PTSB chief praises takeover target Finance Ireland at historically short AGM
PTSB chief executive Eamonn Crowley has said Finance Ireland 'is a fine business', but declined to comment on the bank's bid approach for the nonbank lender.
The Irish Times reported last month that PTSB made an unsolicited overture late last year to buy the largest nonbank lender in the State, run by Billy Kane, a former chief executive of Irish Permanent, a precursor of the bank.
While PTSB is known to remain interested in doing a deal, there is said to be a wide gap between both sides on price expectation.
'We're not going to comment on Finance Ireland, but just to say that it is a fine business. We know Billy Kane quite well,' Mr Crowley said in response to reporters' questions, after the bank held its annual general meeting in Dublin. 'It's a business that is complementary to what we do.'
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Finance Ireland reported a day earlier that its pretax profit jumped 95 per cent last year to €20.3 million as lending grew and funding costs for the sector declined.
Its total new lending rose 19 per cent from 2023 to €646 million. Customer loan balances increased by 14 per cent to €1.2 billion, comprising car, commercial real estate, agri and small business loans. The bank decided in March to get out of mortgage lending, a business it had entered in 2018.
Industry sources have suggested PTSB would have to pay in excess of €300 million to get Finance Ireland's owners to agree to see. The business is 51 per cent-owned by US investment management giant
Pimco
, which is said to not be in a rush to sell. London-based investment company
M&G
owns almost 40 per cent, with the remainder held by management.
Sretaw, an investment owned by businessman Eamon Waters that has a 7 per cent in PTSB, told The Irish Times last month Finance Ireland would find it hard to command a valuation far above €100 million if it were a listed company – unless recent results and the future business plan 'show a step change in prospects'.
PTSB's agm lasted less than 20 minutes, the shortest such meeting for a listed Irish bank in recent memory, with only two shareholders questions coming from the floor.
Chief financial officer Barry D'Arcy said the bank remains on track to make a submission to the Central Bank by the end of June seeking to lower the perceived riskiness of its mortgage book for the purpose of calculating how much expensive capital the bank must hold.
Bank of America analysts have estimated PTSB could free up €270 million of capital on its balance sheet as a result of a recalibration of its models. RBC Capital Markets estimates it could release a little over €200 million.
Mr Crowley reiterated that the bank is hoping to return to paying dividends next year for the first time since before the financial crisis. This could pave the way for the State, which continues to own 57 per cent of the bank, to go about reducing its stake in the bank.
'Our job is to ensure we have the products and the results that are attractive to investors,' said Mr Crowley. 'A key part of any investment play is to see the bank paying dividends and making a return to investors.'
PTSB said last week that its share of new mortgage lending rose to more than 20 per cent in the first quarter of the year, and that it has made 'a good start to 2025' even as the global economy dealt with mounting uncertainty.
Mortgage lending marked a significant improvement from 13.4 per cent in the same period last year, and the 16.4 per cent rate for 2024 as a whole.
Mr Crowley said that new lending in its relatively small business banking unit was up 25 per cent on the year, with small-to-medium-sized enterprise activity 'having a particularly good start to the year'.
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