Permanent TSB Group Holdings PLC on Tuesday said its first-quarter outturn was boosted by rising interest rates, though it cautioned that new lending growth will ease as the year progresses.
The Dublin-based lender, majority-owned by the Irish government, said its total operating income rose 77% year-on-year in the first three months of 2023, while net interest income was up 86%.
Net interest margin climbed to 2.26% from 1.44% a year earlier and from 1.92% at the end of 2022.
‘Q1 2023 was another positive quarter for the bank with new mortgage lending of €721 million, growth of 69% year-on-year, while the mortgage market grew 14%. This growth is supported by the strength in our mortgage proposition and the high proportion of mortgage switchers seen in the market in H2’22 and the early part of 2023 as customers sought rate certainty,’ Permanent TSB said.
‘However, it should be noted that the Mortgage Switcher portion of the mortgage market is expected to reduce over the remainder of the year which will lead to lower year-on-year growth in new lending than that observed in Q1 2023.’
It predicts the Irish mortgage market will grow by around 3% to €14.5 billion in 2023. Permanent TSB’s own total performing loan book stood at €19.5 million on March 31, up by €300 million on December 31.
Chief Executive Eamonn Crowley said: ‘The bank reports a strong business and financial performance in the first quarter of the year. New lending volumes and transactional banking income have increased year-on-year, driven by the competitive market and a larger customer base. We also have a strong pipeline of activity across all of our key product lines. Although the global macroeconomic environment remains uncertain, the Irish economy continues to out-perform in terms of growth and employment levels.
‘Expanding our branch network to 98 branches nationwide, coupled with our €150 million multi-year investment in digital services is evidence of our commitment to deliver the best combination of all our channels - from branch to app to voice to intermediaries - to support our customers’ individual needs.’
The company expects total income of €650 million for 2023, up 60% year-on-year.
The Irish government had a more than 99% stake in the lender in 2011. This was reduced to just below 75% as a result of a stake sale in 2015.
The Irish Treasury’s holding in the bank was diluted to just above 62% last year, after Permanent TSB issued 90.9 million shares, just under a 17% stake, to NatWest Group PLC as part of the Ulster Bank Ireland mortgage business deal.
Shares in Permanent TSB traded 2.6% lower at €2.26 each in London on Tuesday morning. Shares are up 21% so far in 2023 and are up 51% in the past 12 months.
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