Permanent TSB has reported an underlying profit before tax of €17m for 2021, up from an underlying loss before tax of €109m the previous year, after what it called a "transformational year" for the bank.
During 2021, Permanent TSB agreed a deal with NatWest and Ulster Bank to buy about €7.6 billion of the Ulster Bank Retail, SME and Asset Finance business here.
It said this "once in a generation" opportunity will enable PTSB to grow its mortgage book by over 40%, triple its SME business relative to today, increase its branch network by about 30% and hire 450 workers from Ulster Bank.
Permanent TSB today reported a loss before tax of €21m, a marked improvement on the loss before tax of €166m in 2020.
It said this came amid a challenging operating environment for Irish and European banks with the continued lower for longer interest rate environment plus the uncertainties that remained with the Covid-19 pandemic.
It said it saw "strong" new lending of €2.1 billion, an increase of 44% compared to the previous year, while new mortgage lending of €1.9 billion was up by 45% and outperformed the mortgage market which grew by 25%.
Permanent TSB said its new mortgage market share increased to 17.8%, up from 15.3% at December 2020.
"2021 was a year of significant momentum for our business, in that we lent €2.1 billion to Irish customers - and, of that, €1.9 billion was in the mortgage space, where we increased our market share from 15% to 18%," said Permanent TSB CEO Eamonn Crowley on RTÉ's Morning Ireland.
"Really importantly from our point of view, we doubled our lending to the SME and business sector, and that's a key ambition and growth area for us, and an area where we believe more competition is required, the CEO said.
Mr Crowley also hailed the bank's "transformational" deal with NatWest and Ulster Bank. He pointed out that they were able to do it without asking shareholders - of which the State is the biggest - for additional capital.
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"It will increase our balance sheet by about 40%, it will bring us into the whole asset finance and hire purchase area through the acquisition of the Lombard business, it'll triple our SME book," he said.
"It'll just give us more scale and that additional scale will help us to deliver better return, help us to invest more in the business, and deliver more to our shareholders in due course."
He said the bank does not have a timeline for the completion of the Competition and Consumer Protection Commission (CCPC) phase one investigation into the deal.
"We believe the transaction should pass the competition authority because the market itself, the mortgage market itself, is very competitive and this transaction is important as regards how we build the bank, not only to compete in mortgages but also to compete in business banking and in retail banking and in the current account space," he said.
Mr Crowley said the bank was ready to handle the influx of new business that would come as part of the acquisition - as well as those who might be looking to switch from KBC Bank Ireland.
"From our point of view, we haven't shrunk our services in our branches, we've maintained the same number of branches and, through the Ulster Bank acquisition we will have an additional 25 branches, so that's our commitment to our branch network," he said.
"We're also investing heavily in our digital transformation, and we have a digital current account opening process, whereby a customer can open an account within 10 minutes, that is growing day by day.
"We're also recruiting additional staff into the bank in order to help with the challenge that will be opening new current accounts."
However he said that a smooth transfer of hundreds of thousands of banking customers will also require the involvement of others firms too.
"Some of this challenge will be in the space of direct debit providers, so the likes of utility companies, they also need to come on board with banks in order to make this a success," he said.
Mr Crowley said the bank does not have any direct exposure to Russia or Ukraine, but added that it is expected that the Ukrainian crisis may have an impact on inflation and the bank is watching that closely.
Regarding the question of when the State might begin to reduce its 75% stake in the bank, Mr Crowley said once the Ulster Bank deal goes through Natwest will own 16.7% of the bank, reducing the State's shareholding to 62%.
"We've had no direct discussion with the State because that is a key transaction which we have to close this year, and we are very happy with the State as our main shareholder in that respect - they are very supportive with regard to how we operate," he claimed.
On the topic of the Government imposed restrictions on pay for staff at Permanent TSB, Mr Crowley said some existing staff message are leaving because they can get a better package including variable pay at other organisations.
"We do operate at a disadvantage in that respect," he told RTÉ News.
"In our bank we need the same skillsets as an international bank operating in Dublin, and therefore we have to fight for talent."
The bank's underlying operating costs rose by 5% to €345m as it continued to invest in the business.
Permanent TSB said its non-performing loans ratio fell from 7.6% at the end of 2020 to 5.5% at the end of 2021.
It said its impairment release of €1m reflects a "prudent" approach to provisioning, as it balances a better than anticipated macroeconomic forecast with the impact which may arise over the coming months from the removal of pandemic related State supports for households and businesses.
Meanwhile, the bank's SME lending jumped by 104% to €98m during the year.
PTSB said it continues to build on its SME service offering through a number of partnerships including an agreement with the Strategic Banking Corporation of Ireland which has seen €38m of €50m in available funding drawn down.
The bank also takes part in the Brexit Impact Loan Scheme where it offers a further €32m in low-cost loans for Brexit-impacted businesses. This brings its total commitment to customers through the SBCI to €82m.
It also recently announced a significant expansion in its SME offering with a new €1 billion SME lending fund over the next three years.
"The fundamentals of our business remain robust, delivering a strong business performance in 2021 with mortgage market share growing to 17.8% and SME lending continuing to increase," the bank's chief executive Eamonn Crowley said.
"As our economy recovers, and the trend towards digital services accelerates, we are investing to deliver long term value in the bank and drive sustainable growth. We will do this by being a purpose led organisation that focuses on meeting the needs of our customers now and into the future," he added.
Looking ahead, Permanent TSB said there is some optimism that the pandemic might finally have come to an end as the more virulent but less severe Omicron strain fades over the coming months.
"Some uncertainties remain, the residual impacts of Covid-19 together with the emerging geo-political developments in Eastern Europe, however the outlook across our core markets is positive," the bank added.
As previously guided, the bank said its operating costs this year are expected to be about 12% higher, as it accelerates the expenditure to further enhance its digital offerings, streamlining sales and service processes and ensuring IT security and operational resilience.
"The ongoing cost of the acquired business from Ulster Bank will drive an additional cost for the bank of about €50m in a full year, however the bank remains committed to continuing to actively deliver cost savings in the medium term to help pay for investment and manage inflationary pressure," it added.
Shares in the bank were lower in Dublin trade today.
