PTSB mortgage market share rises to 17.9% in Q1

Bank’s new mortgage lending grew by 30%, outperforming wider market by a distance

Permanent TSB said on Wednesday that its share of the Irish mortgage market rose to 17.9 per cent in the first quarter of the year as new lending picked up from the same period last year, which was hit by the initial shock of the Covid-19 crisis.

The bank’s new mortgage lending grew by 30 per cent in the year to €400 million, outperforming the wider market, which grew by 7 per cent, it said in a trading statement. The bank was responsible for 15.3 per of drawdowns last year.

"Whilst the mortgage market in Ireland is estimated to grow 13 per cent from €8.4 billion in 2020 to €9.5 billion in 2021, it remains competitive," it said, adding that it continues to carefully maintain "price discipline and credit underwriting standards".

The increased market share comes at a time when PTSB is in talks to acquire a large part of Ulster Bank's loan book, as the unit of UK-based NatWest Group prepares to withdraw from the market. Analysts estimate that PTSB will end up acquiring about €9 billion of mortgages and small business loans out of Ulster Bank's total €19.8 billion portfolio. AIB is also in talks to acquire €4 billion of the exiting bank's corporate and business loans.


“Negotiations are continuing with NatWest in relation to acquiring certain aspects of Ulster Bank’s retail and SME business. Until these negotiations have concluded there can be no certainty that an acquisition will occur or on what terms,” said PTSB chief executive Eamonn Crowley.

“Any agreement reached will need to provide certainty and clarity for associated customers and employees, be supportive to the overall commercial position of Permanent TSB and value accretive for our shareholders.”


Separately, KBC Bank Ireland announced last month that it plans to exit the market by selling most of its €10.3 billion loan book to Bank of Ireland, further impacting competition in the mortgage market. Still, a number of non-bank lenders have entered the market in recent years, including Dilosk, Finance Ireland and Avant Money, owned by Spanish group Bankinter.

PTSB’s non-performing loans (NPLs) amounted to €1.1 billion at the end of March, in line with where they stood at the end of last year. Analysts expect banks’ NPL ratios to rise later this year as a result of the coronavirus crisis.

Of borrowers that required payment breaks last year, 5 per cent of them, amounting to €100 million of loans, have needed further forbearance, resulting in their loans being classified as the highest level of loan-loss risk. The bank expects that a further 4 per cent of expired mortgage break customers are likely to need additional help and loan restructuring.

The bank’s common equity Tier 1 capital ratio, a measure of a lender’s financial reserves to withstand a shock loss, rose by 0.5 percentage points to 15.6 per cent.

Net interest income at the bank decreased by 10 per cent in the first quarter of 2021, when compared to the same period in 2020. This reflects lower income following the sale of €1.4 billion of mainly interest-only buy-to-let mortgages and lower interest income on bonds held in its treasury division as bond rates remain at ultra-low levels internationally.

Fees and commission income is lower when compared to the prior year, as re-entering Level 5 restrictions had an impact on transactional activity in January. However, since then fees and commissions have returned to pre Covid-19 levels, it said.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times