Permanent TSB ‘good bank’ aims for 2016 profit

The board of

Permanent TSB

is targeting a return to profitability for its “good bank” retail arm by 2016 and a full or part-return to private ownership by “2017 or earlier”. It also plans to begin deleveraging non-core assets this year.

The plans have emerged from an investor presentation given on January 7th by chief executive Jeremy Masding and group treasurer Kieran Bristow.

The pair said they wanted to achieve a 10 per cent or more return on equity by 2017 for the retail bank, and a 5 per cent return for the institution as a whole, the presentation states.

PTSB, which is 99.2 per cent owned by the State, has three units. Its good bank is the retail banking operation of Permanent TSB.

Separately, it has an asset management arm that is working through non-performing loan in Ireland, and a non-core unit comprising its UK businesses and commercial real estate in Ireland.

Banking market
PTSB wants to achieve a 12 to 15 per cent share of the Irish retail banking market. Its strategy is to sustain a 12 to 13 per cent share of retail deposits and a 5 per cent slice of the corporate deposit market, with "rates in line with competition and financing requirements".

It is looking to increase retail deposits by about 1.6 per cent a year. Institutional deposit balances are expected to decrease by €2.4 billion by 2017.

PTSB wants to increase its penetration of current accounts to 10 per cent with a focus on “payroll customers” and to achieve a 15 per cent share of mortgage lending by 2016.

Its standard variable interest rates are “expected to rise given recent market activity and a trend towards economical levels”.

Personal loans
Mr Masding wants the bank to increase its share of personal loans from 5 per cent to 9.5 per cent in the "coming years" against a backdrop of a declining market, as Irish households reduce debt levels.

“Interest rates in the market are expected to increase,” the presentation stated.

It also wants to raise its share of credit cards to 7 per cent from 5 per cent currently.