Permanent TSB completes EU deleveraging plan with sale of second slug of its mortgage book to Cerberus

Oliver Gill
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Cerberus picked up the remnants of Northern Rock's mortgage book (Source: Getty)

The fund that has spent billions hoovering up some of the UK's banks' most distressed mortgage portfolios, today splashed out €2.4bn (£2bn) to snaffle Permanent TSB's Irish housing book.

US distressed debt investor Cerberus Capital Management already owns 50 per cent of Capital Home Loans, a subsidiary of Permanent TSB, and this deal completes the part state-owned lender's €8.4bn EU deleveraging plan.

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Permanent TSB was one of Ireland's high profile victims of the financial crisis. It received billions of euros of state aid and was forced to spin-off its profitable Irish Life business.

The government remains a 75 per cent shareholder and one of the EU conditions for the bail-out was to ensure that the lender sold off its mortgage book.

Chief executive Jeremy Masding said that the mortgage sale would enable the bank to "complete our pivot to the Irish retail marketplace and allow us to focus exclusively on growing our commercial position in key segments of the [Irish] market".

Read more: RBS to receive £1.1bn for Irish home loans portfolio

Analysts at Investec said the proceeds from the sale indicated that Cerberus had picked up the latest slice of Capital Homes Loans for a value that was around 15 per cent lower that the book value of the mortgages – this was at the higher end of Investec's expectations.

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