PTSB's share of the mortgage market slips but the lender expects growth this year

PTSB’s market share of new mortgage drawdowns was 13.4%, a decline of two percentage points compared to the final three months of 2023. Picture: Andres Poveda

PTSB’s share of the mortgage market declined slightly in the first three months but the lender continued to benefit from high interest rates implemented by the European Central Bank (ECB).

PTSB’s market share of new mortgage drawdowns was 13.4%, a decline of two percentage points compared to the final three months of 2023, driven mainly by switching activity.

However, PTSB was boosted by a net interest income increase of 10% compared to the first three months of 2023, reflecting the ECB rate hikes and a swelling loan book and customer base.

This jump was partly offset by higher interest bearing retail deposits, as the lender recorded an overall rise in deposit volumes.

Net loans declined by 1% to €21.3bn as slower levels of new lending were exceeded by repayments and redemptions and business lending doubled to €80m in the quarter as cost pressures weigh on SMEs.

PTSB remains optimistic on its outlook as it reiterated guidance for the year and chief executive Eamonn Crowley said the lender recorded “a strong financial performance”.

The lender also reported its net interest margin also increased to 2.31%, rising five basis points higher in the same period.

PTSB remains optimistic on its outlook as it reiterated guidance for the year and chief executive Eamonn Crowley said the lender recorded “a strong financial performance”.

The bank posted €167m in total operating income for the period, climbing 9% higher compared to the same period a year earlier.

Chronic demand for housing continues to fuel the mortgage market for the three main lenders.

In its interim statement, PTSB said it still expects the mortgage market to grow by 6% to €12.8bn over the financial year.

However, a new entrant into the banking market could shake-up competition in the Republic which has been dominated by three main banks, especially after the departures of KBC and Ulster Bank.

Bankinter, which operates Avant Money, said it is applying for a full Irish banking licence and entering the deposit market.

Meanwhile, the ECB is expected to announce at least one rate reduction before it breaks for the summer in August.

Brokers have speculated though that banks in the Republic will not be quick to pass on these reductions.