The state-owned bank said it was ready to sell €2.6bn of “non-core” loans including the old Springboard Irish subprime mortgages and has appointed advisers Morgan Stanley to find a buyer or buyers.

Improving market conditions mean the bank – once the country’s largest mortgage lender – sees a chance to off-load loans it no longer regards as “core” to its future business.
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But campaigner David Hall’s Irish Mortgage Holders’ Organisation (IMHO) said the action is being taken despite the unfulfilled promise by the Department of Finance to bring in new laws to protect consumers when mortgages were sold.

“This is a cynical exercise by PTSB/Springboard and takes advantage of the ‘heads up’ given by the Finance Department that legislation is supposedly on the way. But where is it?” asked Mr Hall, IMHO director.

“The announcement of the intention to bring in consumer protection legislation has created a flurry of activity, as now announced by PTSB, to sell mortgages ahead of the new laws being enacted,” he said.

Value

The commercial loans account for the lion’s share of the two portfolios, with a so-called face value of about €2.2bn. The residential loans, which include just over 2,000 mortgages, are about €430m par value.

But the key question raised by the sale is whether the buyers of the mortgages will comply with the Central Bank’s code of conduct on mortgage arrears – a consumer protection safety net for borrowers.

That code can only be enforced if the buyer of the mortgage is formally regulated by the Central Bank.

The same concerns were raised when home loans linked to the former Anglo Irish Bank were sold off. The buyers in that case, international investment funds Lone Star and Oaktree Capital Management, agreed to abide by the code but face no penalties for any breach.

A Permanent TSB spokesman said all protocols and regulations would be observed.

“We are conscious of the commitment by the Minister for Finance to introduce legislation to cover this area, and given that we are at the early stages of the transaction, we don’t anticipate any issues in this area,” he said.

It is understood the sales process could take up to 12 months. Last month, the bank’s chief executive Jeremy Masding said the bank had a reasonable chance of returning to private ownership by 2016 or 2017.

It also said that its mortgage arrears had fallen 10pc from their peak last year, while impairment charges are expected to be significantly down this year on those experienced in 2012 and 2013.