Ireland’s Permanent TSB may choose to absorb the first two rounds of European Central Bank interest rate hikes. They plan not to increase its own mortgage pricing to grow its market share, the bank’s chief executive said on Friday.
The ECB outlined plans this month to end quantitative easing on July 1 and then raise rates by 25 basis points on July 21. It plans to hike again on Sept. 8 and go for a bigger move, unless the inflation outlook improves in the meantime.
Crowley said the bank estimates it would make a 40 million euro gain from a 50 basis point rate hike as they would not charge it for holding excess cash and its stock of mortgages that track the ECB rate would automatically reprice.
He also said the bank’s pipeline of approved mortgage loans continues to increase and that he expects the Irish mortgage market to keep growing. The current cost-of-living crunch because of the demand for loans far outstripping the housing supply.
PTSB shareholders on Friday approved the 7.5 billion euro deal to buy mortgage and business loan books, branches, and the asset finance business of NatWest Group’s (NWG.L) Irish unit, Ulster Bank.