Permanent TSB trading in line in Q3

Permanent TSB posted its third quarter trading update for the three months to 30 September on Thursday, with new mortgage lending drawdowns increasing by 12% on a year-on-year basis.

The Irish lender reported that its group net interest margin - excluding Eligible Liabilities Guarantee Scheme fees - improved to 1.44%, compared to a core bank margin of 1.71%.

Group operating expenses were trending in line with previous guidance, and impairments were also in line with previous guidance.

A total of €500m of five year Residential Mortgage Backed Securities were placed during the period, at what the company called a “favourable rate”.

Group Fully Loaded CET1 ratio increased to 16.7% in the quarter, and the sale of the residual non-core UK loan book was also agreed.

“The group continues to trade in line with expectations,” the board said in a statement.

“We remain on track to achieve our guidance for the second half for operating expenses and impairments.

“NIM is expected to be marginally higher than our previous guidance for the second half as a result of the sale of the residual non-core UK assets and a better Q3 performance.”

Having completed the non-core deleveraging programme, the board said Permanent TSB is now focused on strengthening and growing its core Retail and SME banking franchise in Ireland whilst maintaining an active portfolio management approach to its businesses.

“Sustainable shareholder value creation continues to be the governing test for any acquisition or further disposals.

“Nevertheless, challenges remain in the form of constrained housing supply in Ireland, increasing regulatory costs and any potential negative impact on the Irish economy resulting from the UK referendum outcome.”