PTSB Publishes Trading Update Ahead Of AGM

16 May 2018





Permanent TSB Group Holdings plc (‘the Bank’) – Trading Update (Unaudited)

For The First Quarter End 31 March 2018



Key Points:


·       Business and Financial performance continues to trend positively in line with expectations 

·       New lending volume of €0.3 billion was up 60% year-on-year (YoY) compared to Q1 2017. Market Share of New Mortage Lending at 14.0% 

·       Net Interest Margin (NIM) was 1.76% impacted by reduced income from Treasury Assets

·       Non-Performing Loans (NPLs) reduced by €0.1 billion (2%)

·   NPL Reduction Programme continues to progress through Project Glas; the Board has approved the withdrawal of approximately €0.9 billion of Split Mortgages from this transaction

·       Proforma Common Equity Tier 1 (CET1) ratio (on a Transitional basis) was 15.9%[1]



Business & Financial Performance


·     New Mortgage Lending grew by 63% YoY while the overall market grew by 22%[2]. As a result, our market share of drawdowns increased to 14.0%. 

·      Term Lending grew by 42% YoY.

·      Net Interest Income in Q1 2018 was impacted by reduced income from the sale of certain Treasury Assets. However, Non-Interest Income gains from the sale of these Treasury Assets more than compensated for this reduced interest income. As a result, NIM for Q1 2018 was 1.76%, 4bps lower than FY2017.

·       Operating Expenses are in line with Q1 2017. We remain focused on continuous cost management generating efficiencies to support required investment.

·       Impairment trend in Q1 was in line with expectations as we continue to embed the transition to IFRS 9 and execute the NPL reduction programme.


Balance Sheet


·     Customer Deposits remain stable at €16.9 billion (85% from Retail Deposits) and in line with December 2017.

·     Gross Loans amounted to €20.4 billion, reducing by €0.2 billion (1%) from December 2017 as repayments and redemptions exceeded new lending, together with the reduction in non-performing loans.



Non-Performing Loans


·       NPLs reduced by €0.1 billion (2%) to €5.2 billion in Q1 primarily due to cures and reduced default flow.

·       As part of our NPL Reduction Programme, we launched a sale process for NPLs in February (Project Glas). We continue to progress Project Glas and anticipate providing an update to the market at the upcoming Interim Results in Q3 this year. We are encouraged by the strong investor interest in this transaction.  

·       In terms of the composition of Project Glas, the Board has decided to withdraw approximately €0.9 billion of Split Mortgages (PDH[3]Customers) from this transaction. These are mortgages where the borrowers are meeting the terms agreed by the Bank. The Board continues its engagement in respect of the regulatory classification of these mortgages and will also consider alternative options for these loans, including options which will result in the Bank continuing to maintain the relationship with the account holders.  

·       Following the withdrawal of Split Mortgages and further refinements, Project Glas now consists of €2.2 billion (representing approximately 11,200 properties) approximately 11% of Gross Loans. 

·       We are confident that the Bank is adequately capitalised to deliver the NPL Reduction Programme.


Speaking today Jeremy Masding, CEO of Permanent TSB said:“Since the launch of Project Glas there have been some developments including engagement with the Regulatory Authorities on the treatment of Split Mortgages and the emergence of solutions which could enable us to maintain the day-to-day relationship with the account holders. Therefore, we have decided to withdraw mortgages linked to about 4,300 homes (par value of approximately €0.9 billion) from the Project Glas sale process.  We will continue our engagement on the regulatory classification of these mortgages and, at the same time, we will explore different options including ones that enable us to maintain the day-to-day relationship with the account holders.”

“The particular make up of loans included in portfolio sales like Glas always evolves as the process moves forward.  As a result of the removal of PDH3Split Mortgages and other decisions we have taken, the number of properties linked to loans remaining in Project Glas has reduced from an initial 18,000 properties to approximately 11,200 properties.  The value of the loans remaining in Project Glas is approximately €2.2 billion and we believe it will complete in the current year”.




·      Capital ratios include a c.1.1% impact from a partial embedding of TRIM with an incremental 1.4% to be phased in during 2018.

·      As previously indicated, on the 1 January 2018, IFRS 9 transition adjustments reduced the Transitional Ratio by 0.1% (phased in over five years) and the Fully Loaded Ratio by 1.0%.

·      Proforma Transitional CET 1 Ratio decreased to 15.9%[4]compared to 17.1% at 31 December 2017. 

·       Proforma Fully Loaded CET1 Ratio decreased to 13.2%4compared to 15.0% at 31 December 2017. 







Note on forward-looking information:

 This Announcement contains forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Bank or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as at the date of this Announcement. The Bank undertakes no obligation to release publicly any revision or updates to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise except as required by law or by any appropriate regulatory authority.

[1]Includes profits earned in Q1 2018 which are subject to regulatory approval.

[2]Source: Mortgage drawdowns to March 2018, BPFI.

[3]Private Dwelling Homes

[4]Includes profits earned in Q1 2018 which are subject to regulatory approval.

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