State-owned Permanent TSB (PTSB) has reported an operating loss of €41m for 2021 as operating income declined from €375m to €361m.
There were credit impairment gains of €20m in 2021 compared with credit impairment losses of €181m booked in 2020. As a result, the net loss declined from €162m in 2020 to €20m in 2021.
Eamonn Crowley, CEO of PTSB, described the proposed €7.6bn acquisition of Ulster Bank's business in the Republic of Ireland was a "once in a generation opportunity" that would allow PTSB to grow its mortgage book by over 40%, triple its SME business, and increase its branch network by 30%.
"We are also preparing to welcome Ulster Bank deposit and current account customers who will need a new provider with an attractive offering, a strong community and customer ethos, and a nationwide branch network that is growing," he said.
PTSB's share of new mortgage lending rose from 15.3% to 17.8% last year as it approved mortgage lending of €1.9bn, an increase of 45% year-on-year, outperforming marketwide average growth of 25%.
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SME lending more than doubled to €98m, and consumer term lending fell 4% to €93m.
New lending for the year totalled €2.1bn, an increase of 44% year-on-year. Year-end loans and advances to customers in the balance sheet amounted to €14.3bn compared with €14.2bn a year earlier.
PTSB had a total performing loan book of €18bn at the end of the year, up €200m year-on-year, with non-performing loans of €800m, down €300m from 2020 through a combination of sales and "organic cures".
The bank has loaned out €38m of the €50m in funding available through its partnership with the Strategic Banking Corporation of Ireland (SCBI), and it is also announced a €1bn fund for additional SME lending over the next three years.
The lender said 81% of new lending drawdowns were processed through online channels, up 15% from 2019.
The bank also launched its digital current account, an online mortgage application journey, and a customer correspondence management platform, while also facilitating payments through Google Pay for the first time.
Headcount declined by c.200 to 2,240 last year. Administrative, staff and other expenses increased by €20m to €263m, including the €15m cost of legacy legal cases
The company said there is "optimism that pandemic might finally have come to an end" and that its outlook across its core markets is positive despite the residual effects of Covid-19 and the brewing war in Ukraine.
Net interest income at the bank is expected to grow, supported by the migration of Ulster Bank mortgage assets onto PTSB's balance sheet in the fourth quarter of the year, and the bank has forecast an additional €180m in gross interest income from the acquisition of certain Ulster Bank assets.
This bank signalled that costs are expected to increase 12% this year due to expenditure in digital offerings, streamlining sales and service processes and ensuring IT security and operational resilience. The cost of the Ulster Bank transition is estimated at c,€50m for the year.
"On the expectation that the acquisition of Ulster Bank retail and SME business completes in Q4 2022, the bank will have exceptional accounting gains which will increase the overall profitability of the bank and positively contribute to the bank's capital position," Permanent TSB said.
(Pic: RollingNews.ie)
