Home » Latest Irish News » Permanent TSB Benefits from Ulster Bank Loan Gains and ECB Rate Hikes, Posts €267m Profits

Permanent TSB Benefits from Ulster Bank Loan Gains and ECB Rate Hikes, Posts €267m Profits

Permanent TSB, one of the three remaining banks in Ireland, has reported pre-tax profits of €267m in 2022.

The bank has profited from hefty accounting gains from its acquisition of billions worth in mortgage loans from Ulster Bank. Permanent TSB has also rebranded 25 Ulster Bank branches, including the Wilton branch in Cork, Shannon in Clare, and Thurles in Tipperary. The lender, which is majority-controlled by the Irish Government, has benefited from the European Central Bank’s interest rate hikes since last summer.

It reported that it had absorbed €222m in exceptional gains linked to the ongoing acquisition of €7.6bn in mortgages and small business loan books from Ulster Bank. The bank’s underlying profit was significantly smaller at €45m, however.

In the earnings statement, CEO Eamonn Crowley said that the benefits of the Ulster Bank deal were already flowing through for his bank. He stated that underlying profit had “improved significantly” while its share of the new mortgage market had increased to 18.5% by the end of December.

Along with AIB and Bank of Ireland, Permanent TSB is benefiting from the rapid shrinkage of competition in Irish banking, as a second major rival, KBC Bank, prepares to close its doors. All three remaining Irish banks are benefitting from the ECB rate hikes that help boost their income and potentially banking profits.

Permanent TSB said it had increased its net income by 16% to €362m, “driven primarily by the changed interest rate environment, improved returns from treasury balances, and the migration” of the Ulster Bank loans it has taken on. Customer deposits had risen to €21.7bn by the end of the year.

The bank remains optimistic about the future despite the macroeconomic uncertainty, stating that “the bank’s core business markets remain strong and are expected to continue to grow during 2023.”

The latest shake-up of Irish banking involves Bank of Ireland securing €9bn in mortgage loans and deposits from KBC Bank, which is also exiting banking in Ireland, and AIB securing around €5.7bn in performing tracker mortgage loans and €4.2bn in commercial loans from Ulster Bank. Since the start of the year, Permanent TSB’s shares have surged by 44%, valuing the lender at over €1.4bn.

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