Lender to cut staff and raise rates

Irish lender permanent tsb confirmed yesterday that it will cut 15 per cent of its staff and raise its standard variable mortgage rate as it battles to secure its future and return to profit.

The bank, one of Ireland's biggest mortgage providers, and which is the banking arm of Irish Life & Permanent, said it would cut around 280 jobs through a voluntary-led redundancy programme and also redeploy an additional 100 staff.

Sources who had been briefed on the matter said that the bank was planning to announce the cuts and raise its mortgage rate.

"We're entering a new period for banking in Ireland and we have to ensure that permanent tsb bank is correctly sized and has the correct margins for the market conditions we are operating in at present," chief executive David Guinane said in a statement yesterday.

The bank also confirmed that it is raising its standard variable mortgage rate by one percentage point, but that it does not intend to make any further increase to the rate this year outside of any increase by the European Central Bank (ECB).