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Ireland's PTSB cuts H1 loss, mortgage approvals rise strongly

By Reuters

DUBLIN – Ireland’s permanent tsb cut its first-half loss to 4 million euros ($4.72 million) as it recovered from a year of COVID-19 disruption and said mortgage approvals were growing strongly ahead of a major loan acquisition from one of its departing rivals.

Britain’s NatWest agreed last week to sell assets including 7.6 billion euros of loans from its Ulster Bank unit to PTSB in a move PTSB and analysts described as a “once in a generation opportunity” for the smaller bank.

The mortgage lender, which had 14 billion euros worth of mainly mortgage loans at the end of June, recorded an underlying loss of 54 million euros in the first six months of 2020, contributing to a 166 million euro full-year loss.

That was mainly due the to the bank setting aside 155 million euros to cover likely loan losses. The impairment charge for the first half of 2021 was just 3 million euros.

PTSB, 75% state-owned, increased its share of new mortgages to 17.5% from 15.2% a year earlier as it benefited from the planned exit of Ulster Bank and Belgium’s KBC.

It said that with mortgage approvals also up on the same period last year, leading to a strong pipeline of business, new lending volumes are forecast to be ahead of 2020 and 2019 volumes this year.

The bank’s shares, which soared by as much as 16% on Friday when it announced the NatWest deal, were 3.5% higher at 1.50 euros by 0745 GMT.

“Overall, the results provide an encouraging update against the backdrop of the main catalyst for the stock – the material upside from the potential acquisition of Ulster Bank assets,” Davy Stockbrokers analyst Diarmaid Sheridan wrote in a note.

($1 = 0.8469 euros)