Rising Mortgages Boost Loans By 22% At Permanent TSB
The standing TSB reported “strong” lending levels in the first three months of this year.
The bank granted new loans of 400 million euros during the year, an increase of 22% compared to the first quarter of 2020, according to a business update.
This figure, which includes personal loans and loans to small and medium-sized enterprises (SMEs), is mainly attributable to an increase in mortgage lending.
Mortgages increased 30% year-on-year, outperforming the mortgage market which grew 7%, according to the bank. The TSB’s permanent mortgage market share rose to 17.9% in the three months leading up to March 31, from 14.7% in March 2020.
“The bank has been extremely resilient since the start of the Covid-19 pandemic, as evidenced by business performance which continues to grow and follows a very positive trend after a strong fourth quarter of 2020,” said the CEO of Permanent TSB. Eamonn Crowley.
“The bank’s first quarter mortgage drawdown volumes were about 30% higher than the same period last year and mortgage applications and approvals are also ahead of the previous year,” a- he added.
Customer deposits of 18.3 billion euros increased by 2% in the first quarter of 2021.
The bank said its non-performing loans (NPL) of 1.1 billion euros as of March 31 remained “in line with balances” as of December 2020, while the NPL ratio remains at 7.6 pc.
The PTSB’s net interest margin (NIM) – a key measure of a bank’s profitability – was 1.56% as of March 31, up from 1.73% at the end of 2020.
Negotiations with NatWest regarding the acquisition of certain aspects of Ulster Bank’s retail and SME business are continuing, Crowley said.
“Until these negotiations are concluded, there will be no certainty that an acquisition will take place, or under what conditions. Any agreement reached should bring certainty and clarity to customers and associated employees, support Permanent TSB’s global commercial position and create value for our shareholders, ”he said.
The PTSB said it continued to tightly control its administrative cost base. The bank’s voluntary departure plan, which ended earlier this year, will result in the departure of approximately 300 full-time employees, starting this month and continuing throughout the year.
Commenting on the trading update, Goodbody analyst Eamonn Hughes said the bank’s 2021 net interest margin forecast of more than 1.6 pc is lower than it was previously, ” but this seems more motivated by excess liquidity in our opinion “.
“Overall a reasonable IMS [interim management statement] showing that PTSB’s market position is already starting to benefit from recent releases, ”said Mr. Hughes.