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FY profit up sharply to 267 mln euros on accounting gain
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CEO says 'ticked a lot of boxes' for dividend return
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Increases income, profit, return on equity targets
DUBLIN, March 1 (Reuters) - Ireland's permanent tsb (PTSB) posted a jump in annual profit on Wednesday and said it was moving closer to a return to paying dividends after what it has called its "once-in-a-generation" purchase of loans from rival Ulster Bank.
PTSB is being transformed into a much larger player under a deal that will see it take on around 7.6 billion euros ($8.1 billion) of loans and assets from Ulster parent NatWest, which is exiting the Irish market.
It posted a profit before tax of 267 million euros for 2022 versus a loss of 21 million euros a year earlier.
Some 222 million euros of that arose primarily from taking on Ulster's mortgage and SME (small and medium-sized enterprises) loan books, it said.
Its underlying profit before tax rose to 45 million euros from 17 million as it increased new mortgage lending by 40% to 2.6 billion euros, boosting its market share to 18.5%.
Shares in PTSB, up 43% year to date ahead of the results, were 3.5% higher at 2.69 euros by 0930 GMT.
The majority state-owned bank has so far taken on 5.2 billion euros of mortgage loans, 25 branches, and a 165 million euro SME loan portfolio from Ulster, and also opened over 160,000 new accounts.
The first half of this year will see it take on a further 1 billion euros of mortgage loans and a 400 million euro asset finance businesses.
It said it expected the purchased assets to generate some 170 million  euros in gross interest income this year, pushing its net interest margin (NIM) to 2.25% from 1.92% in the fourth quarter of last year.
It also increased its 2025 NIM target to 2.5% from the 2.25% forecast last July, raised its 2025 operating profit target to 325 million euros from 300 million and lifted its medium-term return on equity goal to 13% from 12% previously.
Chief Executive Eamonn Crowley said he thought the bank had "ticked a lot of the boxes" in talks with regulators to remove a dividend blocker introduced when PTSB had to be rescued by the state over a decade ago.
Analysts at Goodbody Stockbrokers said the 2023 NIM forecast appeared conservative, while Davy Stockbrokers said the guidance indicated low- to mid-teen percentage upside to its 2023 forecasts, with potentially more.
NatWest took a 17% share in PTSB as part of the loans deal, diluting the Irish government's holding to 62%.
