Trading Messi-style lending for Carvalho

Permanent TSB chief executive Jeremy Masding was in great form yesterday as the bank unveiled an after-tax profit of €80 million for the six months to the end of June.

This was its first group profit in nine years, prompting Masding to declare that this had “settled the argument about whether we can survive; now we have got to prove that we can thrive and that we can build a compelling commercial and competitive business”.

“Now is the time for us to show our skills and in many ways bare our teeth in terms of competing up. Saving [the bank] is finished, rebuilding is finished – from today we have to grow this bank,” he declared.

All that was missing at the press briefing was a rendition of Yazz's The Only Way is Up playing in the background.

Beat expectations

PTSB beat analysts’ expectations both in the size of the profit announced and the level of writebacks, which fed the surplus.

The bank’s net interest margin, a key measure of profitability, rose by 31 basis points to to 1.43 per cent.

Its 4 per cent rise in mortgage lending to €211 million was steady rather than spectacular for a bank that was once the biggest provider of home loans here.

Masding described the old PTSB as "the Lionel Messi of volume lending" for the manner in which it flashed the cash in the boom years. He thinks of the new version as more like William Carvalho, the low-key Portuguese defensive midfielder.

“Steady, doesn’t make many mistakes, market value went up during the European Championships, lets others take all the glory, doesn’t really give the ball away. I suspect if you ask [José] Mourinho or [Antonio] Conte, that’s the type of person they’d have on the team sheet first,” he said.

There are headwinds facing the company. Its cost-income ratio at 87 per cent is well above the 50 per cent target it has set itself.

Regulatory costs show no sign of abating and the low interest rate environment is not helpful for the lender.

And while PTSB does not have any operating businesses in the UK, Brexit has negative consequences for the group.

The most obvious impact relates to its planned sale of the £2.3 billion CHL mortgage book in the UK. This has had to be shelved for now due to a lack of buyers, with the result that PTSB can’t close the book on its deleveraging programme.

CHL continues to be a drag on PTSB’s financial performance, accounting for the vast bulk of the bank’s €36 million pre-exceptional losses from its non-core activities.

The more worrying impact is the spillover effect for the Irish economy, with the Central Bank yesterday revising down its GDP forecasts both for this year and for 2017.

Masding will be hoping that the Dame Street forecasters are proved wrong and that the sluggish mortgage lending trend of the past few years is reversed by the Government’s planned programme of house building.

Otherwise, the debate about its future might well be reopened.