Permanent TSB has today posted a jump in annual profit reflecting what it has called its "once-in-a-generation" purchase of loans from rival Ulster Bank.
The bank said its profit before tax came in at €267m compared to a loss of €21m in 2021. Some €222m of that arose mainly from taking on Ulster's mortgage and SME loan books, it said.
Its underlying profit before tax rose to €45m from €17m the previous year.
Total income for the year increased by 13% on an annual basis, while it reported strong new lending of €2.8 billion, an increase of about 40% on 2021.
Permanent TSB said it had a new mortgage market share of 18.5% at the end of the year, compared to 17.8% at December 2021.
Its underlying operating expenses increased by 16% to €344m as the bank accelerated its investment in customer services, product offerings and taking on new business from Ulster Bank.
The fourth quarter of the year saw the main completion of the Ulster Bank deal, with the transfer of about €5.2 billion Ulster Bank performing non-tracker mortgages.
In February, the lender also completed the migration of the performing Micro-SME portfolio of €165m and 3,200 customer relationships.
It said it continues to work with NatWest and Ulster Bank here towards the acquisition of the remaining Mortgage and Asset Finance portfolios in the first half of 2023.
As part of the Ulster Bank deal, Permanent TSB also expanded its branch network with the acquisition of 25 Ulster Bank branches.
Over 250 Ulster Bank workers have also transferred to the bank.
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As both Ulster Bank and KBC Bank Ireland continues it departure from the Irish market, Permanent TSB said it opened 113,000 new personal current accounts last year - an increase of 217% on 2021.
It also opened 43,000 personal deposit accounts - up 85% on 2021 - and 6,000 new business current accounts, an increase of 147% on the previous year.
"2022 was a transformational year for Permanent TSB, as we combined the once-in-a-generation opportunity of acquiring certain elements of Ulster Bank's retail, SME and asset finance businesses in the Republic of Ireland with an outstanding business performance," the bank's chief executive Eamonn Crowley said.
He said the bank's underlying profit improved significantly as it attracted new customers and did more business with existing customers.
"We were successful in growing our mortgage market share to 18.5% by supporting mortgage customers with €2.6 billion of new lending - an increase of 40%," the CEO said.
"We also completed the transfer of about €5.2 billion in Ulster Bank mortgage loans, with the remainder scheduled to transfer in the coming months," he added.
He also said the bank made major progress in scaling up its SME offering through a mixture of organic growth and the Ulster Bank acquisition, as it makes its plan for €1 billion in new SME lending over three years a reality.
"Despite a challenging economic backdrop, we approach the remainder of the year and beyond with confidence. We are committed to supporting our customers in the face of cost of living pressures. We see immense opportunity in the Irish retail and SME market and will continue to bring real competition to the market in the years ahead," he added.
Permanent TSB said it expects the purchased Ulster Bank assets to generate €170m in gross interest income this year, pushing its net interest margin to 2.25% from 1.92% in the fourth quarter of last year.
Analysts at Goodbody Stockbrokers said the 2023 NIM forecast appeared conservative, while Davy Stockbrokers said the guidance indicated low to mid-teen percentage upside to its 2023 forecasts, with potentially more.
Ulster Bank's owner NatWest took a 17% share in PTSB as part of the loans deal, diluting the Government's holding to 62%.
Shares in the bank were higher in Dublin trade today.
