PTSB sees an increase in underlying profit despite falls in interest income last year

Underlying profit before tax increased to €180m during 2024 with total income reaching €672m - up 1% year-on-year.

Despite seeing a reduction in overall lending and net interest income over the course of 2024, PTSB has reported an 8% increase in underlying profit to €180m for the year as bank deposits grew by €1.2bn, the company’s latest results show.

According to the bank, underlying profit before tax increased to €180m during 2024 with total income reaching €672m - up 1% year-on-year. However, net interest income for the bank was 1% lower at €612m due to a reduction in its net interest margin (NIM).

Total new lending during the year reached €2.6bn - down around €200m compared to 2023 - of which new mortgages accounted for €2.1bn - down from €2.3bn.

PTSB said their share of the new mortgage market stood at 16.4% during 2024. Customer deposits stood at €24.1bn - an increase of 5% - while the value of all customer loans rose by around 1% to €21.8bn.

The value of the bank's non-performing loans dropped from €700m in 2023 to €400m last year.

Eamonn Crowley, chief executive of PTSB, said the bank had a “strong business and financial performance in 2024” and is seeing “organic growth in our balance sheet as our brand resonates in the market and attracts new customers to the bank”.

The NIM of 2.20% for 2024 - down from 2.32% in 2023. The reduction in margins reflects higher term deposit costs, a reduction in our mortgage fixed rates announced last May and the impact of lower ECB rates on both tracker mortgage and liquidity balances.

Non-interest income of €60m was up 25%, and primarily comprises fees and commissions.

The company spent €531m during the year on operating expenses - up 5% due to inflation, investment costs, as well the full year impact of the final elements of the Ulster Bank acquisition.

Mr Crowley also said the bank is also announcing its refreshed business strategy, which will run through to 2027. He said it is “focused on deepening customer relationships, diversifying income and differentiating through customer experience”.

“We will do this while driving continuous operational efficiencies and prudent cost management so the Bank can continue to grow and prosper in a sustainable manner while rewarding shareholders.” 

A large part of the bank’s new business strategy is “operational improvements” and “cost efficiency” as it seeks to reduce costs to around €500m a year by the end of 2027.

As part of the new business strategy a voluntary redundancy scheme was extended to all employees in December and the bank envisages accommodating around 300 colleagues exiting the bank on a phased basis in 2025.

“This will generate annualised cost savings of over €20 million per annum,” the bank said.

In addition to the voluntary redundancy plan, other cost saving initiatives PTSB is pursuing includes the introduction of customer correspondence via email to reduce paper usage, the development of an end-to-end in-life mortgage servicing platform to enable process simplification and self-serve capabilities, a rationalisation of our software and IT suppliers, and the introduction of a new contact centre platform to improve both colleague and customer experience.