Investor appetite for Permanent TSB shows change in bank’s outlook

Lender has been transformed by rate hikes and Ulster Bank deal

The great bank sell-off continues, not exactly at a breakneck speed, but certainly at a steady one.

The Government and NatWest offloaded about 10 per cent of Permanent TSB shares in a placement on Friday, far more than the three per cent that had been indicated as late as Thursday evening.

The move reduces the Irish taxpayers holding in the lender to just over 57 per cent, while NatWest’s falls below 12 per cent.

Clearly Permanent TSB is still a long way away from getting out of State ownership, but the mood music around the bank that for years had to deal with very real questions about it’s survival has improved dramatically. The deal to buy much of Ulster Bank’s business as it exited the Irish market has transformed PTSB.


At the time details of talks between the two sides emerged in 2021, chief executive Eamonn Crowley seemed almost giddy at what buying €6.1 billion of mortgages and €165 million of microbusiness loans from Ulster Bank could do for his bank. And he’s been proved right.

Not only has that acquisition brought PTSB the sort of scale it desperately needed to compete with the likes of AIB and Bank of Ireland, the sharp increase in interest rates since last summer has bolstered its interest income as mortgage rates rise across the board.

Clearly investors are taking note. The stock has more than doubled since the Ulster Bank talks first emerged, and demand from institutional investors prompted the Government and NatWest to increase the amount of shares they planned to sell this week.

It’s a far cry from the last time the Government holding in PTSB reduced. Back in 2015 the Government cut its holding to 75 per cent from 99.2 per cent when it sold shares as part of an equity raise. At the time those shares traded at €4.50 each. The stock quickly fell away and has not come close to matching that level since.

Things look pretty different now. For years Crowley and his predecessor, Jeremy Masding, dealt with questions around whether it would consider merging with Ulster Bank and create a third banking force. It took Ulster Bank leaving Ireland to make it happen, but that’s effectively what has taken place, and PTSB is reaping the benefits.