Permanent TSB said on Monday it has rebranded the Lombard Asset Finance business it has taken over from Ulster Bank.
The new Permanent TSB Asset Finance has €500 million of credit agreements out to 18,000 personal, business and commercial customers.
The transfer of the Lombard book marks the completion of Permanent TSB’s takeover of €6.75 billion of mortgage and small business loans as well as 25 bank branches from Ulster Bank, as the latter retreats from the Irish market.
All told, more than 330 Ulster Bank employees have moved with the loans, including 66 that have been assigned to the asset finance unit.
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“As our once in a generation deal with Ulster Bank comes to its conclusion today, I am very proud of what the bank has achieved over the past two years,” said Permanent TSB’s chief executive Eamonn Crowley.
“We have transformed the bank and now have greater scale and business model diversification, an increased branch network and have welcomed tens of thousands of new customers to Permanent TSB. We have also had more than 330 new colleagues join Permanent TSB who, along with our other experienced and committed colleagues, are enabling the bank to continue to grow and compete in the market.”
The deal has increased Permanent TSB’s loan book by about 45 per cent and has served – in combination with rising interest rates – to recasting the bank’s outlook.
Permanent TSB forecast in March that its return on equity (RoE) – a key measure of profitability relative to shareholders’ equity in the business – will rise to 13 per cent over the medium term. Analysts generally see an RoE ratio of 8 per cent to 10 per cent as a sign of a healthy bank.
Permanent TSB was delivering an unsustainably low RoE of 2 per cent to 3 per cent before the pandemic and announcements by the parents of Ulster Bank and KBC Bank Ireland that they were quitting the Republic.
With Permanent TSB, Bank of Ireland and AIB each set to report interim results by the middle of next week, Goodbody Stockbrokers analyst John Cronin said the focus will be on what the banks say on their net interest income guidance as the European Central Bank (ECB) has continued to raise official interest rates this year.
Economists largely expect the bank to raise its key lending rate by a further 0.25 of a percentage point, bringing it to 4.25 per cent. This rate stood at zero this time last year and 2.5 per cent at the end of December.
