Permanent TSB Group Holdings has agreed the sale of its sub-prime Springboard mortgage business to Mars Capital Ireland.

The sale is part of the bank's ongoing deleveraging programme of non-core assets. 

Springboard was closed to new business in 2009 and its loan book comprises €468m of assets, €350m of which are non-performing.

Without disclosing financial details of the deal, PTSB said it is expected to be completed after certain regulatory approvals and other consents.

It also said that the impact of the sale would reduce its non-performing loans by about 4% and the Loan to Deposit ratio by about 1%. 

The proceeds from the sale will be used to further reduce its funding requirements in line with the group’s ongoing restructuring of its balance sheet, PTSB added.

"This transaction completes an important part of our planned deleveraging programme and, importantly, it also confirms the adequacy of our provisioning methodology," commented the company's group CEO, Jeremy Masding.

"Non-conforming lending does have a limited role to play in a mature mortgage market, but it was not appropriate for us as at this time as we focus on our rebuilding task," Mr Masding added. 

In a statement, PTSB said that Mars Capital will comply with the terms of the Central Bank's Code of Conduct on Mortgage Arrears.

Earlier this year Mars acquired residential mortgages from Irish Bank Resolution Corporation.