TIDMIL0A TIDM73HR
RNS Number : 6416G
Permanent TSB Group Holdings PLC
25 July 2019
25 July 2019
PERMANENT TSB GROUP HOLDINGS PLC
2019 HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019
Permanent TSB Group Holdings plc ("PTSB", "the Bank") today
reports its half year results for 2019.
Key Points
-- Profit before tax of EUR28m; Profit before exceptional items
and tax of EUR42m; Net interest margin (NIM) of 1.82%.
-- Total new lending volumes of EUR0.7 billion increased by 22%
year-on-year (YoY). Market share of new mortgage lending of
14.7%(1) , up from 13.8% at June 2018.
-- Sale of properties in possession is progressing well, with c.
1400 properties sold over the last 18 months.
-- Non-performing loans (NPL) of EUR1.7bn, NPL ratio remains at
10%, the Bank remains committed to reducing the NPL ratio to
mid-single digits in the medium term.
-- Pro-forma common equity tier 1 (CET1) ratio (on a fully loaded basis) is 14.4%(2) .
-- Moody's upgraded the Bank's credit rating by two notches to
Baa3. This is an exceptional achievement and returns the Bank to
investment grade status for the first time since 2011.
-- The Central Bank of Ireland's (CBI's) investigation into
tracker mortgages at PTSB has now come to a close. The Bank has
paid a fine of EUR21m. As the Bank had made relevant provisions in
prior years, the financial impact in the 2019 financial accounts is
EUR3m.
Jeremy Masding, Chief Executive, said:
"The Bank continued to demonstrate strong business performance
in H1 2019, outperforming the market for new lending and gaining
market share with a range of competitive, customer-friendly
products. The underlying business and franchise remain strong, and
well positioned to capitalise on market opportunities. We will
continue to deliver sustainable shareholder value and fair customer
outcomes, backed by a clear vision and strategy."
Business Performance
-- Business performance continues to trend positively in line with expectations.
-- New mortgage lending grew by 18% YoY, outperforming market
growth of 11%(1) . As a result, H1 2019 market share of drawdowns
was 14.7%(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 16% YoY with lending through
our direct channels up 42% YoY. SME lending also grew YoY, albeit
from a low base.
-- The Bank now has more than 300k active customers using its
mobile App for their banking requirements, an increase of 23% on
2018 and more than 27 million successful account log-ins. More than
16k online Term Loan applications were made in the first half of
2019.
-- Investment in digital transformation is progressing to plan.
The Bank has selected four experienced partners to support business
integration; systems integration and digital platform; renovation
of the core banking platform; and, renovation of the mortgage
servicing platform.
Financial Performance
-- Profit before exceptional items and tax of EUR42m for H1 2019, reduced by 42% YoY.
-- Overall net interest income has reduced by 6% YoY as a result
of reduced income from non-performing loans due to loan sales in
2018 and lower treasury income. However, performing loan income has
grown 3% and, together with the continued management of the cost of
funds, supports a NIM of 1.82%, 5 bps higher YoY. Overall, we
expect NIM to remain stable through 2019.
-- Fees and commissions income of EUR17m in H1 19 has reduced by
EUR2m YoY due to lower overdraft fees.
-- Net other income of EUR12m in H1 2019, primarily relating to
gains on the sale of properties in possession, has reduced by 45%
YoY as 2018 included one off gains from treasury activities.
-- Total operating expenses (excluding regulatory charges and
exceptional items) of EUR145m were broadly in line with the prior
year and within expectations. We continue to focus on delivering
cost saving initiatives to allow for the investment required to
deliver both business efficiencies and drive digital
transformation.
-- Regulatory charges amounted to EUR18m and remained unchanged
from 2018. Bank levy of c. EUR24 million to be paid in the second
half of the year, overall regulatory charges are expected to be in
line with the prior year.
-- A modest impairment charge of EUR5 million in H1 2019
compares to a nil charge at June 2018. The underlying loan book is
performing well reflecting the stability of the portfolio and the
current macroeconomic environment.
-- Exceptional items of EUR14m primarily relates to costs
associated with the Bank's restructuring programme together with a
EUR3m net charge in H1 2019, from paying the Bank's fine (EUR21m)
in relation to the CBI's tracker mortgage examination.
Balance Sheet
Customer Balances
-- Customer deposits of EUR17.4 billion at 30 June 2019 were
EUR0.4 billion higher than 31 December 2018, with current account
balances up 7% from December 2018. The loan to deposit ratio was
91% at the end of June 2019.
-- The total performing loan book at 30 June 2019 was slightly
behind the total performing loan book at 30 December 2018 as the
pace of repayments exceeded the strength of new business. Asset
yield remains above 2%, despite the maturity of higher yielding
treasury assets and the reductions made to certain fixed rate
mortgage products.
Funding
-- The Bank's funding position remains strong. All funding and
liquidity metrics are well above regulatory requirements.
-- Moody's upgraded the Bank's credit rating by two notches to
Baa3. This is an exceptional achievement and returns the Bank to
Investment Grade status for the first time since 2011.
-- The Bank's indicative MREL issuance target remains in the
region of c. EUR1 billion to be in place before 1 Jan 2021. The
Bank intends to start issuances in the second half of 2019.
Non-Performing Loans And Properties In Possession
-- Non-performing loans remain broadly in line with balances at
31 Dec 2018. The Bank continues to actively manage 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.
-- At the end of June 2019, the Bank held 882 properties in
possession, with 372 for sale. The majority of these properties in
possession are as a result of the targeted BTL voluntary surrender
programme. The Bank is satisfied with the progress being made to
date and expects to sell the majority of these properties through
various arrangements over the next 12 months.
Capital
-- The Bank's common equity tier 1 (CET1) ratio on a fully
loaded basis remains strong at 14.4%(2) at 30 June 2019 compared to
a pro-forma of 14.0%(3) at 31 December 2018. The CET1 ratio on a
transitional basis of 16.8%(2) remained broadly in line with the
pro-forma of 17.0%(3) at 31 December 2018.
-- The Central Bank of Ireland Countercyclical Capital Buffer
(CCyB) of 1.0% came into effect from 5 July 2019. As a result, the
Bank is now required to hold an additional capital buffer
equivalent to 1% of its RWAs going forward. The Bank's medium term
target has now increased to c.13% on a fully loaded basis. The Bank
remains confident that it is adequately capitalised for profitable
growth and to deliver the NPL reduction strategy.
Ends
For Further Information Please Contact:
Eamonn Crowley, Chief Financial Officer,
Eamonn.Crowley@Permanenttsb.ie, +353 1 669 5354
Nicola O'Brien, Head of External Reporting,
Nicola.obrien@permanenttsb.ie, +353 1 669 5283, +353 87 148
2275
Leontia Fannin, Head of Corporate Affairs and Communications
Leontia.Fannin@permanenttsb.ie, +353 87 973 3143
Ray Gordon, Gordon MRM, ptsb@gordonmrm.ie, +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.
[1
1 BPFI as at 30 June 2019
2 Includes profits earned in H1 2019 which are subject to
regulatory approval
(3) Pro-forma CET1 ratios for 2018 were post Glas completion and
regulatory approval of capital treatment on Glenbeigh
transaction
3
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
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END
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