Information  X 
Enter a valid email address

Permanent TSB Gp Hld (283)


Wednesday 21 May, 2014

Permanent TSB Gp Hld

Trading Statement

RNS Number : 6352H
Permanent TSB Group Holdings PLC
21 May 2014

permanent tsb Group Holdings plc (ptsbgh)

Trading Update

Wednesday, 21 May 2014



permanent tsb Group Holdings plc issued the following Trading Update in advance of the Group's Annual General Meeting which takes place today at 11.30am.

Commenting on this update, Group Chief Executive Jeremy Masding said; "We are very encouraged by the strong start we have made in 2014.  On the product side, we are growing our positions in all key markets and on the financial side, we are confident that the Group is continuing its recovery and we believe this progress will be evidenced in the Group's financial performance for this year."


Key Points:

·     Strong start to 2014 leading to confidence in outperforming management forecasts:

New mortgage approvals to end April - up 80% year-on-year

Market share for new mortgages now estimated at circa 13% (from low of 1.6% in Q4, 2012)

Continued success with current accounts - 65,000 current accounts opened in the last 12 months

·     On a stand-alone basis ptsb business unit has been profitable after impairments for the year-to-date.

·     Underlying arrears levels now falling in each of the loan portfolios within the Group's Asset Management Unit.  As a result, we expect the 2014 impairment charge to be significantly reduced from the levels seen in 2012 and 2013.

·     Continued strong capital position with a significant buffer against regulatory requirements.

·     ECB borrowings further reduced from year end 2013 levels. ECB borrowings now approximately 60% below peak and similar to levels last seen in 2007 - enabled by

deposit growth;

reductions in debt securities held; and

ongoing reduction in loan book levels.

·     Loans-to-Deposits Ratio for the Group is 142%; Core Bank is 124%.

·     Making progress on planned sale of certain non-core Irish loan books.


In the broader economy, the underlying trading environment shows distinct signs of a continued upturn. The macroeconomic environment is improving with GNP expectations of c2.7% (note 1) growth for 2014, unemployment rates now reduced to 11.7% (note 2) from a peak of 15.1% and RoI house prices now improving having recovered to 53% (note 3) of peak 2007 values (or 47% (note 4) peak-to-trough fall), across Dublin and the rest of Ireland.

 note 1: CBI - 'Quarterly bulletin - QB 2'

 note 2: CSO - 'live register April 2014'

 note 3: CSO - 'Residential property price index March 2014'

 note 4: CSO - 'Residential property price index March 2014




Business Overview:

At a Group level, the expansion of Net Interest Margin ("NIM") is continuing at a similar pace as was seen during 2013.  Within that, the NIM of ptsb SBU has grown at a faster pace, significantly assisted through the growth of retail deposits volumes, complemented by a reduction in cost of funds.  However, it is worth noting that any further cuts to the ECB rates, as has been speculated, would reduce the pace of the recovery of the NIM.

Operating expenses are expected to reduce from 2013 levels with significant one-off items not recurring, although this will be partially offset by costs associated with new business initiatives and increasing costs of regulation.


Core Bank:

permanent tsb Business Unit ('ptsb')

permanent tsb Business Unit has performed well so far this year and continues to play an active and important role in providing competition in the Irish retail banking market.  On a stand-alone basis, ptsb has been profitable after impairments for the year-to-date.   

ptsb is seeing strong business growth in the level of approved lending and cash drawdowns, new Current Accounts and Deposit growth.  New mortgage approvals for the year to April have been approximately 80% higher than the previous year with an estimated market share of new residential mortgage drawdowns of 13%.  While too early to be definitive, initial indications for the Tracker Mover product are very positive and it will be an important component in improving the yield on our historic loan base. 

Personal Term Lending and Credit Cards have also shown growth.  The strong growth in new Current Accounts in 2013 has continued through into 2014, particularly with the exit of certain competitors.   We believe that ptsb has performed considerably stronger than its peer group in winning over current account customers from departing institutions. Customer deposit volumes also continue to increase, while pricing continues to normalise downwards.

We will continue to build out our customer proposition over the course of 2014 offering innovative products and improving service levels and functionality over time.

Asset Management Unit ('AMU')


The AMU manages the Core Bank's non-performing Home Loan and Buy-to Let loan books. Within the AMU, underlying arrears levels are now falling in each of the loan portfolios, across early and late arrears.  Total arrears in the Home Loan and Buy-to-Let portfolios are now c.10% below their peak levels in 2013.   

The AMU remains on track to meet its own targets for arrears resolution, and those of the Central Bank of Ireland's Mortgage Arrears Resolution Strategies ("MARS") process.  The total number of long term treatments offered at end April was 19,000 with 15,700 accepted. 

As at end April 2014, the AMU had engaged with over 80% of customers under the Mortgage Arrears Resolution Targets ("MART"), with almost 2/3rds receiving sustainable treatments. We would urge the minority of our long-term arrears customers who have not yet engaged with our Arrears Support Unit to do so, as it is our clear preference to restructure a loan, where appropriate, rather than resort to legal action.

As a result of the improving quality of the loan book, the flow of impairments is reducing and consequently H1 2014 and year-end 2014 impairment charge is expected to be significantly reduced from the levels seen in 2012 and 2013.


Non-Core Ireland:

The Group's Non-Core Ireland Business Unit consists of the Springboard Mortgages, Commercial Real Estate ("CRE") Books and Geared Property Loans.  The Group is actively exploring disposal opportunities for these loan books. 


Non-Core UK:

The Non-Core UK Business Unit, which primarily consists of Capital Home Loans in the UK, continues to be managed for value and the Group will seek to deleverage these assets over time.  Redemptions within this loan book are increasing from a low base - Q1 redemptions were 34% of the 2013 total.



The Group's funding position has continued to improve with ECB borrowings falling further from €6.9bn in December 2013 to less than €6bn currently. This was achieved through deposit growth, reductions in debt securities held and an ongoing reduction in loan book levels. The Group expects that this position will be further assisted by planned deleveraging initiatives, continuing wind-down of assets in both its Ireland and UK Non-Core Business Units and any further NAMA redemptions. 

Loans-to-Deposits Ratio for the Group is 142%; Core Bank is 124%.



The Group continues to maintain a capital position with a significant buffer against regulatory requirements, with capital attrition reducing as loss levels have abated. As has been publicised, the Single Supervisory Mechanism Programme includes an Asset Quality Review and a Capital Stress Test.  All banks involved in this process continue to engage with the relevant National Competent Authorities in preparing and completing these assessments.  It is expected that the results will be published in the fourth quarter of 2014.


Contact details

Glen Lucken, Group Chief Financial Officer

Tel: +353 1 669 5145

Ray Gordon, Media Relations

Gordon MRM

Tel: +353 1 6650452, mobile +353 87 2417373


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 Company 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 Company will not undertake any 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.

This information is provided by RNS
The company news service from the London Stock Exchange

a d v e r t i s e m e n t