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Permanent TSB Group Holdings PLC on Friday hailed a "very strong" year-to-date performance, though it said costs are on the rise.
Between December 31 and September 30, customer deposits at September 30 rose by €1.7 billion to €20.8 billion. However, the total performing loan book fell by €300 million to €13.7 billion.
The Dublin-based personal and small business bank said for September 2022, the pro forma CET 1 ratio reduced to 14.9% from 15.1% at December 31, 2021.
Permanent TSB added that net interest income is up 3% on a year ago in the third quarter to September 30, while gross interest income was up by 4%. The bank traced this back to larger lending volumes and the charged interest rate environment. The net interest margin in the nine months was 1.39%, down from 1.49% a year ago, impacted by a €9 million cost of holding excess liquidity, TSB explained.
"The macroeconomic outlook continues to be volatile in an environment of higher interest rates and higher inflation. The bank remains adequately provisioned to cater for a slowdown in economic growth and management's guidance remains that there will be a small impairment release for 2022," Permanent TSB said.
It expects operating costs in 2022 to increase by 15% compared to 2021 as it works on completing key investment programmes and the acquisition of Ulster Bank portfolios, while dealing with rising inflation. As a result of the takeover of Ulster Bank DAC assets, the bank expects an additional gross interest income of around €180 million in 2023 with around €40 million funding costs and €50 million operating expenses.
Permanent TSB shares rose 4.0% to €1.74 each on Friday afternoon.
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