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permanent tsb Group Holdings plc has published its results for the six months ended 30 June 2013.

Permanent Bank International's parent, permanent tsb Group Holdings plc (“the Group”), and the holding company of permanent tsb bank, has published its results for the six months ended 30 June 2013.

Jeremy Masding

Group Chief Executive Jeremy Masding (pictured) said: “We are on track for the core ‘Good Bank’ to be profitable in the next 12 months. We’ve made great progress so far this year on winning new current accounts, lending new mortgages and agreeing long term solutions for customers in arrears and there are encouraging signs across the business.”

The results record a loss before tax of €131m. This figure includes provisions for impairment of €430m and net exceptional items of €318m.

The operating loss for the period, after impairments but before exceptional items, was €449m compared to a figure of €457m for the same period in 2012.

The figures show the Group recorded impairment charges of €430m in the first half of 2013, compared to a figure of €437m for the first half of 2012. The Group’s impairment charges reflect continuing prudence in its provisioning methodology.

The figures also highlight that Net Interest Income for the first half of 2013 was €93m – compared to €85m in the same period last year. The Net Interest Margin (excluding ELG scheme costs) stood at 0.82% at end June 2013 versus 0.76% a year earlier.

Net Interest Margin increased because the Group made progress in reducing its cost of funding and broadening its retail and corporate deposit base, whilst reducing its reliance on wholesale and system funding.

Commenting on the results, Group Chief Executive Jeremy Masding said:

“Our financial performance is firmly in line with our Restructuring Plan. We are achieving what we said we would achieve. The reduction in Group losses from €565m to €141m was flattered by technical accounting issues; however, there has been a modest improvement in our like-for-like operating performance despite an ongoing prudent approach to impairment provisions”.

Mr Masding said the Group is dealing with its challenges and that its Bank plus Two strategy is putting it on a path to creating an asset of value to the Irish taxpayer.

“Our Bank plus Two strategy is now firmly in place. This strategy is about splitting the Group into the Bank – permanent tsb - a ‘Good Bank’ that will excel at our core business; and the Plus Two – our specialist Asset Management Unit and a Non-Core division.

Overall Group performance is in line with the Restructuring Plan; the losses we’re reporting are still large but we are committed to doing all in our power to keep these losses to a minimum,” he said.

Mr Masding highlighted the performance of the permanent tsb ‘Good Bank’:

“The permanent tsb ‘Good Bank’ is taking shape well and getting close to pre-provision profit.

The Bank is reporting a pre-impairment loss of €12m and underlying losses – post impairments – of €39 million, which is about 9 per cent of the total for the Group. It’s getting to where we want it to be.”

Speaking on the Group’s priorities for the rest of 2013, Mr Masding said:

“We are a big part of the retail banking market. We have a lot to offer our 1.3 million customers and we are here to make a big contribution to the Irish economy by being a real competitive force.

We want to keep rebuilding our net interest margin after making good progress in the first half; we’ll do this through rigorous management of our funding costs and sensible pricing of our lending.

We’ve made a good start in re-establishing ourselves as a competitive force for mortgages, deposits and current accounts and we’re very much open for business; we’ll add a lot more customers over the rest of the year and our pipeline for new lending is very strong.

And we’ll keep working with our customers who are in arrears. This will continue to be very difficult work but it’s work that simply has to be done and done well. We’re gaining good traction and we expect that to continue.”

To read the report in full please click here

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