As a relatively youthful bank executive, with probably unrivalled experience in negotiating the nitty gritty of EU banking regulation, Mr Masding will be in demand among employers here, in the UK and elsewhere in the euro area.

Yet while Mr Masding may be going places, it is harder to see where the bank he helped rescue goes from here.

Source: Read Full Article