DUBLIN, Aug 3 – Ireland’s permanent tsb (PTSB) set aside 75 million euros ($88.3 million) in the first half of the year to cover expected losses from the 10,500 COVID-19 related repayment breaks, half of which have been extended beyond three months.
Ireland’s banks offered the three-month breaks in March and agreed to extend them to six months for customers in need of further temporary relief as the Irish economy emerges from lockdown at a slower pace than most of Europe.
PTSB reported a 57 million euro first-half pretax loss on Tuesday, down from a 28 million euro profit a year ago.
Excluding the impairment charge, which was higher than the potential 50 million euros flagged in May, the mortgage lender’s profit before exceptional items fell to 23 million euros from 42 million euros in the first half of 2019.
NatWest Group’s Ulster Bank, the first Irish bank to report interim results, said on Friday it was extending breaks for around 60% of 12,000 impacted mortgage customers. Its larger impairment charge of 278 million euros surprised analysts.
PTSB said it saw more positive signs of recovery in July, and with a range of indicators more encouraging than previously anticipated, it anticipates new lending could be around 40% lower than the 1.7 billion euros it lent in 2019.
The 75% state-owned lender’s fully loaded core tier 1 capital ratio – a key measure of financial strength – fell to 13.9% from 15.2% three months earlier. Its net interest margin also slipped slightly to 1.75% and is expected to dip further to low 170 basis points, the bank said. ($1 = 0.8495 euros) (Reporting by Padraic Halpin, editing by Louise Heavens)