PTSB builds mortgage lending share to post-crisis peak of 15.5%

New mortgage lending at the bank rose at an annual pace of 17% during third quarter

Permanent TSB (PTSB), once the State's largest mortgage lender, rebuilt its share of lending to this market to 15.5 per cent in the third quarter, with the aid of cash-back incentives for borrowers.

The bank said in a trading statement on Wednesday that its slice of new mortgage lending grew to 14.7 per cent in the first half of 2019 from as low as 2 per cent during the financial crisis. New mortgage lending at the bank rose at an annual pace of 17 per cent during the third quarter, outperforming the market’s 11 per cent expansion, it said.

“We continue to manage our offering, carefully maintaining price discipline and credit underwriting standards,” the bank said.

“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,” it said.


PTSB chief executive Jeremy Masding announced two weeks' ago that he will step down from the bank in 2020, eight years after the Welsh banker took charge of the lender.

Initially tasked with convincing the Government and the European Commission that PTSB had a future after its €4 billion bailout, Mr Masding subsequently led the bank back to the main Dublin stock market in 2015. The executive completed the sale of its €6.5 billion UK loan book in 2016 after the Brexit vote, and offloaded €3.4 billion of non-performing loans (NPLs) last year without blowing a hole in the group's balance sheet.

The bank subsequently agreed last month to sell about €500 million of loans to US private equity giant Lone Star’s Start Mortgages unit, which will reduce its NPLs ratio to 7 per cent from 10 per cent. It stood at 28 per cent at the start of last year. PTSB said it remains committed to lowering its NPLs ratio to a “mid-single-digit” percentage in the medium term.

The bank’s net interest margin - the difference between the average rates at which it funds itself and lends to customers - remained stable at 1.82 per cent compared to the first half of the year and up 0.05 percentage points from the third quarter of 2018.

Larger rival AIB reported yesterday that its net interest margin contracted by 0.11 percentage points during the third quarter to 2.32 per cent as a result of a "very challenging" interest rate environment internationally. The European Central Bank is currently charging banks a rate of minus 0.5 per cent to hold their excess deposits.

PTSB said it has sold 1,700 properties that it has taken into possession since 2017, mainly from a targeted voluntary surrender programme for struggling buy-to-let borrowers. At the end of September, PTSB held 610 properties in possession, with 261 for sale.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times