Ireland's PTSB reports underlying loss as costs offset loan growth

DUBLIN (Reuters) - Ireland's permanent tsb (PTSB) posted an underlying loss of 2 million euros ($2 million) in the first half of the year as higher operating expenses offset a 22% jump in new lending that it expects to continue into the rest of 2022.

PTSB, which is set to transform into a much larger player in Ireland's shrinking market after winning competition approval last week to buy 7.5 billion euros of loans from NatWest, cut its loss from 4 billion euros a year ago.

After new lending rose to 1 billion euros, PTSB said it had a strong pipeline of activity across all core product lines and that demand remained strong. Its share of Ireland's fast growing mortgage market slipped to 16.3% from 17.5% a year ago.

It now expects operating costs for 2022 to rise 14% year-on-year, higher than previous guidance of 12% due to accelerated investment in its digital offering and inflationary pressures.

The bank remains committed to delivering underlying cost savings in the medium term, it added.

PTSB, which has said it has no plans to pass on a 50 basis point European Central Bank rate increase to fixed and variable rate mortgage customers, said on Wednesday the automatic rise for customers whose mortgages track the ECB rate would add 28 million euros in interest income on an annualised basis.

Analysts at Davy Stockbrokers, which had forecast a 9 million euro underlying profit for the period, said the results nevertheless represented a strong operating outcome and expect PTSB to deliver sustainable returns in the coming years.

($1 = 0.9866 euros)

(Reporting by Padraic Halpin; Editing by Mark Potter)