New PTSB boss sees opportunity in SMEs
Sector needs more competition, says incoming CEO Crowley
PERMANENT TSB (PTSB) will target a push into the small business market and has scope to boost its overall income levels by targeting fees, incoming chief executive Eamonn Crowley has said.
The largely State-owned bank confirmed on Monday that Mr Crowley will take over as CEO from Jeremy Masding, who has long signalled his plans to stand down after eight years in the role.
The transition had been expected for some time and followed approvals from the Central Bank as regulator and Finance Minister Paschal Donohoe.
Eamonn Crowley has been Ptsb’s chief financial officer (CFO) since 2017 and a member of the board.
Before joining PTSB Mr Crowley held a number of senior executive roles, including as CFO of Bank Santander Poland – which until 2011 was AIB’s Bank Zachodni – and as the chief operating officer (COO) of AIB’s Central and
Eastern Europe Division.
“There is no surprise in the appointment, which is good, and his international perspective and his familiarity as CFO with PTSB are positives,” according to Eamonn Hughes, an analyst at Goodbody Stockbrokers.
The initial priority for the new CEO will be to deal with the impact of Covid-19, Mr Hughes said.
The bank’s around 10,000 customers who are now on up to six-month Covid-related payment breaks will have to transition either back to full mortgage repayment, some continued payment relief or have loans restructured, he said.
That work, will be potentially capital and resource intensive for the bank, although PTSB will benefit from having had its arrears support unit running at a high level up to recently, dealing with the legacy of the global financial crisis.
At the same time, the bank faces the challenge of maintaining or growing its share of new mortgages in what will be a smaller market in 2020 and 2021, Mr Hughes said.
The bank had managed to increase its share of new mortgage lending ahead of the Covid-19 crisis – taking 15pc – despite competition from bigger domestic rivals AIB and Bank of Ireland, and foreignowned second-tier peers Ulster Bank and KBC Ireland.
New mortgage lending commands a better return for PTSB than its so-called ‘back book’
of mainly low-return tracker mortgages, which will be a drag on profitability as long as the European Central Bank maintains its ‘lower for longer’ stance on interest rates.
On a call with journalists yesterday, Mr Crowley emphasised his drive to boost the bank’s income – including by tapping into what he described as an under-served SME markets and bringing up the bank’s fee income.
“There is a requirement for more competition in the SME area, we have been looking to get involved more in recent years,” he said.
With a national branch network, he said PTSB is active in communities where SMEs operate and in many cases Ptsb deals with SME owners for their mortgage needs but not for their business.
The around 10pc of PTSB’s income that comes from fees compares to around 30pc of income at AIB and Bank of Ireland, and 20pc for Ulster Bank, he said.
That means there is an opportunity “but we need to be balanced”, he said.
For an interim period, Mr Crowley will continue to perform his CFO duties.
International search firm Heidricks & Struggles has been hired to find a replacement financial officer.
There’s an opportunity but we need to be balanced