PTSB shares plunge 7% after reporting slow deposit growth

PTSB chief executive Eamonn Crowley remained positive about the bank’s performance for the full year though and said PTSB’s capital and liquidity positions are 'strong'.

PTSB, formerly Permanent TSB, shares plunged more than 7% after it posted an update that showed growth in deposit and new mortgage lending has slowed.

In an interim statement, the banks said the overall deposit market grew by 2.6% this year despite inflation and a higher interest rate environment.

However, this is down from 4% over the same period in 2022 indicating that the pace of growth is slowing.

PTSB chief executive Eamonn Crowley remained positive about the bank’s performance for the full year though and said PTSB’s capital and liquidity positions are “strong”.

The bank said customer deposits reached almost €23bn by the end of September, which is €1bn higher compared to the end of December last year, primarily due to a 6% increase in current account balances to €9.5bn while retail deposits grew by 4% to €12bn.

The bank also said new mortgage lending across fixed products accounted for 97% of total new mortgage agreements year-to-date, but evolving customer behaviour could change this.

The bank has observed some customers maturing from a fixed rate are now opting for a variable rate “for the first time in a number of years”.

Davy Stockbrokers said it expects this slow growth will not impact the bank’s performance this year, but “it will likely result in a lowering of our 2024 and 2025 forecasts”.

What's your view on this issue?

You can tell us here

Meanwhile, PTSB profits are set to benefit from a 93% year-on-year increase in net interest income, driven by rate hikes by the European Central Bank (ECB).

In a statement on PTSB performance this year to September, the bank also posted a 115% rise in gross income following the migration of the remaining Ulster Bank Mortgages, Micro-SME and Asset Finance portfolios.

“Asset quality remains robust and we continue to take a measured approach with respect to the impact to our customers of ECB interest rate rises,” said Mr Crowley.

The bank has grown its mortgage market share to nearly 21% compared to 17% in September last year.

PTSB total income for the year is expected to be €680m, 65% higher than last year and higher than its previous guidance of €650m.