Ireland's PTSB boosts lending outlook after strong September

DUBLIN, Nov 3 (Reuters) - Mortgage applications and approvals at Ireland’s permanent tsb (PTSB) were the highest so far this year in September and the bank said that with the pipeline remaining strong, new lending will not fall as much as anticipated this year.

PTSB initially thought new lending would be 40-50% lower than the 1.7 billion euros it lent in 2019, revising that to 40% in July when it saw signs of recovery from the COVID-19 crisis. It said on Tuesday it now anticipated a 30% decline.

The smallest of Ireland’s three domestically-owned lenders said new lending rose 30% in the third quarter compared to the second, meaning lending was down 23% and net interest income 6% lower so far this year versus the same period in 2019.

Ireland’s two dominant lenders, Allied Irish Banks and Bank of Ireland also reported a better-than-expected third quarter performance last week.

PTSB set aside 75 million euros in the first half to cover what it anticipated would be the bulk of expected losses from 10,700 coronavirus-related repayment breaks for customers. It set aside a further 17 million euros on Tuesday.

The mortgage lender said just 917 of those customers remained on payment breaks at the end of October with a significant majority of the rest resuming capital and interest repayments, a similar pattern seen across Ireland’s banks.

PTSB, which is 75% state-owned, said its fully loaded core Tier 1 capital ratio - a key measure of financial strength - stood at 14.3% at the end of September. Its net interest margin was 1.73%.

“The duration of the COVID-19 pandemic and its impact on the economy remains unpredictable, the recent government announcement, placing further restrictions on the country, presents continued uncertainty,” PTSB chief executive Eamonn Crowley said in a statement. (Reporting by Padraic Halpin; Editing by Kirsten Donovan)