Permanent TSB’s reinvention as a good bank seems possible after the virtually nationalised bank said its plan has been approved by the troika.

permanentTSBThe idea centres on carving out a good bank and parking €12.5 billion of doubtful loans in an internal bad bank, which would leave €14.2 billion in a “good” Permanent TSB.

So are we on the verge of seeing the re-emergence of a third national bank, as the Minister for Finance Michael Noonan recently put it?

In 2002 it had €14 billion of loans and deposits of €10 billion - a loans-to-deposits ratio of 140 per cent.

Now under the new EU-IMF targets it has to reach a target of 122.5 per cent.

And the question is: will this new plan achieve this ratio?

The new boss of Permanent TSB, Jeremy Masding, seems to think so. He has secured approval for the plan where Anglo Irish Bank (now Irish Bank Resolution Corporation) could not.

This had more to do with the types of banks they are, however. Permanent TSB had a national reach while Anglo was a specialist lender primarily to property developers and builders.

So Permanent TSB is likely to rise from the ashes. But is it fair for it to be allowed to simply jettison €12.5 billion of their own potential debt?

Once again the banks seem to get the deal while the man on the street and small businesses get crumbs – and credit facilities are rare.

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