TIDMIPM TIDM73RH 
 
RNS Number : 3782G 
Irish Life & Permanent Grp HldgsPLC 
29 January 2010 
 

Statement on mortgage rates by permanent tsb bank. 
(permanent tsb is a trading name of Irish Life & Permanent plc which is a fully 
owned subsidiary of Irish Life & Permanent Group Holdings plc) 
 
 
 
 
Friday 29th January 2010.permanent tsb bank is engaged in a number of steps to 
address the challenging business environment in which it operates. 
 
 
permanent tsb facing losses 
As has been previously advised to the market, permanent tsb is facing 
significant financial challenges. In the six months to June 2009 the banking 
business reported an operating loss of EUR132 million and is expected to report 
full year losses ahead of this. 
 
 
ptsb pursuing comprehensive cost reduction programme 
In response the bank is implementing a broad programme to reduce its operating 
expenses. This has included the closure of 11 of its 103 branches and the 
introduction of a voluntary severance scheme for approximately 120 staff. In 
total employee numbers at the bank will have been reduced by 500 [20%] in the 
two and a half years from the start of 2008 to the middle of 2010. 
 
 
High cost of funds continues to pose challenges 
A key challenge continues to be the high cost of funds required to finance the 
bank's mortgage loan book. 
 
 
While the bank sources funds from a variety of sources, the overall cost of 
funds continues to be substantially higher than the official ECB interest rate. 
For example, permanent tsb is currently paying up to 3.35% for retail deposit 
funds.  This is higher than the bank's Standard Variable Rate [SVR] mortgage of 
3.19%. 
 
 
Clearly its not sustainable for the bank  to be paying more for the raw material 
[money] than it can charge for the finished product [mortgage]. 
 
 
 
 
Plan to increase SVR mortgage rate 
In this context the bank today confirms that it will raise the interest rate on 
its Standard Variable Mortgage [SVR] and a number of related products by a 
further 0.5% with effect from 1st February next.   The new SVR rate for 
permanent tsb customers therefore will be 3.69% [was 3.19%]. 
 
 
Impact on customers: 
We have carefully analysed the impact of this move on our customer base. 
 
 
  *  This move will affect just under 80,000 residential mortgage customers; the vast 
  majority [70,000] who have SVR mortgages with the bank [equivalent to 45% of the 
  bank's residential mortgage customers]. It will have no impact on the remaining 
  100,000 residential mortgage customers [55%]. 
 
 
 
  *  Affected customers [with SVR mortgages] have an average mortgage outstanding of 
  EUR62,500. 
 
 
 
  *  Therefore the decision to increase rates by 0.5% will add an average of EUR15 per 
  month on a customer's repayments. 
 
 
 
 
 
SVR still cheaper than many competitors 
Following this increase, the permanent tsb bank Standard Variable Rate mortgage 
will still be cheaper than many competitors in the market. 
 
 
 
 
Comment from Chief Executive 
Speaking today, David Guinane, Chief Executive of permanent tsb bank, said that 
the decision to increase rates had been forced on the bank as a result of the 
continuing high cost of funds; "We will of course work closely and 
sympathetically with any customer who has financial difficulties but we must 
face up to our own financial challenges also. To persist with uneconomic margins 
on this product at a time when the bank is losing money would be irresponsible 
and would result in larger problems down the line." 
 
 
 
 
Further Information: 
Ray Gordon 
Gordon MRM 
Ph: 01 6650452 
Ph: 087 2417373 
 
 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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