The chief executive of Permanent TSB has confirmed to RTÉ News that the bank will be increasing mortgage interest rates, and that an announcement is expected tomorrow.

The bank is expected to announce an increase of one percentage point in its standard variable mortgage rate.

Chief executive David Guinane said the bank was loss-making in 2009 and 2010, and that banks which continued to be make losses had to resort to aid from the taxpayer. In order to avoid that outcome, he said, PTSB had decided to increase interest rates.

Mr Guinane said he understood why customers would be 'angry', but he was left with no choice.

He also confirmed that staff would be told of the company's rationalisation plan tomorrow. At an internal meeting in CityWest Hotel in Dublin today, the bank outlined plans to cut between 250 to 350 jobs. The redundancies will be voluntary. It also understood some people could be offered redeployment.

The bank, owned by Irish Life & Permanent, currently employs 1,800 people and has 100 branches around the country.

Permanent TSB hired consultants Accenture to examine its costs. Its latest results showed that it lost €131m in the first half of last year.

Permanent TSB has been the country's biggest mortgage lender. Now it is affected by a significant decline in revenue since the property bust.

The UNITE trade union has confirmed that it has held talks with senior management at Permanent TSB today over future restructuring.

'Until we have an opportunity to communicate and consult with our members it would not be fair to them to comment on today's speculation about the company,' said regional co-ordinator Walter Cullen. 'We hope to be in a position to issue a more comprehensive statement to the media on Friday morning,' he added.