Permanent TSB has cut its first-half loss to €4 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.

Last week, PTSB announced a potential deal worth about €7.6 billion to buy some elements of Ulster Bank's business here.

In a statement today, Eamonn Crowley, Chief Executive of PTSB said the potential transaction complements their growth strategy.

"It supports the investments we are making in the transformation of our in-branch and digital banking services and will accelerate the delivery of Permanent TSB's ambition of becoming Ireland's best personal and small business bank," he said.

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

That was mainly due the to the bank setting aside €155 million to cover likely loan losses.

The impairment charge for the first half of 2021 was just €3 million.

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

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.

"We saw a strong rebound in activity in the second half of 2020 and have built further on this momentum in the first half of 2021, evident from the significant increase in our new mortgage market share, which now stands at 17.5%," said Eamonn Crowley, Chief Executive of PTSB.

The bank's shares, which soared by as much as 16% on Friday when it announced the NatWest deal, closed 2.4% higher at €1.48.

"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.