Customer lending stood at €21bn as the bank took a higher share of the mortgage market
As it reported that pre-tax profits in the first half of 2024 almost tripled to €75m, the bank said it had earned fee income of €23m as changes to the current-account fee structure began to materialise.
“This increasing trajectory is expected to continue through the second half [of the year], supporting the fees and commission income growth in 2024,” it said.
Up to 500,000 customers were affected when the monthly maintenance fee for the PTSB current account went from €6 to €8.
The bank does not levy day-to-day transaction fees for lodgements and withdrawals or the setting up of standing orders and direct debits. It has said these were the first increases in current-account fees since 2019.
PTSB’s chief executive Eamonn Crowley said there were no plans to make any further changes to the fee structure.
“Our current account isn’t just about a flat fee – it is also about the benefits we provide back to customers,” he said. “The more active you are with our current account, the more you are able to get back, and therefore there is a benefit to the consumer.”
The bank’s surge in profitability came on the back of a €20m impairment release and was despite an expected 20pc increase in operating costs.
Total customer lending stood at €21bn, broadly in line with forecasts, with a non-performing loan ratio that was reduced to 1.7pc.
PTSB recently sold €348m worth of non-performing loans to a consortium that included Mars Capital.
PTSB’s share of the mortgage market edged back up to 13.5pc in the second quarter, after it cut rates by 1pc earlier this year, and it said retention of existing customers was “trending favourably”.
The bank, which is still majority state-owned after being bailed out during the financial crash, is at a disadvantage compared to bigger rivals AIB and Bank of Ireland in the mortgage market.
Every €100 of mortgages the bank issues has a risk weighting of more than 40pc, against which it must hold expensive capital. The risk weighting on new Bank of Ireland and AIB mortgages is in the 20s.
“The market continues to be impacted by the low level of switching activity,” PTSB said of the mortgage market.
“However we anticipate this segment will increase activity in the future as the European Central Bank reduces rates.”
In terms of acquiring and retaining customer deposits, there was a balance of €23.6bn at the end of June, up about 4pc year-on-year.
This was driven by an increase in retail deposit balances to €12.9bn, with the current account balances of €9.3bn remaining broadly in line with last December.
Total operating expenses of €245m had increased by €41m year on year in line with management expectations.
Regulatory charges rose by €5m to €29m, up 21pc, in the first half of the year.
This was due to a legislative change which means the bank levy, of €24m, is now recognised in the first half of the year instead of in the last quarter of the previous year.
