Business Irish

Monday 19 August 2019

Profits tumble at Permanent TSB on the back of tracker fine

PTSB boss Jeremy Masding
PTSB boss Jeremy Masding
Ellie Donnelly

Ellie Donnelly

State-backed Permanent TSB has reported profit before tax and exceptional items of €42m for the six months to 30 June, a 42pc fall year-on-year.

After exceptional items, the bank reported a profit before tax of €28m for the period, down from €57m when compared to the prior year, according to interim results from the group.

Exceptional items include €14m related to its restructuring programme and a €3m charge related to its €21m fine from the Central Bank's investigation into the tracker mortgage scandal.

Permanent TSB has already paid the record punishment.

The bank's net interest margin (NIM) of 1.82 was 5 basis points higher year-on-year.

NIM is a key barometer of a bank's profitability. The bank said the net interest income was partly offset by reduced income from non-performing loans due to loan sales in 2018 and lower treasury income.

Performing loan income has grown 3pc, however the total performing loan book at 30 June was slightly behind the 30 December 2018, as the pace of repayments exceeded the strength of new business.

Elsewhere, new mortgage lending grew by 18pc year-on-year. The bank now has a 14.7pc market share of drawdowns.

Personal term lending grew by 16pc, when compared to the prior year, while loans to small and medium businesses was also up, though from a low base. 

Jeremy Masding, CEO of Permanent TSB, said: “The bank continued to demonstrate strong business performance in H1 2019, outperforming the market for new lending and gaining market share with a range of competitive, customer-friendly products.”

“The underlying business and franchise remain strong, and well positioned to capitalise on market opportunities. We will continue to deliver sustainable shareholder value and fair customer outcomes, backed by a clear vision and strategy.”

At the end of June, the bank held 882 properties in possession, with 372 for sale.

The majority of these properties in possession are as a result of the targeted voluntary surrender programme.

The bank said it is satisfied with the progress being made to-date and expects to sell the majority of these properties through various arrangements over the next 12 months.

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