PTSB said it remains on track to pay a dividend next year for the first time since the financial crisis, after the bank’s loans and deposits grew in the first half of 2025 and it eyes regulatory relief on how much expensive capital it must hold.
Customer loans grew by 4 per cent in the year to €22.2 billion in the 12 months to the end of June, while deposits rose by 7 per cent to €25.2 billion. Still, underlying pretax profit fell by 38 per cent to €51 million as net interest income declined and operating expenses grew.
The bank said it filed an application with the Central Bank at the end of May to reduce the perceived riskiness of its mortgage book, which would free up expensive capital on its balance sheet.
Bank of America analysts have estimated PTSB could release up €270 million of capital on its balance sheet as a result of a recalibration of its so-called risk-weighted asset (RWA) models. RBC Capital Markets estimates it could release a little over €200 million.
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However, the bank has already benefited from some of the capital relief earlier this year, amounting to about €125 million, from the introduction of new EU rules, known as Capital Requirement Regulation 3.
“Our guidance for 2025 remains unchanged, as does our intention to restart dividend payments to our shareholders next year, subject to financial position and required approvals,” said chief executive Eamonn Crowley. “While certain financial metrics are lower versus the previous year, this is in line with management expectations given the more challenging interest rate environment we are operating in.”
The bank said it still expects to cut about 300 jobs over the course of this year, through a voluntary redundancy scheme and natural attrition. The severance scheme “is at an advanced stage”, it said. Staff numbers at the end of June were 3,085, down 162 or 5 per cent compared with the end of December.
Mr Crowley told reporters that no further former redundancy schemes are planned in the coming years as the group aims to reduce its cost-to-income ratio from 74 per cent in 2024 to about 60 per cent in 2027.
PTSB, whose first-half earnings were boosted last year as it released €16 million of loan loss provisions, did not set aside any loan charges for the same period this year. The newly-agreed 15 per cent tariff on most EU imports, including pharmaceuticals, is in line with what the bank said in February that it had been priced into forecasts for potential bad loan losses for the coming years.
“PTSB continues to demonstrate strong progress with good activity in customer lending and deposits and the commencement of its voluntary severance programme,” said Davy analyst Diarmaid Sheridan.
Denis McGoldrick, an analyst with Goodbody Stockbrokers, said: “Overall, this is a positive update, with the company well positioned for future growth and shareholder returns, given the surplus capital position and positive outcome expected from the [risk-weighted assets] review.”
UK banking giant NatWest sold its remaining 11.7 per cent stake in PTSB two weeks ago for €126 million as it seeks to draw a line under its involvement in the Republic’s banking sector.
The UK banking group received an original 16.7 per cent stake in PTSB in late 2022 as part payment for Ulster Bank loans it sold to the Republic’s smallest remaining domestic bank. It subsequently sold down part of the stake two years ago.
While the Irish Government has an agreement in place with NatWest that allows both to sell shares at the same time as the UK lender, Minister for Finance Paschal Donohoe decided not to sell down taxpayers’ 57 per cent interest earlier this month.
