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Permanent TSB Forecasts a 60% Surge in Income Following Ulster and KBC’s Exit – A Promising Future Ahead!

Permanent TSB Expects 60% Income Boost Following Closure of Ulster Bank and KBC

Permanent TSB, one of the remaining three general Irish lenders, has predicted a 60% boost in total income this year, following the closure of its formidable rivals Ulster Bank and KBC. In its quarterly update, PTSB revealed that operating income surged 77% from a year earlier, while net interest income climbed by 86%. The lender now commands a market share of 25% for new mortgage business in the Republic, up from 15% a year earlier, before the exits of the two rivals. Total income for 2023 is expected to jump by 60% to €650m.

The exits of Ulster and KBC have transformed the landscape of Irish banking for a second time in less than a decade, further lessening competition in an already concentrated market. This has driven the shares of the three Irish banks to be among the best performing in Europe. Shares in Permanent TSB, AIB, and Bank of Ireland have also benefited since the European Central Bank began hiking interest rates last summer, which helped lenders increase their interest income.

Since the start of the year, PTSB customer deposits have risen by €500m to €22.3bn, while total performing loans increased by €300m to €19.5bn in the same period. This was helped by the transfer of microbusiness loans from Ulster Bank and tapping additional mortgage business. However, Irish bank shares have not been immune from the global banking turmoil of recent weeks that led to the collapse in the US of First Republic, Silicon Valley Bank, and Signature, as well as the firesale of Credit Suisse to UBS in Europe.

Shares in AIB are up by 88% from a year ago, Bank of Ireland is up by 62%, and those in PTSB have climbed by 50% in the same period. PTSB chief executive Eamonn Crowley said, “Although the global macroeconomic environment remains uncertain, the Irish economy continues to outperform in terms of growth and employment levels.” Crowley added that in quarter one, the lender had successfully completed the acquisition of 25 Ulster Bank branches and circa 3,200 Ulster Bank SME loan accounts, valued at circa €165m, and that the lender had no significant exposure to commercial property loans.

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