PTSB mortgage lending growing more than twice as fast as market

Third-quarter update shows bank’s market share of drawdowns now 11.9%

A Permanent TSB office on Dublin’s Grafton Street. Photograph: Alan Betson

A Permanent TSB office on Dublin’s Grafton Street. Photograph: Alan Betson


Permanent TSB increased its residential mortgage lending by almost two thirds during the third quarter of 2017 compared to the same period last year, more than double market growth.

In a trading update for the nine months ended September 30th, on Wednesday the bank said new lending volumes increased by 64 per cent year-on-year.

Furthermore, residential mortgage lending grew by 65 per cent year-on-year, outperforming market growth of 32 per cent.

As a result, the bank’s market share of drawdowns increased to 11.9 per cent. Consumer and SME lending also grew by 56 per cent year-on-year, albeit from a low base.

Permanent TSB, once the State’s largest mortgage bank, was the first lender to come under public scrutiny for the tracker mortgage issue when it disclosed in July, 2015 that 1,372 customers had been denied their rights to a low-cost loan.

Tracker redress

In relation to the bank’s review into the scandal, it said it “continues to make progress” with 1,971 customer accounts identified as affected.

“All are now on the correct interest rate,” it said, with 1,448 of those affected now “fully redressed and compensated”.

“The remaining customers will receive redress and compensation before the end of next month.

“The bank will continue to support the Central Bank in its independent assessment. We continue to review the provision associated with this review and, at present, we believe it remains appropriate.”

Elsewhere, the bank said it was trading in line with expectations. During the first nine months of the year, more than 30,000 new current accounts were opened which is an increase of 16 per cent year-on-year.

PTSB “continued to reduce” its non-performing loans portfolio mainly due to improvement in new defaults and favourable cure trends. “We expect this trend to continue for the rest of the year,” it said.

“We outlined our strategy on non-performing loans at the interim results which is to reduce our ratio to a high single digit percentage over the medium term. We continue to execute this strategy and are satisfied with the progress made.

“While the impairment trend during the quarter was favourable to expectations as a result of better underlying performance, we continue to review our provisioning level in the context of executing the non-performing loans strategy.”

In terms of the bank’s balance sheet, customer deposits of €17.1 billion have marginally increased from €16.9 billion at the end of the first half of the year. This was as a result of growth in retail deposits and current account balances.

In addition, PTSB said it continued to diversify its funding mix. In October, the bank successfully placed €500 million of five-year residential mortgage backed securities at a cost of approximately 0.10 per cent.

Net loans amounted to €18.6 billion and remain unchanged since the end of the first half of the year.

“Whilst the tracker mortgage book is paying down at approximately 4 per cent (annualised), the variable and fixed mortgage book grew by 1 per cent (annualised) in the first nine months of the year,” it said.