Permanent TSB expects to make a profit of around €90m next year from its takeover of Ulster Bank assets.
The lender said in a trading update on Friday that it is targeting a 13 percent rise in net interest income by the end of the year, thanks to rising European Central Bank interest rates and new lending.
Net interest income is up 3 percent so far this year compared to the same period in 2021.
PTSB said in a statement that it is also generating additional income from deposits.
The bank has opened more than 100,000 new current accounts (up 250 per cent over the same period last year) and 35,000 new deposit accounts (up 80 per cent) as former KBC and Ulster Bank customers left these departing lenders.
Customer deposits have increased by 9 percent to 20.8 billion euros since December last year.
Earlier this week PTSB announced it had completed the acquisition of Ulster Bank’s powerful non-tracker residential mortgage business, which is expected to grow its mortgage book by about 40 per cent.
The bank is also on course to acquire Ulster Bank’s SME and wealth finance businesses and 25 of its branches.
Chief Executive Eamonn Crowley said the Ulster Bank acquisitions are a “step” for the bank as it expands its customer base.
“The bank has delivered a very strong operational and financial performance year-to-date, with significant momentum in the final quarter of the year,” he said.
“Although the macroeconomic environment remains uncertain, the Irish economy continues to outperform in terms of growth and employment levels.”
New lending volume at PTSB rose 33 percent year-on-year to €1.8 billion, with new green home loans now accounting for 25 percent of mortgage interest.
New mortgage loans were up 31 percent year-over-year, or €1.6 billion, with mortgage loans slightly lower year-on-year at 16.9 percent (vs. 17.5 percent).
Non-performing loans fell by €0.1 billion this year to €0.7 billion, with the NPL ratio expected to fall from 5.5 percent in December last year to 4 percent by year-end once the acquisition of Ulster Bank’s non-tracker residential mortgage business has been completed.
The bank’s fully utilized pro forma Tier 1 capital ratio was 14.9 percent and is expected to remain above the bank’s minimum regulatory requirements.
Operating expenses increased 13 percent year-on-year to €271 million and are expected to increase approximately 15 percent for the full year as the business grows.
The PTSB said it also expects “a small impairment release” as it will take precautions “given the inflationary environment”.
Meanwhile, the Irish Independent reported this week that the High Court is set to hear five test cases from Permanent TSB (PTSB) customers each seeking more than €75,000 in compensation for allegedly being put on the wrong tracker mortgage rate by the bank .
https://www.independent.ie/business/personal-finance/banking/ptsb-eyes-profit-growth-from-rising-interest-rates-and-new-ulster-bank-customers-42136002.html PTSB sees profit growth from rising interest rates and Ulster Bank’s new customers