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Permanent TSB Group (IL0A)


Wednesday 06 November, 2019

Permanent TSB Group

Trading Statement

RNS Number : 3929S
Permanent TSB Group Holdings PLC
06 November 2019


                                                                                                                                                     06 November 2019



Trading Update for the Nine Months Ended 30 September 2019 (Unaudited)



Business and financial performance continues to trend in line with market expectations as the Bank maintains profitability, retains capital above regulatory requirements, reduces Non Performing Loans (NPLs) and increases new lending.

In September, we completed the inaugural €300m MREL issuance, positioning us well to meet our overall requirements by January 2021. Both Moody's and DBRS have upgraded the Bank's credit ratings in 2019, representing significant progress; we have now returned to Investment Grade status for the first time since 2011.

We continue to make progress on our key priorities, improving our risk profile and being positioned well to deliver for our customers and shareholders.  



Key Points:

·    Total new lending volumes of €1.2 billion increased by 19% year-on-year (YoY), supporting the Bank's performing loan book growth in Q3 2019.

·    Market share of new mortgage lending of 15.5%1 YTD, up from 14.7% at both H1 2019 and Q3 2018.    

·    Net interest margin of 1.82%, in line with H1 2019 and up 5 basis points on Q3 2018.

·    Non-Performing Loans (NPLs) reduced by 35% to €1.1 billion at September 2019 from €1.7 billion at June 2019, following the sale of €0.5 billion of NPLs (Glas Tranche II), on a capital accretive basis. NPL Ratio is now reduced to below 7%, from a peak of 28%3, with the Bank remaining committed to reducing the NPL ratio to a mid-single digit in the medium term.

·    Pro forma Common Equity Tier 1 (CET1) ratio (on a fully loaded basis) of 14.7%2, post the sale of Glas Tranche II.

·    Sale of properties in possession progressing strongly, with c. 1700 properties sold into the market since 2017.


Business And Financial Performance

·    New mortgage lending grew by 17% YoY outperforming the market growth of 11%1. As a result, YTD market share of drawdowns increased to 15.5%1, up from 14.7% at H1 2019. Whilst the mortgage market in Ireland continues to grow steadily, it remains competitive. We continue to manage our offering, carefully maintaining price discipline and credit underwriting standards.

·    Personal term lending grew by 14% YoY with lending through our direct channels up 30% YoY.

·    SME lending also grew YoY, albeit from a low base. 

·    YTD NIM of 1.82% remains in line with H1 2019. We expect NIM to remain broadly unchanged from this level for the full year 2019.

·    Operating expenses remain in line with management expectations; we continue to focus on delivering cost saving initiatives to allow for the investment required to deliver both business efficiencies and digital transformation.

·      Underlying loan book continues to perform well reflecting the quality of the portfolio and the current macroeconomic environment.


Balance Sheet

Customer Balances

·    Customer deposits of €17.3 billion at 30 September 2019 were €0.3 billion higher than at 31 December 2018, with current account balances up 9% from December 2018. The loan to deposit ratio was 95% at the end of September 2019.

·    The total performing loan book at 30 September 2019 was ahead of the total performing loan book at 31 December 2018, as the strength of new business outpaced the repayments on the loan book. Asset yield remains above 2%, despite the maturity of higher yielding treasury assets and reductions made to certain fixed rate mortgage product pricing.




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

·     In September, the Bank completed its first 5 year senior non-preferred (SNP) MREL compliant €300 million bond at mid swaps + 255 basis points (equating to 2.15%) which is callable in year 4. The order book was over-subscribed with more than 50 investors participating. The overall MREL issuance target remains in the region of c. €1 billion to be in place before 1 Jan 2021.

·     Both Moody's and DBRS have upgraded the Bank's credit ratings in 2019, representing significant progress; we have now returned to Investment Grade status for the first time since 2011.  


Non-Performing Loans And Properties In Possession


·    NPLs reduced by €0.6 billion to €1.1 billion following the sale of €0.5 billion of NPLs (Glas Tranche II), announced in September 2019, together with organic cures of c. €0.1 billion, bringing the NPL ratio to below 7%.

·    The Bank agreed to sell the Non Performing Loan portfolio (Glas Tranche II) to Lone Star; the transaction reduces the overall NPL ratio from 10% to below 7%. The sale continues to progress in line with management expectations.

·    The remainder of the NPL portfolio is actively managed, and the Bank is committed to reducing the NPL ratio to a mid-single digit ratio in the medium term, as per regulatory guidelines, whilst continuing to protect capital.

·    At the end of Q3 2019, the Bank held 610 properties in possession, with 261 for sale. The majority of these properties in possession are as a result of the targeted BTL voluntary surrender programme. The Bank is satisfied with the progress being made to date and expects to sell the majority of these properties through various arrangements over the next 12 months.




·    The Bank's pro forma CET1 ratio on a fully loaded basis remains strong at 14.7%2 following the NPL sale of €0.5 billion in September 2019, compared to a pro forma of 14.0% at 31 December 2018. The pro forma CET1 ratio on a transitional basis was 17.2%2 at the end of September 2019, compared to a pro forma of 17.0% at 31 December 2018.

·    The Bank remains confident that it is adequately capitalised for both profitable growth and delivery of the remaining stages of its NPL reduction strategy.



1 BPFI as at 30 September 2019

2 Includes profits earned in Q3 2019 which are subject to regulatory approval

3 NPL Ratio at 31 December 2016


-            Ends           -




For Further Information Please Contact:



Eamonn Crowley | Chief Financial Officer >[email protected] [email protected] | +353 87 148 2275


Leontia Fannin >




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 BPFI as at 30 September  2019

2 Includes profits earned in Q3 2019 which are subject to regulatory approval

3 NPL Ratio at 31 December 2016



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