Banks need to move quickly to deal with the high percentage of non-performing loans on their books in order to protect the banking system and the community from any downturn in the economy, according to the CEO of Permanent TSB.

Jeremy Masding made the claim in an appearance before the Oireachtas Finance Committee.

He said the sale of non-performing loans to third party funds does not dilute or weaken the protections which mortgage holders have when it comes to their homes.

A number of banks have been criticised over plans to sell mortgage loans to so-called vulture funds.

Permanent TSB told the committee that 539 properties which had been surrendered to the bank are to be sold on the market.

The bank has also offered the Housing Agency some 400 properties for use as housing.

Mr Masding said that around 500 of the bank's borrowers who may meet the criteria to allow them to avail of mortgage-to-rent have been identified and contacted.

He also said the bank is reviewing the cost of fixed rate mortgages for existing customers.

The bank has already reduced the cost of fixed rate mortgages for new customers, but existing customers remain on higher rates.

The committee was also told that 46,700 customers who are on standard variable rate could get a reduction in mortgage payments by moving to a managed variable rate.

The bank said it has written to these customers to inform them, and information appears on their annual statements.