TIDMIL0A TIDM73HR
RNS Number : 0833M
Permanent TSB Group Holdings PLC
26 July 2017
26 July 2017 07:00
PERMANENT TSB GROUP HOLDINGS PLC
2017 INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2017
Permanent TSB Group Holdings plc ('the Bank') today reports its
half year results.
Key Points:
-- Profit Before Exceptional Items and Tax of EUR53 million
-- Net Interest Margin increased by 38 basis points to 1.81% from 1.43% in H1 2016
-- Operating Expenses reduced by EUR8 million (5%) Year-on-Year ('YoY')
-- Low Impairment Charge of EUR6 million
-- Fully Loaded CET1 ratio increased by 10 basis points to 15.0%
-- Over 20,000 Current Accounts were opened
-- Total New Customer Lending increased by 61% YoY to EUR392 million
Jeremy Masding, Chief Executive, said:
"The business is in great shape and growing strongly. In the
first half, we continued to generate profits and our competitive
performance was excellent, with new lending growth outperforming
the market and our new Explore current account exceeding our
expectations.
Whilst acknowledging there are legacy challenges, which we are
addressing robustly, we are well placed to take advantage of the
opportunities presented by Ireland's fast-growing economy. We will
do this by competing vigorously, innovating continuously and
delivering more of what our customers want."
Business And Financial Performance
During the first half, we acquired new customers through our
Current Account product 'Explore' and opened over 20,000 new
accounts.
New Mortgage Lending grew strongly by 62% YoY while the overall
market to the end of May 2017 grew by approximately 35%(1) . As a
result, our market share of drawdowns increased to 10.8%(1) . Term
Lending also grew by 59% YoY. Approximately 25% of new Term Lending
was originated via online channels as customers responded
positively to our new online offering.
NIM improved to 1.81% in the first half primarily reflecting the
completion of Non-Core deleveraging in Q4 2016, lower Cost of Funds
and prudent balance sheet management.
Operating Expenses (excluding Regulatory Charges) reduced by
EUR8 million (5%) YoY mainly due to a reduction in professional
fees and project related costs. Regulatory Charges amounted to
EUR18 million, a reduction of EUR7 million YoY, primarily due to
timing differences. Regulatory Charges are expected to total
approximately EUR55 million for the full year 2017.
The Impairment Charge for the first half was EUR6 million. This
compares to a write-back of EUR61 million for the same period in
2016. The write-back for 2016 consisted of EUR35 million resulting
from a House Price Inflation related adjustment and EUR26 million
primarily from cures. For 2017, we are guiding a full year charge
of approximately 25 basis points before considering the impact from
recalibrating the House Price Inflation buffer.
Balance Sheet
Customer Deposits amounted to EUR16.9 billion at the end of June
2017, marginally reduced from EUR17.0 billion at end December 2016
and represent 81% of Total Funding. ECB Funding reduced further by
EUR1.2 billion in the first half to EUR0.2 billion (approximately
1% of Total Funding) which represents the Bank's participation in
the ECB's Targeted Longer-Term Refinancing Operations (TLTRO)
Scheme.
Net Loans amounted to EUR18.6 billion at end June 2017,
marginally reduced from EUR18.9 billion at end December 2016 as
repayments and redemptions exceeded new lending.
Non-Performing Loans
As part of the 2012 Troika Programme of Support for Ireland,
Permanent TSB (and other Irish banks) set out to deal with the
problem of mortgage arrears. Since then, both the industry's and
the Bank's arrears levels have reduced by over 50% from their peak
in 2013. This was predominantly achieved through a range of
sustainable and affordable long term forbearance measures. We have
been executing this strategy successfully over the last four years.
We have assessed approximately 40,000 customers and offered long
term treatments to over 35,000 customers. Over 90% of accepted
treatments are performing to their restructure terms. At 30 June
2017, 53% of our NPLs are in some form of forbearance treatment. We
continue to collect significant amount of cash from these customers
notwithstanding the fact that these loans continue to be classified
as NPLs.
Whilst the Bank has made good progress in reducing its stock of
NPLs, the Board and Management recognises that its current NPL
level remains unsustainably high due, in part, to non-engagement
and/or lack of affordability on the part of customers, and
constraints in the legal system. In response, the Bank intends to
report progress in reducing its NPL% to a high single digit number
over the medium term through a range of strategies including:
accelerated workout; maximised repayments; natural cures; closures
(Assisted Voluntary Sales and Foreclosures); and, portfolio
sales.
Capital(2)
During H1 2017, the Fully Loaded Common Equity Tier 1 (CET1)
Ratio increased to 15.0% compared to 14.9% at 31 December 2016
while the CET 1 ratio on a Transitional Basis marginally reduced to
17.1%. The Total Capital Ratios were 16.0% on a Fully Loaded Basis
and 18.4% on a Transitional Basis. Risk Weighted Assets (RWAs) at
30 June 2017 amounted to EUR10.6 billion, unchanged from the 31
December 2016 level.
The Total Capital Ratio, at 30 June 2017, includes a preliminary
downward adjustment of approximately 1.5% relating to IRB model
recalibration (TRIM). We continue to engage in discussions with the
regulatory authorities in respect of the TRIM Programme.
As guided at year end 2016, we expect these discussions to lead
to a material change in RWA intensity. At present, we expect that
these discussions should conclude in early 2018 with an estimated
additional impact of c.2.5% on the CET1 Ratio. The Bank's
Regulatory Minimum CET1 Ratio is 11.45% on a Transitional
Basis.
Ends
For further information, please
contact:
Investors and Analysts Media
Eamonn Crowley Rajesh Manirajan Ray Gordon
Chief Financial Head of Investor Gordon MRM
Officer Relations ptsb@gordonmrm.ie
eamonn.crowley@permanenttsb.ie rajesh.manirajan@permanenttsb.ie +353 87 241
+353 1 669 5354 +353 1 669 5622 7373
Note on forward-looking information:
This Announcement contains forward-looking statements, which are
subject to risks and uncertainties because they relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends, and similar expressions concerning
matters that are not historical facts. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of the Bank or the industry in which it operates, to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. The forward-looking statements referred to in this
paragraph speak only as at the date of this Announcement. The Bank
undertakes no obligation to release publicly any revision or
updates to these forward-looking statements to reflect future
events, circumstances, unanticipated events, new information or
otherwise except as required by law or by any appropriate
regulatory authority.
(1) Source: Mortgage drawdowns YTD to May 2017, BPFI.
(2) Profit earned in the first six months of the 2017 is
included in the calculation of Capital ratios. The application for
the inclusion of the Interim Profit in the regulatory capital
metrics is being sought under Article 26 (2) of the Capital
Requirements Regulation (CRR).
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEANXSASEXEFF
(END) Dow Jones Newswires
July 26, 2017 02:01 ET (06:01 GMT)
Permanent Tsb (LSE:IL0A)
Historical Stock Chart
From Apr 2024 to May 2024
Permanent Tsb (LSE:IL0A)
Historical Stock Chart
From May 2023 to May 2024