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Permanent TSB to cut deposit rates
07 February 2010 By David Clerkin, Markets Correspondent
Permanent TSB is to take further action to repair its margins, by cutting the rates it pays on some deposit products by up to 0.25 per cent in the coming weeks.
The cuts will be the second levied by the bank in the space of two months, and will mean that some customers will be earning up to 0.6 per cent less on their savings than they were last month.
Changes to Permanent TSB’s pricing, scheduled for early April, will reduce rates paid on the bank’s 21-day and 35-day notice accounts by up to 0.25 per cent.
Last week, the bank implemented a number of changes to its savings rates that saw rates fall by as much as 0.35 per cent on some deposit accounts.
The bank also increased lending rates on its standard variable rate mortgage by 0.5 per cent.
Permanent TSB has come under pressure to change the pricing on its savings and loan products, as its net interest margin - the difference between the price it pays for money and the price it charges borrowers - has fallen sharply.
The bank, part of Irish Life & Permanent (ILP), is currently examining its strategic options, and may spin off from the ILP group as part of a wider restructuring of the Irish financial services landscape.
Its banking business could be merged with the savings and homeloan business of building societies EBS and Irish Nationwide, or its mortgage book could be taken on by a bigger institution, such as AIB or Bank of Ireland.
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