Permanent TSB Group Holdings PLC on Wednesday reported a swing to half-year profit, while its top line got a boost from rising interest rates.
The Dublin-based lender, majority-owned by the Irish government, reported a pretax profit of €26 million for the first half of 2023, swinging from a loss of €36 million a year prior.
Total operating income surged 81% to €323 million from €178 million. Net interest income alone jumped 92% to €298 million from €155 million.
‘The increase is mainly driven by the impact of ECB interest rates on the bank’s excess liquidity held with the central bank and improved yields on the bank’s tracker mortgage portfolio,’ the company said.
Its net interest margin expanded to 2.29% from 1.41%.
Permanent TSB booked a €9 million impairment on loans and advances to customers, compared to a write-back of the same amount 12 months earlier.
‘This charge reflects the impact of interest rates increases in the period and a more cautious outlook on future macroeconomic performance and the potential impact on portfolio quality,’ the company said.
The company lifted its annual guidance. It now expects total operating income of around €680 million, a 65% rise from 2022, and an increase from its previous guidance of €650 million.
Permanent TSB upped guidance because ‘interest rate trajectory moves higher than previously assumed’. It expects an ECB deposit rate of 3.75% in December. The rate currently stands at that level, after the ECB hiked by 25 basis points last week.
Shares in the company traded 3.1% higher at €2.34 each in London on Wednesday morning.
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