Dublin-based Permanent TSB Group Holdings PLC on Wednesday said its net interest income has surged year-to-date, on rising European Central Bank interest rates, as the lender progresses with a brand overhaul.

Permanent TSB added that it has seen some mortgage customers turn to variable rates. It also noted a ‘lower level of market growth than previously expected’ for retail deposits.

Permanent TSB shares fell 9.3% to €1.85 each in London on Wednesday.

Net interest income jumped 93% in the first nine months of 2023. Its net interest margin jumped 92 basis points on-year to 2.31%. Permanent TSB put this down to ‘the changed interest rate environment’.

Year-to-date, new lending totalled €2.2 billion, up 9% annually. It represents a growth slowdown from the rise of 36% to €1.42 billion in the six months to June 30.

New mortgage lending alone was 11% higher, despite the wider market being down 10% over the same period.

‘This growth is supported by the strength in our mortgage proposition, together with mortgage switching activity which continued in the market into Q1’23 as customers sought rate certainty,’ Permanent TSB said.

‘We have observed a change in customer behaviour, where some customers maturing from a fixed rate are now opting for a variable rate for the first time in a number of years.’

Permanent TSB added: ‘The bank remains in a strong position to continue to support our customers, the Irish economy and our shareholders, with the guidance on key performance indicators for FY23 remaining broadly in line with prior market communications. Changes in mortgage customer rate choice plus a lower level of market growth than previously expected in retail deposits are factored into our FY23 expectations.’

Earlier in October, the firm announced a ‘major overhaul’ of its brand. It changed its brand name to PTSB.

The company added: ‘An initial investment of €5 million has been made into customer research, the development and roll-out of a new visual identity, together with a customer promise and a national advertising campaign. Further investment is planned to modernise PTSB locations, including the bank’s nationwide branch network, over the next 18 months.

‘The bank has also invested in improving its customer experience and has put in place a number of initiatives to further support customers, including the introduction of a host role in all 98 branches and the establishment of a vulnerable customer support team, as well as partnering with O’Cualann Co-housing Alliance to enable the development of social and affordable homes across the country.’

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