Monday 23 July 2018

PTSB return to profit as new lending rises to over €1bn

PTSB chief Jeremy Masding
PTSB chief Jeremy Masding
Ellie Donnelly

Ellie Donnelly

State-backed Permanent TSB has reported a profit after tax of €40m for 2017, a significant improvement on the loss after tax of €266m incurred by the bank in 2016.

The return to profit was driven by a 74pc increase in new lending volumes, bring the volume of new lending to over €1bn, the bank said in its annual results today.

In addition, during the year the bank, which recently announced plans to sell almost €4bn of non-performing loans (NPLs) under what it called Project Glas, reduced its NPLs by 10pc or €0.6bn.

NPLs loans at the bank now stand at €5.3bn.

Project Glas consists of €2.8bn of home loans and €0.9bn of buy-to-let loans. Of the €2.8bn in home loans, €1.9bn related to untreated loans, where there is a lack of affordability or engagement, the bank said.

Overall PTSB has reduced its absolute volume of NPLs by 42pc in five years, however the ratio of NPLs remains high as the bank's overall loan book has decreased.

During the year the bank saw its residential mortgage market share by 12.6pc, while there was a 10pc increase in current account balances.

"I am pleased to report a successful commercial year for the bank where we have lent over €1bn to the Irish economy," Jeremy Masding, chief executive of PTSB, said.

"This is an increase of over 70pc year-on-year. Crucially, we have regained our natural market share in the residential mortgage market, this has increased to 12.6pc in 2017 from a low single digit in 2012."

Net interest margin - a key measure of profitability – increased by 32 basis points to 1.80pc in 2017 from 1.48pc in 2016.

Total income at the bank increased by €11m to €433m, a 3pc increase on 2016, which the bank said was mainly due to the increase in net interest income.

Meanwhile, customer deposits amounted to €17bn, unchanged from December 2016. Customer deposits now represent 83pc of total funding at the bank.

Gross loans amounted to €20.6bn, reducing by €0.7bn or 3pc from December 2016, as repayments and redemptions exceeded new lending, the bank said.

On the matter of the tracker mortgage scandal, PTSB said that all of the customers impacted by the Tracker Mortgage review have been placed on the right rate and contacted with a redress and compensation payment offer, with 91pc of customers having now been fully redressed.

"Against the backdrop of a growing Irish economy, the bank’s results show that we are making steady progress towards building a focused, low risk business that delivers shareholder value through providing outstanding service to our customers," Mr Masding said.

"There remain challenges in transforming the bank, in particular, the high level of NPLs that must be reduced to meet both our own and our regulator’s desire for a safer bank that can continue to contribute to the growth of the Irish economy. We believe we have the right strategy and sufficient capital to address these challenges and to deliver our strategic objectives."

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