TIDMIL0A TIDM73HR
RNS Number : 3929S
Permanent TSB Group Holdings PLC
06 November 2019
06 November 2019
PERMANENT TSB GROUP HOLDINGS PLC (the "Bank")
Trading Update for the Nine Months Ended 30 September 2019
(Unaudited)
Business and financial performance continues to trend in line
with market expectations as the Bank maintains profitability,
retains capital above regulatory requirements, reduces Non
Performing Loans (NPLs) and increases new lending.
In September, we completed the inaugural EUR300m MREL issuance,
positioning us well to meet our overall requirements by January
2021. Both Moody's and DBRS have upgraded the Bank's credit ratings
in 2019, representing significant progress; we have now returned to
Investment Grade status for the first time since 2011.
We continue to make progress on our key priorities, improving
our risk profile and being positioned well to deliver for our
customers and shareholders.
Key Points:
-- Total new lending volumes of EUR1.2 billion increased by 19%
year-on-year (YoY), supporting the Bank's performing loan book
growth in Q3 2019.
-- Market share of new mortgage lending of 15.5%(1) YTD, up from
14.7% at both H1 2019 and Q3 2018.
-- Net interest margin of 1.82%, in line with H1 2019 and up 5 basis points on Q3 2018.
-- Non-Performing Loans (NPLs) reduced by 35% to EUR1.1 billion
at September 2019 from EUR1.7 billion at June 2019, following the
sale of EUR0.5 billion of NPLs (Glas Tranche II), on a capital
accretive basis. NPL Ratio is now reduced to below 7%, from a peak
of 28%(3) , with the Bank remaining committed to reducing the NPL
ratio to a mid-single digit in the medium term.
-- Pro forma Common Equity Tier 1 (CET1) ratio (on a fully
loaded basis) of 14.7%(2) , post the sale of Glas Tranche II.
-- Sale of properties in possession progressing strongly, with
c. 1700 properties sold into the market since 2017.
Business And Financial Performance
-- New mortgage lending grew by 17% YoY outperforming the market
growth of 11%(1) . As a result, YTD market share of drawdowns
increased to 15.5%(1) , up from 14.7% at H1 2019. Whilst the
mortgage market in Ireland continues to grow steadily, it remains
competitive. We continue to manage our offering, carefully
maintaining price discipline and credit underwriting standards.
-- Personal term lending grew by 14% YoY with lending through our direct channels up 30% YoY.
-- SME lending also grew YoY, albeit from a low base.
-- YTD NIM of 1.82% remains in line with H1 2019. We expect NIM
to remain broadly unchanged from this level for the full year
2019.
-- Operating expenses remain in line with management
expectations; we continue to focus on delivering cost saving
initiatives to allow for the investment required to deliver both
business efficiencies and digital transformation.
-- Underlying loan book continues to perform well reflecting the
quality of the portfolio and the current macroeconomic
environment.
Balance Sheet
Customer Balances
-- Customer deposits of EUR17.3 billion at 30 September 2019
were EUR0.3 billion higher than at 31 December 2018, with current
account balances up 9% from December 2018. The loan to deposit
ratio was 95% at the end of September 2019.
-- The total performing loan book at 30 September 2019 was ahead
of the total performing loan book at 31 December 2018, as the
strength of new business outpaced the repayments on the loan book.
Asset yield remains above 2%, despite the maturity of higher
yielding treasury assets and reductions made to certain fixed rate
mortgage product pricing.
Funding
-- The Bank's funding position continues to remain strong. All
funding and liquidity metrics are well above regulatory
requirements.
-- In September, the Bank completed its first 5 year senior
non-preferred (SNP) MREL compliant EUR300 million bond at mid swaps
+ 255 basis points (equating to 2.15%) which is callable in year 4.
The order book was over-subscribed with more than 50 investors
participating. The overall MREL issuance target remains in the
region of c. EUR1 billion to be in place before 1 Jan 2021.
-- Both Moody's and DBRS have upgraded the Bank's credit ratings
in 2019, representing significant progress; we have now returned to
Investment Grade status for the first time since 2011.
Non-Performing Loans And Properties In Possession
-- NPLs reduced by EUR0.6 billion to EUR1.1 billion following
the sale of EUR0.5 billion of NPLs (Glas Tranche II), announced in
September 2019, together with organic cures of c. EUR0.1 billion,
bringing the NPL ratio to below 7%.
-- The Bank agreed to sell the Non Performing Loan portfolio
(Glas Tranche II) to Lone Star; the transaction reduces the overall
NPL ratio from 10% to below 7%. The sale continues to progress in
line with management expectations.
-- The remainder of the NPL portfolio is actively managed, and
the Bank is committed to reducing the NPL ratio to a mid-single
digit ratio in the medium term, as per regulatory guidelines,
whilst continuing to protect capital.
-- At the end of Q3 2019, the Bank held 610 properties in
possession, with 261 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 pro forma CET1 ratio on a fully loaded basis
remains strong at 14.7%(2) following the NPL sale of EUR0.5 billion
in September 2019, compared to a pro forma of 14.0% at 31 December
2018. The pro forma CET1 ratio on a transitional basis was 17.2%(2)
at the end of September 2019, compared to a pro forma of 17.0% at
31 December 2018.
-- The Bank remains confident that it is adequately capitalised
for both profitable growth and delivery of the remaining stages of
its NPL reduction strategy.
(1) BPFI as at 30 September 2019
2 Includes profits earned in Q3 2019 which are subject to
regulatory approval
3 NPL Ratio at 31 December 2016
- 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 & Investor
Relations | Nicola.obrien@permanenttsb.ie | +353 87 148 2275
Leontia Fannin | Head of Corporate Affairs and Communications |
Leontia.Fannin@permanenttsb.ie | +353 87 973 3143
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) BPFI as at 30 September 2019
2 Includes profits earned in Q3 2019 which are subject to
regulatory approval
(3) NPL Ratio at 31 December 2016
1
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END
TSTDBBDBGDGBGCU
(END) Dow Jones Newswires
November 06, 2019 02:00 ET (07:00 GMT)
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