PTSB ‘on course to get back to profit by 2017’

Permanent TSB remains on course to return to profitability — on a group basis — by 2017, with its so-called ‘good bank’ core element likely to make a profit as early as next year, management said yesterday.

On the back of an improving set of interim results showing an annualised reduction in pre-tax losses from €587m to €131m, group chief executive Jeremy Masding said “great progress” had been made this year and PTSB’s core banking element was on track to be profitable, on a pre-provision basis, “in the next 12 months”.

Management’s ‘Bank plus Two’ restructuring strategy, which will see a ‘good’ core lending bank split from a non-core division, and a specialist asset management unit, is expected to be approved by the European Commission by early December.

In the six months to the end of June, PTSB showed an operating loss, before exceptional items, of €449m, down from a figure of €457m a year earlier.

The after-tax loss was €141m, as opposed to €565m last year.

The pre-tax loss figure includes provisions for impairment of €430m and net exceptional items of €318m.

The ‘good bank’ alone made a pre-impairment loss of €12m and a post-impairment/underlying loss of €39m, leading management to say “it’s getting to where we want it to be”.

Mr Masding said PTSB’s recent financial performance had been “firmly in line” with its restructuring plan.

He said the performance showed the bank could, at its core, be a viable business and “an asset of value” to the Irish taxpayer.

Current management had, earlier this year, considered shutting the bank down in order to deal with its problems.

“We are achieving what we said we would achieve,” Mr Masding said, although he did admit that the reduction in group losses was “flattered” by technical accounting issues.

However, he also noted there had been “a modest improvement” in the bank’s like-for-like operating performance, “despite an ongoing prudent approach to impairment provisions”.

PTSB had signed up nearly 30,000 new current account customers to date, this year, and he said it would add “a lot more customers” over the rest of the year.

“We’ve made a good start in re-establishing ourselves as a competitive force for mortgages, deposits and current accounts and we’re very much open for business,” Mr Masding said.