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Permanent TSB increases share of mortgage market


Eamonn Crowley

Eamonn Crowley

Eamonn Crowley

Permanent TSB (PTSB) has increased its share of the mortgage market in Ireland.

The bank has seen its share of the new mortgage market increase to 17.5pc on September 30 from 14.9pc in September 2020.

New mortgage lending of €1.3bn grew by 56pc year-on-year at the bank, outperforming the mortgage market which grew by 32pc, according to a trading update from the group.

The bank said that while the mortgage market in Ireland is estimated to grow 19pc from €8.4bn in 2020 to around €10bn this year, according to estimates from Davy, it “remains competitive”.

Overall, the State-backed bank says it has experienced “strong” levels of new lending in the first nine months of this year.

New lending of €1.4bn in the year-to-date is 50pc higher than the same period in 2020, as the economy beings to recover following Covid restrictions.

The bank said it is making good progress in lending to small and medium-sized businesses, with an increase of 43pc in SME lending from the prior period.

“The bank is competing successfully, maintaining new mortgage market share at 17.5pc and delivering a strong financial performance,” Eamonn Crowley, chief executive of PTSB, said.

“We are also making good progress in SME lending, with an increase of 43pc from the prior period.”

PTSB’s net interest margin (NIM) – a key measure of profitability in a bank – of 1.49pc is 25 basis points lower year-on-year, which the bank said is due to higher levels of excess liquidity and rate reductions for new and existing customers.

Customer deposits of €18.9bn at September 30 are €900m higher than at the end of 2020, reflecting a 19pc increase in current account balances.

The bank’s non-performing loans of €1bn at September 30 are approximately €100m lower than balances at the end of 2020, with lower levels of new defaults in the period.

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Operating expenses for 2021 are expected to be around 3pc higher than 2020 due to investment in the bank’s digital offering and sales service.

In July PTSB entered into a Memorandum of Understanding with NatWest regarding a potential acquisition of certain parts of the Ulster Bank retail and SME business in the Republic of Ireland.

PTSB said it is continuing to work with NatWest with a view to entering into legally binding agreements “over the coming months”.

“Until an acquisition is finally concluded there can be no certainty that an acquisition will occur or on what terms,” PTSB said.

Looking to the rest of this year, the bank said business activity and demand “remain strong”.

PTSB expects new lending volumes for this year to be ahead of both last year and 2019 volumes.

Commenting on the update, Eamonn Hughes, analyst at Goodbody, said: “PTSB guides costs +3pc for the year (in line) and whilst there is no explicit impairment guidance, its tone is positive, which may raise hopes of net writebacks at year end.

“All in all, a reassuring statement for us, showing some stabilisation (marginal growth) in the loan book, excess liquidity is still an issue (not a surprise) and a possible positive tone on impairments,” he added.

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