PTSB Publish Half Year Results

29 Aug 2018




Permanent TSB Group Holdings plc (“PTSB”, “the Bank”) today reports its half year results for 2018.



Key Points:


·        Profit Before Tax of €57 million increased by 33% compared to €43 million for the first half of 2017

·        New lending volumes increased by 50% to €585 million compared to the first half of 2017

·        Residential Mortgage Market Share increased to 13.8% from 12.6% for full year 2017

·        Net Interest Margin (NIM) reduced marginally by three basis points to 1.77% from 1.80% at year-end 2017

·        Non-Performing Loans (NPLs) reduced by €0.2 billion to €5.1 billion in the first half

·        Sale of €2.1 billion of NPLs announced in July which, when completed in Q4, will reduce the NPL ratio down to 16% from 25%

·    Fully Loaded Common Equity Tier 1 (CET1) ratio of 13.4%. The expected final outcome of the ECB’s TRIM exercise and the completion of Project Glas sale are expected to decrease the ratio by 50 basis points in the second half.


Jeremy Masding, Chief Executive, said:

 “In the first half of 2018, we continued to maintain strong momentum in new lending recording close to a 50% increase year-on-year. We have increased our market share in mortgage lending while maintaining pricing discipline and making process improvements to deliver a better customer experience. This has been achieved against the backdrop of an increasingly competitive market.


Whilst our underlying business continued to show progress, we have also made significant progress in reducing the level of NPLs following the announcement of a €2.1 billion sale at the end of July. In addition, we continue to maintain capital levels comfortably above the required regulatory minimum which positions us well for investment, profitable growth and the continued reduction in NPLs over the medium term.


We are very close to completing the rebuilding of the Bank so that we can focus solely on competing in the Retail and SME markets. In summary, our goal is that by early 2019 we will have built a Retail and SME Bank that is focused on delivering the right outcomes for its customers and quality earnings for its shareholders – the Bank Of Choice.”

Business & Financial Performance

  • Total New Lending volumes grew by 50% to approximately €585 million.
  • Mortgage Lending grew by 51% which outperformed the market growth of 22%. Mortgage market share increased to 13.8% compared to 12.6% for full year 2017.
  • Consumer Lending increased by 42% to €61 million. 54% of Consumer Lending payouts were from Voice and


Digital channels. 

  • NIM decreased by three basis points to 1.77% from 1.80% at year-end 2017. This was primarily due to reduced income from the sale and maturities of certain Treasury Assets and reduction in income recognised from NPLs. The second half NIM trajectory is expected to remain stable. 
  • Other Income of €41 million comprises Net Fees and Commissions of €19 million, a Net Trading Gain of €9 million and Other Operating Income of €13 million. Other Income increased by €23 million compared to the first six months of 2017. This is mainly due to a €10 million gain as a result of the closure of certain derivative contracts during the first half and a €15 million gain as a result of the sale of a portion of the Treasury Asset portfolio.
  • Operating Expenses (excluding Bank Levy and Regulatory Charges) increased by €14 million to €158 million. This is mainly due to an additional provision of €15 million in relation to legacy mortgage issues.
  • Regulatory Charges amounted to €18 million and remained unchanged from 2017. Bank Levy of €23 million expected to be paid in the second half of the year.
  • Impairment Charge amounted to €nil million (under IFRS 9) reflecting stable economic conditions. Impairment Charge for the first half 2017 amounted to €6 million.


Balance Sheet 

Customer Balances 

    • Customer Deposits amounted to €17.1 billion (86% from Retail Deposits and Current Accounts), remaining stable from December 2017 and representing 83% of Total Funding.
    • Gross Loans amounted to €20.3 billion (including NPLs of €2.1 billion which were held for sale at the end of first half) reducing by €0.3 billion (1%) from December 2017. This was primarily due to repayments and redemptions exceeding new lending in the period. The Bank expects to return to net lending growth in 2019.

Non-Performing Loans And Properties In Possession

    • NPLs reduced by €0.2 billion to €5.1 billion from December 2017 primarily due to Cures and the targeted Voluntary Surrender programme undertaken on the Buy-To-Let portfolio.
    • On 31 July, the Bank announced the sale of €2.1 billion of NPLs which, when complete, will further reduce the Bank’s NPLs to €3.0 billion. As a result, the NPL ratio will fall significantly to 16%. The transaction is expected to complete in the fourth quarter this year. 
    • PTSB continue to manage the remainder of its NPL portfolio and is committed to reducing the NPL ratio to single digit in the medium term, as per regulatory guidelines, whilst protecting capital.
    • PTSB currently holds approximately 1,900 properties in possession at the end of July 2018 which it primarily acquired through the targeted voluntary surrender programme on the Buy-To-Let portfolio in 2017. Approximately, 500 properties were sold in the last 18 months and over 350 properties year-to-date to July 2018. We expect to sell the majority of these properties through various arrangements over the next 12 months.


  • Strong liquidity position with Net Stable Funding Ratio at 114% and Liquidity Coverage Ratio at 156%.
  • MREL indicative target set at 25.8%; issuances manageable at approximately €1 billion over the next three years.


  • Transitional CET 1 Ratio decreased to 16.2%1 from 17.1% at 31 December 2017 whilst the Fully Loaded Ratio decreased to 13.4%1 from 15.0%. This is mainly due to the partial embedding of TRIM and transition to IFRS 9 (Fully Loaded only) offset by H1 Profit.
  • Risk Weighted Assets (RWAs) increased to €11.2 billion from €10.6 billion at the end of 2017 mainly due to partial embedding of TRIM (c.€0.7 billion) offset by a reduction in the loan book.
  • Subsequent to 30 June 2018, and following the sale of €2.1 billion of NPLs, RWAs of approximately €1.3 billion will be derecognised at completion.

TRIM Update 

  • The Bank has received communication from the ECB indicating the conclusion of the bilateral Targeted Review of Internal Models (TRIM) exercise. Based on the communication received, it is expected the implementation of the review will increase RWAs by an incremental approximate €1.7 billion in the second half bringing the total impact from TRIM to approximately €2.4 billion in 2018.
  • Consequently, the pro forma CET1 ratio, after including the impacts from completion of NPL sale (Project Glas) and incremental TRIM, will decrease by approximately 50 basis points.

Medium Term Target 

  • During July 2018, the Central Bank of Ireland announced an increase in the Countercyclical Capital Buffer (CCyB) from 0% to 1.0% effective from July 2019. As a result, the Bank will be required to hold an additional capital buffer equivalent to 1% of its RWAs from that date. Despite this, the Bank’s medium term target remains unchanged at 12% on a Fully Loaded basis.
  • The Bank remains confident that it is adequately capitalised for profitable growth and to deliver the NPL reduction strategy.



For further information, please contact:

Ray Gordon
Gordon MRM




Back to all

Request a Callback! One of our consultants will get in touch ASAP