TIDMIL0A
RNS Number : 4336Y
Permanent TSB Group Holdings PLC
09 May 2019
EMBARGO 0700hrs
09 May 2019
Permanent TSB Group Holdings plc ('the Bank') - Trading Update
(Unaudited)
For The First Quarter Ended 31 March 2019
Key Points
-- Business and financial performance continues to trend positively in line with expectations.
-- Total new lending volumes of EUR0.3 billion increased by 25%
year-on-year (YoY) compared to Q1 2018.
-- Market share of new mortgage lending of 15.1%, up from 14.0% in Q1 2018.
-- Net interest margin (NIM) of 1.79%, 1bps higher than full year 2018.
-- Pro-forma Common Equity Tier 1 (CET1) ratio (on a fully loaded basis) was 14.3%(2) .
-- Moody's upgraded the Bank's credit rating by two notches to
Baa3, returning the Bank to Investment Grade, and maintaining their
outlook on the Bank as 'positive'.
Business And Financial Performance
-- New mortgage lending grew by 19% YoY, outperforming market
growth of 11%(1) . As a result, Q1 2019 market share of drawdowns
was 15.1%(1) . Whilst the mortgage market in Ireland continues to
grow steadily, it remains competitive. We continue to manage our
offering carefully by maintaining price discipline and credit
underwriting standards.
-- Personal term lending grew by 17% YoY with lending through
our digital channels up 74% YoY. SME lending also grew, albeit from
a low base.
-- Net interest income from our performing loan book was stable,
partly offset by reduced income from non-performing loans (NPLs)
due to loan sales in 2018. We continue to manage the cost of funds
actively which supports a NIM of 1.79%. Overall, we expect NIM to
remain stable through 2019.
-- Operating costs were in line with expectations. We continue
to focus on delivering cost saving initiatives to allow for
investment; in addition, the full year bank levy and regulatory
charges are expected to be in line with the prior year.
-- As part of the Bank's investment in Digital Transformation,
it has launched a major new Application Programme Interface (API)
Developer Portal that will offer third party Fintech and payment
providers an easy way to integrate their digital services in a
secure and safe manner. As a result, the Bank will accelerate its
Fintech innovation agenda.
Balance Sheet
Customer Balances
-- Customer deposits of EUR17.2 billion at 31 March 2019 were
EUR0.2 billion higher than 31 December 2018, with current account
balances up 3% from December 2018. The loan to deposit ratio was
98% at the end of March 2019.
-- The total performing loan book at 31 March 2019 was broadly
in line with the total performing loan book at 31 December
2018.
1 Source: Mortgage drawdowns YTD to March 2019, BPFI
2 Includes profits earned in Q1 2019 which are subject to
regulatory approval
Non-Performing Loans And Properties In Possession
-- Non-performing loans reduced in the first quarter of 2019
primarily due to cures and reduced default flows. We expect this
trend to continue for the rest of the year.
-- The Bank continues to manage the remainder of the NPL
portfolio and is committed to reducing the NPL ratio to mid-single
digits in the medium term, as per regulatory guidelines whilst
protecting capital.
-- While the impairment trend during the quarter was favourable
to expectation, as a result of better underlying performance, we
continue to review our provisioning level in the context of
reducing the NPL ratio.
-- At the end of March 2019, the Bank held 960 properties in
possession, with 200 for sale. The majority of these properties in
possession are as a result of the targeted voluntary surrender
programme which the Bank ran on the BTL portfolio. The Bank expects
to sell the majority of these properties through various
arrangements over the next 12 months.
Funding And Capital
-- The Bank's funding position remains strong. All funding and
liquidity metrics are well above regulatory requirements.
-- Moody's upgrading the Bank's credit rating by two notches to
Baa3 is an exceptional achievement and returns it to Investment
Grade for the first time since 2011. The Bank has now received
upgrades from Moody's, Standard and Poor's (S&P) and DBRS
following the announcement of Projects Glas and Glenbeigh, and the
Bank's 2018 Annual Results.
-- The Bank's indicative MREL issuance target remains in the
region of c. EUR1 billion over the next three years; depending on
market conditions, we intend to start issuances in the second half
of 2019.
-- The Bank's pro-forma Common Equity Tier 1 (CET 1) ratio on a
fully loaded basis increased to 14.3%(2) at 31 March 2019 compared
to a pro-forma of 14.0% at 31 December 2018. The CET1 ratio on a
transitional basis of 16.9%(2) remained broadly in line with the
pro-forma of 17.0% at 31 December 2018.
Ends
For further information, please contact:
Eamonn Crowley Nicola O'Brien Leontia Fannin Ray Gordon
Chief Financial Officer Investor Relations Corporate Affairs
and
Gordon MRM
Communications
Eamonn.crowley@permanenttsb.ie Nicola.o'brien@permanenttsb.ie
Leontia.fannin@permanenttsb.ie
ptsb@gordonmrm.ie
+353 1 669 5354 +353 1 669 5283 +353 87 973 3143 +353 87 241
7373
Note on forward-looking information:
This announcement contains forward-looking statements, which are
subject to risks and uncertainties because they relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends, and similar expressions concerning
matters that are not historical facts. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of the Bank or the industry in which it operates, to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. The forward-looking statements referred to in this
paragraph speak only as at the date of this announcement. The Bank
undertakes no obligation to release publicly any revision or
updates to these forward-looking statements to reflect future
events, circumstances, unanticipated events, new information or
otherwise except as required by law or by any appropriate
regulatory authority.
2 Includes profits earned in Q1 2019 which are subject to
regulatory approval
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END
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