By Elena Vardon
Permanent TSB Group Holdings, the Dublin-listed lender, has increased its guidance for 2023 following higher interest rates, resulting in a first-half pretax profit. The company now predicts total income of €680 million for the year, up from the previous estimate of €650 million. Furthermore, it expects its cost-to-income ratio to improve from over 70% to over 65%. Total operating costs are anticipated to be approximately 25% higher in 2023 due to the inclusion of new businesses, the absorption of increased depreciation charges, and investment in growth initiatives.
Underlying profit guidance for the year has also been raised by approximately 13% to around €180 million.
For the six months ending on June 30, the bank reported a pretax profit of €26 million compared to a loss of €36 million during the same period last year. On an underlying basis, profit increased to €86 million from a loss of €2 million.
Total income saw a significant 81% year-on-year increase to €323 million, boosted by a substantial rise in net interest income. The net interest margin stood at 2.29% at the end of 2022, compared to 1.54% previously.
New lending experienced a 36% year-on-year growth, reaching €1.4 billion. Additionally, the bank's total gross loan book expanded by 42% to €21.1 billion.
As of the end of June, the fully loaded common equity Tier 1 ratio, an important measure of balance sheet strength, was at 14.4%, slightly lower than the 15.2% from six months prior due to the impact of Ulster Bank SME and Mortgage asset migrations during the first half.
Originally published by Elena Vardon in The Wall Street Journal
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