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Irish Independent
44 minutes ago
- Business
- Irish Independent
Investors pare bets on European Central Bank interest rate cut
©Reuters Money markets pared back their bets on European Central Bank (ECB) rate cuts yesterday, now pricing in just a 50pc chance of an additional 25-basis-point easing move by the end of the year. Markets had on Wednesday seen a 58pc chance of a rate cut by December, which was down near certainty last week, before the announcement of the US-Japan trade deal and the ECB meeting. Register for free to read this story Register and create a profile to get access to our free stories. You'll also unlock more free stories each week.
Irish Independent
11 hours ago
- Business
- Irish Independent
Profits tumble but PTSB says strategy is on track
The CEO of the country's third biggest lender, Eamonn Crowley, said the results are in line with management expectations. 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.
CNBC
17 hours ago
- Business
- CNBC
German inflation dips to cooler-than-expected 1.8% in July
German inflation fell more than expected to 1.8% in July, data from statistics agency Destatis showed Thursday. Economists polled by Reuters had anticipated inflation to dip to 1.9%. July's reading compares to the 2% print recorded in June, which brought the German inflation rate in line with the European Central Bank's target. The figures are harmonized across the euro zone to ensure comparability. Euro zone inflation data is due later this week, with the reading forecast to come in at 1.9%. Inflation figures are being watched closely by economists and analysts as they assess the impact of U.S. President Donald Trump's tariff policy. Several sectoral tariffs, as well as temporarily reduced reciprocal duties have already been in effect in recent months. Last week the European Union and U.S. came to an agreement that includes EU goods being hit with 15% tariffs. While the levies are widely expected to affect prices in the U.S., it is less clear if, and how, inflation elsewhere may be affected. Thursday's inflation figures come just after Destatis on Wednesday published a preliminary reading of Germany's second-quarter gross domestic product. The economy shrank slightly by 0.1% in the period, marking a decline from the 0.3% growth recorded in the first quarter.
Reuters
17 hours ago
- Business
- Reuters
German inflation falls further to 1.8% in July
BERLIN, July 31 (Reuters) - German inflation fell slightly more than expected to 1.8% year on year in July, preliminary data from the federal statistics office showed on Thursday. Analysts polled by Reuters had forecast EU-harmonised inflation decreasing slightly to 1.9% from 2.0% the previous month. Germany's core inflation rate, which excludes volatile food and energy prices, remained unchanged at 2.7% in July. The German data comes ahead of the euro zone inflation release on Friday. Inflation in the bloc is expected at 1.9% in July down from 2.0% in the previous month, according to economists polled by Reuters. The European Central Bank left interest rates unchanged last week and offered a modestly upbeat assessment of the euro zone economy, raising doubts among investors about further policy easing.
Reuters
19 hours ago
- Business
- Reuters
Benign figures suggest euro zone inflation remains on target
FRANKFURT, July 31 (Reuters) - Inflation in some of the euro zone's biggest economies was at or just above expectations this month, indicating that price growth in the broader currency bloc remained near the European Central Bank's 2% target. Euro zone inflation eased back to 2% this summer after years of overshooting and the central bank now sees it hovering near this level, even as a few policymakers now fear that risks have shifted to undershooting. Inflation in Italy eased to 1.7% in July from 1.8% in June, coming above expectations for 1.6% while price growth in France was unchanged at 0.9%, above expectations for 0.8%, official figures showed on Thursday. The data, combined with an anticipated jump in Spanish inflation to 2.7% from 2.3%, suggests a modest upside risk in the euro zone figure, which is due on Friday and is seen by economists at 1.9% after a 2.0% reading in June. Such a small miss is unlikely to concern the ECB, however, after it made clear it considered inflation defeated and was not in any hurry to move rates again after halving them to 2% in the year to June. The ECB is also keen to hold out until it gains more clarity on how the evolution of a global trade conflict will impact prices. Tariffs, imposed by President Donald Trump on U.S. imports, are expected to weigh on prices for now since they slow global trade and economic growth, but a major realignment is corporate value chains could actually raise price pressures further out. For now, the ECB sees inflation dipping under 2% in the coming months and projects an 18-month period of undershooting before price growth returns back to 2% in 2027. This muted inflation picture and relatively resilient growth are why financial investors think the ECB is close to done cutting rates. Markets see less than a 50% chance of another rate cut this year and they have started to price in a hike towards the end of 2026. Friday's euro zone inflation reading is also going to be influenced by Germany but figures from various German states showed only modest changes compared to the previous month. Euro zone inflation is expected by policymakers to remain near 2% as still quick price growth in services will be offset by energy and goods prices. The stronger euro and muted wage growth are also exerting some downward pressure on prices, enough to counter upward pressure from increased government spending on things like defence or infrastructure.
