independent

Saturday 19 April 2014

Losses at Permanent TSB narrow but arrears rise

Jeremy Masding

STATE-owned Irish lender Permanent TSB (PTSB) saw its losses narrow last year but mortgage arrears rose again, as it cuts jobs and shuts branches in an attempt to return to profit by 2016.

The smallest of Ireland's three remaining domestically-owned banks, Permanent TSB was handed approval by the EU/IMF/ECB last year to seek out a viable future by moving bad assets off its balance sheet.

The bank, split from its more profitable life insurance arm last year, said on Tuesday that its full-year loss fell to €999m, or €1.2bn if a one-off liability management gain is not accounted for.

That compared to an underlying loss of €1.42bn a year earlier.

Mortgage arrears climbed due to an economic crisis that has left Ireland's unemployment rate hovering above 14pc.

"Ireland needs a competitive and thriving banking system to support its economic growth. permanent tsb is well placed to be a cornerstone of this system," Chief Executive Jeremy Masding said in a statement.

The €433m loss in the second half of the year compared to a €566m deficit in the first, a similar trend to Bank of Ireland, which said momentum from late last year had continued into 2013.

PTSB's proportion of Irish owner-occupier loans in arrears for more than 90 days was 15pc at the end of 2012, up from 13.2pc at the end of June.

That compared to an industry average of 11.9pc while 21pc of buy-to-let investors were three months or more in arrears, again higher than the 18.9pc reported by the central bank for the sector as a whole.

The bank's net interest margin, measuring the profitability of its lending, remained the lowest in the industry at 72 basis points of a percent versus 76 at the end of June, while its loan-to-deposit ratio stayed broadly stable at 191pc.

Reuters

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