Permanent TSB Group Expects Falling Interest Rates to Hit Income
By Anthony O. Goriainoff
Permanent TSB Group warned that falling interest rates will hurt its income this year after pretax profit rose in 2024.
The Dublin-listed lender said Tuesday that it expects total income to fall by a low to mid-single digit percentage in 2025, and a net interest margin of more than 2.0% down from the 2.2% margin it posted last year.
However, the company entered 2025 with a strong mortgage and business-lending pipeline, it said.
The bank said that for 2024, pretax profit was 159 million euros ($166.8 million) compared with 79 million euros the year before. On an adjusted basis, pretax profit was up 8% to 180 million euros.
Net interest income–the difference between what banks earn on loans and what they pay on client deposits–fell 1% to 612 million euros. The net interest margin of 2.2% was down from 2.32% the year before, and in line with guidance.
New mortgage lending fell to around 2.1 billion euros from 2.3 billion euros in 2023, with a 95% increase in the second half versus the first half.
“While falling interest rates will reduce income this year, market conditions in Ireland remain supportive and asset quality is strong, reflecting robust underwriting criteria over the last decade,” it said.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com