Permanent TSB has reported an underlying loss before tax of €2 million in the first half of the year, down from €4 million the previous year, as higher operating expenses offset a 22% jump in new lending that it expects to continue into the rest of 2022.

In its half year results, the bank reported exceptional costs of €34 million, €29 million higher than the previous year, primarily relating to costs associated with the transaction to acquire a portion of Ulster Bank's assets.

Last year, 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.

Last week, the Competition and Consumer Protection Commission cleared the proposed acquisition by Permanent TSB of certain Ulster Bank assets, which the bank today described as another "significant milestone".

The acquisition includes 25 branches, two of which will combine with Permanent TSB branches, and the remaining will be rebranded early next year. Permanent TSB has no plans to close any branches.

PTSB said they opened 70,000 new deposit and current accounts throughout the first half of the year, and increase of 130% compared to the same time last year.

"Customers are also increasingly choosing our digital account opening process, with 69% of new current accounts being opened via the Permanent TSB app in June, evidence of the investment the bank has made to further enhance digital services for customers," said Eamonn Crowley, Chief Executive of PTSB.

Speaking on Morning Ireland, Mr Crowley said 70% of new current accounts were opened digitally in June, and the bank will facilitate joint account holders to open joint accounts digitally in the next two months.

He said customers have also been opening accounts in branches as well. "We have a couple of pressure points around the country, that's because we are welcoming more and more customers to our branches but we are meeting the demand."

The bank reached agreement with the Financial Services Union on the transfer of 400 staff from Ulster Bank which is contingent on Ulster Bank members voting to accept the proposals. Mr Crowley is confident they will vote in favour of the agreement.

"We're providing over 400 Ulster Bank staff with a positive future with Permanent TSB," he said. "We are growing, we are welcoming customers and we want to welcome those 400 staff. We believe we have put forward proposals which are very acceptable to our new Ulster Bank colleagues."

The bank reported significant growth across all three of their core lending product lines of mortgages, SME and term lending.

It said it saw "strong" new lending of €1 billion, 22% higher compared to previous year, while the new mortgage market share dropped to 16.3% from 17.5% in June 2021.

The bank said it made two "notable" adjustments to its mortgage product offering in the first half of the year.

It said the full benefits will materialise in the second half of the year and into 2023.

"Firstly, the bank launched its inaugural Green mortgage product which offers discounts of 0.2% on five year fixed rates for both new and existing mortgages on homes with a Building Energy Rating of A1 to B3," the bank said.

"Secondly, the bank reduced the interest rate for new customers on its four year fixed rate products by 20bps to as low as 2.05%"

PTSB reported an operating loss of €11 million in the first half of the year, up from €1 million the previous year and a loss before tax of €36 million, compared to €9 million the previous year.

"The Irish economy and operating environment for banks has remained positive in the first half of the year, notwithstanding the near-term headwinds which are beginning to manifest in the form of high levels of inflation driven primarily by rising energy and fuel costs," the bank said.

PTSB now expects operating costs for 2022 to rise 14% year-on-year, higher than previous guidance of 12% due to accelerated investment in its digital offering and inflationary pressures.

The bank remains committed to delivering underlying cost savings in the medium term, it added.

PTSB, which has said it has no plans to pass on a 0.5% European Central Bank rate increase to fixed and variable rate mortgage customers, said on Wednesday the automatic rise for customers whose mortgages track the ECB rate would add €28 million in interest income on an annualised basis.

Analysts at Davy Stockbrokers, which had forecast a €9 million underlying profit for the period, said the results nevertheless represented a strong operating outcome and expect PTSB to deliver sustainable returns in the coming years.