Permanent TSB has reported a big increase in new lending, growth in its share of the mortgage market and a further reduction in non-performing loans for the third quarter of 2021.

In a trading update for the three months to the end of September, the lender said it was seeing strong new lending of €1.4 billion so far this year - 50% higher than the same time in 2020.

Permanent TSB said its loan book growth, mainly residential home loans, rose by 1% from December 2020, while it also increased its mortgage market share to 17.5% from 14.9% the same time last year.

SME lending rose by 43% to €58m.

Permanent TSB said that partnerships with the Strategic Banking Corporation of Ireland (SBCI), Bibby Financial Services Ireland, Digital Business Ireland and WorldPay from FIS provides it with an excellent platform to build on the momentum generated to date.

It also reported customer deposits of €18.9 billion, up 5% since the start of the year, while its non-performing loan ratio further reduced to 6.9%.

The bank also said it was focusing "intently" on the opportunities arising from the potential acquisition of a major part of the Ulster Bank retail and SME business, first announced in July.

"We are building on our Memorandum of Understanding with NatWest Group and the parties are working towards legally binding agreements," the bank said in today's trading statement.

It also said that in addition to the Ulster Bank assets it is proposing to acquire, it is ready to welcome Ulster Bank current account and deposit customers who will need a new bank.

"The bank is competing successfully, maintaining new mortgage market share at 17.5% and delivering a strong financial performance. We are also making good progress in SME lending, with an increase of 43% from the prior period," its chief executive Eamonn Crowley said.

"In addition to the Ulster Bank assets we are proposing to acquire, we are also ready to welcome Ulster Bank current account and deposit customers who will need a new bank," the CEO said.

"Through our branches in communities throughout Ireland, our online and phone channels and our enhanced digital app, we are here to support these customers in moving their business to Permanent TSB," he added.

The lender said its operating expenses are €10m higher than the previous year as it accelerated investment in its digital capability to meet customer demands.

It said it will continue to make underlying savings in administrative expenses to offset higher depreciation and amortisation.

Operating expenses for 2021 are expected to be about 3% higher than 2020, it added.

Permanent TSB said that business activity and demand remain strong as it moves into the final quarter of the year.

"Market share of mortgage applications and drawdowns are higher than for the same period last year, while approvals are also significantly ahead leading to a strong pipeline of business. Significantly, we expect new lending volumes for this year to be ahead of both 2020 and 2019 volumes," it added.

The bank also said it is maintaining a strong capital position with a fully loaded CET1 capital ratio of 15.1%.