PTSB mortgage share surges as it taps chaos of Ulster Bank and KBC exit plans

Amid the crisis facing Irish banking, there are already signs that PTSB is benefiting from the uncertainty for home loan borrowers after KBC said it would follow Ulster by closing up in the Republic. File picture.

Permanent TSB (PTSB) reported no major scarring from the Covid-19 crisis and appears to be already benefiting from the chaos caused by the plans of Ulster Bank and KBC to quit banking in the Republic, as its mortgage market share surges to almost 18%.      

PTSB shares were little changed at €1.40 after the bank issued a new update but have nonetheless soared by 62% since the start of the year and since late February in particular when PTSB first unveiled plans to buy loans in the carve-up of Ulster Bank books. The shares have risen 10% in the past week alone.       

PTSB is favoured to take a large slice of Ulster's €14bn performing home loans book, a development that most banking industry observers say will only consolidate Irish banking further to the benefit of lenders and not borrowers.

The lender is the third largest home loans lender in the Republic and buying Ulster's mortgage book could vault its mortgage share to close to 25%.

Amid the crisis facing Irish banking, there are already signs that PTSB is benefiting from the uncertainty for home loan borrowers after KBC said it would follow Ulster by closing up in the Republic. 

The Irish Examiner reported last week on the fears of leading mortgage brokers who warn that the upheaval in the mortgage market is already having a chilling effect on competition. First-time borrowers are already turning away from Ulster and KBC, which offered among the lowest borrowing rates, for more expensive lenders, the brokers said.

There was some evidence of this fallout as PTSB in its update reported a huge climb in its share of the mortgage market, to almost 18% from 14.7% a year ago. 

However, in the update, its new chief executive Eamonn Crowley said the Ulster deal was still under consideration but pointed to the opportunities it would entail for the lender.         

"Any agreement reached will need to provide certainty and clarity for associated customers and employees, be supportive to the overall commercial position of Permanent TSB and value accretive for our shareholders," Mr Crowley said.  

"The bank’s mortgage drawdown volumes in quarter one were circa 30% higher than the same period last year and mortgage applications and approvals are also materially ahead versus the prior year," it said.