News

Bank tells 1.3m not to worry

ONE of Ireland's leading banks has moved to reassure its 1.3 million customers after it failed a major European health check.

Permanent TSB is scrambling to plug an €885 million (£696 million) hole in its reserves exposed by the European Central Bank (ECB).

It was one of 25 banks in the Eurozone which failed the socalled stress tests, designed to ensure lenders can withstand any future economic shocks.

The ECB confirmed the four other main Irish financial institutions - AIB, Bank of Ireland, Merrill Lynch and Ulster Bank - all passed the requirements.

In a statement yesterday Permanent TSB Group chief executive Jeremy Masding said the lender has already "provided for" more than 80 per cent of its capital shortfall.

"The tests were based on our position at the end of December last and we've made huge progress since then on a number of fronts, so we've already provided for over 80 per cent of the shortfall that the ECB identified," he said.

"We look forward to bringing international investors on board now to raise the remaining amount which will leave the bank fully in line with the ECB requirements."

The state-owned bank is working with international investment lender Deutsche Bank to raise the remaining shortfall over the coming months.

Mr Masding said the failed stress test would have no effect on the day-to-day operations of the bank or on its customers.

"The tests confirm that Permanent TSB has more than enough capital to meet what the ECB describes as a baseline scenario and has made the right provisions for dealing with bad loans," he said.

"Customers are unaffected by these tests and are not required to do anything as a result of today's news."