Permanent TSB is to withdraw more than 4,000 split mortgages from its proposed sale of non-performing loans.
The bank had planned to sell off 18,000 distressed mortgages in the Project Glas sale, with fears they will be bought up by so-called vulture funds.
The 4,300 mortgages are home loans where borrowers are meeting the terms of the split deal agreed by the lender. The amount withdrawn amounts to around €0.9bn. There will be around €2.2bn left in Project Glas which the bank expects to conclude this year.
The bank said: “The board continues its engagement in respect of the regulatory classification of these mortgages and will also consider alternative options for these loans, including options which will result in the bank continuing to maintain the relationship with the account holders.”