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Comment by Eamonn Crowley, Chief Executive:

‘Earlier this week, the Bank announced the material completion of the acquisition of the performing non-tracker residential mortgage business of Ulster Bank Ireland DAC. This is a step-change for the Bank as we grow our mortgage book by approximately 40%. Our imminent acquisitions of Ulster Bank’s SME and Asset Finance businesses and 25 of its branches, will support the Bank in generating greater scale with more customers and becoming a much stronger competitive force in Irish retail banking.

The Bank has delivered a very strong business and financial performance year-to-date with significant momentum heading into the final quarter of the year. New lending volumes have increased 33% year-on-year to €1.8 billion, driven by a very popular Green mortgage offering which is now accounting for approximately 25% of mortgage drawdowns, and we have a strong pipeline of activity across all of our key product lines. Whilst the macroeconomic environment remains uncertain, the Irish economy continues to out-perform in terms of growth and employment levels.

We are pleased to report that the Bank has opened more than 100,000 new current accounts and 35,000 new deposit accounts so far in 2022 – a 250 per cent and 80 per cent increase, respectively, on the same period last year – as we welcome new customers from KBC Bank and Ulster Bank. 70% of new current account openings are now taking place through the Bank’s award-winning digital current account opening process, which allows customers open an account in less than 15 minutes via the Permanent TSB app. Alternatively customers can make an appointment in one of Permanent TSB’s existing 75 branches nationwide or in our mobile branches.’

Key Points:

  • The Bank maintains a strong capital position; fully loaded pro forma[1] CET1 capital ratio of 14.9%; regulatory pro forma CET1 capital ratio 16.5%
  • Strong new lending of €1.8 billion YTD; +33%  year-on-year
  • New business mortgage market share of 16.9%[2] (versus 17.5% in September 2021)
  • Net interest income is ahead of expectations due to higher new lending and a changed interest rate environment
  • Net Interest Margin (NIM) of 1.39%, lower than prior year of 1.49% as a result of the costs incurred on holding excess liquidity YTD. The outlook for NIM is favourable as costs associated with the low interest rate environment reduce (see further comment below)
  • Operating costs of €271m, 13% higher year-on-year (YoY), in line with management expectations
  • Customer deposits of €20.8 billion, an increase of 9% (€1.7 billion) since Dec 2021
  • Non-performing loans (NPLs) of €0.7 billion at September 2022 are €0.1bn lower than balances reported at December 2021; the NPL Ratio is 4.8% vs 5.5% at December 2021

Business Performance

New mortgage lending of €1.6 billion grew by 31% YoY. Market share of mortgage drawdowns was strong at 16.9%, although slightly lower than the September 2021 market share (17.5%) with significant momentum moving into quarter four. The mortgage market in Ireland is estimated to grow 32% from €10.5 billion in 2021 to c. €13.9 billion[3] in 2022, while remaining highly competitive. Our Green mortgage product, launched earlier this year, is performing extremely well and comprised c. 25% of total mortgage drawdowns over the last three months. We continue to manage our offering carefully, by maintaining price discipline and credit underwriting standards.


Net interest income is up 3% YoY; with gross interest income 4% higher YoY due to higher new lending volumes and the changed interest rate environment. The rates applying to Tracker Mortgages have changed in line with their terms and conditions. Interest income is also increasing from excess liquidity placed with the Central Bank, with the Bank beginning to record positive earnings on this excess liquidity since August after a prolonged period in which this represented a cost.   The net interest margin YTD of 1.39% is impacted by a c. €9m cost of holding excess liquidity. Excluding this cost, the Underlying NIM is 1.74%. As the interest rate environment changes and the first tranche of Ulster Bank assets is consolidated from Q4 2022, the Bank expects a NIM of c. 1.50% in 2022 (an increase from the previous guidance of c. 1.40%). Fees and commission income performance is strong YTD, 28% higher when compared to the prior year, due to higher transactional activity.


In line with management expectations, Operating Expenses are trending higher than prior year, with the outlook in 2022 projecting total costs to be c. 15% higher YoY, as we work to complete key investment programmes and the acquisition of the Ulster Bank portfolios, whilst catering for rising levels of inflation.

Balance Sheet

Customer deposits of €20.8 billion at 30 September 2022 are €1.7 billion higher than 31 December 2021, reflecting an increase in current account balances to €8.5 billion. The loan to deposit ratio of 67% at the end of September 2022 provides the Bank with a strong liquidity position and a secure funding source for future growth in lending volumes.

The total performing loan book of €13.7 billion at 30 September 2022 is €0.3bn lower than the total performing loan book at 31 December 2021, primarily as a result of the most recent portfolio sale, Glenbeigh IV, which was a c. €0.8bn predominantly performing buy-to-let loan sale. Excluding the effect of loan sales, the performing loan book is growing, with new mortgage lending YTD exceeding repayments and redemptions by c. €0.3bn. Non-performing loans of €0.7 billion at 30 September 2022 are €0.1bn lower than balances at 31 December 2021 through a combination of net cures and the impact of the loan sale.

The macroeconomic outlook continues to be volatile in an environment of higher interest rates and higher inflation. The Bank remains adequately provisioned to cater for a slowdown in economic growth and Management’s guidance remains that there will be a small impairment release for FY2022.


The pro forma[4] Common Equity Tier 1 (CET 1) ratio on a fully loaded basis reduced by 20 basis points to 14.9% at 30 September 2022 compared to the pro forma CET1 ratio of 15.1% at December 2021. The pro forma CET1 ratio on a transitional basis was 16.5% at 30 September 2022, a reduction of 90 basis points from 17.4% at December 2021, primarily due to the inclusion of transitional filters. The regulatory minimum for CET1 on a transitional basis is currently 8.94%[5]. The pro forma Total Capital ratio on a transitional basis was 24.7% at the end of September 2022. The regulatory minimum for Total Capital on a transitional basis is currently 13.95%. During October, the Bank issued a €250m AT1 instrument which results in a c. +3% increase to the Total Capital ratios. The impact is included in the (Pro forma) September 2022 ratios outlined below.

Capital Ratios (%)

(Pro Forma)4






(Pro Forma)



CET1 (Fully Loaded)




CET1 (Transitional)




Total Capital (Fully Loaded)




Total Capital (Transitional)





Following a strong performance in the first three quarters of 2022, based on current business performance expectations and macroeconomic assumptions, the Bank’s outlook for this year is forecast to be more favourable than previously guided. Latest guidance for the 2022 out-turn is as follows:

  • Net Interest Income will increase year-on-year by c.13% with the Exit NIM expected to be c. 150bps
  • Operating Costs are expected to be c.15% higher than 2021 as we continue to invest in the business, completing key technology programmes and supporting the growing business
  • We continue to expect a small Impairment release as we remain prudent with provisioning levels given the inflationary environment
  • Exceptional Items will show a net gain of greater than €200m as we recognise the accounting gains associated with the Principle Completion of the Ulster Bank DAC residential mortgage portfolio; this will be partially offset by transaction costs and other costs associated with deleveraging activity
  • FY2022 NPL is expected to reduce to c. 4% following the material completion of the acquisition of the performing non-tracker residential mortgage business of Ulster Bank Ireland DAC
  • Capital remains strong and, having assessed a range of scenarios, the CET1 ratio will remain above the Bank's minimum regulatory requirements.
  • As a result of the acquisition of the Ulster Bank DAC assets, the Bank expects in 2023 an additional c. €180m Gross interest income (excluding discount unwind), c. €40m Funding Costs and c. €50m Operating expenses.

[1]  September Pro forma Capital ratios include the most recent AT1 issuance and ‘Glenbeigh IV’ disposal

[2] Regulatory requirements for both CET1 and Total Capital on a transitional basis exclude P2G.

For Further Information Please Contact:

Leontia Fannin

Head of Corporate Affairs and Communications


Phone: +353 87 973 3143

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.

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