Permanent TSB? More like Permanent inability.

Groucho, Mortgage Information BlogPermanent Tsb are in the financial news again, this time its not for ripping off brokers though, its because their sub-prime mortgage wing ‘Springboard’ have had their funding pulled by Merrill Lynch. Springboard is a joint venture between PTsb and Merrill Lynch, the question now is ‘what does a mortgage company who can’t lend money do?’. I suspect they will be standing in line with the Woodworm who specialises in concrete only products.

The same thing happened several months back to another lender and they swiftly left the market. The concern now is for the IL&P share price, Dennis Casey will have some serious wangling on his hands to avoid disaster because he now has a war on several fronts, in fact, if I could raise Bismark from the dead and get a decent Prussian translator I would do it and let the original ‘Mr. Blood and Guts’ lay down some facts for the beleaguered CEO of Permanent Tsb.

Today’s news is about the fact that a major bank (Merrill Lynch) is pulling funding from Springboard, they are not pulling funding from all operations around the world though. Does this shine some light on how things at Springboardare operating? Or can we really be lead to believe that an operation which sold €250 million in loans is simply ‘not worth it’ on a global scale? Ireland is small, but profit is profit and that is what gives me the foundation for believing that the IL&P stock price is about to take a serious pounding.

Banking only better: mortgage information blogPTsb can’t afford to simply ‘drop’ Springboard so the likelihood is that they will continue by becoming a wholly owned subsidiary of IL&P. However, Springboard is also (almost 100%) a broker only channel, so it will need the ongoing support of brokers and currently that support is not there. Why? Easy, because Dennis Casey and David Guinane recently decided with little or no consultation to alienate the broker market, it was an unusual way to introduce oneself to the broker channel which accounts for 57% of the mortgage market in the country.

‘Wake up people!’ is the line that Frank Vincent (right: who played Phil Leotardo in the Sopranos) tells people on the advertisements for Permanent TSB, frankly, I agree, but I think its the shareholders who should wake up and at the next AGM question the current management as to why the feel alienating 57% of the market is a good ‘strategic move’ for the group because the broker backlash is likely to hit further than just Springboard or PTsb, it will likely hit Irish Life as well who are the truly profitable member of the group, undoing years of goodwill which will be hard to win back if they stay on the current track they are pursuing. It will also open the very real possibility of brokers introducing a broker bank from outside which will have a huge competitive effect on banks in general going forward.

When a publicly listed Banks starts to use a Mafia character to promote their brand perhaps its time that we take stock…. Are they being just a little too ‘literal’ maybe?

Comments

  1. TUG

    Whatever about the mafia, I think the subject header of this post and the allusion it makes is absolutely abhorrent and is in the worst taste possible.

    You’ll be very lucky not to offend alot of people with this but that’s more due to relative obscurity which on this occasion, you can be very thankful for!

  2. leon o connor

    hello karl just read your report i found it enlighting great work just a question i have been dealing with the ptsb for the last 10 years and to be honest the urterly shoddy buinsess practice is driving me nucking futs i now have been called to meet with my local manager the first time ever but i feel that with over 1 million costomers in ireland i think i would do them a justice to stop what happened to me happening to them some of which would be of legal issues any advice would be great thanks leon

Trackbacks for this post

  1. Banking, Only Better? | Broadsheet.ie

Leave a Comment

Awesome! You've decided to leave a comment. Please keep in mind that comments are moderated.

*