One in five PTSB mortgages in arrears

Roughly 16% of all Permanent TSB’s Irish mortgage book was in arrears by more than 90 days at the end of December, which is up from 12% in arrears more than 90 days at the end of 2011.

Moreover, 5% of its total Irish mortgage book was in arrears by less than 90 days at the end of December, which means that one in five of its mortgages in the Republic of Ireland is in arrears.

The State-controlled bank released its results for 2012 yesterday, which show that losses after tax climbed to €999m, compared with €424m for 2011.

However, the 2011 figure benefited from a €963m profit on a liability management exercise.

Loss before exceptional items was €980m last year, compared with €1.47bn the previous year.

Impairment charges for last year was €891m compared with €1.44bn the previous year.

Operating income at PTSB reached €197m in 2012 although operating expenses came in at €286m over the same period.

The net interest margin, which is a key indicator of profitability, fell from 0.92% in 2011 to 0.72% in 2012.

PTSB attributed the decrease to a reduction in the interest rate that is being charged on variable rate mortgages combined with an increase in the cost of deposits.

However, the bank closed 16 branches and laid off 200 staff.

These cost savings will flow through the 2013 accounts and are expected to significantly improve the net interest margin.

The removal of the Government’s eligible liabilities guarantee scheme at the end of this month will lower fees by “tens of millions” for the year.

The total value of mortgages in arrears reached €5.5bn at the end of December.

However, the flow of impairments on residential mortgages fell by 51% between 2011 and 2012, while the flow of impairments on buy-to-lets fell by 62% over the same timeframe.

The level of impairments on commercial mortgages increased by €141m to reach €320m by the end of 2012.

Total loans to customers fell by €1.9bn year-on-year to €31.8bn in December. Retail and corporate deposits grew by €2.2bn over the same period.

Retail deposits were €13.5bn at the end of 2012, while corporate deposits were €3.1bn.

Funding from official sources fell by €3.3bn to €10.7bn last year and the bank has not tapped the emergency liquidity assistance programme since Apr 2012.

The core tier one equity capital now stands at 18%.