Permanent TSB’s (PTSB) net loss shrunk nearly 90% last year as it began to release some of the Covid-19 loan loss provisions taken in 2020.
The lender reported a loss of 20 million euros for 2021, compared to a shortfall of 162 million euros for the previous year, which was hit by a charge of 155 million euros for possible loans questionable in the wake of the pandemic. About 1 million euros were freed up last year, the bank announced on Wednesday when publishing its annual results.
The loss for 2021 is due to PTSB recording €38 million of net exceptional charges, including €28 million of advisory fees related to its planned €6.8 billion acquisition of mortgages and loans to small businesses as well as 25 branches of Ulster Bank as the latter withdraws from the market.
The bank has also provisioned 15 million euros for legal costs inherited from the past.
Chief executive Eamonn Crowley described the deal with Ulster Bank as making 2021 a “transformative year” as it will increase the size of the PTSB’s loan portfolio by more than 40%. The size of Ulster Bank’s portfolio to be transferred, subject to competition watchdog approval, was €7.6 billion when the deal closed last year . However, it should have fallen back to 6.8 billion euros by the time of its completion.
“We are also preparing to welcome Ulster Bank’s deposit and current account customers, who will need a new provider with an attractive offer, a strong community and customer ethos, and a growing national branch network. growth,” he said.
PTSB is the only one of the three remaining banks in the market that needs additional deposits as it needs additional funds to help acquire the Ulster Bank loans.
The bank’s total performing portfolio grew by 200 million euros last year to reach 14 billion euros, with new loans offsetting repayments. Non-performing loans fell from €300 million to €800 million thanks to a combination of loan sales and “organic cures”.
“As we begin 2022, there is some optimism that the pandemic is over as the more virulent but less severe Omicron strain fades over the next few months. Some uncertainties remain – the residual impacts of Covid-19 as well as emerging geopolitical developments in Eastern Europe – however, the outlook in our core markets is positive,” the bank said.