Profits tumble but PTSB says strategy is on track
PTSB reported profit before tax fell to €19m in the first six months of the year, from €75m the same time last year. Operating profits fell to €51m from €62m as the feed-through of reducing European Central Bank (ECB) rates saw the bank's own net interest income decline.
At the same time, new mortgage lending was up 84pc year-on-year and new business lending was up 23pc. The bank's overall savings increased 7pc.
Eamonn Crowley said guidance for the financial performance in the full year for 2025 remains unchanged, as does an intention to restart dividend payments next year.
'As PTSB completes the first six months of its three-year business strategy, I am pleased with the performance the bank has delivered in H1 2025. While certain financial metrics are lower versus the previous year, this is in line with management expectations given the more challenging interest rate environment we are operating in,' he said.
Customer deposits stood at €25.2bn at the end of June, total lending was €22.2bn, operating profit for the first half of the year was of €51m from a total income of €322m. Net interest margin (NIM), a key measure of bank profitability, fell to 2.02pc from 2.27pc.
New mortgage lending of €1.3bn was up 84pc on the same period last year, lifting the bank's share of new mortgage drawdowns to more than 20pc.
The bank submitted an application to the Central Bank on May 30 to review the accounting processes used to determine key mortgage risks, known as internal ratings-based (IRB) model. That is expected to lead to less strict criteria, based on safer post-crash lending, that will free the bank to lend more, in line with the current regimes for AIB and Bank of Ireland.
The bank said falling interest rates have reduced its income this year, but that market conditions in Ireland remain supportive and asset quality remains strong, reflecting robust underwriting criteria over the last decade.
'Aside from exceptionals where we expect a charge of €32m, our guidance for 2025 remains unchanged as do our medium-term financial targets. As previously indicated, the bank expects to return to making distributions to shareholders next year, subject to financial position and required approvals,' the bank said.
Meanwhile, Mr Crowley said a target to bring the bank's cost-to-income ratio, a measure of efficiency, from 76pc to 60pc by 2027 will not involve another large-scale redundancy programme.
A voluntary severance scheme announced last year is at an advanced stage, he said.
Combined with natural attrition, PTSB expects a reduction in staff numbers of about 300 this year. Staff numbers at the end of June were 3,085, down 162 since the start of the year.
Chief Financial Officer Barry D'Arcy said lifting income as well as managing down costs would combine to meet the cost-to-income target.
The bank will consider 'inorganic' growth opportunities – takeover deals – Mr Crowley said. He declined to comment on reports his bank has been in talks for some time to buy non-bank lender Finance Ireland.
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