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permanent tsb Gp (IL0A)


Thursday 09 May, 2019

permanent tsb Gp

Trading Update

RNS Number : 4336Y
Permanent TSB Group Holdings PLC
09 May 2019

EMBARGO 0700hrs                                                                                                                                           

09 May 2019


Permanent TSB Group Holdings plc ('the Bank') - Trading Update (Unaudited)

For The First Quarter Ended 31 March 2019



Key Points

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

·      Total new lending volumes of €0.3 billion increased by 25% year-on-year (YoY) compared to Q1 2018.

·      Market share of new mortgage lending of 15.1%, up from 14.0% in Q1 2018.

·      Net interest margin (NIM) of 1.79%, 1bps higher than full year 2018.

·      Pro-forma Common Equity Tier 1 (CET1) ratio (on a fully loaded basis) was 14.3%2.

·      Moody's upgraded the Bank's credit rating by two notches to Baa3, returning the Bank to Investment Grade, and maintaining their outlook on the Bank as 'positive'.



Business And Financial Performance

·      New mortgage lending grew by 19% YoY, outperforming market growth of 11%1. As a result, Q1 2019 market share of drawdowns was 15.1%1. Whilst the mortgage market in Ireland continues to grow steadily, it remains competitive. We continue to manage our offering carefully by maintaining price discipline and credit underwriting standards.

·      Personal term lending grew by 17% YoY with lending through our digital channels up 74% YoY. SME lending also grew, albeit from a low base.

·      Net interest income from our performing loan book was stable, partly offset by reduced income from non-performing loans (NPLs) due to loan sales in 2018. We continue to manage the cost of funds actively which supports a NIM of 1.79%. Overall, we expect NIM to remain stable through 2019.

·      Operating costs were in line with expectations. We continue to focus on delivering cost saving initiatives to allow for investment; in addition, the full year bank levy and regulatory charges are expected to be in line with the prior year.

·      As part of the Bank's investment in Digital Transformation, it has launched a major new Application Programme Interface (API) Developer Portal that will offer third party Fintech and payment providers an easy way to integrate their digital services in a secure and safe manner.  As a result, the Bank will accelerate its Fintech innovation agenda.



Balance Sheet


Customer Balances

·      Customer deposits of €17.2 billion at 31 March 2019 were €0.2 billion higher than 31 December 2018, with current account balances up 3% from December 2018. The loan to deposit ratio was 98% at the end of March 2019.

·      The total performing loan book at 31 March 2019 was broadly in line with the total performing loan book at 31 December 2018.



1 Source: Mortgage drawdowns YTD to March 2019, BPFI

2 Includes profits earned in Q1 2019 which are subject to regulatory approval

Non-Performing Loans And Properties In Possession

·      Non-performing loans reduced in the first quarter of 2019 primarily due to cures and reduced default flows. We expect this trend to continue for the rest of the year.

·      The Bank continues to manage the remainder of the NPL portfolio and is committed to reducing the NPL ratio to mid-single digits in the medium term, as per regulatory guidelines whilst protecting capital.

·      While the impairment trend during the quarter was favourable to expectation, as a result of better underlying performance, we continue to review our provisioning level in the context of reducing the NPL ratio.

·      At the end of March 2019, the Bank held 960 properties in possession, with 200 for sale. The majority of these properties in possession are as a result of the targeted voluntary surrender programme which the Bank ran on the BTL portfolio. The Bank expects to sell the majority of these properties through various arrangements over the next 12 months.



Funding And Capital

·     The Bank's funding position remains strong. All funding and liquidity metrics are well above regulatory requirements.

·     Moody's upgrading the Bank's credit rating by two notches to Baa3 is an exceptional achievement and returns it to Investment Grade for the first time since 2011. The Bank has now received upgrades from Moody's, Standard and Poor's (S&P) and DBRS following the announcement of Projects Glas and Glenbeigh, and the Bank's 2018 Annual Results.

·     The Bank's indicative MREL issuance target remains in the region of c. €1 billion over the next three years; depending on market conditions, we intend to start issuances in the second half of 2019.

·     The Bank's pro-forma Common Equity Tier 1 (CET 1) ratio on a fully loaded basis increased to 14.3%2 at 31 March 2019 compared to a pro-forma of 14.0% at 31 December 2018. The CET1 ratio on a transitional basis of 16.9%2 remained broadly in line with the pro-forma of 17.0% at 31 December 2018.




For further information, please contact: 


Eamonn Crowley                                Nicola O'Brien                           Leontia Fannin                                 Ray Gordon

Chief Financial Officer                     Investor Relations                     Corporate Affairs and                    Gordon MRM


[email protected]            Nicola.o'[email protected]       [email protected]       [email protected]

+353 1 669 5354                                                  +353 1 669 5283                                        +353 87 973 3143                            +353 87 241 7373      



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.


2 Includes profits earned in Q1 2019 which are subject to regulatory approval

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