Annual Report 2023
Permanent TSB Group Holdings plc
23
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This document contains certain forward-looking statements with respect to Permanent
TSB Group Holdings plc’s (the ‘Group’) intentions, beliefs, current goals and expectations
concerning, among other things, the Group’s results of operations, financial condition,
performance, liquidity, prospects, growth, strategies, the banking industry and future
capital requirements. These forward looking statement often can be identified by the
fact that they do not relate only to historical or current facts.
Generally but not always words such as “expect”, “anticipate”, “intend”, “plan”, “estimate”,
“aim”, “forecast”, “project”, “target”, “goal”, “believe”, “may”, “could”, “will”, “seek”, “would”,
“should”, “continue”, “assume” and similar expressions (or their negative) identify
certain forward-looking statements but their absence does not mean that a statement
is not forward looking. The forward-looking statements in this document are based on
numerous assumptions regarding the Group’s present and future business strategies
and the environment in which the Group will operate in the future. Forward-looking
statements involve inherent known and unknown risks, uncertainties and contingencies
because they relate to events and depend on circumstances that may or may not
occur in the future and may cause the actual results, performance or achievements of
the Group to be materially different from those expressed or implied by such forward
looking statements. Many of these risks and uncertainties relate to factors that are
beyond the Group’s ability to control or estimate precisely, such as future global,
national and regional economic conditions, levels of market interest rates, credit or
other risks of lending and investment activities, competition and the behaviour of other
market participants, the actions of regulators and other factors such as changes in the
political, social and regulatory framework in which the Group operates or in economic
or technological trends or conditions. Material economic assumptions underlying the
forward looking statements are discussed further in Market and Regulatory context.
Past performance should not be taken as an indication or guarantee of future results,
and no representation or warranty, express or implied, is made regarding future
performance. Nothing in this document should be considered to be a forecast of future
profitability or financial position and none of the information in this document is intended
to be a profit forecast or profit estimate.
The Group expressly disclaims any obligation or undertaking to release any updates
or revisions to these forward-looking statements to reflect any change in the Group’s
expectations with regard thereto or any change in events, assumptions, conditions
or circumstances on which any statement is based after the date of this document
or to update or to keep current any other information contained in this document.
Accordingly, undue reliance should not be placed on the forward looking statements,
which speak only as of the date of this document.
Investor and shareholder information and services including these Annual Reports, are
available on-line at www.permanenttsbgroup.ie.
Contents
Strategic Report
Financial Highlights
Non-Financial Highlights
Chairperson’s Statement
Chief Executive Review
Market Context
Our Strategy, Business Model and Culture
Sustainability
Financial Review
Capital Management
Risk Management
Corporate Governance
Directors’ Report
Corporate Governance Statement
Directors’ Report on Remuneration
Statement Of Directors Responsibilities
Consolidated Financial Statements
Independent Auditor’s Report
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Company Financial Statements
Company Financial Statements
Notes to the Company Financial Statements
General Information
Alternative Performance Measures
Abbreviations
Definitions
2
3
5
7
10
12
23
64
77
80
111
118
169
175
176
184
190
291
295
300
308
309
1
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Financial Highlights
Financial Performance
Underlying profit/(loss) €m (a)
Underlying (loss)/profit €m (a)
Profit / (loss) before taxation
Profit/(loss) before taxation
Adjusted cost to income ratio (d)
Adjusted Cost to Income Ratio (d)
Transformation and simplification
2023
€166m
2023
€79m
2022
€45m
2021
€17m
2022
€267m
€(21)m
2021
2023: €166m
Underlying profit increased due to higher
net interest income partially offset by
higher operational expenses.
2023: €79m
Reduction is due to a non-recurring gain
on bargain purchase being recognised in
2022.
2023
2022
2021
66%
84%
82%
2023: 66%
Decreased due to a significant increase in
net operating income due to ECB interest
rate increases and increased scale
delivered as a result of the Ulster Bank
transaction.
Net Interest Margin % (b)
Net Interest Margin % (b)
Return on Equity % (c)
Loss/return on Equity % (c)
Customer deposits (e)
Customer deposits €m(e)
2023
2022
2021
2.32%
2023
6.36%
2023
€23bn
1.54%
1.51%
2022
0.55%
2021
0.97%
2022
2021
€21.7bn
€19.1bn
2023: 2.32%
78bps higher due to higher yields on
variable rate products and the elimination
of negative yields on excess liquidity in
the second half of 2022. This is offset by
higher wholesale funding margins.
2023: 6.36%
Higher income as a result of the interest
rate environment and migration of
Ulster Bank assets, offsetting increases
in operating costs.
2023: €23.0bn
Increase in current account and retail
deposits as a result of Retail Banks exiting
the Irish Banking market and deposit rate
increases attracting new customers.
Sustainability
CET 1 Ratio (Transitional basis) (f)
CET Ratio (Transitional basis) (f)
NPL Ratio (g)
NPL Ratio (g)
Risk weighted assets (RWA) (h)
Risk weighted assets (R.W.A) (h)
2023
2022
2021
14.3%
16.2%
16.9%
2023
2022
2021
3.3%
3.3%
2023
2022
2021
5.5%
€11,546m
€10,627m
€8,600m
2023: 14.3%
Decrease is driven by planned capital
usage due to the migration of the
remaining Ulster Bank business portfolios
during the year.
2023: 3.3%
NPLs have remained in line with 2022,
reflecting resilience in key credit metrics in
the Irish Economy including house prices
and unemployment rates.
2023: €11,546m
Increase is due to balance sheet growth
through new lending and the purchase of
the Ulster Bank business.
(a) Operating profit before exceptional and other non-recurring items. See table 8 on page 72 for a reconciliation of underlying profit to operating profit on an IFRS
basis.
(b) Defined as net interest income (NII) divided by average interest-earning assets.
(c) Defined as profit for the year after tax (excluding exceptional and other non-recurring items) expressed as a percentage of total average equity.
(d) Defined as total operating expenses (excluding exceptional and other non-recurring items) divided by total operating income.
(e) Defined as the sum of current accounts, retail deposits and corporate deposits.
(f) Total common equity tier 1 (CET 1) capital on a transitional basis divided by total risk weighted assets (RWAs).
(g) Defined as non-performing loans (NPL) expressed as a percentage of the total gross loans of the bank.
(h) RWAs are the Group’s assets and off balance sheet exposures, weighted according to risk.
2
PTSB Group Holdings plc - Annual Report 2023 Non-Financial Highlights
An increased focus on Sustainability and Climate Risk, with a
Board approved Sustainability Strategy aligned to the Sustainable
Development Goals (SDGs)* and the ongoing implementation of a
Climate-Related and Environmental Risk Implementation Plan
A ‘Low’ ESG Risk Rating through Sustainalytics
c.€300,000 in charitable giving through the PTSB Community
Fund in 2023, which included matched funding by the Bank
c.1,700 volunteering hours provided on the ground last year,
equating to c.€45,500 of in-kind giving
Issuance of the Bank’s inaugural Task Force on Climate-Related
Financial Disclosures (TCFD) Report
Title Sponsor of the Irish Olympic Team and the Irish
Paralympic Team for the 2024 Games in Paris
Disclosing the Bank’s carbon impact across Scope 1,2 and 3
(including financed emissions) and committing to setting science-
based carbon emission reduction targets (SBTs) by 2024
81% Culture Index Score, +11% above our Culture Index Target
of 70%
c.€700m in Green Mortgage Lending in 2023, accounting for
c.30% of New Mortgage Lending**
89% of employees feel comfortable to be themselves at work
regardless of background or life experiences
c.38,000 new Current Accounts opened during 2023, with 54%
of new Current Account openings taking place through the Bank’s
award-winning Digital Current Account
58% Female Board Gender Composition and 39% of Senior
Leadership positions are filled by Women
c.€19.4 million in funding provided to the Social Finance
Foundation since 2009***
+20 Relationship Net Promoter Score (RNPS)****, placing
PTSB in joint first position among the retail banks in Ireland
Our Commitment to Building
a Sustainable Business
Awards And
Recognition In 2023
Ambitions For
2024 And Onwards
Our purpose is to work
together to build trust
with our customers and
communities.
Our Sustainability
Strategy gives us an
opportunity to put our
purpose into action -
enabling us to play our
part in addressing the
global climate crisis,
elevate our social impact,
enhance our culture and
deliver what matter most
to our customers and
colleagues.
Ultimately, building a
sustainable organisation
that is fit for the future.
• Winner - Innovative Banking Product, FS
Awards, 2023
• Winner - Grand Prix Award, FS Awards, 2023
• Winner - Financial Services Loyalty Programme/
Initiative of the Year, Irish Loyalty and CX
Awards, 2023
• Winner - Customer Experience Award, Marketing
Institute Ireland All Ireland Marketing Awards,
2023
• Winner - Best Customer Success Story,
Customer Experience Awards, 2023
• Winner - Best Customer Service Team,
Customer Experience Awards, 2023
• Winner - Industry Professional of the Year (Team
Leader), CCMA Awards, 2023
• Winner - Best Procurement Team of the Year,
PTSB and Efficio, The National Procurement
Awards, 2023
• Winner - Most Innovative Use of Technology –
e-flow Procurement Software, PTSB and Efficio,
the National Procurement Awards, 2023
• Investors in Diversity Gold Accreditation, Irish
Centre for Diversity, 2023
• Winner - Inclusion and Diversity (Large), CIPD
Awards, 2023
• Winner - Excellence in Diversity and Inclusion,
Workplace Excellence Awards, 2023
• Winner - Excellence in Flexible and Hybrid Work,
Workplace Excellence Awards, 2023
• Recertification to the Business Working
Responsibly Mark, Business in the Community
Ireland, 2023
• Continuing to embed PTSB’s Sustainability
Strategy and evolve the Bank’s Sustainability
Maturity
• Increasing our focus on climate-related and
environmental risk management
• Using our carbon baseline to set SBTs
aligned to the Paris Agreement and IPCC
findings and developing a corresponding
Carbon Transition Plan to help us to achieve
our targets
• Elevating our social impact through
partnerships and continuing to support local
communities through the PTSB Community
Fund
• Partnering with small businesses through our
Business Banking Strategy
• Ensuring strong corporate governance,
compliance and fair business conduct
* The United Nation’s Sustainable Development Goals
(SDGs) were launched in 2015 to provide a plan of
action for people, planet and prosperity. While we
recognise that we may contribute to all 17 SDGs in
some way, we have identified 6 as being core to our
Strategy.
** A 5-Year Fixed Product available to all new and
existing home loan customers where their homes
have a confirmed or proposed Building Energy Rating
of A1 to B3.
*** The Social Finance Foundation was established in
2007 by the Irish Government to address the needs
of community organisations and social enterprises
for loan funding which was difficult to obtain
from mainstream financial institutions. Acting as a
‘wholesaler’, it provides funding to its lending partners
Clann Credo and Community Finance Ireland.
**** A Relationship Net Promoter Score (RNPS) is a
measure of customer advocacy towards a brand
and indicates the willingness of a customer to
recommend a company’s products or services to
others. The question asks customers how likely they
are to recommend their bank to friends or family on
the basis of their own experience. The range for the
scoring is -100 to +100.
3
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 “Robertwasoneofthoseveryrarepeoplewiththe
abilitytodeliverresultswhileneverforgettingthe
humansideoftheequation,dignity,respectand
empathyforthepeopleheinteractedwith.Ilearned
somuchfrommytimeworkingwiththisremarkable
manandwillgreatlymisshisgoodhumour,sharp
intellectandaboveallhisfriendship.”
Conor Ryan,
Company Secretary and Head of
Corporate Governance
“Robertwasatrulygreatleader,guidingtheBoard
throughoneofthemosttransformativeperiods
intheBank’shistoryculminatinginthesuccessful
completionoftheUlsterBankbusinessasset
acquisition.Hisenergy,optimismandintellectwas
aninspirationtomeandmyfellowBoardmembers,
particularlyduringthosedifficultCoviddayswhen
effectiveleadershipwasneededtokeepthelights
onandtheBankopenforourcustomers.Hewillbe
deeplymissed.”
Ronan O’Neill,
Senior Independent Non-Executive Director
“I’dliketoexpressmyheartfeltappreciationforthe
incredibleleadershipthatRobertbroughttothe
Bank.Hisstrength,resilienceandselflessnesshave
beenaninspirationtomeandtomanyotherswho
haveknownhim.Inthefaceofhisownchallenges
heremainedunwaveringandledtheBankthrough
atransformationaldeal,withdedicationand
commitment,whichempoweredtheoverallteam
success.Robertepitomisedtrueleadership;a
visionary,withintegrity,empathy,decisiveinnature,
resilient,responsible,positiveandinclusive.Robert
willalwaysberemembered.”
Nicola O’Brien,
Chief Financial Officer
“Robertwasanexceptionalleaderwithahighly
engagingandinclusivestyle.Hisbehaviour,example
andkindencouragementappealedtotheconscience
ofhiscolleaguesandhadaprofoundinfluenceon
ourculture.ThroughouthistenureasChairman,
thereweresomanypreciousmomentswherehe
helpedustobemorecourageous,inspiredusto
‘pushbackthehorizonofourhopes’andbroughtus
intoamorecertainfuture.Iwanttoexpressmydeep
gratitudetoRobertforhisdedication,hisenormous
sacrifice,hiscareandcompassion,andofcoursehis
devilishwit.”
Ger Mitchell,
CHRO & Corporate Development Director
Note:
The Chairperson and Chief Executive pay their own tribute to
Robert Elliott in their respective statements.
Robert Elliott RIP
In December 2023, sadly, we learnt of
the untimely death of our friend and
former Chairman, Robert Elliott.
In March 2017, Robert commenced
his position as Chairman of PTSB
shortly after retiring as Chairman and
Senior Partner of the international
law firm, Linklaters LLP. In his
six-year term, he led the Bank
through an unprecedented period
of transformation and growth
culminating in the transformative
acquisition of certain elements of
Ulster Bank’s Retail, SME and Asset
Finance business in Ireland.
Robert was a true gentleman and a
dedicated custodian of the Bank. His
profound impact on the organisation,
and on those who were lucky to know
him as a colleague and friend, will be
felt deeply for many years to come.
We extend our heartfelt condolences
to Robert’s wife, Sally, to his children,
Catherine, Robert and Jamie, and to his
extended family and friends. We will
always remember him with fondness
and appreciation.
4
PTSB Group Holdings plc - Annual Report 2023 Chair’s Statement
It was my great honour to be appointed Chair of PTSB
in March 2023. From my experience as a Board member
from 2014 to 2020, I knew the extent to which the
people in this Bank strive to serve its customers and
communities; I am very proud to return to work with
them as Chair of the Bank.
At the outset I want to pay tribute to my
predecessor, Robert Elliott, who died in
December 2023 as a result of an illness he
had suffered from for some time. His was
a tragic loss.
We opened 25 new branches in
communities across Ireland in early 2023.
We evolved our business banking offering
with the acquisition of former Ulster Bank
Business Direct loans and the subsequent
launch of PTSB Asset Finance in July.
I had the privilege of getting to know
Robert over many years. I remember his
warmth, his ability to think so clearly and
the deep care he felt for the people who
work in PTSB.
He displayed tremendous leadership,
corporate governance and people skills.
He was very successful at guiding the
Bank throughout his six-year term to the
point where it is now a much bigger Bank,
with more customers, more branches,
a wider product offering, a stronger
competitive proposition and an attractive
platform for significant growth.
In my time as Chair so far, I have been
struck by the commitment, dedication and
professionalism shown throughout the
Bank as we work together to achieve our
Ambition of being Ireland’s best personal
and business bank through exceptional
customer experiences.
Our results for 2023 show a Bank that has
continued to make significant progress,
despite the challenging economic
conditions and cost of living pressures
that have emerged since the Russian
invasion of Ukraine in 2022 and in an era
of significant geo-political tensions.
The Bank is growing. It is competing
vigorously. It is successfully attracting
new personal and business customers in
significant volumes.
What is especially encouraging is the
extent to which the Bank has been
capitalising on the growth opportunities
generated by its landmark acquisition of
Ulster Bank businesses and branches.
And, of course, we welcomed thousands
of new mortgage and current account
customers, not to mention over 220 more
new colleagues who transferred to PTSB
from Ulster Bank throughout 2023.
All the while continuing to compete
strongly for new business across all our
chosen markets.
This is an exciting time for PTSB. A
time for investing heavily in our digital
infrastructure, in our branch infrastructure,
in the people who make this Bank
attractive to our customers.
In being ‘Altogether more human’.
A time to show how we are different
from other banks and our commitment to
bringing the best of technology and our
people together to solve real customer
needs and deliver a better banking
experience.
Our commercial performance
Our results show we are reporting a
very significant increase in underlying
profitability – from €45m in 2022 to
€166m in 2023.
We have generated significant momentum
across the business through a balance
of organic and acquisition-driven growth.
This will stand us in good stead in the
years to come.
We have generated material
improvements in Net Interest Income,
in our overall loan book, our customer
numbers, and in customer deposits – the
lifeblood of our business – while managing
our costs carefully.
Our business banking proposition is strong
and our increased lending in this space
throughout 2023 is testament to this.
We are providing business customers
seeking a new banking relationship with a
meaningful alternative and this offers us a
major growth opportunity. Notwithstanding
the major leap forward that came with
the Ulster Bank acquisition, there is still
considerable scope for us to grow our
business banking customer base.
We have the skills, the expertise, the
customer knowledge, the risk appetite and
the lending capacity to support businesses
throughout Ireland with a range of lending,
deposit and current account offerings that
are tailored to their needs.
At a time when personal and business
banking customers throughout Ireland
need strong competition more than ever,
we are proud to offer that competition
and to give both existing and prospective
customers greater choice, a better
personal and digital service and innovative,
customer-friendly products.
Governance and management
A key focus of my role as Chair has been
to build on the progress the Bank has
made in respect of strengthening our
corporate governance, our management
team and the way we collectively serve
our customers to meet the needs and
expectations of all stakeholders.
As the Bank progresses through the next
stage of its evolution as a full-service,
customer-focused personal and business
Bank, we will continue to invest in and
5
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Chair’s Statement
(continued)
strengthen our foundations, ensuring we
deliver for our shareholders, customers and
colleagues in a sustainable, responsible
and efficient manner.
When it comes to Sustainability and
DEI, our work is, and always will remain,
unfinished. We will keep striving to do
better next year – and even better the
year after that.
In this vein, delivering sustainable
profitability, as well as incorporating
sustainability into our business practices
and strategic decision making, is a key
priority for the Bank.
Our Sustainability strategy encompasses
four key pillars, across the environmental,
social and governance agenda.
As part of enhancing our culture
and investing in our people, we are
implementing a comprehensive Diversity,
Equity & Inclusion (DEI) strategy which
harnesses the benefits that diversity
among our colleagues brings, making
everyone feel valued for who they are and
what they can contribute.
An important aspect of this is creating
a workforce that is reflective of the
communities that we serve. My ambition
for PTSB is to be an organisation
where everyone, regardless of gender,
age, ethnicity, orientation, ability or
socioeconomic status, can feel that they
have true equality of opportunity and
influence.
While there is still more work to be done,
we have made a lot of progress in this
area. In 2023, we achieved 58% female
representation at Board level and 52% of
our senior hires were female. We continued
our progress of recent years by achieving
a further reduction in our gender pay gap
to 15.9%.
Our colleagues champion and celebrate
our collective commitment to DEI through
their participation in the Bank’s Employee
Resource Groups. The benefit and impact
of colleague-led initiatives such as this is
evident through our Culture Index score of
81% and colleague Trust score of 82%.
We were also extremely proud for our
progress to be recognised externally when
we were awarded with the Investors in
Diversity Gold accreditation by the Irish
Centre of Diversity in 2023, being only the
twelfth company to receive that award.
Outlook
The departure of two retail banks from
the Irish market in recent years has been
a significant inflection point – both for the
sector and for customers.
While it has created opportunities for
PTSB to demonstrate its credentials as
a strong competitive force, it has also
brought into focus our responsibilities to
our customers, to the Irish economy and
to our society to provide the products and
services they need.
To be an institution they can trust with
their savings, with their payments, with
meeting their wider financial needs.
To be a Bank that recognises the extent
of the role we play in the communities we
serve – the employment we provide, the
branches in which we keep investing, the
digital capabilities that we deploy so that
customers have a real choice in doing
business with us at a time and a place of
their own choosing.
Our new brand promise, ‘Altogether
more human’, unveiled in late 2023, is
the public commitment we are making
to our customers and our communities.
This brand promise augments and
complements our Purpose, which is
working together to build trust with our
customers and communities, and our
Ambition, to be Ireland’s best personal
and business bank through exceptional
customer experiences.
We are entering 2024 and beyond with
confidence. We have the right people, the
right platform and the right ideas to make
the most of the opportunities that we see
in the market.
The Irish economy has remained resilient
in the face of the exceptional challenges
of recent years and, notwithstanding
these challenges and those that may yet
emerge, offers a competitive environment
in which PTSB can continue to grow and
prosper.
But our strategies can only deliver the
changes we all want if we apply them
rigorously to everything we do. Every
interaction we have with a colleague or a
customer. Every decision we make. Every
new idea we generate.
As we embark on the next stage of our
growth I want to thank my fellow Board
members and the Bank’s management
team for the care, diligence and
enthusiasm they bring to their roles.
6
In particular, I thank our Chief Executive,
Eamonn Crowley, for leading the Bank so
effectively, for listening to our customers
and colleagues so intently, and for
planning and executing our strategy with
such clarity, vision and authority.
I welcome Catherine Moroney and Rick
Gildea, who joined the Board as non-
executive directors in December, and
thank Andrew Power and Ken Slattery,
who stepped down from the Board in
2023, for all their efforts in making the
Board more effective in discharging its
duties.
And I also thank the Minister for Finance,
the Department of Finance and the
Central Bank of Ireland for the support
that they have given to the Bank.
But I want to conclude by thanking all
the people who make up PTSB for their
extraordinary customer focus, resilience
and professionalism.
It is through their individual and collective
efforts that the Bank has evolved
in recent years to become a truly
competitive force that combines the very
best of personal and digital service for the
benefit of our customers.
I am greatly encouraged by the positive
approach they bring to their roles and I
know that this is valued, not just by me
and all their other colleagues, but by
customers too.
It is down to them that the Bank is in such
robust shape and in such an attractive
position as we build on our 200-year
heritage of serving our customers and our
communities.
Julie O’Neill
Chairperson
PTSB Group Holdings plc - Annual Report 2023
Chief Executive Review
I am pleased to present the 2023 Annual Report for PTSB
which reflects another year of significant progress for the
Bank.
Our performance demonstrates real momentum in
our business as we compete with greater scale and
diversification, offering customer-centric products and
services that reflect our promise to be ‘Altogether more
human’ and positions us to achieve sustainable profitability
and business growth.
Introduction
2024 promises to be an exciting year for
PTSB as we build on the strong progress
of 2023.
PTSB, these games will be the culmination
of our landmark title sponsorship of
Ireland’s Olympic and Paralympic teams,
which we first announced in March 2022.
We made a bold statement of intent
when we unveiled our new business
repositioning in late 2023, moving from
Permanent TSB to PTSB and launching
our new customer promise of being
‘Altogether more human’.
This is a promise that we are all extremely
proud of. It highlights our commitment
both to the people we serve – our
customers – and to the people we work
with – our colleagues.
It highlights how we differentiate
ourselves from other banks. How we place
such a high value on the human aspect
of what we do. On our commitment
to combining the best of what we call
“Tech and Touch” – top-class technology
working in tandem with top-class people,
giving our customers the best of both
worlds.
We’re different because we know the
value to our customers of being able to
manage their banking needs through
efficient digital channels, while having
exceptional human support available to
them where they need it.
We’re not an either/or proposition. That’s
why we are investing in technology,
investing in branches and customer-facing
roles, and investing in our communities.
And that’s why we’re particularly excited
because 2024 is both an Olympic and
Paralympic year, with both sets of games
taking place in Paris this summer. For
This sponsorship is really important to us.
It’s the perfect match because it allows
us to demonstrate our commitment to
communities around Ireland and to show
our support for the role they play in
nurturing, developing and encouraging
our Olympic and Paralympic athletes and
participation in sport more broadly. We’re
huge supporters of the communities
that we’re a part of and we’re also huge
supporters of Team Ireland.
Our sponsorship also means that our
customers and prospective customers will
be seeing a lot more of the PTSB brand in
the run-up to the games and during the
games themselves.
That’s a huge opportunity for us because
we’re now at a stage where we’ve
successfully integrated all the new
customers, businesses and product
offerings that transferred to PTSB
following the completion of the Ulster
Bank transaction, giving us a much bigger
platform to demonstrate our credentials
to the wider market and to continue
competing strongly and growing strongly.
And our results for 2023 show that we
are competing strongly. By providing
customer-friendly personal and business
banking products through a combination
of in-person, voice and digital channels,
we are driving an improved business
performance.
Before I go through aspects of that
performance in detail however, I would
firstly like to echo the Chair’s tribute to our
former Chairman, Robert Elliott.
I was extremely saddened to learn of
Robert’s passing in December 2023
following a long and bravely fought battle
with illness.
Robert was as kind in spirit as he was
impressive in business and his loss is still
deeply felt across the organisation, by
his colleagues and friends alike. Robert’s
steadfast leadership was crucial to the
Bank safely navigating the period of
immense transformation and growth we
have just experienced and the strong
business performance in the 2023 results
is a testament to him.
Business Performance Overview
Funding
Customer Accounts
At 31 December 2023, customer accounts
of €23 billion are €1.2 billion higher
than 31 December 2022. Retail deposit
balances of €12.3 billion have increased
by 6% over the course of 2023, while
current accounts of €9.2 billion have
increased by 3%. The Bank remains
strongly funded by retail deposits and
current accounts, making up 86% of
the total funding profile and reflecting a
strong liquidity and funding position.
Lending
Total new lending in the financial year
2023 amounted to €2.8 billion, flat versus
2022.
The Irish mortgage market declined in
2023 largely driven by a drop in switching
after a strong rebound in 2022 from
the COVID-19 pandemic. Mortgage
7
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Chief Executive Review
(continued)
drawdowns in the market declined by
-14% in 2023, decreasing from €14.1bn
in 2022 to €12.1bn in 2023. 32,695 new
homes were completed in 2023, the
largest annual delivery in 15 years and
10% higher than in 2022. The pipeline
is also strong with 32,800 new homes
commencing construction in 2023, and
permission granted for over 37,600
homes.
Mortgage lending in 2023 was €2.3
billion, representing an 11% year on year
decrease outperforming the wider market,
which decreased by 14%. This resulted
in our mortgage drawdown market share
increasing from 18.5% in 2022 to 19.2% in
2023.
SME lending in 2023 was €167 million,
an 11% increase compared with 2022.
PTSB participated in both the Future
Growth Loan Scheme and the SBCI Brexit
Impact Loan Scheme. PTSB acquired the
Lombard Asset Finance business from
Ulster Bank during 2023 and it recorded
€223m of new lending.
The Group recorded gross new Term
lending of €117 million in 2023. This is a
22% increase compared to 2022.
Financial Performance Overview
The Bank reported a Profit Before Tax of
€79 million for 2023 (2022: Profit Before
Tax of €267 million, primarily due to a
one-off gain on bargain purchase being
recognised in 2022. Net Interest Income
increased by 71% year-on-year, mainly
driven by increased income on loans
linked to ECB marginal rate, growth of the
performing loan book, and the migration
of Ulster Bank performing mortgage, SME
and Asset Finance businesses. Net fees
and commission income is €42m for the
year ended 31 December 2023 which is in
line with 2022.
Operating Income
Net interest income (NII) of €620 million
has increased by 71% year on year and
our Net Interest Margin (NIM) increased
by 78bps to 2.32%. Net interest income
increased due to higher new lending, an
increase in ECB rates which impacted
tracker mortgages and increased
income as a result of the migration of the
remaining Ulster Bank businesses during
2023.
Net fees and commission income is €42m
for the year ended 31 December 2023
which is in line with 2022.
31 December 2022, on a Fully Loaded and
Transitional basis respectively.
Net other income was €6 million for 2023
compared to €5 million in 2022. Other
income is driven by sales of properties
in possession and gains on derivative
contracts.
Operating Expenses
Operating expenses excluding exceptional
and other non-recurring items of €504m
are higher than prior year, primarily due
to an increase in staff numbers during
2023, along with Performance Related
Pay increases, a one off 2% cost of
living payment for staff during 2023,
and costs associated with servicing the
Bank’s increased Branch network, and the
investment in the Bank’s brand position.
Impairment
The Bank recorded an impairment write-
back on loans and advances to customers
of €2 million for 2023, compared to a
€31 million write-back for 2022. This
reflects stability within the Irish economy
continued customer resilience to higher
interest rates and inflationary pressures.
Exceptional and other non-recurring
items
The total exceptional and non-recurring
items for 2023 are €95 million. Exceptional
costs of €31m in relation to the Ulster
Bank transaction, consist primarily of
costs around the planning and execution
of the remaining migrations completed
during 2023. Additional costs of €5 million
relates to releases of warranty provisions
held on deleveraging transactions that the
Group executed in prior years.
NPLs
Non-performing loans as a percentage of
gross loans were 3.3% at 31 December
2023, no change from 3.3% at 31
December 2022. Our customers have
continued to manage the impacts
of inflation and higher interest rate
environment during 2023.
Capital
The Common Equity Tier 1 (CET1)
capital ratio was 14% and 14.3%, on
a Fully Loaded and Transitional basis
respectively. This compares to the Bank’s
reported CET1 ratio of 15.2% and 16.2% at
The reduction of the transitional CET1
ratio (-190bps) in the year is primarily
due to increasing RWAs as a result of net
loan book growth and the migration of
remaining Ulster Bank mortgages, SME
Business, Asset Finance Business and
annual phase-in of transitional prudential
filters: Deferred Tax Assets and IFRS9.
Capital ratios remain above both
management and regulatory minima.
Business Repositioning and ‘Altogether
more human’ customer promise
In October, for the first time in over 20
years, we launched a major overhaul of our
brand and repositioned the business as a
full-service, customer-focused personal
and business bank.
In addition to launching a new brand name,
PTSB, and visual identity, we introduced a
new customer promise of being ‘Altogether
more human’. This means that we bring the
best of technology and our people together
to solve real customer needs and deliver a
better banking experience.
Being ‘Altogether more human’ represents
our commitment that we will put customer
needs at the centre of how we plan, design
and deliver for them, whether through our
voice, digital or in-personal channels, or a
combination of them all.
It is the outward expression of the positive
change already happening across the
Bank. Of the evolved culture that we are
building by living our values and promoting
an open and inclusive, risk-aware culture
that celebrates diversity and personal
development each and every day.
Of a culture of accountability, where
everyone takes ownership of their actions
in order to deliver on our Purpose of
building trust with our customers and
communities so that we can achieve our
Ambition of being Ireland’s best personal
and business Bank through exceptional
customer experiences.
Digital Transformation
Throughout 2023, we continued to invest
in improved customer experiences through
our multi-year digital transformation
programme.
8
PTSB Group Holdings plc - Annual Report 2023 We launched several enhancements to the
PTSB mobile app and desktop services on
open24.ie. This included the introduction
of Webchat service in-app, a significant
milestone in our digital service offering,
which enables our customers to self-serve
and access a new support channel when
they need it.
Elevating our social impact is a key priority
for PTSB.
Indeed, given our deep roots in
community banking across Ireland which
stretch back over 200 years, connecting
with our local communities in a meaningful
way is a fundamental aspect of our DNA.
In a global banking first, we introduced
'PTSB Protect' in October, a new feature
to our banking app which will help prevent
customers falling victim to fraudulent
scams.
We demonstrate this through various
initiatives including our Community Fund,
our Community Partnerships, National and
Regional Sponsorships, Schools initiatives
and Volunteer Partners.
We were delighted to win the overall
Grand Prix award at the 2023 FS
Awards, in addition to the Innovative
Banking Product award for our PTSB
Digital Mortgage Portal which provides
customers with a fully digitised mortgage
application process.
Winning these awards was a fantastic
endorsement of our digital transformation
strategy and our ‘Altogether more human’
customer promise in action.
Sustainable Business Growth
Delivering sustainable profitability and
incorporating Sustainability into our
business practices and strategic decisions
remains a key priority for the Bank.
Throughout 2023, we have continued
the strong and steady progress of recent
years across the four pillars of our
Sustainability Strategy.
We are continuing to support our
customers in navigating the transition to
a low carbon economy with the Bank’s
Green Mortgage offering accounting
for c.30% of our new lending. We are
committed to expanding our green
customer propositions and look forward to
participating in the SBCI Retrofit Scheme
this year.
In July, we issued our first Task Force
on Climate-related Financial Disclosures
Report (TCFD) Report to the market,
demonstrating the progress we are
making on integrating consideration
for climate-related and environmental
risk into all areas of our business. We
also completed a programme of work to
understand our carbon impact across
Scope 1, 2 and 3 (including our financed
emissions) and received limited assurance
on our data.
We were extremely proud to donate
€300,000 to our 2023 Community Fund
partners, which included €150,000 in
matched funding by the Bank. Through
our partnership with Ó Cualann Cohousing
Alliance, we support the development
of affordable housing schemes in
communities across the country. Through
our partnership with LIFT Ireland, we
support in funding the delivery of training
to over 35 charities and 40,000 secondary
school children, to strengthen their skills
and become stronger and better leaders
in their communities.
In recognition of our efforts across
the Sustainability agenda, we were
honoured to recertify to the Business
Working Responsibly Mark (The Mark)
from Business in the Community Ireland.
The Mark is an external accreditation
recognising best in class Responsible
Business Programmes in Ireland and as
such, PTSB joins a prestigious group
of only 40 other companies who have
achieved this accolade.
Outlook
An important milestone in 2023 was the
designation by the Central Bank of Ireland
(CBI) of PTSB as an Other Systemically
Important Institution (OSII).
This is an important development which
serves to illustrate the extent of the
progress being made by the Bank in
achieving greater scale and returning to
sustainable and consistent profitability.
As the Chair stated in her review, the Bank
has become a much bigger Bank, with
more customers, more branches, a wider
product offering, a stronger competitive
proposition and an attractive platform for
significant growth.
However, being a responsible, sustainable
organisation about more than being green.
It is encouraging to see the extent to
which PTSB has successfully returned to a
sustainable growth trajectory.
This has been achieved through a
combination of organic and acquisition-led
growth, building on our key strengths as
a community serving the community and
all the time seeking to fulfil our purpose
of building trust with our customers and
communities.
Over the past number of years we have
cemented our position as an attractive
and secure home for customers who
wish to entrust their deposits with us; as
a competitive and innovative provider of
mortgages, personal loans, car loans and
credit cards; as a trustworthy provider
of reliable payments services; and, more
recently, as an emerging force in business
banking, augmenting our existing business
offering with the additional skills, wider
product range and larger customer base
that have transferred to PTSB from Ulster
Bank.
We will continue to build on this
momentum, and through investment in
our people, our branches and our digital
capabilities, we will be well placed to
become an even greater competitive
force.
And while we must always be mindful
of the challenges and threats that wider
economic conditions can surface, not
least a more challenging interest rate
environment and persistent cost of living
pressures, the strength of the Bank’s
proposition, the quality of our service and
our commitment to our customers can
give us grounds for confidence as we
continue our growth story.
I want to echo the Chair’s remarks praising
our colleagues for the work they put in
to making PTSB a better Bank and an
institution we can rightly be proud of. We
are resolutely committed to delivering for
our customers, for the Irish economy and
for our shareholders in 2024 and beyond.
Eamonn Crowley
Chief Executive
9
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
In compliance with the recently enacted
Assisted Decision-Making (Capacity) Act
2015, we have enhanced our procedures
for assisting vulnerable customers,
modernized our internal systems and
cultivated effective relationships with
relevant government bodies. In response
to meeting the needs of customers who
require additional assistance, we have
established a dedicated Vulnerable
Customer Support Unit, aimed at
providing unwavering support to both our
valued customers but also our frontline
staff.
Market and Regulatory Context
Retail Banking Trends in Ireland
2023
Over the past year, PTSB has undergone
significant transformation, successfully
migrating €6.75 billion in assets
from Ulster Bank, welcoming 88,000
new customers, and completing a
comprehensive bank rebranding. These
initiatives have firmly established
our position as the third-largest full-
service retail bank in Ireland, marking
substantial progress in terms of scale
and diversification. Our focus now lies in
realising our ambition to become Ireland's
premier personal and business bank,
driven by our commitment to delivering
exceptional customer experiences
through our Brand Promise of leveraging
technology and human expertise to
address genuine customer needs and
enhance banking experiences.
In 2022, the European Central Bank
responded to inflationary pressures
by ending a prolonged period of low
interest rates, a trend that continued into
2023. The ECB announced a total of ten
interest rate increases from July 2022
to September 2023, bringing the main
borrowing rate to 4.50%. The deposit rate,
previously in negative territory, rose to
4.00%, while the marginal lending facility
reached 4.75%. This series of rate hikes
marked the first significant adjustment
since 2011, signalling a notable shift in the
interest rate landscape.
In the mortgage market, a contraction
persisted throughout 2023, primarily
attributed to a decline in switching
activity. Consequently, the market
projection adjusted to €12.2 billion - €12.5
billion, representing a substantial drop
from the initial estimate of €14.0 billion.
Market pay-outs stood at €8.8 billion by
the end of September 2023, marking a
year-on-year decrease of approximately
9%, primarily driven by a decline in the
switcher market. This trend is expected
to continue into the first half of 2024,
influenced by a fall in application and
approval rates, which have fallen by 2%
and 8% respectively year-on-year. These
factors, coupled with the impact of ECB
interest rate increases on the broader rate
environment, are anticipated to temper
growth in the mortgage market.
PTSB continues to make substantial
strides in its digital banking journey,
aligning with increasing customer digital
expectations in 2023. With c.38,000 new
current accounts opened, 54% of which
through the mobile app, our customers'
adoption of digital channels has surged.
Card payments have seen a 31% year-
on-year increase, with mobile payments
increasing to 48 million in 2023, an 87%
rise from 2022. Digital channel usage
remains on an upward trajectory, with
159m logins on our App and Website
facilitating product applications totalling
137k in 2023. PTSB has been recognised
with the Best Current Account and Best
First-Time Buyer Mortgage awards by
Bonkers.ie, in addition to receiving the
Financial Services Loyalty Programme/
Initiative of the Year at the 2023 Irish
Loyalty & CX Awards.
PTSB remains committed to delivering
exceptional experiences to its customers
by leveraging technology and human
interaction through our extensive network
of 98 branches, intermediary channel
and digital & voice channels. We continue
to evolve our channel mix by investing
in self-service digital channels while
maintaining the crucial role in-person
channels (branch & voice) plays in on-
boarding, lead generation & supporting
customers that fall off digital journeys. In
2023, we continued to update our digital
capabilities offering current accounts,
mortgages and business banking through
our voice and digital channels.
At PTSB, we are committed to fostering
openness, inclusivity, and to deliver
an exceptional experience to all our
customers and communities, especially
those in our communities that might
require additional support or are
vulnerable. Supporting vulnerable
customers is not just a moral obligation;
it is also a reflection of our commitment
to fairness and inclusivity. By prioritising
the needs of vulnerable customers we
not only enhance their financial wellbeing
but also strengthen our commitment in
building trust within our communities.
10
PTSB Group Holdings plc - Annual Report 2023 “ PTSB launched
its new Asset
Finance business
which migrated
from Ulster Bank
at the end of
July 2023. This
expansion allows
PTSB to provide
a wider range of
finance options
to our Customers
and will be a vital
component of our
SME proposition
going forward.”
Business Banking Trends in Ireland
2023
The Irish economy has shown robust
recovery from the pandemic; however,
the onset of inflationary challenges
following the beginning of the Ukraine war
has introduced a new set of challenges
for business owners to navigate in
early 2023. As interest rate movements
began to stabilise in late 2023, many
businesses are eager to plan ahead, by
stabilising their cost base and capitalising
on returning customer demand. Key
sectors driving growth in new lending in
2023 include hospitality, manufacturing,
wholesale, and retail. SMEs are effectively
managing their business models through
innovation and automation, with a focus
on sustainability to enhance business
performance. Noteworthy developments
fostering growth in the sector include
initiatives such as the Growth &
Sustainability Loan Scheme (GSLS) by the
Strategic Banking Corporation of Ireland
(SBCI). The SBCI loan guarantee schemes
have been instrumental in enhancing the
bank's reputation in the SME market and
driving growth across all existing product
ranges.
Critical challenges faced by many SMEs
are linked to tight labour markets and
skills shortages, with the Irish economy
nearing full employment with 2.6 million
people now employed. Inflation and
interest rate hikes stabilized in 2023, with
growth forecasted for the Irish economy
in 2024, outpacing most other European
economies. The SME economy also
benefits from significant Foreign Direct
Investment in Ireland, with Multinational
Companies (MNCs) continuing to invest
and expand their footprint in the only
"English-speaking" economy in the EU.
Irish SMEs play a crucial role in the value
chains for those MNCs that choose
Ireland as a business hub.
The continuation of energy support
schemes for business owners is welcome
as they seek to manage the higher
energy costs and the overall cost of doing
business in the current climate. Relief is
expected in 2024 as wholesale energy
prices have decreased in recent months.
PTSB has continued to grow its business
lending activity through the period while
providing timely support to borrowers in
financial difficulty. The Bank increased
its new SME loan activity by 14% in the
year despite overall lending to the SME
market experiencing a decrease in 2023
compared to 2022. The business lending
portfolio is well spread across industry
sectors with continued investment in
our capabilities. During 2023 we have
grown our Business Banking customer
base though the migration of a micro
SME portfolio and Asset Finance team
from Ulster Bank. The Bank has also
bolstered its Business Banking team with
experienced specialists to support the
market and position PTSB as one of the
top three Business Banks in the market.
PTSB launched its new Asset Finance
business which migrated from Ulster Bank
at the end of July 2023. This expansion
allows PTSB to provide a wider range of
finance options to our Customers and
will be a vital component of our SME
proposition going forward. Business
demand for Asset Finance has remained
strong through 2023 although there is
some evidence of higher interest rates
starting to impact on demand towards
the end of the year. We have continued
to finance assets across a wide range of
sectors including transport, agriculture,
and manufacturing. Consumer demand
for car finance, which we service via our
appointed Motor Dealers has remained
strong throughout the year.
11
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Our Strategy, Business Model and Culture
Introduction
2023 marked the beginning of a new chapter in the Bank’s
history. Having successfully de-risked the Balance Sheet through
a number of critical transactions in the preceding years, the
Management Team oversaw the acquisition of new retail and
SME Business from Ulster Bank, as it exited the market. This
transformational acquisition provides additional scale and
capabilities, and has established PTSB as the 3rd Pillar bank in
Ireland. Together with a strong capital position and stable NPL
ratio, the Bank has a new platform from which the company can
grow profitably.
Acknowledging this exciting new period of growth, the Bank
has undertaken a review of key organisational processes and
foundational capabilities, to ensure readiness to maximise the
opportunities arising from a reduction in the number of Banks
operating in the Irish market. This review resulted in a new
Strategic Direction for PTSB, and includes a multi-year phased
approach to transforming the Bank into a ‘Market Leading Retail
and SME Bank in Ireland’.
Our Business Model
The 10 year view for the Bank is to
be a full service Retail and SME Bank,
operating exclusively in the Republic of
Ireland. The Bank will move from being
a predominantly Mortgage focused
operation, to one that increases its share
of Consumer Term Loans, Credit Cards,
SME, Asset Finance and Overdrafts.
Management will focus on technology
investments and driving operational
efficiencies, to ensure a sustainable cost
base.
Customer retention and deepening
existing customer relationships will be
a key focus for the Bank, leveraging the
c.1.3 million customer relationships that
already exist. We will increase investment
in Digital channels, allowing customers to
engage on routine tasks via web and app.
This will release capacity in our Branches
and Contact Centres, to assist customers
with more complex sales and servicing.
In doing so, the Bank aims to offer an
enhanced Customer Experience at a fair
price.
The Bank is expected to remain a
predominantly ‘Deposit Led Lender’,
reducing further its reliance on external
wholesale funding, while continuing
to meet all Regulatory Funding
Requirements, in as efficient an Issuance
strategy as possible.
Delivery of the Strategic Direction will
take place in 3 phases; 1. Strengthen
foundations to enable future growth; 2.
Optimise offerings and make selective
investments to deepen customer
relationships, and; 3. Accelerate growth
and diversification.
The current focus for the Management
Team, under phase 1, is uplifting our
organisational capability and culture,
ensuring compliance with all regulatory
obligations, including our expected
transition to ECB/SSM Supervision,
delivering all mandatory and critical
enhancements and investing in areas that
will deliver simplification and superior
customer experiences.
12
PTSB Group Holdings plc - Annual Report 2023 Our Strategy
PTSB is a full-service Retail and SME bank, operating in the Republic of Ireland. We provide our customers with a digitally-led
experience supported by a nationwide branch footprint, helping our customers in person when they need our sales support. We offer
the right products and propositions, at the right price, with strong market share in our target segments.
We have a clearly defined Purpose, Ambition, Brand Promise and set of Values.
Our Purpose
Working together to build trust with our customers and communities
Our Ambition
To Be Ireland’s best personal and Business Bank through exceptional customer
experiences
Our Brand
Promise
Our Values
Altogether More Human
Customer
Focus
Straight-
forward
Courageous
United
Open
Our Strategic Priorities
The Bank is aligned and committed to delivering its Strategic Priorities.
Sustainable
Business Growth
Connected Customer
Experience
Secure & Resilient
Foundations
Cultural
Evolution
Delivering sustainable
profitability and
incorporating Sustainability
into our business practices
and strategic decisions
Combining the best of
technology and our people
together to deliver an
‘All Together More Human’
customer experience
Investing in core capabilities
in order to protect our
customers and our
colleagues
Living our values and
promoting an open and
inclusive risk aware culture
that celebrates diversity and
personal development
We have the right people in
the right roles and build our
workforce capability for the
future in the right areas
We prepare ourselves for
SSM supervision: managing
change effectively to
meet all future regulatory
obligations, and delivering
within our strategic, risk and
financial boundaries
We differentiate ourselves
through exceptional
Customer experiences and
use data and insights to
expand existing customer
relationships and drive
business growth
We broaden our personal
banking propositions in line
with changing customer
needs and grow our
business banking and Asset
Finance business lines
We keep the Bank secure
and resilient through
effective risk management
across the three lines of
defence
We deliver on our Diversity,
Equity and Inclusion
commitments and
consistently challenge our
thinking in this area
We manage capital carefully
by focusing on growth with
our key customer segments;
and, generating organic
capital through sustainable
profitability
We manage product margins
to protect our sustainable
business model and deliver
consistent returns for our
Shareholders. We are a
‘deposit-led’ lender, with a
consistent focus on growing
retail deposits
We incorporate
Sustainability into our
business practices and
strategic decisions, while
managing our exposure to
Climate and Environmental
risk
We offer our customers
exceptional digital channels
for their everyday banking
needs and provide superior
personal services for their
bigger financial decisions
We reduce our cost base by
transforming the way our
business operates aligned
to our customers’ needs
We build a culture of
accountability, where
everyone takes ownership
of their actions in order to
further build trust with each
other and our customers
As we look to the future with a refreshed set of Strategic Priorities, we reflect in more detail on some of our strategic achievements in
2023.
13
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Our Strategy, Business Model and Culture
(continued)
2023 Strategy Achievements – Customer
We build a deep understanding of our customers with defined strategies for key segments. We develop sustainable propositions
which meet our customers’ needs, supported by fair and transparent pricing. We continuously seek to reinforce our position with our
customers as a recognised and trustworthy brand.
38,000
New Current Accounts
€2.3Bn Mortgage Drawdowns
Participating Bank in the government-
backed ‘First Home Scheme’ A shared equity
scheme aiming to bridge an affordability gap
by providing first time buyers with part of the
purchase price of their home, in return for a
minority equity stake
Green Mortgages accounting for c.30% of
total mortgage drawdowns in 2023.
11% growth in SME lending
Winner of ‘Best Innovation’ award for PTSB
Protect at the Bonkers.ie National Consumer
Awards 2024
Online Switching Hub launched
to better support customers seeking a move
to PTSB
2023 Strategy Achievements – Profitability
We manage our assets and sustainable capital base in a way which protects and generates value for the Bank and our shareholders.
We embed a cost-aware culture at all levels of the organisation, eliminating waste where we see it.
Underlying Profit for the year is €166m,
increasing from €45m in 2022
Net Fees & Commission income of €42m
Winners of ‘Best Procurement External
Collaboration Project’ & ‘Best Procurement
Transformation Project’ awards at the 2023
National Procurement Awards
€1.6bn of the remaining assets successfully
migrated from Ulster Bank to PTSB in 2023
NPL Ratio of 3.3% at YE 2023
in line with 2022
14
PTSB Group Holdings plc - Annual Report 2023 2023 Strategy Achievements – Digital
We provide capabilities and propositions for our customers which combine digital with a human touch. We have a robust digital
platform, and continue to focus on renovating and integrating existing systems. Enhanced analytical capabilities support improved
customer engagement and generate customer-focused insights.
New Scalable & Resilient Digital Servicing
Platform launched for customers with
corresponding Mobile Application to follow in
H1 2024
SME Online Current Account application
introduced
c.637,000 Active Digital Customers
54% of new Current Accounts opened
Digitally, and 96% of Term Lending
Applications completed Digitally
‘Innovative Banking Product Award’ winner
for our Digital Current Account at the 2023
FS Awards
2023 Strategy Achievements – Simplification
We drive end-to-end automation in order to: reduce manual risk; generate resource and capacity efficiencies; and, improve overall
customer and colleague experience. We continuously adapt and improve our internal processes and customer journeys.
c.1.9m fewer paper statements issued
annually with the launch of e-Statements for
Credit Card customers
35% growth in Robotic Process Automation
outputs from existing processes
Launched a streamlined digital application
process for Credit Cards and Overdrafts
Rollout and Embedding of a new internal
Change Management Model
2023 Strategy Achievements – Culture
We inspire a customer-centric, open, inclusive, risk integrated, growth culture, where diversity is encouraged and celebrated. We
empower all colleagues to develop as leaders, fostering a mind-set of leadership in all teams. We recognise and embrace the role we
play in the community of accountability and risk awareness at both a local and national level.
Title Sponsorship of Team Ireland for the
2024 Olympics and Paralympics
226 former Ulster Bank colleagues joined
our team in 2023
Over 2,300 Nominations received for our
Annual ‘Values In Practice’ (VIP) Awards
Winner of ‘Best Community or Charity
Engagement’ award for the PTSB
Community Fund at the Bonkers.ie National
Consumer Awards 2024
Launch of PTSB Archive and heritage
website to celebrate and reflect on over 200
years of banking history in Ireland
66% of colleagues availing of Smarter
Working arrangements…
…Our approach was recognised at the 2023
CIPD HR Awards, with PTSB winning the ‘Best
Hybrid and Flexible Workplace’ Award
15
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Our Strategy, Business Model and Culture
(continued)
Looking Ahead – Our Business Model and Strategy 2024-26
PTSB is a full-service Retail and SME bank, operating in the Republic of Ireland.
We provide our customers with a digitally-led experience supported by a
nationwide branch footprint, helping our customers in person when they need our
sales support. We offer the right products and propositions, at the right price, with
strong market share in our target segments.
2023 has been a transformational year for PTSB, primarily due to the migration
of remaining business assets from Ulster Bank Retail. The completion of the
migration of assets in 2023 marked the beginning of a new phase in the Bank’s
200+ year history in Ireland.
As a result of the acquisition, and to ensure that we embrace the opportunities
afforded to us by both our own organic growth success to date, as well as the
broader exit of Ulster Bank and KBC from the Irish Retail Banking sector, we
refreshed our Strategic Priorities in Q4 2023.
Connected
Customer
Experience
Sustainable
Business
Growth
Secure &
Resilient
Foundations
Cultural
Evolution
Target Outcomes
• We have sustainable
business practices and are
committed to real reduction
of our carbon footprint.
• We accelerate and enhance
our customer propositions
through partnerships.
• Data is used to create
insights and to drive our
decision making.
• We deliver consistent
returns for our shareholders
by delivering an exceptional
customer experience.
Target Outcomes
• Our culture is open, diverse
& inclusive, risk integrated,
customer and growth
focused.
• Modern skillsets are forged
and developed internally.
• We have a technology
enabled workplace
which helps colleagues
better meet the needs of
customers.
Our Strategic Priorities 2024-26
Target Outcomes
• Our Customers are at the
heart of everything we do.
We offer them the products
and services they need,
when they need them.
• Our services are digitally
enabled with a human touch.
• We are recognised by our
customers as the best
Personal and Small Business
bank, as measured through
NPS and Trust scores.
Target Outcomes
• We have a robust, secure
and resilient operating
environment that protects
our customers and
colleagues.
• A Continuous improvement
and nimble approach to
change allows us to adapt
and learn.
• Internal and customer
journey processes are
automated and simplified
to the benefit of customers
and colleagues.
16
PTSB Group Holdings plc - Annual Report 2023 Our Culture – Bringing the Lived Experience to Life
At PTSB, we describe our culture as the way
we do things: We are Open. We are Inclusive.
We build trust. We are One PTSB.
new brand repositioning and business
strategy to better reflect the enhanced
position of our Bank in the Irish market
and our growing ambitions for the coming
decade. In repositioning the Bank for the
future, and we rebranded from Permanent
TSB to PTSB. Our new brand promise,
‘Altogether More Human’, underpins our
brand position, where we bring the best
of technology and our people together
to solve real customer needs and deliver
a better banking experience. Aligned to
our new brand and business strategy,
our CEO, together with our Executive
Committee and Board, evolved our
Purpose and our Ambition:
Our Purpose:
‘Working together to build
trust with our customer and
communities’
Our Ambition:
‘To become Ireland’s best
personal and business bank
through exceptional customer
experiences’.
Living our values and managing risk builds
trust. We nurture an accountable and
supportive workplace where everyone is
encouraged to contribute meaningfully,
as we become Ireland’s best personal
and business bank through exceptional
customer experiences. We are committed
to creating a supportive and inclusive
environment where everyone is welcome
and respected. When colleagues can be
their authentic selves they bring their
best selves to work. This creates better
experiences for all colleagues and leads to
leads to exceptional experiences for our
customers.
With the launch of our refreshed business
strategy and repositioned brand, we
also reviewed and simplified Our Culture
Charter, such that all colleagues have a
consistent understanding of our culture
and the expectations of them. Our
Simplified Culture Charter reflects our
evolved Purpose and Ambition, as well as
our Brand Promise. We have advanced
from our Culture Ambition to a Workplace
Culture Statement which is a simple and
straightforward declaration that describes
how people should behave and work
together at PTSB. It sets out our Purpose,
Values and beliefs that guide colleague
interactions to support the delivery of our
Ambition. Our 12 culture enablers help to
nurture and improve our culture.
Culture is the DNA of a company. Our
culture shows up in our behaviours - how
we work, how we treat our customers
and each other, what we focus on, and
how we live our Values. Our culture is
unique and special. It makes us who we
are – Friendly, customer and colleague
focused, inclusive and caring. We manage
risk and comply with regulations, where
everyone works to meet our goals and
are proud of the part they play. Every
colleague influences our culture at PTSB
- How we each think, behave and act
makes a difference here. A great culture
brings people together by imparting a
strong sense of meaning, direction, and
passion. Our Culture unites us together
as one team to deliver for our customers.
We have been continuous and proactive
in working to improve and evolve our
culture since 2015; keeping and enhancing
the elements that make us unique and
special, whilst altering any aspects that
don’t align with our Values and Purpose.
We have a made a lot of progress and
know that there is more to do to reduce
the behavioural inconsistencies across the
Bank.
Our cultural evolution is a strategic priority
as it influences how people experience
our Bank; what it’s like for customers to
engage with us, for our colleagues to work
with us and for our communities to live
with us. At PTSB, we describe our culture
as the way we do things. Our goal is to
create a culture of building trust, where all
colleagues have a consistent experience
regardless of their role, tenure, location,
ways of working or function. Our culture
is made up of our Purpose, Ambition and
Values. Our Values are articulated through
behaviour articles, which help colleagues
to understand how to role model our
Values. Through our behaviours and the
way colleagues work together to support
our customers and our community we live
our Values. They are demonstrated in how
we handle day-to-day operations, our
everyday communication and tasks that
create the PTSB way of doing things.
In 2023 following the completion of the
migration of substantial parts of the
business of Ulster Bank, we launched our
17
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Our Strategy, Business Model and Culture
(continued)
Everything we are doing to improve
our culture comes down to one simple
goal – Creating Psychological Safety.
Psychological safety is a belief that
one will not be punished or humiliated
for speaking up with ideas, questions,
concerns or mistakes. By building a Bank
where colleagues can be themselves,
where they can be at their best, where
their contribution is encouraged and
valued, and where they are welcomed,
respected, recognised and supported, we
will consistently deliver ethical decision
making, fair customer outcomes and risk
management in everything that we do.
2023 Culture Reflection
2023 represented a landmark moment in
the history of the Bank, as we continued
to welcome hundreds of new colleagues
and thousands of new customers through
the acquisition of various elements of
Ulster Bank. From the outset, the cultural
migration strategy was to integrate our
new colleagues to the Bank, and create
a ‘One PTSB’ ethos as we move forward
together to deliver on our evolved
Purpose and Ambition. We are building
a responsible & sustainable business to
deliver for our customers, colleagues
& communities. We are committed to
building on the cultural improvements
made and sustained, and to achieve our
espoused culture.
We are making improvements to our culture:
Our Purpose and Values continue
to resonate with colleagues
• Over 93% of colleagues tell us that they understand our Purpose and Values.
(Source: Every Voice Counts 2023).
We have improved our culture Index
• It is 81% (+1% year on year); however we have inconsistencies by function that
must be addressed (Source: Every Voice Counts 2023).
We are improving Gender Pay Gap
• It is 15.9% compared to the national average of 11.3% (Source: Eurostat 2022).
• We have committed to achieving 50:50 at senior management level upwards by
2025.
We have been awarded the Gold
accreditation from the Irish Centre
for Diversity.
• We were awarded the Gold accreditation from the Irish Centre for Diversity in
2023. PTSB was the 12th company in Ireland to receive the Gold award. This
award recognises PTSB’s progress in Equality, Diversity and Inclusion, including
[60:40] gender diversity at Board.
We have increased Trust in our
Bank
• 82% of colleagues trust PTSB to do the right thing (+1%) (Source: Every Voice
Counts 2023).
• We won the CIPD Award for Diversity & Inclusion, and the Workplace Excellence
Award for Diversity & Inclusion in 2023.
Our colleagues have told us that our Purpose and Values resonate strongly with them (93% of colleagues understand our Purpose
and Values [EVC 2023].Colleagues understand their role and want to serve customers, and they believe that the leadership team is
moving the Bank in the right direction.
Our Purpose
Working together to build trust with our customers and communities.
Our Ambition
Our Promise
To become Ireland’s best personal and business bank through exceptional customer experiences.
Altogether more human.
We are open. We are inclusive. We build Trust. One PTSB.
Our Values
Lived Every Day through Our Behaviours
Customer Focus
We take due care
and consideration
for our customers
always.
Courageous
We Speak Freely
without fear
of negative
consequences &
welcome diverse
perspectives to
mitigate group
think.
United
We reinforce
accountable
leadership through
our behaviour.
Open
We innovate and
continuously
improve.
Straightforward
We aim to get it
right first time
every time.
We have continued to focus on improving our culture by embracing the enablers and being committed to identifying and over-coming
the blockers. Our dynamic culture diagnostic, enables us to include transparent tracking, measurement and reporting of Engagement,
Culture and eNPS on a sustained basis as part of our Risk Appetite.
18
PTSB Group Holdings plc - Annual Report 2023 We have 12 cultural enablers
which help shape and guide
our cultural journey, and
include:
Living as Leaders - Join the
Conversation
2023 marked the fourth year of our
partnership with LIFT Ireland (Leading
Ireland’s Future Together). Our Living
as Leaders Programme is designed to
support colleagues in role-modelling
our Values through their actions and
words aligned to our Purpose and
Values. Since we launched the Living as
Leaders Roundtables in 2020, almost
2,000 colleagues have participated.
This programme isn’t about titles or
positions; it’s about embracing a growth
mind-set and being open to improving
how our colleagues do things for
themselves, each other, our customers
and our communities. By utilising the self-
reflective roundtable table approach with
our behaviour articles, colleagues become
more self-aware of their own actions and
characteristics. Our Values guide the
behaviours we expect of our colleagues.
Behaviours practiced over time become
habits, which in turn become mind-set.
We believe that the consistent actions
and behaviours of everyone, every day
is essential in creating a better future for
one another and for our Bank. Our Living
as Leaders Programme is foundational in
influencing our culture, and is included
in our Induction Programme for all new
joiners.
LIFT Ireland is a Not for Profit Organisation
with a vision to make Ireland a better
place to live by creating better leaders
across our society and in our communities.
LIFT’s philosophy aligns closely with that
of PTSB’s, as they believe that each of us
is a potential leader; whether that is within
our families, our peer groups, our schools,
our sports teams or our businesses.
LIFT believe that by developing personal
leadership qualities within each individual,
we can develop a generation of stronger
and better leaders.
We have further expanded on our
partnership with LIFT Ireland to become
one of five sponsors of their ‘Changing
futures for the better – Schools Initiative’.
LIFT are already active in over 300
of Ireland’s secondary schools where
students and teachers have adopted
the LIFT Ireland Programme, with the
curriculum being delivered to more than
17,700 students in communities across the
country.
“The standard and quality of Leadership, true leadership at every
level, is fundamental to navigating all of us and our business
to a better place. Leadership isn’t about a title, the level you
are at, length of service or the size of the office, Leadership is
the creation of positive energy to bring about an outcome that
otherwise would not have happened”.
Ger Mitchell, Chief Human Resources and Corporate Development Director
“At PTSB we are Altogether More Human, where we bring the
best of technology and our people together to solve real customer
needs and deliver a better banking experience. PTSB has been
a proud partner of LIFT Ireland since 2020. At the heart of our
purpose is a commitment to work together to build trust with our
customers and our communities. This trust is earned through the
decisions and actions we take on a daily basis. How each of us
at PTSB lives our Values each day directly impacts that trust. We
believe that the more we consistently live our Values through our
behaviours, the further we will progress in building trust with our
customers. This is a fundamental part of our roles as members
of the PTSB community serving its community. Colleagues from
every team, and all levels across the Bank, participate in LIFT
roundtables. This allows each of us to reflect on our behaviours,
which in turn helps us to consistently role-model our Values
through our actions and words, living as leaders every day.”
Eamonn Crowley, CEO
Speak Freely – Change Behaviour By
Starting The Conversation
Our goal is to evolve our culture to ensure
that our colleagues feel psychologically
safe and empowered to share their voice.
As an organisation, we are striving to
grow a Speak Freely environment where
it is safe and acceptable to raise genuine
concerns about practices, processes
or behaviours that do not meet our
standards or align with our Purpose.
Our progress in creating this culture is
measured through our Every Voice Counts
(EVC) Survey and our Micropulse survey
which ask the question “where I work,
people can share their opinion without
fear of negative consequences”, which
held the EVC scoring at 76% from 2022 to
2023. In addition we monitor the usage of
the Speak Freely procedure and include
this in our KRI reporting, which particularly
focuses on a key indicator of trust –
that colleagues feel confident to raise
concerns in a non-anonymised manner.
Our Speak Freely Procedure protects
colleagues who wish to raise a concern or
to make a protected disclosure, relating
to actual or potential wrongdoing in the
workplace, and ensures that they can
do so without any fear of retribution
or penalisation. We have a number of
different channels through which a
concern can be raised. The Bank has
in place procedures to deal with any
protected disclosures that may arise as
part of Speak Freely and reports to the
Executive Committee and Board on a half
yearly basis.
To continue our embedding plan, in 2023
we delivered a number of initiatives to
further educate, track and highlight
examples of speaking up, including:
• Training People Managers and Speak
Freely Champions on Speak Freely and
Protected Disclosure procedures, and
colleague conduct.
• Completion of Colleague Conduct
Training by all colleagues which
included further awareness and focus
on Speak Freely.
19
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 “ At PTSB we are
fostering a culture
of recognition,
enabling
colleagues to
recognise each
other from across
the organisation
who are living
the Bank’s Values
and are making a
positive impact to
our business, our
customers and our
community.”
Our Strategy, Business Model and Culture
(continued)
Business Partnering, People Experience,
Group Technology and Facilities. This
Working Group supports the ongoing
review of Hybrid Working arrangements
for colleagues under the mentioned
pillars and address colleagues’ needs. A
Micropulse survey was conducted in 2023
which saw a positive scoring response
of 22 eNPS from colleagues, an increase
from 9 in the Bank’s 2022 EVC survey.
Feedback from the survey is raised with
the appropriate stakeholders and areas
of concern are reviewed to understand
what steps need to be taken to address
colleague feedback. These actions will
form part of the 2024 Hybrid Working
review.
As the world of work continues to evolve
and the pace and impact of digitisation
continues, we are placing our customers,
colleagues and communities at the centre
of our decision making to ensure that we
continue to build trust and make a positive
impact in their lives.
Values in Practice Awards
At PTSB we are fostering a culture of
recognition, enabling colleagues to
recognise each other from across the
organisation who are living the Bank’s
Values and are making a positive
impact to our business, our customers
and our community. We have two
‘Values In Practice’ or ‘VIP’ recognition
programmes available to celebrate the
great examples of colleagues living our
Values in work and in our communities;
(1) Annual VIP Awards (which enables
colleagues to recognise the outstanding
contribution of individuals during a fixed
nomination period), and 2) VIP Every
Day Recognition (which is available all
year around enabling colleagues to say
thank you every day. With over 2,400
nominations received, 2023 marked the
highest level of recognition to date since
the VIP Annual Awards were launched
six years ago. Colleagues from all across
the organisation were recognised
by their peers under our five ‘Values’
categories, and the additional categories
of Community Impact Award and Living as
Leaders Award. There has been 2,037 VIP
Everyday’s sent so far in 2023, which have
been received by over 1,722 colleagues.
• Embedding of the Irish Banking Culture
Boards’ DECiDE Framework on ethical
decision making and the Bank’s Team
Culture Charter,
• Regular Reporting on Speak Freely
concerns to the Board, and
• Developing and sharing of Speak
Freely Management Information with
colleagues and acting on feedback from
the bank-wide Every Voice Counts and
‘Speak Freely’ Micro-Pulse survey and
subsequent focus groups.
Ways of Working (Hybrid Flexible
Working)
In 2020 the Bank introduced a Smarter
Working Programme to enable optionality
and to provide more flexible ways of
working for colleagues, while encouraging
the use of a broader range of technology
at all levels of the organisation.
Through our Flexible and Hybrid
Working programme, we sought to
create a reimagined, customer-centric
PTSB work environment which fits our
strategic design criteria across the areas
of Organisational Design, Property,
Technology and New Ways of Working.
Our Smart Working Framework includes
range of options available such as:
reduced hours; job sharing; compressed
hours; sabbaticals and career breaks;
home working or working from an
alternative office location.
Over 1,160 colleagues have opted for
Smarter Working in the Bank. To support
smarter working, we have rolled out
several initiatives to enable adoption
including Infographics, Team Commitment
Charters, Collaboration Zones, Colleague
Kit Personas and Kits, new Ways of
Learning, and a No Meeting Slot.
Throughout 2023 we have continued to
evolve our Flexible & Hybrid Workplace
to a work environment that is fit for now,
and fit for the future, enabling improved
flexibility and choice for a great colleague
experience. We have created three
dimensions of the Flexible & Hybrid
Workplace that we consider, cohesively
integrate, coherently communicate, and
consistently monitor through adoption and
embedding: Physical Dimension [Where
we work], Digital Dimension [Tools for
work] and Behavioural Dimension [How
we work].
Whilst continuing to enable the Flexible
& Hybrid Workplace in 2023, a Hybrid
Working Group was established
comprised of representatives from HR
20
PTSB Group Holdings plc - Annual Report 2023 People Experience Council (PEC)
As a group of leaders within the
organisation, across multiple levels and
functions, PEC members are empowered
and mandated by their ExCo member to
work with teams in their area as they seek
to drive and support positive cultural and
behavioural change. The PEC members
listen to elevate colleague feedback and
work to support the culture evolution
in their function to address behavioural
inconsistencies across the Bank, and
to improve trust with our customers. As
respected colleagues both in their division
and across the bank, they lead the
development of their Every Voice Counts
(EVC) action plans to address areas of
improvement.
The Irish Banking Culture Board
(IBCB)
Established in 2018, the IBCB is an
independent industry initiative funded by
the three retail banks in Ireland. Its aim
is to rebuild trust in the sector through
demonstrating a change in behaviour
and overall culture. As one of the three
member banks, PTSB is committed to its
mission of re-building trust in the banking
sector supporting its programme of
work, including colleague participation in
the listening sessions on the role of the
IBCB. The Bank also supported and co-
facilitated a number of Financial Resilience
training sessions with Safe Ireland key
workers, under the IBCB partnership with
the TASC and Safe Ireland for a Financial
Awareness. Safe Ireland identified serious
issues of financial illiteracy observed with
domestic abuse victims, and this training
will support the victims’ ability to empower
themselves.
We also continued embedding the
IBCB’s DECiDE (Ethical Decision Making)
framework, as part of our Code of Ethics.
The DECiDE framework acts as a practical
guide and tool for colleagues, regardless
of level, when making difficult decisions
on a day-to-day basis. We look forward to
continuing our work with the IBCB in 2024
and beyond, as we work hard to re-build
trust in the banking sector together.
In 2023, we participated in the IBCB Éist
Staff Survey to continue to listen and act
upon the feedback from our colleagues on
culture within the Bank and the industry
as a whole. Éist is an Irish language word
which means listen. The IBCB expressly
use this word as since the establishment
of the IBCB, one of the most consistent
pieces of feedback received from bank
staff and bank customers alike is that they
want banks to listen to them more and to
then act on that feedback. Along with the
other member banks, PTSB is committed
to listening to this feedback and working
collectively and individually to address
this through actions aimed at rebuilding
trust in the Irish banking sector.
As one of the three member Banks
of the IBCB, PTSB participated in the
IBCB Éist Staff Banking Survey in April
2023, achieving a response rate of 63%
(+10 vs. Sector). The IBCB’s purpose
is to work with member banks to build
trustworthiness in order to assist the
industry in regaining public trust. They
are focused on promoting an environment
where ethical behaviour lies at the heart
of banking; fair customer outcomes are
achieved; staff are supported and the
industry reputation for competence is
rediscovered.
We have seen strong improvements
across the board compared with the
2021 Éist Survey, with significant gains in
trust, ethical ways of working, pride and
colleague wellbeing. This feedback from
our colleagues demonstrates the impact
of the improvements made which form the
basis of a healthy and customer focused
culture in the Bank. We look forward to
continuing our work with the IBCB in 2024
and beyond, as we work hard to re-build
trust in the banking sector together.
Yes Checks
We are building a trustworthy and
sustainable business - One that has
the best interests of colleagues and
customers at heart, and one that makes
a positive and lasting impact on our
community. Our Culture Charter guides
how we make decisions through our
Purpose and Values. However, sometimes
decisions are not simple and in 2022
we developed and piloted ‘Our Yes
Checks’ to help colleagues weigh up the
impact and consider the consequences
of our decisions, so that we make the
best decisions each day, every day.
Our Yes Checks are designed to enable
good debate, ensuring that no strategic
decision is taken before different views
have been considered and the related
risks have been assessed. Ethical
dilemmas are difficult, especially when
there is no obvious ‘right thing to do’. We
recognise that we have more to do to help
colleagues to act ethically every day, by
creating a safe space to talk about ethical
dilemmas and judgement calls more
frequency. We need to encourage the use
of the DECiDE framework for day to day
decision-making, embedding it in to how
we operate our business.
Our six ‘Yes Check’ questions, ensure that
colleagues think about the consequences
of decisions and their impact on our
customers and colleagues, from a risk,
compliance, ethical, sustainable and
profitable growth perspective. During
2023 we have further refined Our Yes
Checks and have extended across other
Committees across the Bank.
What our colleagues said:
81% (+8pts v’s sector) of the
words used to describe our
culture were positive including:
19% of words colleagues used
were negative:
• Friendly
• Risk Aware
• Customer / client focused
• Supportive
• Respectful
• Always looking to improve
• Learning / Development
• Diverse
• Healthy Work-Life Balance
• Fair
• Long Hours
• Bureaucratic
• Inefficient
• Hierarchical
21
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Our Strategy, Business Model and Culture
(continued)
Making a positive and lasting impact in
our customer’s lives has been at the core
of PTSB throughout our over 200 year
history. 2024 will be another important
year in our journey as we collectively
work hard every day to build trust with
our customers. To build trust we are
committed to being relevant and to
demonstrate significant cultural change
for our customers, colleagues, and
community.
We are making improvements to our
culture; we are doing a lot and have more
to do to create a consistent experience
for all. We are committed to improving our
culture by embracing enablers & over-
coming blockers. In order for us to have
the culture we want, we need to build
it together, step by step, with Trust and
Psychological Safety at the core.
We are Open.
We are Inclusive.
We build Trust.
We are one PTSB.
Culture in 2024 and Beyond
We are committed to living our Values
every day, as they orient our behaviours
and guide our decision making. We will
continue our culture journey in 2024, to
embed our new Brand, the delivery of
our evolved Purpose and Ambition and
embedding our Culture Statement.
Our key activities to continue our culture
evolution will include:
• Living as Leaders: Role-modelling our
Values through our actions and words
by Living as Leaders every day.
• Speak Freely: Creating an environment
where everyone feels safe to Speak
Freely and to develop an innovative
mindset.
• Diversity, Equity & Inclusion: Building
a bank where everyone is included and
encouraged to share different views
and perspectives.
• Smart Working Framework: Supporting
colleagues with new trust-based ways
of working on a sustainable basis.
• Wellbeing: Supporting colleagues to
bring their best selves to work in all
aspects of their working day.
• Customer Focus: Building trust-based
relationships with customers with due
care and consideration always.
• Risk Integration & Management:
Providing the supports and tools to help
integrate and manage risk in all that we
do every day.
• Strong Stakeholder Engagement:
Listening and actioning feedback to
align our Colleagues, Customers and
Community.
• Quality Communications (Internal):
Communicating in a way which is
simple, clear and connects with every
colleague.
• Reputation Management (External):
Protecting, enhancing, and measuring
our reputation in the community.
• Brand: Positioning PTSB to bring our
Purpose to life.
• Culture Measurement: Encouraging
colleagues to share their feedback to
improve the colleague experience.
• Cultural Integration: Stimulating our
Culture with the best of all acquired
businesses “ways of doing things” in
evolving our culture to deliver on our
ambition.
22
PTSB Group Holdings plc - Annual Report 2023 Sustainability
Our Commitment to Building a Sustainable Business
‘As the impacts of climate change become more severe and widespread, it is clear that immediate
action is needed to secure a sustainable future. To this end, organisations are working to make their
operations more sustainable, with many increasing their focus on sustainability and developing
and implementing integrated Sustainability Strategies. PTSB’s Sustainability Strategy gives us an
opportunity to put our purpose into action - enabling us to play our part in addressing the global
climate crisis, but also elevate our social impact, enhance our culture, and deliver what matter most
to our customers and colleagues. Ultimately, building a sustainable organisation that is fit for the
future.’
Eamonn Crowley, Chief Executive Officer
Impact in Action
Addressing Climate Change and Supporting the Transition to a Low Carbon Economy
A Board approved Sustainability
Strategy aligned to the Sustainable
Development Goals (SDGs)*
Issuance of the Banks inaugural Task
Force on Climate-related Financial
Disclosures (TCFD) Report
c.€700m in Green Mortgage Lending
in 2023, accounting for c.30% of New
Mortgage Lending**
• An increased focus on Climate Risk, with the
ongoing implementation of a Climate-Related
and Environmental Risk Implementation Plan
• A CDP rating of B, indicating that the Bank
addresses its environmental impacts and
ensures good environmental management
• Disclosing the Bank’s carbon impact across
Scope 1, 2 and 3 (including financed emissions)
• Committing to setting science-based carbon
emission reduction targets (SBTs) by 2024
• Founding member of the International
Sustainable Finance Centre of Excellence
• A Sustainability Committee and a PTSB Green
Team
Elevating Our Social Impact and Connecting with Local Communities
c.€19.4 million in donated and low-cost
funding provided to the Social Finance
Foundation since 2009***
€300,000 in charitable giving through
the PTSB Community Fund in 2023,
which included match funding by
the Bank. Community Fund Partners
included Bluestack Special Needs
Foundation, Irish Motor Neurone
Disease Association, ChildVision,
Dublin Society for the Prevention of
Cruelty to Animals (DSPCA), Down
Syndrome Cork – Field of Dreams and
the Cork Cancer Care Centre
c.1,700 volunteering hours provided
on the ground last year, equating to
c.€45,500 of in-kind giving
• Title Sponsorship of the Irish Olympic Team
and the Irish Paralympic Team for the 2024
Games in Paris
• More than 67,000 students reached through
the Olympic Federation of Ireland’s Dare to
Believe School Programme, proudly supported
by PTSB
• c.17,700 students completing LIFT Ireland’s
‘Changing Futures for the Better’ Schools
Initiative, proudly supported by PTSB
• Launch of the PTSB NextGen athlete
recruitment campaign, in partnership with
Paralympics Ireland
• 8,000 financial reviews completed last year,
supporting customers in taking control of their
financial future
• A partnership with Dublin City University (DCU)
Access Programme
• Re-certification to the ‘Business Working
Responsibly Mark’ from Business in the
Community Ireland
23
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Sustainability
(continued)
Enhancing Our Culture and Investing in Our People
81% Culture Index Score, +11% above
our Culture Index Target of 70%
89% of employees feel comfortable to
be themselves at work regardless of
background or life experiences
58% Female Board Gender
Composition and 39% of Senior
Leadership positions are filled by
Women
• A Diversity, Equity and Inclusion (DEI) Strategy
supported by 5 Employee Resource Groups
– LiveWell, PRISM, DiCE, Adapt and Better
Balance
• Investors in Diversity Gold Accreditation, Irish
Centre for Diversity, 2023
• 15.9% Gender Pay Gap
• 75,000 hours of training delivered through the
Bank’s eLearning platform COMPASS in 2023
• c.182 employees received an Institute of
Banking (IOB) accreditation, with c.792
employees enrolled in banking education
programming
• More than 2,300 nominations received to
our Values in Practice (VIP) Awards, the
Bank’s Colleague Recognition Programme.
Nominations were up 57% on 2022
Championing our Customers & Creating a Bank that is fit for the Future
Established a new Brand promise,
‘Altogether More Human’
• Relationship Net Promoter Score (RNPS)****
•
of +20pts, up 10 points on last year and
The first Irish Retail Bank to be
awarded the Guaranteed Irish Symbol,
recognising our contribution to local
communities across the country
c.159 million logins on our digital
channels in 2023
placing PTSB in joint first position
•
among
•
the retail banks in Ireland
• c.38,000 new Current Accounts and c.40,000
new Deposit Accounts opened during 2023
• 54% of new Current Account openings took
place through the Bank’s award winning Digital
Current Account
• A Digital Mortgage Application Journey
• Broadening our Business Banking offering
through partnerships with Bibby Financial
Services, the Strategic Banking Corporation of
Ireland, Digital Business Ireland and Worldpay
• A focus on cyber security and data protection
•
with training delivered to all colleagues
* The United Nation’s Sustainable Development Goals (SDGs) were launched in 2015 to provide a plan of action for people, planet and prosperity. While we
recognise that we may contribute to all 17 SDGs in some way, we have identified 6 as being core to our Strategy.
** A 5-Year Fixed Product available to all new and existing home loan customers where their homes have a confirmed or proposed Building Energy Rating of A1 to
B3.
*** The Social Finance Foundation was established in 2007 by the Irish Government to address the needs of community organisations and social enterprises for
loan funding which was difficult to obtain from mainstream financial institutions. Acting as a ‘wholesaler’, it provides funding to its lending partners Clann Credo
and Community Finance Ireland.
**** A Relationship Net Promoter Score (RNPS) is a measure of customer advocacy towards a brand and indicates the willingness of a customer to recommend a
company’s products or services to others. The question asks customers how likely they are to recommend their bank to friends or family on the basis of their
own experience. The range for the scoring is -100 to +100.
24
PTSB Group Holdings plc - Annual Report 2023 Awards, Recognition and Pledges
Awards and Recognition in 2023
• Winner - Best Current Account, Bonkers
National Consumer Awards, 2023
• Winner - Best Mortgage for First-Time
Buyers, Bonkers National Consumer
Awards, 2023
• Winner - Innovative Banking Product, FS
Awards, 2023
• Winner - Grand Prix Award, FS Awards
2023
• Winner - Financial Services Loyalty
Programme/Initiative of the Year, Irish
Loyalty and CX Awards, 2023
• Winner - Customer Experience Award,
Marketing Institute Ireland All Ireland
Marketing Awards, 2023
• Winner - Best Customer Success Story,
Customer Experience Awards, 2023
• Winner - Best Customer Service Team,
Customer Experience Awards, 2023
• Winner - Industry Profession of the Year
(Team Leader), CCMA Awards, 2023
• Winner - Best Procurement Team of the
Year, PTSB and Efficio, The National
Procurement Awards, 2023
• Winner - Most Innovative Use of
Technology – e-flow Procurement
Software, PTSB and Efficio, the National
Procurement Awards, 2023
• Investors in Diversity Gold Accreditation,
Irish Centre for Diversity, 2023
• Winner - Inclusion and Diversity (Large),
CIPD Awards, 2023
• Winner - Excellence in Diversity and
Inclusion, Workplace Excellence Awards,
2023
• Winner - Excellence in Flexible and
Hybrid Work, Workplace Excellence
Awards, 2023
• Recertification to the Business Working
Responsibly Mark, Business in the
Community Ireland, 2023
Pledges
Business in the Community Ireland’s
Elevate Inclusive Workplace Pledge:
PTSB has added our signature to Business
in the Community Ireland’s Elevate
Pledge, committing to building inclusive
workplaces that are representative of all
members of our society. Workplaces have
become more diverse, incorporating a
multiplicity of backgrounds, experiences
and identities. This has brought huge
benefits to Irish business. However,
diversity alone is not enough. Workplace
inclusion is about creating a culture where
everyone feels welcome, has access to
opportunities and is supported to thrive.
Business in the Community Ireland’s
Low Carbon Pledge: PTSB was pleased
to add our signature to Business in the
Community Ireland’s Low Carbon Pledge,
deepening our commitment to long-
term sustainability and committing to
new climate action goals. The Pledge
focusses on setting carbon emissions
reduction targets based on science by
2024 and will include measuring and
reducing our carbon footprint in line
with the Paris Agreement and the latest
Intergovernmental Panel on Climate
Change (IPCC) findings. The Bank was
proud to add our signature to the Pledge,
joining 68 other Irish businesses in
committing to set robust carbon emissions
reduction targets.
Engaging with Stakeholders
We recognise that building strong
relationships with our stakeholders,
and ensuring that we engage with them
regularly, plays a fundamental role in
informing our Business Strategy. It guides
our reporting, allows us to identify risks
and emerging trends, while helping us
to prioritise investment and resourcing
- ultimately, enabling us to conduct and
manage all areas of our business in a more
sustainable way.
As part of the development of our
Sustainability Strategy, in 2021, we
engaged stakeholders to complete a
materiality assessment to support us in
identifying the Environmental, Social and
Governance (ESG) issues that are not only
material to our business, but important to
our stakeholders.
PTSB’s Materiality Matrix
The findings of the materiality assessment
were consolidated to form a materiality
matrix, with the position of material issues
being plotted relative to the degree of
stakeholder importance and potential
business impact.
It is important to note, that the 20 issues
that were deemed as being material to
our stakeholders, are also considered as
important areas of focus for us at PTSB,
regardless of their position within the
matrix. As such, each material issue has
been given representation, in one form
or another, in our overall Sustainability
Strategy.
For a full overview of the Bank’s Materiality
Assessment process, please see our 2022
Annual Report.
During 2024, the Bank will complete
an exercise in double materiality in line
with Corporate Sustainability Reporting
Directive (CSRD) Regulation. The exercise
will assess both stakeholder impact
and financial materiality of the issues
that are critical to our business and will
form an integral part of our stakeholder
engagement strategy for the year ahead.
Customer Wellbeing
& Literacy
Cyber Security
Customer Trust
Accessibility
Of Products &
Services
Corporate Governance,
Compliance & Fair
Business Conduct
Digital Transformation
& Innovation
Community Investment
Climate Risk Management
Social Issues
(Social & Affordable Housing)
Employee Development
Employee Wellbeing
Sustainable
Products & Services
Carbon Footprint
High Quality Products
& Superior Customer
Experience
Data Protection
Diversity & Inclusion
Branch Presence
Sustainable Profitability
Sustainable Procurement
Supporting SMEs
Impact On PTSB
Environmental Impact
Social & Community Impact
Economic Impact
Purpose & Culture
25
l
s
r
e
d
o
h
e
k
a
t
S
o
T
t
n
a
t
r
o
p
m
I
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Sustainability
(continued)
Sustainability Strategy
The materiality assessment findings and associated stakeholder insight have played an important role in the development of an
overarching Sustainability Strategy for the organisation across 4 key areas of focus.
4 Key
Areas
Of Focus
We’re
Committed
To
Addressing
Climate Change
& Supporting The
Transition To
A Low Carbon
Economy
• Managing Climate Risk
• Delivering sustainable
products and services
• Ensuring responsible
procurement practices
• Minimising our
carbon impact
and managing our
wider environmental
footprint
• Ensuring transparency
through reporting
Elevating Our
Social Impact
& Connecting
With Local
Communities
Enhancing
Our Culture &
Investing In Our
People
Championing
Our Customers &
Creating A Bank
That Is Fit For The
Future
• Maintaining our
branch presence
• Encouraging the right
cultural behaviours
• Enabling accessibility
of our products and
services
• Embedding our values
and creating a culture
of ‘Speaking Freely’
• Delivering high quality
products and a superior
customer experience
• Supporting our Business
Banking customers
• Encouraging customer
financial wellbeing and
literacy
• Focusing on Diversity,
Equity and Inclusion
• Investing in employee
• Investing in digital
transformation and
innovation
• Investing in local
community initiatives
• Addressing social
issues, such as
social and affordable
housing
learning and
development
• Fostering employee
wellbeing
• Ensuring cyber security
• Managing data protection
• Delivering long-term,
sustainable profitability
OUR STRATEGY IS UNDERPINNED BY
Living Our Purpose And Ensuring Strong Corporate Governance,
Compliance And Fair Business Conduct
The 6 United Nations Sustainable Development Goals (SDGs) At The Core Of Our Strategy
The United Nations Sustainable Development Goals
The United Nation’s Sustainable Development Goals (SDGs) were launched in 2015 to provide a plan of action for people, planet and
prosperity. The 17 goals act as an urgent call for action for countries to work together to develop strategies to tackle some of the
world’s most critical issues.
While we recognise that we may contribute to all 17 SDGs in some way, the following six have been identified as being core to our
Strategy.
The following is a summary of progress made under each of the 4 pillars of the Bank’s Sustainability Strategy during 2023.
26
PTSB Group Holdings plc - Annual Report 2023 Addressing Climate Change and Supporting
the Transition to a Low Carbon Economy
Overview
The Bank recognises our environmental impact and is mindful that making a positive
contribution to the economy through consideration of environmental issues across each
channel of our organisation is fundamental to running our business in a responsible
and sustainable way. In order to achieve this, we are focussed on: managing climate-
related and environmental risk; supporting the transition to a low carbon economy; and,
taking action to reduce our own environmental footprint, while continuing to disclose
transparently.
Sustainable Development Goals
Impact in Action:
An increased focus on climate-related and environmental risk, with the ongoing
implementation of a Climate-related and Environmental Risk Implementation Plan
A Low ESG Risk Rating through Sustainalytics
A CDP rating of B, indicating that the Bank addresses its environmental impacts and
ensures good environmental management
Issuance of the Bank’s inaugural Task Force on Climate-Related Financial
Disclosures (TCFD) Report
Committing to setting science-based carbon emission reduction targets (SBTs) by
2024
Continued success of the Bank’s Green Mortgage, with c.€700 million in green
lending drawn down during 2023, accounting for c.30% of new mortgage lending
Climate-related and Environmental
Risk Management
Central banks and financial regulators
widely acknowledge that climate change is
a source of financial stability risk. Managing
climate-related and environmental (CR&E)
risks and opportunities is a key area of
focus for the Bank under the ‘Addressing
Climate Change and Supporting the
Transition to a Low Carbon Economy’ Pillar
of our Sustainability Strategy.
We are conscious of the effect that
climate change has on the Bank and view
it as manifesting itself in two ways, firstly,
through the operations of our business and
secondly the financial risk it brings to the
economy in the longer term.
The Bank made good progress in 2023
on the integration of CR&E consideration
across its operations. These include:
• Ongoing delivery of the Bank’s CR&E
Implementation Plan;
• Completing a CR&E Risk Qualitative
Materiality Assessment;
• Sourcing and integrating CR&E Risk
data for Bank use to inform CR&E Risk
analysis;
• Developing CR&E Key Risk Indicators;
• Building CR&E consideration into
the Bank’s Product and Proposition
development process and delivering
c.€700 million in green lending through
the Bank’s Green Mortgage;
• Delivering CR&E risk training and
supports to the Board, Executive
Committee and the Senior Leadership
Team;
• Completing an ESG Risk Rating through
Sustainalytics and receiving a Low
Rating;
• Contributing to CDP and achieving an
B rating;
• Disclosing on CR&E under the
recommendations of the Taskforce on
Climate-related Disclosures (TCFD);
• Measuring and disclosing our carbon
impact across Scope 1, 2 and 3
(including our financed emissions); and,
• Introducing a Sustainable Supplier
Charter.
In addition to these deliverables, the Bank
has invested in resources to deliver on its
Sustainability Programme objectives, which
includes the appointment a professional
services firm to provide strategic guidance
and support, as well as introducing a Climate
Risk Manager and a Sustainability Manager.
For more information on the Bank’s approach
to CR&E Risk Governance, Strategy and
Risk Management and Metrics and Targets,
please visit our TCFD Report beginning on
page 48.
Sustainable Products and Services
Notwithstanding the fact that climate change
presents risk to financial institutions, it also
brings with it a significant opportunity to
meet new customer needs.
Ireland’s Climate Action Plan 2023 provides
a detailed plan for taking decisive action
to achieve a 51% reduction in overall
greenhouse gas emissions by 2030 and
setting the country on a path to reach net
zero emissions by no later than 2050.
Key areas of focus within the Plan include:
Powering Renewables; Building Better;
Transforming How We Travel; Making Family
Farms More Sustainable; Greening Business
and Enterprise; and, Changing our Land Use.
The country’s financial institutions will have
a role to play in financing elements of the
Plan, while also supporting the broader green
transition through the implementation of
sustainable products and services.
PTSB’s Green Mortgage
Our customer research has indicated that
64% of consumers are actively taking steps
to be more sustainable, with 55% stating
that sustainability is important to them when
availing of financial products and services.
This customer insight has enabled the Bank
to identify a customer need in relation to
green products and services.
To support the above, in 2022 the Bank
introduced our Green Mortgage to the
market, a 5-Year fixed rate product available
to all new and existing home loan customers
where their homes have a confirmed or
proposed Building Energy Rating of A1 to B3.
During 2023, c.700 million in green lending
was drawn down, accounting for c.30% of
new mortgage lending.
27
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
The Green Mortgage is envisaged to be
the first in a suite of Sustainable (Green*)
Finance Product offerings for PTSB, with
proposition development continuing on
future products for both the Retail and
SME sectors.
Strategic Banking Corporation of
Ireland’s Retrofit Loan Scheme
PTSB was pleased to be accepted as
participating on-lender in the Strategic
Banking Corporation of Ireland’s (SBCI)
new Retrofit Loan Scheme. The Scheme
is aimed at supporting consumers and
small private landlords who wish to invest
and improve in the energy efficiency of a
residential property.
Under Ireland’s Climate Action Plan, the
Irish State set a target to upgrade 500,000
homes to a Building Energy Rating B2
level and the installation of 400,000 heat
pumps in existing premises to replace
fossil fuel heating systems.
To meet these targets, there is a
requirement to develop a loan guarantee
scheme to provide a competitive funding
offer with State support to help increase
the volume of retrofit activity. The
guarantee-based product will offer both
a degree of risk-sharing to lenders, and
an additional leverage effect to mobilise
private capital, which means that the
funding is used in a more efficient way.
The €500m Scheme will be part-funded
by the Department of the Environment,
Climate and Communication and the EU
Recovery and Resilience Facility under
Ireland’s National Recovery and Resilience
Plan, and will be backed by a counter
guarantee provided by the European
Investment Bank.
PTSB was successful in obtaining €100m
in funding and is preparing to launch the
Scheme to customers during 2024.
Partnerships
Sustainable Finance Centre of
Excellence
PTSB is pleased to be a founding member
of the International Sustainable Finance
Centre of Excellence, a key output of
Ireland’s Sustainable Finance Roadmap.
Headquartered in Dublin, the Centre is
focused on the practical acceleration of
the sustainable finance agenda at a policy,
regulatory and market level. Fully aligned
with the Ireland for Finance Strategy; the
Irish Climate Action Plan; and, the EU’s
Renewed Sustainable Finance Strategy it
leads on research, talent development and
leadership activities to support the design
and implementation of innovative financial
solutions to facilitate the transition
to a net zero economy in Ireland, and
internationally.
In addition, the Centre plays a critical
role in delivering the Sustainable Finance
Roadmap – which was co-created by
Sustainable Finance Ireland, the UN
convened FC4S and Skillnet Ireland,
in collaboration with key stakeholders,
including PTSB – and the Ireland for
Finance Strategy which aims to position
Ireland as a global centre of sustainable
finance by 2025.
We know that collaboration amongst the
financial services sector will be critical
for success, as we continue to navigate
this next, and very important chapter.
The Centre provides an opportunity for
member organisations to work together
collaboratively to develop meaningful
solutions that will deliver a lasting impact.
Teagasc Signpost Programme
PTSB is proud to work with the Teagasc
Signpost Programme, a multi-annual
campaign to lead climate action by all Irish
farmers.
The Programme aims to achieve early
progress in reducing gaseous emissions
from Irish agriculture and also improve
water quality, maintain (and in some
cases) improve biodiversity, reduce
costs and create more profitable and
sustainable farming enterprises.
There are two elements to the
programme; a network of Signpost Farms,
including beef farms, which will act as
demonstration farms for the programme
and sites for carbon sequestration
measurements; and the Signpost Advisory
Campaign, which engages with farmers
and supports them to move towards more
sustainable farming systems.
PTSB is focused on supporting our
Business Banking customers, with an
added layer of focus on customers who
need additional support to establish
infrastructure for new climate friendly
business models.
We are committed to:
• Developing lending products for
Business Banking customers that
support sustainability goals and
objectives and work with the SBCI
to help develop market products to
support;
• Partnering with agencies to provide
Business Banking customers with
training, advice and tools to further their
understanding of sustainability;
• Embedding the Teagasc Signpost
Programme into our lending processes
for Agri; and,
• Introducing specialised training to
support the Agri sector with the help of
Teagasc.
Carbon Impact and the Transition to
a Low Carbon Economy
In 2021, PTSB deepened our commitment
to long-term sustainability and committed
to new climate action goals by signing
Phase 2 of the Low Carbon Pledge. The
refreshed Pledge focusses on setting
carbon emissions reduction targets (SBTs)
based on science by 2024 and includes
measuring and reducing our carbon
footprint in line with the Paris Agreement
and the latest Intergovernmental Panel on
Climate Change (IPCC) findings.
The first step to setting SBTs is
understanding our carbon footprint.
During 2023, we continued our focus
on improving our data and completed
a comprehensive assessment of our
emissions across Scope 1, Scope 2 and
Scope 3, including the Bank’s financed
emissions.
* Green Products and Propositions are those which address the Bank’s climate change objectives
28
PTSB Group Holdings plc - Annual Report 2023 Carbon Footprint
A breakdown of our carbon impact across Scope 1, 2 and 3 can be found below:
Emissions
Scope 1
Scope 2 (Location-based value)
Scope 2 (Market-based value)
Scope 3 emissions
Total Scope 1, 2 and 3 (Location-based value)
Total (Market-based value)
2022 tCO2e
2023 tCO2e
1,188
2,502
0
841
2,217
0
230,682
342,035
234,372
231,870
345,093
342,876
For further detail relating to our carbon impact and the calculation assumptions associated with the Bank’s emissions, please visit our
TCFD Report beginning on page 48.
Our Own Operations
Energy Usage and Efficiency
At PTSB, we know that the use of energy is a significant contributor to our emission intensity and that in order to reduce our impact
on climate change that we need to address our energy usage. In order to achieve this, we are committed to reducing our overall
consumption, while also moving to low carbon energy sources.
With this in mind, in 2023 we took additional action to minimise the carbon impact of our operations through continuing to invest in
energy efficiency initiatives and programming, including:
• Purchasing 100% renewable energy;
• Rolling out energy smart metres across our branch locations to get information relating to consumption in real time;
• Continuing to migrate our data centre to a new and more efficient building. The migration is expected to reach completion during
2024 and will see the Bank improve the energy efficiency of our data centre;
• Implementing LED lighting across our branch network as part of our ongoing branch refurbishment process;
• Celebrating Earth Hour, raising awareness and encouraging our colleagues to reduce their energy consumption both in the office
and at home; and,
• Introducing colleague communication and awareness campaigns focussed on energy efficiency, led by the PTSB Green Team.
Energy Consumption*
Electricity - Total
Natural Gas
Oil
Fuels
Total
2021
GWh
8.7
2.9
0
1.4
2022
GWh
8.4
2.9
0
1.4
2023
GWh
9.5
1.8
0
0.2
13.0
12.8
11.4
*
See TCFD Report for full comments on data and calculations methodology.
During 2023, we estimate that our direct energy usage equated to 11.4 GWh. This was a decrease of 11% compared to 2022.
29
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
2021
Tonnes
2022
Tonnes
2023
Tonnes
84
42
191
0.9
3.0
93
54
229
0.9
3.2
103
58
132
1.2
0.1
We are focussed on minimising our
environmental impact from purchased
services, while also working alongside our
suppliers to find opportunities to procure
goods in a sustainable way. Key progress
during 2023 includes:
• Continuing to engage with all suppliers
through the expectations that we set
out in the Bank’s Sustainable Supplier
Charter;
• Working alongside our partners to
continue to develop our carbon cube;
which takes spend data and combines it
with a category-specific emission factor
in order to calculate supplier emissions
in line with the Greenhouse Gas (GHG)
Protocol methodology; and,
• Delivering sustainable procurement
training to the Bank’s Sourcing and
Procurement Team.
During 2023, PTSB and our Procurement
partner Efficio were proud to win awards
for Best Procurement Team of the Year
and Most Innovative Use of Technology
at the National Procurement Awards,
recognising the progress that we have
made over the last year.
The Bank’s Procurement Policy and
Sustainable Supplier Charter is reviewed
annually, communicated as required and
made available to our colleagues on our
internal website.
Waste Generation
Waste to Energy
Recycling Waste
Recycled Confidential Shred Waste
Recycled Used Cooking Oil
Recycled Grease
Sustainable Sourcing and
Procurement
Sustainable Sourcing and Procurement is
at the heart of our Sustainability Strategy
and ensuring that we purchase goods and
services and engage with our suppliers
in a sustainable way is fundamental to
its delivery. We set high standards for
ourselves and for our suppliers. We insist
that all of our business activities are
conducted lawfully, sustainably and above
all, ethically.
At PTSB, we continue to enhance our
Procurement and Sourcing Frameworks
to ensure that they support our
sustainability goals and objectives. Our
Procurement Policy sets out a framework
for engaging with our suppliers, including
a commitment to procure goods and
services from suppliers who can support
the needs of our business in a sustainable
manner.
The Framework is supported by our
Sustainable Supplier Charter, which sets
out our expectations of suppliers and acts
as a ‘Code of Conduct’ detailing what is
expected from all suppliers with regard to
business practice and responsibilities as a
supplier to PTSB.
In addition we hold membership to the
Financial Supplier Qualification System
(FSQS), an online platform where suppliers
submit their compliance data and
information relating to their organisation,
allowing us to have a consistent view of
our suppliers to ensure they meet our
minimum standards.
Sustainability
(continued)
Waste Management and the Circular
Economy
Waste Reduction
PTSB’s waste management supplier is
committed to ensuring that all waste
is diverted from landfill and goes to
incineration and converted to energy,
recycled or upcycled.
Actions taken to reduce our waste during
2023 include:
• Introducing new recycling and waste
management stations in our Corporate
Call Centre. The implementation
included a multi-channel awareness
campaign for colleagues designed
to encourage a shift in mind-set and
behaviour aligned to our Sustainability
Strategy and waste management
objectives;
• Ongoing rollout of the Bank’s market-
leading Digital Current Account,
eliminating between 130-270 pages
of paper from our business for every
application that comes through the
online channel. During 2023, more than
16,000 Current Account applications
came through the online channel,
resulting in a reduction of c.2.3 million
pages of paper;
• Introducing a new Digital Mortgage
Journey, eliminating c.250 pages of
paper from our business for every
application that comes through the
online channel. More than 3,000
Mortgage applications came through
the online channel in 2023, resulting in a
reduction of c.785,000 pages of paper;
• Engaging shareholders to encourage
them to receive the Annual Report
by electronic means. The Bank has
c.130,000 shareholders. In 2023, we
issued c.1,000 units of the Annual
Report in hardcopy. The remaining
copies were issued in digital form,
saving more than 16 million pages of
paper;
• Celebrating Earth Day, raising
awareness and encouraging both our
internal and external stakeholders to
reduce, reuse and recycle, both in the
office and at home; and,
• Monitoring water consumption in all of
our branch and administrative sites.
30
PTSB Group Holdings plc - Annual Report 2023
Actions taken during 2023 include:
• Supporting the Native Woodland Trust,
enabling the organisation to plant native
trees in Ireland at a woodland site that
is open to the public; and,
• Initiating a pilot project across our
Retail Network with the aim of creating
spaces for introducing native plants and
shrubs across selected sites around the
country.
Green Team
PTSB has in place an employee-led Green
Team, a cross functional working group
who together, work on green initiatives
and awareness campaigns that support
our green agenda.
With the support of the wider
Sustainability Committee, the team are
focused on environmental programming
including: energy efficiency and
transition to a low carbon economy;
use of resources and recycling; green
procurement; biodiversity and green
space; volunteering initiatives with an
environmental impact; and, training,
communication and awareness.
Circular Economy
The circular economy has been identified
as a priority by the Irish Government
as set out in the Whole of Government
Circular Economy Strategy 2022 – 2023
‘Living More, Using Less’. At PTSB we
understand that by moving away from
linear production methods to a more
circular approach, it will enable us to
reduce waste and also contribute to the
use innovative methods when designing
goods through our purchasing power.
A Banking Uniform Designed with
Sustainability in Mind
In 2023, the Bank partnered with Tailored
Image to design and produce a new suite
of uniforms for our colleagues across the
Branch Network.
As part of the tendering process, it was
important that the new uniforms were
procured with sustainability in mind in
order to meet the Bank’s sustainability
objectives at all stages of the process
– from method of manufacture, to the
packaging used to deliver it.
The new suited garments are made from
recycled plastic bottles. The packaging
for all uniforms contains no plastic and
instead has a recyclable cardboard
backing board for shirts, metal clips
and biodegradable and/or recyclable
polythene bags for wrapping.
Biodiversity
The United Nations reports that
unprecedented changes to our
ecosystems and the loss of biodiversity
presents an increasing threat to nature,
human lives, livelihoods and wellbeing.
As stated in the Joint Committee on
Environment and Climate Action’s Report
on Biodiversity the climate crisis and
biodiversity are inextricably linked, and
must be viewed holistically.
At PTSB, we recognise that we must
address biodiversity loss and take action
to protect our ecosystems.
31
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Elevating Our Social Impact and
Connecting with Local Communities
Overview
With a presence in more than 100 retail and office locations nationwide, PTSB is a local
community Bank whose purpose is to work together to build trust with our customers
and communities. We are a community serving the community and our commitment to
encouraging financial wellbeing, ensuring the accessibility of our products and services
and investing in local communities across the country is a demonstration of that
purpose in action.
Sustainable Development Goals
Impact in Action:
c.€19.4 million in donated and low-cost funding since provided to the Social Finance
Foundation since 2009
c.€300,000 in charitable giving through the PTSB Community Fund in 2023, which
included matched funding by the Bank
c.1,700 volunteering hours were provided on the ground in local communities last
year, equating to c.€45,500 of in-kind giving
More than 67,000 students reached through the Olympic Federation of Ireland’s
Dare to Believe School Programme in 2023
Launch of the PTSB NextGen athlete recruitment campaign, in partnership with
Paralympics Ireland
Encouraging Financial Wellbeing
At PTSB, we recognise that we have a
responsibility to enable financial wellbeing
among our customers.
Support Policy and Framework to enable
us to remove barriers, meet the needs
of customers who may require additional
support and care and to provide guidance
and support to our colleagues.
As part of our partnership with Irish Life,
all customers can avail of a free financial
review, focused on supporting them in
making informed financial decisions. The
financial health check is undertaken by
Irish Life and was traditionally completed
by making an appointment at any of our
branch locations nationwide. In 2023
we completed c.8,000 financial reviews,
both in-person and through our digital
channels, to support customers in taking
control of their financial future.
Enabling Accessibility of Our
Products and Services
PTSB is committed to understanding the
needs of our customers and to ensuring
that the products and services we provide
allow all people, including those who may
be vulnerable or underrepresented, equal
opportunity to access them.
To support the above, the Bank has
in place a set of Vulnerable Customer
Guiding Principles, an Enhanced Customer
32
The following measures are in place in
order to provide appropriate access and
support to our customers including:
• Enhanced Customer Support Charter
for all colleagues which provides
guidance on how we support customers
in accessing our products and services
including those who may be vulnerable;
• Continued support for the most
vulnerable when moving their banking
relationship as set out in ‘A Guide
to Moving Banks for Customers in
Vulnerable Circumstances';
• Provision of an Enhanced Customer
Support Team within the Bank's
Customer Contact Centre, with a
supporting dedicated phone line;
• Vulnerable Customer Appointment
Booking Service through our Enhanced
Customer Support Team;
• A dedicated webpage for customers
requiring enhanced support, outlining
the services available and providing
detail in relation to how they can be
accessed;
• Creation of an internal digital hub
for staff with training and supports
including Assisted Decision Making Act
Resources and Supports, policies and
procedures, internal communications
and links to external supports for all
colleagues across the Bank;
• A Sign Language Interpreting Service
(SLIS) for customers to interact with us
via interpreter services in our branch
and over the phone;
• Working with Inclusion and Accessibility
Labs (IA Labs) and the National Council
for the Blind (NCBI) towards Web
Content Accessibility Guidelines 2.1
level AA certification in order to provide
a website that is accessible to the
widest possible audience, regardless of
technology or ability;
• Web Accessibility Advice Guidelines
offering customers simple ways to
make it easier to view content on our
web pages including changing font size,
colours and browser zoom options;
• A webchat service providing alternative
ways to access the help and support of
our Customer Support Team;
• A dedicated webpage to support
customers affected by the humanitarian
crisis in Ukraine, which included a guide
available in both English and Ukrainian;
• A dedicated phone line to support
our Ukrainian customers in booking
appointments; and,
• Refunding all transaction fees on SWIFT
payments to Ukraine and Moldova.
PTSB ensures that accessibility standards
are embedded into our online and mobile
channels, as well as in the development
of its digital platforms. In our Retail
Network, our branches are designed with
accessibility in mind.
JAM Card
PTSB is proud to support the ‘Just a
Minute’ (JAM) Card initiative across each
of our retail locations nationwide.
JAM Card is a growing initiative that
allows customers with a learning difficulty,
autism or communication barrier tell
others that they need ‘Just a Minute’
discreetly and easily when in public
settings like shops, public transport or
their local PTSB branch.
PTSB Group Holdings plc - Annual Report 2023 The JAM Card is a welcome addition to
the Bank’s growing supports for vulnerable
customers, allowing our customer facing
teams to give JAM Card users a bit of
extra support and time when conducting
their transaction.
for the Prevention of Cruelty to Animals
(DSPCA), Down Syndrome Cork – Field
of Dreams and Cork Cancer Care Centre
as its Community Fund Partners for the
fundraising year.
Dublin City University Access
Scholarship Programme and Access
to the Workplace Programme
In 2023, PTSB was proud to continue our
partnership with Dublin City University’s
(DCU) Access Scholarship Programme,
which provides funding support that
enables DCU to put students through 3rd
level education programming and realise
their full potential.
As part of the partnership, the Bank are
also actively involved in the DCU Access
to the Workplace Programme, providing
paid work placement opportunities
and professional career guidance and
support to talented students from
socioeconomically disadvantaged
backgrounds.
The Access to the Workplace Programme
was established in 2019, with the aim of
providing Access students high quality
internship opportunities within leading
Irish businesses, in order to support
them in gaining work experience that
is related to their degree endeavours.
To complement the above, Access to
the Workplace provides students with a
range of personal, financial and academic
support to enable students to thrive and
excel in their studies during their time at
DCU.
Since its establishment in 2019, the
Programme has provided 318 summer
internships for DCU students with 95
partner companies and it has received
widespread recognition for its excellence
and innovation.
Investing in Local Communities
through the PTSB Community Fund
The PTSB Community Fund was
established to support communities
by providing funding to community
organisations that are having a positive
and meaningful impact on the ground
and who are working hard to make a
difference.
With more than 120,000 votes cast by the
Irish public through both our website and
mobile App, in 2023 the Bank was proud
to announce Bluestack Special Needs
Foundation, Irish Motor Neurone Disease
Association, ChildVision, Dublin Society
Numerous fundraising events were
organised and managed by our colleagues
from around the Bank throughout the year
including: the Charity Table Quiz; Payroll
Giving Campaign; Christmas Mega Raffle;
and, Hell & Back – an 8km obstacle course
which saw our colleagues climb, crawl and
swim in support of our Community Fund
Partners .
All money raised during the year was
match funded by the Bank, for an overall
donation to our Community Fund Partners
of c.€300,000.
Since its establishment, the Community
Fund has contributed c.€1.8million in
funding to Irish community organisations,
supporting local communities across the
country.
In 2023, PTSB was proud to be shortlisted
at the Bonkers National Consumer
Awards in the Best Community or Charity
Engagement Category for the work of the
PTSB Community Fund.
PTSB Employee Volunteering
Programme
The Bank has in place an Employee
Volunteering Programme and
corresponding Volunteering Policy.
The Programme is driven by the PTSB
Community Fund Committee and sees our
colleagues from across the organisation
take part in the volunteering initiatives
affiliated with the Bank’s Community Fund
Partners.
During 2023, c.1,700 volunteering hours
were provided on the ground in local
communities, equating to c.€45,500 of in-
kind giving. Feedback from our people has
been positive, with 95% of participants
saying that they would recommend the
Employee Volunteering Programme to a
colleague.
Addressing Affordable Housing
through our Partnership with Ó
Cualann Cohousing Alliance
During 2023, we continued to embed our
partnership with Ó Cualann Cohousing
Alliance, supporting the agency’s work
developing fully integrated, co-operative
and affordable housing schemes in
communities across the country. Ó
Cualann is a member of the SEI Network
and is an SEI Impact Programme Awardee
- a programme recognised as having the
potential to grow and scale its impact.
As part of the partnership, the Bank has
provided €350,000 to Ó Cualann, which is
being used to fund the resources required
to accelerate its development plans
with the aim of building more than 1,800
houses across Ireland.
The Ó Cualann Cohousing Alliance was
founded in 2014 with the aim of providing
fully integrated, co-operative, affordable
housing in sustainable communities.
The agency is committed to a zero
carbon future and are involved in three
post-occupancy energy use studies to
ensure that homeowners are using their
A-rated homes to the maximum potential.
The three schemes (Amber, Esher and
Autodan) are part of SEAI and Horizon
2020 research projects.
Social Finance Foundation
The Social Finance Foundation (SFF) was
established, as a not-for-profit, in 2007
by the Irish Government to address the
needs of community organisations and
social enterprises for loan funding which
was difficult to obtain from mainstream
financial institutions.
The SFF’s mission is threefold: Firstly,
generate a strong social impact by
funding, through its lending partners,
creditworthy projects with loan finance;
Secondly, to realise the full potential of
social finance in Ireland; Finally, working
collaboratively, to undertake research and
deliver initiatives which promote social
good, with the Irish Government and the
Irish Banking Industry as its sponsors.
Since inception, the SFF has granted more
than €200 million in funding to c.2,000
social projects in communities throughout
Ireland.
Recognising the social mission of the SFF,
PTSB has made available more than €19.4
million in donated and low-cost funding
since 2009. Through a partnership with
Banking & Payments Federation Ireland
(BPFI), and collaboration with the broader
Irish Banking Sector, future funding has
been agreed through 2025.
Title Sponsorship of the Irish
Olympic Team and the Irish
Paralympic Team
PTSB is pleased to be the title sponsor of
Team Ireland for the 2024 Games in Paris,
becoming the first-ever title sponsor to
partner with both the Irish Olympic Team
and the Irish Paralympic Team during
33
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 The Programme brought Paralympic
sport to athletes at four regional events
(Galway, Cork, Lisburn and Dublin)
introducing athletes to sports, testing
their physical capabilities and providing a
link between the athlete and the relevant
Sporting National Governing Body.
The Programme is the first of its kind in
Ireland.
The PTSB Sustainability Team and
Community Fund Committee manage
the engagement with both our charity
and community partners, and ensure
that effective governance is in place via
the implementation of comprehensive
partnership agreements, as required.
In addition, the Bank has in place
a Community Fund Constitution, a
document which governs how we engage
with charities, manage relationships
and includes processes for completing
effective due diligence at regular intervals.
PTSB’s Chief Executive Officer
receives regular updates regarding the
implementation of the Elevating Our
Social Impact and Connecting with
Local Communities Pillar of the Bank’s
Sustainability Strategy. Progress against
Key Performance Indicators (KPIs) is
reported upward to the ExCo and the
Nominations, Culture and Ethics Board
Committee on a quarterly basis, or more
often as required.
Sustainability
(continued)
an Olympic and Paralympic cycle. The
partnership also marks the first time
that Paralympics Ireland has had a title
sponsor.
At PTSB we are not only passionate
about sport, but we also understand its
importance at the heart of communities
the length and breadth of the country.
As part of the partnership, we are
delighted to be working alongside eleven
world class athletes who will act as
ambassadors for the Bank. These athletes
include Olympic Champion Boxer Kellie
Harrington, Olympic Badminton Player
Nhat Nguyen, Olympic Champion Rower
Paul O’Donovan, Olympic Champion
Rower Fintan McCarthy, Olympic Hurdler
Sarah Lavin, Olympic Gymnast Rhys
McClenaghan, Olympic Swimmer Daniel
Wiffen, Paralympic High-Jumper Jordan
Lee, Paralympic Swimmer Nicole Turner,
Paralympic Cyclist Ronan Grimes and
Paralympic Powerlifter Britney Arendse.
The Olympic Federation of Ireland’s
Dare to Believe Schools Programme
In addition to our title sponsorship of
the Irish Olympic Team and the Irish
Paralympic Team, PTSB is also proud to
be title sponsor of the Olympic Federation
of Ireland’s Dare to Believe Schools
Programme.
Dare to Believe was originally launched
in 2019 in order to bring the spirit of the
Olympic Games to the primary school
classroom and inspires young people
across Ireland to dare to believe in
themselves. Our community ethos is a key
differentiator for PTSB and like us, Dare to
Believe is grounded in communities across
the country.
Over the last year, we were pleased to
be able to support the Programme’s
expansion into secondary schools to help
further grow its impact.
During 2023, 700 primary and secondary
schools took part in Dare to Believe
programming, with the curriculum being
delivered to more than 67,000 students in
communities across the country.
34
The PTSB Sanctuary Run in
partnership with the Olympic
Federation of Ireland and Athletics
Ireland
As proud title sponsor of Team Ireland,
PTSB were delighted to collaborate with
our partners at the Olympic Federation
of Ireland, as well as the teams at both
Sanctuary Runners and Athletics Ireland to
deliver the PTSB Sanctuary Run 2023.
Through our own commitment to Diversity,
Equity and Inclusion, we continually seek
to create a more inclusive PTSB for our
colleagues and for our customers.
The Sanctuary Runners are a community
charity who promote social cohesion
and community integration through
sport. They have a particular focus on
those living in direct provision and those
currently seeking asylum. The Sanctuary
Run is their annual headline event, a
family 5km run held on the National Cross
Country Course at the National Sports
Campus in Dublin. The Run creates
awareness and raises funds for the
important work that Sanctuary Runners do
in communities across Ireland, using sport
as a force for social good.
More than 800 people took part in the
PTSB Sanctuary Run 2023, coming
together in solidarity regardless of their
nationality, background or personal
experience.
PTSB NextGen in Association with
Paralympics Ireland
As part of our Team Ireland sponsorship,
we were honoured to work with our
partners in Paralympics Ireland this year
to deliver the first ever PTSB NextGen
Athlete Pathway Programme.
PTSB NextGen’s vision is to improve
access to and participation in sport
for people living with a disability and
providing them with an opportunity to
uncover their abilities in sports in which
they may not have had the chance to
try. Paralympic Sport is the pinnacle of
a sporting career in disability sports.
However, for multiple reasons (including
logistics, information and accessibility)
there are athletes out there that have
abilities in sport, but they may not have
had the opportunity to realise them.
PTSB Group Holdings plc - Annual Report 2023 Enhancing Our Culture and Investing in Our People
Overview
The Bank’s ambition to be Ireland’s best personal and business Bank through
exceptional customer experiences is only possible if we create a diverse and inclusive,
risk aware, growth culture, where our colleagues feel engaged, valued and are given the
support that they need to be the best they can be.
Sustainable Development Goals
Impact in Action:
89% of employees feel comfortable to be themselves at work regardless of
background or life experiences
81% Culture Index Score, +11% above our Culture Index Target of 70%
58% Female Board Gender Composition and 39% of Senior Leadership Positions are
filled by Women
75,000 hours of training delivered through the Bank’s eLearning platform COMPASS
in 2023
c.182 colleagues received an Institute of Banking (IOB) accreditation, with c.792
employees enrolled in banking education programming
More than 2,300 nominations received to the ‘Values in Practice’ (VIP) Awards, the
Bank’s colleague recognition programme. Nominations were up 57% on 2022
Investors in Diversity Gold Accreditation, Irish Centre for Diversity, 2023
Irish Banking Culture Board
PTSB is actively involved in improving
culture across the banking industry as
a member of the Irish Banking Culture
Board (IBCB), since it was established
in 2018. The IBCB, which operates as an
independent body chaired by Justice
John Hedigan, helps to ensure the
industry is focused on fair outcomes for
our customers and employees, thereby
rebuilding a sustainable banking sector.
With the objective of rebuilding trust
and improving culture and behaviours
in the industry, the Board includes
representation from the three Irish Retail
Banks.
Throughout 2023, we continued our
contribution to and support of the IBCB
and its programme of work, including:
• Playing an active role in a number
of IBCB workshops focussed on
addressing key challenges across the
sector;
• Participating in the IBCB Éist staff
survey to continue to listen and act on
feedback from our colleagues on culture
within the Bank, and across the wider
industry; and,
• Embedding the industry wide DECiDE
(Ethical Decision Making) Framework as
part of our Code of Ethics.
For more on the progress made in our
cultural evolution during 2023, please visit
page 20.
Living as Leaders
We believe that the consistent actions
and behaviours of everyone, every day is
essential in creating a better future for one
another and for our Bank.
During 2023, PTSB were proud to partner
with LIFT Ireland (Leading Ireland’s Future
Together) for the fourth year to continue
our Living as Leaders Programme, which
aims to promote and encourage the right
behaviours across all levels within the
organisation.
LIFT Ireland is a not-for profit organisation
with a vision to make Ireland a better
place to live by creating better leaders
across our society and in our communities.
LIFT’s philosophy aligns closely with that
of PTSB’s, as they believe that each of us
is a potential leader; whether that is within
our families, our schools, our sports teams
or our businesses. LIFT believe that by
developing personal leadership qualities
within each individual, we can develop a
generation of stronger and better leaders.
Over the last year, we were pleased to
be able to support the Programme’s
expansion into the Language and Leisure
schools programming to help to further
grow its impact.
During 2023, 300 schools took part
in the Language and Leisure schools
programming, with the curriculum
being delivered to c.17,700 students in
communities across the country.
For more on Living as Leaders, please visit
page 19.
High Performance Culture
The Bank’s Performance Management
Strategy is designed to cultivate a
culture where employees are valued,
developed and motivated to use their
talent, empowered to bring their best
selves to work and provided with regular
coaching and open two-way feedback.
Performance for each employee is
evaluated under two core principles which
are equally weighted:
• What You Do in line with the Bank’s
Strategic Priorities; and,
• How You Do It in line with the Bank’s
espoused Culture and Values.
The Bank has in place a set of core
competencies for all colleagues, relevant
to their role within the business. These
competencies are aligned to our
Organisational Values – Courageous,
United, Straightforward, Customer
Focused, and Open – and describe
the mind-set and behaviours required
for all colleagues within the Bank. The
competencies are an integral part of
our Career Development Framework,
supporting our colleagues’ development
and on the job career growth trajectory.
PTSB has in place an online performance
management system, Performance
COMPASS, to encourage quality
conversations and to streamline
the completion of the performance
management process.
35
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Pay and Reward
The Bank has a Pay and Reward Policy
which targets base pay to an acceptable
range around the market median. This
Policy is reviewed on a regular basis,
including assessing the competitiveness
of total reward arrangements against
market norms and taking account of State
agreements.
In December 2022, the Minister for
Finance issued a deed of partial release
in respect of the 2011 Placing Agreement
and accompanying Minister’s Letter which
relaxed the restrictions on variable pay
so as to allow for maximum pay-outs
(aggregated) of €20,000 in any 12-month
period.
The Bank is committed to ensuring the
ongoing alignment of remuneration
with our overall business strategy and
sustainability objectives, by linking
pay outcomes directly to individual
performance (what our colleagues achieve
but also the manner in which they achieve
it), and how their contribution strengthens
both our shared culture and the long-term
sustainability of our business.
PTSB is cognisant of the extent of the
cost of living crisis and the impact that
increases in energy, food and fuel prices
have had for our colleagues and their
families. In 2023, in recognition of the
extent of the pressures and in addition
to the previous special ‘cost of living’
gestures extended in 2022, the Bank took
the decision to process a special, once-off
support payment equivalent to 2% annual
salary. This payment was extended to
eligible colleagues up to and including our
less senior managers but excluded our
Middle and Senior Management Teams,
all Material Risk Takers and the Executive
Directors. The payment was accompanied
by a further gesture in the form of a €750
gift voucher issued in November 2023 and
which was extended to include our Middle
Management Team also.
36
Those gestures build on a number of
initiatives that were delivered to support
colleagues as part of the two-year pay
deal for 2022 and 2023 inclusive:
Wellbeing Offering
Financial
Pension Plan
• A 6.5% two-year pay deal;
• Increased entry-level salaries;
• Enhanced employer pension
contribution rates; and,
• Extended paid maternity leave, the
introduction of a Wellbeing day, and
expansion of sick pay entitlements.
Ways of Working (Hybrid Working)
The Bank encourages smarter and more
flexible ways of working for colleagues at
all levels of the organisation.
In 2023, PTSB continued embedding our
Smarter Working Programme to enable
optionality and more flexible ways of
working for colleagues, while enhancing
our tools and encouraging the use of a
broader range of technology.
The range of Smarter Working Options
available to colleagues include: reduced
hours; job sharing; compressed hours;
sabbaticals and career breaks; and, home
working or working from an alternative
office location.
In 2024, we will continue to assess
and evolve our colleague offering, and
corresponding policies, supports and
technology, with a view to ensuring the
work environment is fit for the future,
enabling improved flexibility and choice
for a greater colleague experience.
For more on Ways of Working, please visit
page 20.
Encouraging Employee Health,
Safety and Wellbeing
The wellbeing of our employees
throughout all stages of their career and
personal lives is of paramount importance
to us. As part of PTSB’s investment in
employee wellbeing, we offer a range of
programmes and benefits to assist and
support our people.
As part of our Employee Proposition,
our people are provided with a range of
financial, physical and emotional health
and wellbeing programmes and benefits
as outlined:
Income Protection Benefit
Sick Pay Scheme
Staff Banking
Cycle To Work Scheme
Annual Travel Pass Scheme
Employee Discount Scheme
Holiday Fund
Physical/Emotional/Mental Health
Health Screening
Eye Testing
Employee Assistance Programme For
Colleagues And Their Spouse, Adult
Dependent Children And Dependent
Parents (Counselling Service)
Parental Supports (1:1 Career
Coaching For Parents And People
Managers And Supports For Parents
And Carers Of Toddlers To Teenagers)
Menopause Supports For Colleagues
And People Managers
Mental Health Training Addressing A
Variety Of Themes
A Range Of Health And Wellbeing
Related Information Sessions
Lifestyle/Wellbeing Workshops
Work Station Assessments (Both In
Office And At Home)
Education Support
Paid Maternity And Paternity Leave
Adoptive Leave
Life Leave (5 Days)
MyLife App
The Bank has an Employee Health
Screening Programme that is made
available to all colleagues on an
annualised basis. We continued our
commitment to this programme by
investing in an annual free flu vaccination
programme in order to further safeguard
the health, safety and wellbeing of our
people.
PTSB Group Holdings plc - Annual Report 2023 • 89% of employees feel comfortable to
be themselves at work regardless of
background or life experiences.
existing skillset, while enabling them to
learn and adopt new skills that will be
critical to the future of banking.
LiveWell – Our Employee Resource
Group on Wellbeing
The Bank has in place an Employee
Resource Group (ERG) called LiveWell that
includes representation from all areas of
the business. Together, LiveWell focus on
areas of employee wellbeing and support
in the delivery of programming for our
colleagues, including:
• Contributing to the Employee Resource
Group Page on Workvivo, our employee
communication application;
• Rolling out the ‘Get Ready, Get Set For
Life’ Campaign for a second year in a
row, providing advice on Mortgages,
Banking Following a Bereavement, Wills
and Pensions;
• Offering parental support sessions and
coaching for People Managers who are
new parents;
• Hosting a series of events and
communications throughout 2023
dealing with topics such as Mental
Health, Meditation, Budgeting and
more; and,
With a focus on continuous improvement,
PTSB is focused on addressing the
feedback and will implement action plans
across the business during 2024.
The Bank recognises the importance
of checking in and staying connected
with our colleagues at regular intervals
throughout the year outside of our Every
Voice Counts cycle. With that in mind, in
2023 we continued to deliver a series of
micro-pulse surveys to check in with our
people and to get insight into how we
could assist them further in their role.
The micro-pulse surveys covered a
number of key themes including, Flexible
and Hybrid Working and Speaking Freely.
The findings enabled us to evolve our
action plans, ensuring that we were
focussed on the right things in order to
support our colleagues.
• Supporting and promoting the ‘Irish Life
Step Challenge’ and the ‘Grant Thornton
5km’ in Cork and Dublin.
For more on Every Voice Counts, please
visit page 19.
The Bank has a safety statement
in place which documents how the
highest standards of Health and Safety
Management are maintained across the
organisation. The Safety Statement, and
associated policies and processes, have
been prepared in accordance with Section
20 of the Safety, Health and Welfare at
Work Act, 2005 (The Act). The Safety
Statement is reviewed on a regular basis
and is revised as necessary.
Employee Engagement and
Development
Listening to Employees and Acting on
Feedback
The Every Voice Counts Employee
Engagement Survey is conducted annually
and is designed to give our people an
opportunity to provide feedback on what
is working well across the organisation,
while identifying areas for improvement.
PTSB’s most recent Every Voice Counts
Survey results showed a Culture Index of
81%, +11% above our Culture Index Target
of 70%. A selection of our survey results
include:
• 4 out of 5 employees trust PTSB to do
what is right;
• 4 out of 5 employees feel engaged in
the company and are proud to work for
PTSB; and,
Investing in Learning and Development
PTSB recognises the importance of both
personal and professional development
when it comes to delivering on our
purpose and ambition. Our focus is on
our people and our mission to equip them
with the necessary skills and behaviours
to develop and thrive in an ever-changing
financial services landscape.
We support our people in pursuing
both their professional and career
development goals. We are recognised as
approved employers by ACCA, Chartered
Accountants Ireland and CIMA and have
been recognised at a national level for
excellence in learning and development in
financial services.
In 2023, we continued to support our
colleagues with a diverse catalogue
of training courses which offered the
opportunity to develop their skills across
a number of different areas including
Leadership and Personal and Professional
Development.
In addition, we were proud to continue our
participation in Ignite, a learning initiative
in partnership with the Institute of Banking
and Skillnet Ireland. Ignite offers our
colleagues the opportunity to assess their
More than 75,000 hours of training was
delivered through the Bank’s e-learning
platform COMPASS last year, c.182
colleagues received an IOB accreditation,
with c.792 employees enrolled in banking
education programming.
Recognising Colleagues through
Our ‘Values in Practice’ Awards
The Bank’s employee recognition
programme, the ‘Values in Practice’ or
‘VIP’ Awards, recognises employees from
across the organisation that are living the
Bank’s Values and are positively impacting
the business.
In 2023, more than 2,300 nominations
were received with representation from
all parts of the business. This marked
the highest level of colleague recognition
since the Awards were introduced six
years ago.
In addition to our five ‘Values’ categories,
the Bank has two additional award
categories, the Community Impact
Award and the Living as Leaders Award,
recognising those who are having a
positive and meaningful impact on
their local communities, and those who
consistently live all five of our Values each
and every day.
In 2023, we continued to deliver our
‘VIP Every Day’ Programme, enabling
colleagues to recognise each other’s
outstanding contribution all year long, and
outside of our annual award cycle. Since
the launch of ‘VIP Every Day’ in May 2021,
more than 5,000 colleagues have been
recognised for their contribution.
Diversity, Equity and Inclusion
PTSB is an equal opportunities employer
committed to creating a professional
environment in which our employees
feel valued, included and empowered
to succeed in their career, regardless
of gender, age, sexual orientation, race,
religion, ability/disability, background or
life experiences.
Diversity and Inclusion has been a key
strategic area of focus for PTSB since
2017 and in 2023, we were proud to
introduce our new Diversity, Equity and
37
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Inclusion (DEI) Strategy. The addition
of Equity is a significant step towards
creating a more inclusive PTSB – one that
represents modern Irish society and the
many customers and communities we
serve.
We have made significant progress.
Actions taken in 2023 include:
• Achieving the Investors in Diversity
Gold accreditation and a Silver from the
Irish Centre for Diversity, recognising
the progress made across five pillars of
DE&I;
• Embedding our Smarter Working
Framework with 66% of our colleagues
now availing of Smarter Working
Options;
• Establishing a new Ability Employee
Resource Group to focus on physical
ability and neurodiversity;
• Continuing to support and promote
‘Elevate’, Business in the Community
Ireland’s Inclusive Workplace Pledge
with our CEO speaking at the launch of
the Elevate Report 2023;
• Rolling out the third phase of the Bank’s
Better Balance Female Mentoring
Programme, providing mentoring to
over 100 colleagues with support from
over 30 mentors at Senior Leadership
level;
• Publishing our Gender Pay Gap and
action plan for the fourth year in a row;
• Launching the Bank’s Domestic
Violence Support Guidelines, going
beyond legislation to offer the option of
additional paid leave to those affected;
• Continuing support for parents through
1:1 coaching and group sessions with
our parental support partners;
• Designing and launching the DEI
Awareness mandatory eLearning for all
colleagues;
• Ongoing review of all internal training
material, ensuring consideration for
accessibility and representation;
• Maintaining our Faith Room, Wellbeing
Room and All Gender Toilets facilities,
which now form part of our Property
Strategy;
• Promoting a culture of psychological
safety through Speak Freely, our
channel for encouraging colleagues to
speak up and raise a concern; and,
38
In addition, through the work of the
ERGs we have identified opportunities
to improve our brand visuals, address
accessibility issues and broaden our
understanding through introducing
supports like our LGBTQ+ terminology
document and launching the ‘Say My
Name’ Campaign, encouraging colleagues
to use phonetics and acknowledge the
importance of our given names.
Gender Balance in the Workplace
PTSB is a member of the 30% Club,
a group of c.200 Chairs and CEOs
committed to better gender balance at all
levels of their organisations. The Club’s
focus is on gaining visible and practical
support for gender balance from business
leaders in private, public, state, local and
multinational companies as well as other
interested groups.
The Bank is a member of Triple FS
(Female Fast Forward – FS Women in
Leadership) and has actively championed
women in leadership development
through our partnership with the Irish
Management Institute (IMI). In addition,
the Bank has in place an Early Career
Development Programme, supporting
our female colleagues who are only just
beginning their career.
PTSB supports Better Balance for
Business, and played an active role in the
development of the Banking and Payment
Federation of Ireland’s (BPFI) Women in
Finance Charter.
Analysis of our workforce by gender and
type of contract is as follows:
Total Headcount
At Year End*
2023
3,330
* excludes Non-Executive Directors (level 7)
• Being awarded the ‘Diversity & Inclusion
(Large Company)’ Award at the CIPD
Awards 2023 and the ‘Excellence in
Workplace Diversity and Inclusion’ at
the Workplace Excellence Awards 2023.
During 2024, we will enhance our DEI
Strategy with the recommendations put
forward by the Irish Centre for Diversity
following our Gold Accreditation, as we
continue to drive improvements and target
re-accreditation in 2025.
Employee Resource Groups
To support the delivery of the DEI
Strategy, the Bank has in place a number
of Employee Resource Groups (ERGs),
whose aim is to enable employees to join
together based on shared characteristics
or life experiences. The ERGs help diverse
groups obtain a collective voice within the
organisation and serve as an organised
and established platform that our people
can utilise to promote change.
There are currently five ERGs in place:
• PRISM – Our LGBTQ+ Network for
colleagues and allies. The Network
promotes and values individual
differences no matter how our people
identify;
• Better Balance – The Network aims to
be the catalyst for change in achieving
Gender Balance in PTSB;
• LiveWell – LiveWell provides space,
connection and support for colleagues
to engage in areas of wellbeing
important to them regardless of
location;
• DiCE (Diversity, Inclusion, Culture and
Ethnicity) – The Network promotes
and celebrates people of all races,
ethnicities, nationalities and cultural
heritage; and,
• Adapt – The Network focusses on
physical ability and neurodiversity.
The ERGs continue to champion
the cause of each group, promoting
and encouraging conversations with
colleagues, while celebrating key dates
such as International Women’s Day,
International Men’s Day, PRIDE, Diwali,
National Coming Out Day and Cultural
Diversity Day, to name a few.
PTSB Group Holdings plc - Annual Report 2023 Analysis By Type Of Contract
2021
2022
2023
Permanent
Fixed Contract
94%
6%
89%
11%
89%
11%
Gender Analysis
Male
Female
Male
Female
Male
Female
2021
2022
2023
Total*
Senior Management**
Senior Management Direct Reports***
Part-Time/Job Sharers
48%
64%
-
9%
52%
36%
-
91%
48%
62%
52%
11%
52%
38%
48%
89%
47%
61%
52%
7%
53%
39%
48%
93%
Excludes Non-Executive Directors (level 7)
*
** Senior Management are Level 0, Level 1 and Level 2
*** Senior Management Direct Reports are Level 3 and Level 4
Representative Body Relationships
and Employee Consultation
PTSB operates under an established
partnership model with our formally
recognised Representative Bodies – Unite,
Mandate and FSU.
Company representatives meet with the
internal committees and the full time
officials on a regular basis. This allows for
matters to be discussed in a structured
way and provides an opportunity to deal
with anything that may arise at inception,
greatly increasing the chances of internal
resolution.
All material organisational changes,
including changes to established terms
and conditions of employment (to
the extent they arise), are discussed
and negotiated in advance with the
Representative Bodies.
All employees receive regular updates on
organisational matters through a diverse
range of communication mechanisms.
Gender Pay Gap
We believe in being transparent about our
gender pay gap and the journey we are
on. As a purpose driven organisation, DEI
is a core pillar of our culture. For the fourth
year in a row, we are proud to publish our
gender pay gap.
This forms part of our commitment to hold
ourselves accountable by tracking our
progress against our action plan which we
put in place as part of our Board approved
DEI Strategy.
For more on our Gender Pay Gap
disclosure, please visit page 45.
Investors in Diversity Gold
Accreditation
In 2023, PTSB was proud to be
awarded the Investors in Diversity Gold
Accreditation. Supported by IBEC,
the Programme recognises existing
efforts, while supporting the journey of
continuous improvement by providing
a structured framework to transform
workplace practices and culture.
PTSB was only the twelfth company in
Ireland to receive the Gold Accreditation,
which recognises the power of leadership
commitment, well planned strategies,
and a relentless focus on driving positive
change. By embracing diversity and
fostering an inclusive culture, the Bank not
only achieved recognition, but has also
positioned itself for long-term success.
39
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Championing our Customers &
Creating a Bank that is fit for the Future
Overview
Our ambition is to be Ireland’s best personal and business bank through exceptional
customer experiences. Best doesn’t necessarily mean the biggest, but it does mean
being the best at what we do for both our Personal and Business Banking customers.
We are committed to understanding our customers and delivering what matters most to
them through every stage of their financial journey.
Sustainable Development Goals
Impact in Action:
Relationship Net Promoter Score
A customer brand tracking survey carried out in December 2023 indicated a
Relationship Net Promoter Score* (RNPS) of +20, up 10 points on last year and
placing PTSB in joint first position among the retail banks in Ireland
c.159 million logins on our digital channels in 2023
c.38,000 new Current Accounts and c.40,000 new Deposit Accounts opened during
2023
54% of new Current Account openings took place through the Bank’s award winning
Digital Current Account
Broadening our Business Banking offering through partnerships with Bibby Financial
Services, the Strategic Banking Corporation of Ireland, Digital Business Ireland and
Worldpay
*
A Relationship Net Promoter Score (RNPS) is a measure of customer advocacy towards a brand and
indicates the willingness of a customer to recommend a company’s products or services to others. The
question asks customers how likely they are to recommend their bank to friends or family on the basis
of their own experience. The range for the scoring is -100 to +100.
Customer Engagement
Delivering High Quality Products and a
Superior Customer Experience
Our purpose is to work together to
build trust with our customers and our
communities. In order to deliver on our
purpose, we are focused on developing
trusted banking relationships with
customers through: listening to what
they have to say; developing products
that matter most to them; and, delivering
a great customer service experience,
whether that be in our network of
branches, through our customer service
centres, online or via the PTSB App.
Examples of our commitment to
delivering high quality products and a
superior customer experience include:
establishing a new brand identity,
delivering improvements based on insight
though engaging customers in our Voice
of the Customer Programme; investing
in digital transformation and innovation;
and, broadening our service offering for
our Business Banking customers through
partnerships.
Establishing a New Brand Positioning
In October 2023, the Bank launched a
major overhaul of brand and customer
positioning for the first time in over 20
years.
Key elements of the change include:
• A complete rebranding of the Bank as
PTSB, an acronym of the Bank’s full
name and previous brand (permanent
tsb). The introduction of a new
customer promise – Altogether More
Human – which emphasises PTSB’s
intentions as a full-service personal
and business Bank, to bring great
technology and great people together
40
to solve real customer needs and
deliver a better banking experience;
• The new brand name and visual identity
is being phased in across the Bank’s
operations and will feature across
primary branch locations, customer
touchpoints and digital platforms,
communications and advertising; and,
• An initial investment of €5 million into
customer research, the development
and roll-out of a new visual identity
and customer promise and a national
advertising campaign, with further
investment planned to modernise
PTSB locations, including the Bank’s
nationwide branch network, over the
next 24 months.
Listening to Our Customers and Acting
on their Feedback
PTSB has in place a customer listening
programme called Voice of the Customer
(VOC), designed to give our customers a
voice and create a channel for two-way
communication and feedback.
VOC enables us to collect customer
feedback from everyday interactions in
our Customer Contact Centres, Retail
Network and Digital channels in real time
and turn that insight into action.
The data received from the VOC surveys
provides the Bank with a valuable look
at what we are doing well, but more
importantly, highlights the areas of
opportunity available to improve both our
customer service offering and processes.
VOC feedback is reported weekly to key
stakeholders, including our customer
facing teams, Senior Leadership Team and
Executive Committee.
Investing in Digital Transformation and
Innovation
Our customers want the ability to interact
with us at a time and place that works for
them, and through the optimal channel.
During 2023, our customers continued to
engage with us through digital channels:
• c.687,000 active users of Open24 Web
and App
• c.159 million logins on both Open24
Web and App
• More than 16,000 Digital Current
Accounts opened during 2023
• 96% of our Term Lending applications
are now being completed online
• 119 million contactless payments made
by PTSB customers last year
PTSB Group Holdings plc - Annual Report 2023
Personal service will remain at the heart of
everything we do. However, as customer
needs have changed so profoundly,
digitalisation is playing an ever increasing
role in our service offering.
Through our Digital Transformation
Programme, PTSB has been on a journey
to transform our business, committing
€150 million in investment in technology
infrastructure and digital services over the
last number of years.
Actions taken during 2023 include:
Digital Support for our Customers
• Modernising our technology
architecture;
• Renovating our core banking platforms;
• Introducing our new Open24.ie Online
Banking Platform, a new-look website
that provides customers with a simpler,
more modern experience, making
everyday banking easier through more
streamlined navigation;
• Embedding our digital customer
journeys, such as our Digital Current
Account and our Digital Mortgage
Journey; and,
• Leveraging Artificial Intelligence (AI)
technology within some of our key
customer journeys.
Digital Support across our Workplace
• Continuing to retrofit our branches to
include the latest in digital technology;
• Ongoing introduction of digital
workplace technology to support our
colleagues as they continue to transition
into our new hybrid working model
(including office space improvements
and Microsoft 365 enhancements); and,
• Embedding Workvivo, our application
based colleague communication tool,
delivering more targeted colleague
communications and encouraging two-
way engagement.
These service offerings allow us to
support our customers further, allowing
them to bank in a way that is more
convenient, flexible and secure. We look
forward to building on this momentum
with further digital rollouts planned for
the year ahead, including: continued
improvements of the next generation of
our mobile app; and, the implementation
of further digital supports for our Business
Banking customers and colleagues.
Products and Services
Transforming Our Retail Network
At PTSB, we believe that our branches are
a vital part of our business model and that
the key to safeguarding their future is to
make them efficient. For us that’s about
delivering the innovative digital solutions
that our customers are asking for, while
also providing that in-person support.
Over the last number of years, PTSB
has committed more than €30 million in
funding to transform our branches. During
2023, the Bank invested an additional €25
million into the 25 branch locations that
were acquired as part of the Ulster Bank
transaction in the Republic of Ireland,
bringing the total investment to c.€55
million. This has allowed us to better
serve our customers via a channel of their
choosing.
Our refurbished branches now have
enhanced digital capabilities including,
digital marketing screens that reduce our
reliance on print marketing, new Open 24
kiosks with enhanced capabilities, state of
the art, purpose-built customer meeting
areas and the latest ATM and SSBM
technology that allows us to accept cash
and cheque lodgements across many
branches in our network 24/7.
We remain committed to providing a
personal service for customers, and
combining that personal service with
the best that digital technology has to
offer. We look forward to building on this
momentum with further refurbishments
planned as we evolve our branches in line
with our new brand identity.
An Award Winning Digital Current
Account
The Bank has in place an award winning
Digital Current Account offering, which
facilitates a fast and easy account
opening process in minutes via the
PTSB App. The Digital Current Account
continues to perform strongly, with
c.16,000 new Current Accounts being
opened via the App last year.
As well as being popular amongst our
customers, the introduction of the Digital
Current Account has also enabled the
Bank to reduce its environmental footprint.
Through the launch, we estimate that
we eliminate 130 to 270 pages of paper
from our business for every application
that comes through the online channel. In
addition to the Digital Current Account, we
have also introduced online applications
for Term Lending, Credit Cards and
Overdrafts, further reducing our reliance
on paper.
The Bank was proud to win Best Current
Account at the Bonkers National
Consumer Awards in 2023.
A Market Leading Digital Mortgage
Journey
During 2023, the Bank was proud to
launch a Digital Mortgage Journey to
the market through the introduction of
its Online Mortgage Portal. Through
the Portal, customers can now start
their Mortgage application, track their
progress and talk to a PTSB team member
whenever they need to, at a time and a
place that suits them.
We estimate that we remove c.250 pages
of paper from our business for every
application that comes through the online
channel. More than 3,000 Mortgage
applications came through the online
channel in 2023, resulting in a reduction of
c.785,000 pages of paper;
The Bank was proud to win Best
Innovation in Banking and the overall
Grand Prix Award at the Annual FS Awards
during 2023.
Extending our 2% & 2% Mortgage
In 2022, the Bank was pleased to extend
its award winning 2% & 2% Mortgage until
31 March 2024.
Launched in 2017, the proposition
was the first of its kind in Ireland and
enables customers to get 2% cashback
at drawdown and 2% cashback on their
monthly repayments until 2027, when they
pay using their Explore Current Account.
In 2023, the Bank was proud to be
awarded the Best First Time Buyer
Mortgage at the Bonkers.ie National
Consumer Awards for the sixth year in a
row.
Increasing our Deposit Interest Rates
During 2023, PTSB announced four
increases to its personal deposit rates,
including to the Regular Saver (+2.10%),
the Safari Saver account (+0.99%), and
the 3 Year Fixed-Term Deposit account
(+2.00%). Business customers also
benefitted from competitive deposit
rate increases throughout the year with
changes made to Fixed Term Accounts.
As at November 2023, the Bank had
increased its personal deposit rates
six times since November 2022. This
41
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Sustainability
(continued)
momentum has continued in early 2024
with further changes announced in
February for both personal and business
deposit rates for new and existing
customers. These latest changes include
the introduction of a new 32-day Notice
Deposit account for business customers
in March which will attract a rate of 2.00%
AER.
Privacy and Security
Cyber Security
The Irish banking landscape is changing
rapidly and the Bank recognises
the fundamental role that we play in
protecting both our customers and our
business from online security threats.
Led by our Chief Technology Officer,
our Technology Team constantly
monitor cyber security threat levels, in
addition to completing horizon scanning.
Based on threat intelligence, the Bank
prioritises investment in cyber defences
and implements preventative measures
accordingly. Proactive planning, ongoing
vigilance and enhanced monitoring are
key to our approach to cyber safety within
the organisation.
In order to set out our commitments to
protect both customers and the Bank,
control requirements are defined within
PTSB’s Information Security Policy.
In addition, to support our workforce in
navigating the online world in a safe and
responsible way the Bank continues to
invest in learning and development, with
compulsory cyber security training and
awareness campaigns delivered to all
colleagues on an annual basis.
Data Protection
At PTSB, working together to build trust
with our customers is at the heart of
our purpose. In today’s digital era, data
protection threat continues to evolve and
as such, protecting and safeguarding our
customers’ and our colleagues’ personal
data remains one of our key priorities.
Our day-to-day business activities require
the processing of personal data. While
Data Protection is a fundamental right
under the EU Charter of Fundamental
Rights, protected by both European
and Irish legislation of which the Bank
complies, PTSB has its own Data
Protection Policy in place which sets out
our approach.
Complying with the requirements and
principles of the Policy is a condition of
42
employment for our colleagues. The Bank
has in place procedures to deal with data
security breaches and reports regularly to
the Executive Committee and Board.
Ensuring data protection is considered
as part of change programmes, raising
awareness and providing ongoing
education and training to our people are
critical ways in which we mitigate against
data protection risk.
Supporting our Business Banking
Customers
PTSB’s Business Banking Strategy is
focused on partnering with our Business
customers, not just in terms of supporting
their banking needs, but through acting as
trusted advisers to help them to manage
and grow their business.
In 2023, we continued the expansion of
our business customer offering through
deepening our partnership with the
Strategic Banking Corporation of Ireland
(SBCI).
The partnership has proven successful,
with the final €6 million of funding drawn
down during 2023.
The additional funding brings our total
commitment in low-cost loans under the
Irish Government's Brexit Impact Loan
Scheme and Future Growth Loan Schemes
for SMEs to €82 million, to date.
As a result of this success, the Bank has
secured €70m of new funding through the
SBCI’s new Growth and Sustainability Loan
Scheme, which is expected to launch in
2024.
Through the partnership, SMEs will
benefit from lower borrowing rates and
more attractive borrowing terms as the
loans will be 80% guaranteed by the SBCI,
which was set up by the Irish Government
to enhance access to low-cost finance for
SMEs through banks and other lenders.
Additional actions taken to support our
Business Banking customers last year
include:
• Introducing our PTSB Asset Finance
offering to our Business Banking
customers;
• Launching a new Regional Business
Banking Hub in our Patrick Street
location in Cork, enabling us to continue
to support our Business Banking
customers as they work to grow their
business;
• Continuing to collaborate with partners
to enable us to broaden our service
offering, including, Bibby Financial
Services for invoice finance and
Worldpay for merchant acquiring;
• Partnering with Sentenial to enhance
the Bank’s payment solutions;
• Embedding our partnership with
Digital Business Ireland (DBI), further
supporting our Business Banking
customers to migrate their business to
online channels through the supports
offered by DBI;
• Continuing with our title sponsorship
of the Digital Business Ireland National
Digital Awards for the fourth year in a
row;
• Supporting the Small Firms Association
(SFA) National Business Manufacturing
Category Award, encouraging
excellence, achievement and innovation
amongst small businesses of all sectors;
• Training and upskilling provided to our
people, with a special focus on systems,
processes, targeted sector lending
and sustainability – which included the
delivery of a bespoke training program
in partnership with Teagasc to support
responsible lending activity within the
Agriculture sector; and,
• Ongoing recruitment of sector and
market expertise within our Business
Banking team.
Business Banking Partnerships
Digital Business Ireland
In 2023, we were proud to continue
to embed our partnership with Digital
Business Ireland (DBI), Ireland’s dedicated
e-business representative body, for an
additional two-year term.
Through the partnership, PTSB provides
programme funding to support Digital
Business Ireland, as it continues to work
in tandem with its membership, to help
businesses grow, scale and digitally
transform.
The ongoing collaboration between the
Bank and DBI will enable the agency to
further grow its extensive network of over
8,000 members, providing an enhanced
suite of supports and opportunities.
These include its complimentary advisory
services, training events, and its annual
National Digital Awards Programme, of
which PTSB is the title sponsor.
Over the last year, we have built a strong
partnership with DBI delivering supports
for Irish Business, including:
PTSB Group Holdings plc - Annual Report 2023 • c.750 businesses received training on
digital strategy which helped them to
turbo-charge their online growth;
• 1000s of SMEs received advice
and support, through collaboration
with Digital Business Ireland affiliate
membership bodies;
• Supporting Digital Business Ireland to
deliver the Digital Summit, a one day
conference and expo for SMEs that
wish to harness the power of digital
business; and,
• More than 550 businesses entered
the Digital Business Ireland National
Digital Awards, proudly supported by
PTSB, with 22 winners and runners-up
spotlighted across three categories;
Website, Innovation and People.
We look forward to building on this
momentum during 2024, as we remain
focussed on continuing to support Irish
businesses to scale and grow.
Guaranteed Irish
In 2023, PTSB continued our partnership
with Guaranteed Irish in order to deliver
the Guaranteed Irish Business Awards,
celebrating businesses that support
jobs, communities and provenance, while
contributing to Ireland, its people, and its
economy.
Since 1974, Guaranteed Irish has been
a business membership networking
champion in Ireland. Their network
consists of over 2,000 member
businesses, employing over 120,000
people across the country and generating
an annual combined Irish turnover of €13
billion.
Throughout our 200 year history, the
Bank has been committed to delivering
exceptional customer service and
connecting with local communities. In
2021, we were proud to be the first Retail
Bank to be awarded the Guaranteed
Irish Symbol for our contribution to
communities across the country.
We look forward to deepening our
partnership with Guaranteed Irish through
our support of the annual Business
Awards, recognising the outstanding
contribution of Irish business on a national
scale.
Governance and Reporting
Corporate Policies
Living Our Purpose and Ensuring Strong
Corporate Governance
The Board of Directors approved the
Sustainability Strategy and ensures
Management have comprehensive plans
in place for achievement of the Bank’s
sustainability objectives. PTSB’s Chief
Executive receives regular updates
regarding the implementation of the
Strategy, and progress against KPIs is
reported upward to both the Executive
Committee and the Nominations, Culture
and Ethics Board Committee on a
quarterly basis, or more often as required.
To support the above, the Bank has in
place a Sustainability Committee (SusCo)
which operates as a Sub-Committee of
the Executive Committee. The SusCo is
chaired by the Chief Human Resources
Officer and Corporate Development
Director and includes representation from
Executive Committee members and Senior
Leaders representing business units
across the organisation. The Committee
meets monthly to review and direct the
development of programming, with a clear
focus on the Environmental, Social and
Governance (ESG) factors that are core
to operating our business in a responsible
and sustainable way.
A dedicated Sustainability Team is in place
to provide leadership and coordinate
enterprise-wide activity, with the support
of the SusCo.
For more on Governance, please refer to
the Directors’ Report on page 111.
Operating Responsibly
PTSB is committed to operating
responsibly and conducting our business
to the highest ethical and professional
standards. We are similarly committed,
under our Sustainability Strategy, to
building trust and playing an active role in
communities across the country.
We are focussed on upholding the highest
standard of conduct and behaviour among
our people. This is not just a nice to have,
it is a commitment that underpins how
we work together, our relationship with
society, and, most importantly, how we
build trust with our customers and with
our communities.
Individual Accountability Framework
(IAF)
The Individual Accountability Framework
(IAF) was introduced in 2023 by the CBI.
It aims to bring accountability to financial
services through three key elements:
the Senior Executive Accountability
Framework (SEAR), the Conduct
Standards and certain aspects of the
enhancements to the Fitness and Probity
(F&P) Regime.
The SEAR will require in-scope firms
to set out clearly and fully where
responsibility and decision-making lie
within the firm’s senior management. The
Conduct Standards include ensuring that
organisations are acting with honesty and
integrity, with due skill, care and diligence,
and in the best interest of customers, and
will apply to individuals in all regulated
firms. Updates in the F&P regime include
the business’ obligations to proactively
certify that individuals carrying out certain
specified functions are fit and proper.
PTSB has introduced an Individual
Accountability Framework (IAF) Conduct
Standards Policy, which sets out the
requirements across PTSB and its
subsidiaries for the embedding of the IAF
Conduct Standards. The Bank has put
in place comprehensive communication
and training plans which ensures that
it delivers on its obligations aligned to
the Individual Accountability Framework
Act 2023, acknowledging PTSB’s role
in driving positive improvements in
behaviour and culture within the financial
services industry, while rebuilding
consumer trust in the Irish banking sector.
The IAF Conduct Standards Policy outlines
the Bank’s commitment to the highest
Conduct Standards and the behaviours
expected by colleagues in order to meet
IAF requirements relative to Conduct.
Colleagues in Controlled Function (CF)
roles are required to adhere to IAF
Common Conduct Standards and those
in Prescribed Control Function (PCF) and
CF1 roles are also required to adhere to
the IAF Additional Conduct Standards.
This IAF Conduct Standards Policy is
overarching and takes consideration of
PTSB’s Colleague Conduct Policy.
43
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Colleague Conduct Policy
The Bank has in place a Colleague
Conduct Policy, an overarching colleague
framework which includes the policies and
procedures that are integral to upholding
high standards of colleague conduct
across the organisation. The Policy sets
out the behaviours expected of our
people, and lays out the requirements
for the effective management of those
behaviours within the Bank to ensure that
our customers and colleagues are treated
in the right way.
PTSB has a zero tolerance for
inappropriate colleague conduct. A
colleague conduct paper is produced
and presented to the Board on a bi-
annual basis that gives qualitative and
quantitative updates on key colleague
related policies and procedures over the
period, in line with our Colleague Conduct
Policy. The Colleague Conduct Policy
takes into consideration a number of other
documents that encourage appropriate
colleague conduct and behaviour,
including our Code of Ethics and Speak
Freely. The Colleague Conduct Policy
is reflected within the overarching IAF
Conduct Standards Policy.
In addition, the Colleague Conduct
Policy gives consideration to our Dignity
and Respect Code and our Equality
through Diversity and Inclusion Charter,
recognising the responsibility we have to
respect and protect the human rights of
every individual that works for us.
Code of Ethics
The Bank has in place a Code of Ethics
that provides a general framework for
expected behaviour and guides our
workforce in doing the right thing. It
codifies how best to interact with our
stakeholders and provides standards
that colleagues must follow in both
their professional life, and in conducting
their own personal financial affairs. It is
there to protect us from unacceptable
behaviour and minimise opportunities for
misconduct.
Complying with the requirements and
principles of the Code is a condition of
employment for our colleagues. Aligned
to the introduction of the IAF, from 31st
December 2023 it is also a regulatory
requirement of the Central Bank of Ireland
as it sets out the behaviours expected of
all colleagues in relation to the Business
Standards, and for those in Control
Function and PCF roles the Common and
Additional Standards expected.
The Board supports a zero risk appetite
for deliberate and/or repeated poor or
unfair customer outcomes (financial or
non-financial), or any market impact which
arises through inappropriate actions, or
inactions in the execution of our business.
Any instances of breaches are reported
throughout the year.
To further support the above, the Bank
has in place an industry wide DECiDE
(Ethical Decision Making) Framework.
This was incorporated into Ethics
training which is delivered annually to all
colleagues.
The DECiDE Framework is communicated
across all areas of the Bank and
includes an interactive animation which
demonstrated to colleagues how the
Framework can be used within every
day decision making. At a more strategic
level, the Bank also introduced the ‘Yes
Checks’, which now form an integral part
of decision making within the Bank’s
Committees.
Speak Freely
To support the cultural evolution of PTSB,
the Bank has developed an alternative
approach to simplifying and clarifying the
channels by which an employee can speak
up and raise a concern; namely, Speak
Freely. Speak Freely, and associated
procedures, protects employees who wish
to make a protected disclosure, relating to
an actual or potential wrongdoing in the
workplace.
The Bank has in place procedures to deal
with any protected disclosures that may
arise as part of Speak Freely and reports
to the Executive Committee and Board
on a half-yearly basis. You can read more
about our commitment to Speak Freely in
2023 on page 19.
We acknowledge our responsibility to
respect human rights as set out in the
International Bill of Human Rights and the
eight fundamental conventions on which
the United Nations Guiding Principles on
Business and Human Rights are based.
In order to mitigate against human rights
risk, or violations that may occur, the
Bank has comprehensive due diligence
procedures in place, which include: the
implementation of a Colleague Conduct
Policy that establishes the requirements
for the effective management of
appropriate behaviours within the Bank;
procedures for ensuring that we meet
all relevant human rights legislation in
the Republic of Ireland; and, a suite of
reporting mechanisms through our Speak
Freely channels to support the timely
reporting of issues.
Procedures are in place for dealing with
reported human rights allegations and
instances are addressed on a timely basis.
In addition, the Bank has in place
additional requirements set out in other
policy documents that help to encourage
the right behaviour, including: Conflict of
Interest; Anti-Money Laundering/Terrorist
Financing; Sanctions and, Anti-Bribery
and Corruption.
Conflict of Interest
A Conflict of Interest occurs when an
employee’s personal relationships,
participation in external activities or
interest in another venture influence or
could be perceived to influence a business
decision. PTSB has in place a Conflict
of Interest Policy to provide guidance to
employees and to ensure that the Bank
proactively manages both personal and
organisational Conflict of Interests. Every
employee is responsible for identifying,
reporting and managing Conflict of
Interests and, in doing so, must comply
with the letter and spirit of the Policy.
Human Rights
PTSB recognise our responsibility to
respect the human rights of every
individual. The Bank ensures the
protection of our colleagues’ human rights
through its Dignity and Respect Code and
Equality through Diversity and Inclusion
Charter. The Code and the Charter focus
on the prevention of discrimination, the
provision of equal opportunities and
ensure that employees are treated with
dignity and respect in the workplace.
The Bank has in place procedures to deal
with Conflict of Interest that may arise.
The Human Resources Team monitors
adherence to this Policy and reports to
the Executive Committee and Board on a
half yearly-basis.
Financial Crime Compliance
PTSB maintains an overarching Financial
Crime Compliance Framework, which
includes three supporting policy
documents relating to Money Laundering/
44
PTSB Group Holdings plc - Annual Report 2023 our gender pay gap. This forms part
of our commitment to hold ourselves
accountable by tracking our progress
against our action plan which we put in
place as part of our Board approved DEI
Strategy.
Our 2023 gender pay gap sits at 15.9%,
down from 16.5% in 2022.
We acknowledge that we have more to
do to close our gap and have a dedicated
action plan in place as part of our Board
approved DEI Strategy.
The Business Working Responsibly Mark
Following a comprehensive programme
of work, in 2023 the Bank was honoured
to recertify to the Business Working
Responsibly Mark (The Mark) from
Business in the Community Ireland (BITCI).
The Mark is an external accreditation
recognising best in class Responsible
Business Programmes in Ireland and as
such, the Bank joins a prestigious group
of only 41 other companies who have
achieved this accolade. As part of this
accreditation, our CEO, Eamonn Crowley
sits alongside the CEOs of other member
companies as part of the Leaders Group
on Sustainability – a collaborative group
who work with key stakeholders to drive
Environmental, Social and Governance
(ESG) change across the country.
The Bank first received the Mark in
2020. We will continue to work alongside
BITCI as we continue to embed our
Sustainability Programme in the years that
lie ahead.
Terrorist Financing, Sanctions and Bribery
and Corruption Risk. The Framework and
related Policies set out how the business
adheres to all laws and regulations relating
to financial crime compliance and how
these risks are managed within the Bank.
An assessment of the specific Money
Laundering/Terrorist Financing and
Sanctions Risk faced by the Bank is
undertaken annually, and a review of the
Bribery and Corruption Risk relevant to
the Bank’s business is also completed on a
periodic basis. Financial crime compliance
training, which covers Money Laundering/
Terrorist Financing, Sanctions and
Bribery and Corruption Risk, is provided
to all employees each year, with tailored
training provided to the Board of Directors
and members of the Executive Committee.
PTSB is committed to managing and
mitigating the financial crime compliance
risk associated with its business activities
and complying with all applicable
Money Laundering/ Terrorist Financing,
Sanctions and Bribery and Corruption
laws and regulations in the jurisdictions
in which it operates. In order to mitigate
against any financial crime compliance
related risk that may occur, the Bank has
comprehensive due diligence procedures
in place, which include requesting
documents such as proof of identity and
proof of address at account opening
and at intervals thereafter, conducting
enhanced due diligence reviews and
undertaking Politically Exposed Persons
(PEPs) and Sanctions screening in
accordance with our Policies.
Environmental Policy Statement
PTSB’s Environmental Policy Statement
outlines the Bank's commitment to
environmental sustainability through the
ongoing identification, management and
improved efficiency of those significant
environmental impacts associated with
our business activities, including: carbon
impact and contributing to a low carbon
economy; energy management; use of
natural resources; biodiversity; and, waste
management.
The Environmental Policy Statement is
reviewed annually as part of a senior
management review of all sustainability
programming. Progress against our
Sustainability Strategy is reported
upward to the Chief Executive, Executive
Committee and the Nominations, Culture
and Ethics Board Committee on a
quarterly basis, or more often as required.
Policy Governance
PTSB is committed to mitigating the
Environment, Social and Governance
(ESG) risks associated with its business
activities and complying with all laws and
regulations in the jurisdictions in which
it operates. We manage our ESG risk
through the effective implementation
of our Sustainability Strategy outlined
in this report and through the effective
application of policies and procedures that
are integral to operating our business in a
responsible way.
All policies that the Bank has in place to
protect our workforce meet the relevant
regulatory requirements, adhere to PTSB’s
Document Management Standards and
Procedures Policy and are reviewed and
updated as appropriate, on an annual
basis.
Policies are monitored by their respective
policy owners, communicated as required
and made available to our colleagues on
our internal website.
ESG Disclosures
An ESG Risk Rating Through
Sustainalytics
PTSB engaged Sustainalytics, a leading
independent ESG and Corporate
Governance research ratings and
analytics firm, to produce an ESG Risk
Rating for the organisation. ESG Risk
Ratings measure a company’s exposure to
industry-specific material Environmental,
Social and Governance (ESG) risks, in
order to determine how well a company is
managing those risks.
Following the process, the Bank received
a ‘Low’ rating, recognising that enterprise
value is considered to have a low risk of
material financial impacts driven by ESG
factors. Company ratings are categorised
across five levels: negligible, low, medium,
high and severe.
Gender Pay Gap
We believe in being transparent about our
gender pay gap and the journey we are
on.
As a purpose driven organisation,
Diversity, Equity and Inclusion (DEI) is a
core pillar of our culture. For the fourth
year in a row, we are proud to publish
45
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
The EU Taxonomy
In accordance with Article 8 of the EU
Taxonomy Regulation and the underlying
Disclosures Delegated Act, PTSB is
required to disclose KPIs related to the
proportion of taxonomy-eligible (across
all six environmental objectives) and
taxonomy-aligned activities (for climate
change mitigation, and climate change
adaption) for year-end 2023.
PTSB recognises limitations in data
availability and evolving technical
screening criteria. Notwithstanding these
constraints, the Bank is progressing
the disclosure in line with regulatory
requirements with broader aim of
providing stakeholders meaningful insights
into its sustainable financing activity.
The Bank’s business is primarily focused
on residential lending, small and medium
enterprises (SMEs) and personal lending
customers. As at year-end 2023,
Residential Mortgages represent the
Bank’s most material asset portfolio
currently [94% value]. As a result, for
this first disclosure, the Group has
focused on assessing alignment of the
Residential Mortgage Book. In 2022, the
Bank introduced our Green Mortgage to
the market, a 5-Year fixed rate product
available to all new and existing home
loan customers where their homes
have a confirmed or proposed Building
Energy Rating of A1 to B3. In addition,
the Bank was pleased to be accepted as
participating on-lender in the Strategic
Banking Corporation of Ireland’s (SBCI)
new Retrofit Loan Scheme, aimed
at supporting consumers and small
private landlords who wish to invest
and improve in the energy efficiency
of a residential property. PTSB was
successful in obtaining €100m in funding
and is preparing to launch the Scheme to
customers during 2024.
Annex VI of the Disclosures Delegated
Act contains a series of Template for the
KPIs of credit institutions. PTSB’s 2023
returns can be found in the Appendix.
Template 1 lays out the Bank’s approach
Main KPIs and Additional KPIs
to determining EU Taxonomy-alignment
of key financing activities. This involved
phased screening of residential properties
including an assessment of energy
efficiency, property age, and exposure
to Physical Risk, supported by external
data sources against defined technical
screening criteria. Metrics have been
derived from financial reporting systems
using available tagging capabilities,
though these mechanics continue to
evolve.
PTSB expects the share of Taxonomy-
aligned activities to gradually increase
as the Bank continues to focus on the
development of products which support
the green transition, while engaging with
customers to improve data quality. Data
availability and capabilities will likewise
continue to mature and evolve. The Bank
welcomes ongoing engagement with
stakeholders and regulators on experience
to date and ways disclosure may evolve to
enhance transparency and compatibility
over time. PTSB is committed to playing
its part in progressing towards a more
sustainable future.
Total
environmentally
sustainable
assets
KPI Turnover*
KPI
% coverage (over
total assets)***
% of assets
excluded from
the numerator of
the GAR (Article
7(2) and (3) and
Section 1.1.2. of
Annex V)
% of assets
excluded from
the denominator
of the GAR
(Article 7(1) and
Section 1.2.4 of
Annex V)
Main KPI
Additional
KPIs
474.75
2.03%
Green asset
ratio (GAR)
stock
GAR (flow)
109.90
2.82%
Trading
book***
Financial
guarantees
-
-
-
-
-
-
-
-
1.68%
6.51%
17.45%
2.32%
8.44%
17.49%
Based on the Turnover KPI of the counterparty
*
** Based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used. Not applicable to PTSB.
*** KPIs due to begin applying in 2026.
46
PTSB Group Holdings plc - Annual Report 2023
Green asset ratio (GAR) stock: is based on assets on the balance sheet as at 31 December 2023.
GAR (flow): covers new assets acquired during the year prior to disclosure date.
For the 31st December 2023 disclosure, the Bank has reviewed the book for exposures to nuclear gas related and fossil gas related
activities based on the questionnaire provided in Annex XII Template 1. The Bank has no exposures to these activities at 31st
December 2023.
For the 31st December 2023 disclosure, bank reviewed the book for exposure based on the below questionnaire provided in Annex
XII Template 1.
Row
Nuclear gas related activities
1.
2.
3.
4.
5.
6.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment
of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from
the fuel cycle.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear
installations to produce electricity or process heat, including for the purposes of district heating or industrial
processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that
produce electricity or process heat, including for the purposes of district heating or industrial processes such as
hydrogen production from nuclear energy, as well as their safety upgrades.
Fossil gas related activities
The undertaking carries out, funds or has exposures to construction or operation of electricity generation
facilities that produce electricity using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined
heat/cool and power generation facilities using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat
generation facilities that produce heat/cool using fossil gaseous fuels.
NO
NO
NO
NO
NO
NO
CDP
In 2023, we continued to further our commitment to environmental transparency by disclosing PTSB’s environmental impact through
CDP (formerly the Carbon Disclosure Project), the non-profit that runs the world’s leading environmental disclosure platform.
We achieved a CDP rating of B during the 2023 disclosure cycle, indicating that the Bank addresses its environmental impacts and
ensures good environmental management
By completing CDP’s annual request for disclosure on climate change, the Bank is demonstrating the transparency and
accountability vital to tracking progress toward a thriving, sustainable future.
47
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Task Force on Climate-related Financial Disclosures
Governance
The Bank’s risk governance structure establishes the authority, responsibility, and accountability for risk management across the
Group and enables effective and efficient monitoring, escalation, decision-making, and oversight with respect to risks by appropriate
Board and management-level governing bodies.
TCFD Recommendation: PTSB’s governance around climate-related and environmental risks and opportunities
A. Board and Management Oversight of climate-related risks and opportunities.
Board and Management Oversight
The PTSB Board of Directors (Board) is accountable for the success of the Bank over the long-term and are responsible for overseeing
and approving the Bank’s strategic plan and monitoring its implementation and effectiveness within its Risk Appetite. In addition, the
Board is accountable for formulating, approving and supervising the implementation of the Bank’s Sustainability Strategy and Climate-
related and Environmental (CR&E) Risk Implementation Plan to realise its long-term financial interests and maintain its solvency.
PTSB’s Risk Governance Structure
The Board is collectively responsible for the governance of the Bank. Various Committees assist the Board and Executive Committee
in managing and monitoring the risks and opportunities that climate change presents. Within the Bank, CR&E risk is coordinated at an
enterprise level, with the functions and business segments sharing responsibility for addressing CR&E risks and opportunities.
Throughout 2023, the Board met at regular intervals in order to receive updates in relation to sustainability and CR&E risk integration.
Meetings took place at least once per quarter, and more often as required. Key topics included:
• Refreshed approach to Sustainability Programme governance;
• Ongoing delivery of the Bank’s CR&E Risk Implementation Plan, with updates in relation to a programme of work for further CR&E
enhancements identified for 2024;
• Completion of a CR&E Risk Qualitative Materiality Assessment;
• Updated CR&E Risk Framework and the Risk Appetite Qualitative statement for CR&E risk;
• Horizon scanning and regulatory and voluntary CR&E risk disclosures, including the EU Taxonomy, Pillar 3 Environmental, Social and
Governance (ESG) Templates and the TCFD; and,
• Updates on carbon impact and the Bank’s commitment to setting science-based carbon emission reduction targets (SBTs) by 2024.
Board of Directors
Board Nominations, Culture
and Ethics Committee
Board Risk and Compliance
Committee (“BRCC”)
Board Audit
Committee (“BAC”)
Board Remuneration
Committee
Group Executive
Committee (“ExCo”)
Assets and Liability
Committee (“ALCO”)
Group Risk
Committee (“GRC”)
Sustainability
Committee
Customer
Committee
Operational Risk Management
Committee (“ORMC”)
Group Credit
Committee (“GCC”)
Board Level Committees
Management Level Committees
48
PTSB Group Holdings plc - Annual Report 2023
The PTSB Group Governance Structure
The Board Committees with CR&E risk oversight responsibility can be found below.
BAC
BRCC
GRC
Group Credit
Committee
Board Audit Committee (BAC)
The BAC is responsible for overseeing the
process of disclosure and communication
with external stakeholders and competent
authorities, which includes CR&E risk
disclosures.
Board Risk and Compliance Committee
(BRCC)
The BRCC has delegated responsibility
from the Board to assess the impact
of CR&E risk on the Bank’s overall Risk
Profile. The BRCC consists of 5 Non-
Executive Directors, one of who chairs
the Committee. The BRCC has approved
and provides oversight on the execution
of an enterprise-wide CR&E Risk
Implementation Plan.
Nomination, Culture and Ethics
Committee (NomCo)
The NomCo is the overarching Board
advisory committee with five Non-
Executive Directors (including the Board
Chairperson) and is responsible for the
review, design, implementation and
effectiveness of the Bank’s Sustainability
Strategy. A key pillar within the Bank’s
Sustainability Strategy is ‘Addressing
Climate Change and Supporting the
Transition to a Low Carbon Economy’,
which includes a focus on CR&E risk.
Board
CEO
ExCo
ALCo
CustCo
NomCo
SusCo
Sustainability Programme
Steering Group
B. Board and Management’s role in
assessing and managing climate-
related and environmental risks and
opportunities.
least once per quarter, and more often as
required. Key topics included:
• Refreshed approach to Sustainability
Programme governance;
Executive Management Oversight
The Executive Committee (ExCo) is the
Senior Management Committee of PTSB
established by the CEO with authority to
operate and make decisions within limits
set by the Board.
The purpose of the ExCo is to ensure
that the operations, compliance, and
performance are conducted appropriately,
and are correctly aligned to the Bank’s
strategy and interests of the shareholders,
all while operating within applicable
regulatory and legal requirements.
The ExCo is the ultimate management
committee responsible for the
development and implementation of the
Bank’s Sustainability Strategy and CR&E
risk implementation.
The Bank continues to make good
progress integrating CR&E responsibilities
into the Bank’s management structure
and business model. The ExCo meets
frequently to discuss business strategy,
planning, change management, financial
planning, risk management, operations
and performance. These discussions
also include CR&E risk matters, when
applicable.
During 2023, the ExCo met at regular
intervals in order to receive updates
in relation to sustainability and CR&E
risk integration. Meetings took place at
• Ongoing delivery of the Bank’s CR&E
Risk Implementation Plan, with updates
in relation to a programme of work for
further CR&E enhancements identified
for 2024;
• Progress made on the remediation and
integration of CR&E data;
• Completion of a CR&E Risk Qualitative
Materiality Assessment;
• Updated CR&E Risk Framework and the
Risk Appetite Qualitative statement for
CR&E risk;
• Horizon scanning and regulatory
and voluntary CR&E risk disclosures,
including the EU Taxonomy, Pillar 3 ESG
Templates and the TCFD; and,
• Updates on carbon impact and the
Bank’s commitment to setting science-
based carbon emission reduction targets
(SBTs) by 2024.
The management level roles and
responsibilities are outlined below, as is the
detail on the management committees with
sustainability and CR&E risk responsibilities.
The Chief Executive Officer (CEO)
is responsible for overseeing PTSB’s
Sustainability Strategy and climate action
agenda. The CEO sits on the Board, is Chair
of the ExCo and attends the NomCo as
requested - the overarching Board advisory
committee responsible for Sustainability.
The CEO is responsible for assessing and
managing CR&E risks and opportunities
and is a member of the Sustainability
Committee (SusCo).
49
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Sustainability
(continued)
The Chief Financial Officer (CFO)
is responsible for the Bank’s financial
planning including capital management
and all external reporting and disclosures
for PTSB. The CFO is responsible for
oversight and reporting of climate-related
disclosures. The CFO reports directly to
the CEO and sits on the Board of PTSB.
The CFO is also an attendee of the BAC,
the Committee who oversee material
climate-related disclosures. The CFO is
also a member of the SusCo.
The Chief Risk Officer (CRO) is
responsible for assessing the impact of
CR&E risk on the Bank’s overall Risk Profile
and supports the CEO in overseeing
PTSB’s Sustainability Strategy and climate
action agenda. The CRO attends the Board
to present their monthly CRO Report,
which includes an update on CR&E risk,
is a member of the ExCo and attends the
BRCC, which has delegated responsibility
from the Board to assess the impact of
CR&E risk on the Bank’s overall Risk Profile.
The CRO is also a member of the SusCo.
Under the new Individual Accountability
Framework (IAF), the CRO has taken
on prescribed responsibility 24, ‘the
responsibility for managing financial risks
from climate change’.
The Chief Human Resources Officer and
Corporate Development Director provides
Executive Level guidance and leadership
to the Bank’s overall Sustainability
Programme, driving activity and reviewing
progress against objectives at regular
intervals. The Chief Human Resources
Officer and Corporate Development
Director is a regular attendee of the
NomCo, is a member of the Bank’s ExCo,
and acts as Chair of the SusCo.
The Retail Banking Director is responsible
for developing and implementing
key elements outlined in the Bank’s
Sustainability Strategy, for example
the delivery of climate-related (Green1)
sustainable finance products and
propositions. The Retail Banking Director
is supported principally, by the Chief
Operating Officer (COO) and Chief
Technology Officer (CTO) and is a member
of the SusCo.
1 Green Products and Propositions are those
which address the Bank’s climate change
objectives.
2 Green Products and Propositions are those
which address the Bank’s climate change
objectives.
50
Management Committees with
Climate-related and Environmental
Risk Oversight Responsibility
Green Mortgage was brought through
the Committee for approval prior to
implementation.
PTSB has Executive Level Committees
that oversee and deliver on the Bank’s
CR&E Risk Implementation Plan and
associated commitments. These
Committees take an enterprise-wide
approach to overseeing our climate
strategy, targets, commitments, goals
and disclosures, working with a broad
set of leaders across PTSB to encourage
alignment and coordination.
Group Risk Committee (GRC)
GRC is a sub-committee of ExCo and
assesses bank-wide risk management
issues and ensures that fair customer
outcomes are delivered. A key role within
GRC is the assessment of the impact
of CR&E risk on the Bank’s overall Risk
Profile.
Group Credit Committee (GCC)
GCC oversees and manages credit
related CR&E risk for the Bank via both
monitoring and providing regular updates
on the following: related Risk Appetite
Statements which are kept aligned with
the Bank’s strategy; and, the Bank’s Credit
Policies which are formulated considering
the Bank’s appetite as well as external
factors such as regulation and market
dynamics.
Customer Committee (CustCo)
The CustCo is a sub-committee of the
ExCo and is chaired by the Retail Banking
Director. The Committee approves new,
and changes to current, products and
services that are aligned to the Bank’s
Sustainability Strategy which includes
consideration for climate-related (Green2)
sustainable finance products and
propositions.
Assets and Liabilities Committee (ALCo)
The ALCo reviews, and is responsible for
overseeing, all activity relating to Asset
and Liability Management (ALM), Treasury
and Market Risks, including Liquidity Risk,
Interest Rate Risk, Treasury Counterparty
Risk and Foreign Exchange (FX) Risk, and
Capital Management.
The ALCo is the body accountable for
the evaluation of other potential drivers
of earnings volatility, including, but not
limited to, competitive and external market
pressures, and for approving optimisation
and hedging strategies against those
risks. The ALCo is a sub-committee of the
ExCo and is responsible for overseeing
pricing decisions. As such, the Bank’s
Disclosures Committee (DC)
The Bank’s Disclosures Committee is a
governance body that provides oversight
of material disclosures, including: the
Annual Report; Interim Report; Task Force
on Climate-related Financial Disclosures
(TCFD); Pillar 3; and, selected ESG
disclosures.
Sustainability Committee (SusCo)
The SusCo acts on delegated authority
from the ExCo to provide oversight in
line with supervisory expectations on
the execution of the Bank’s Sustainability
Strategy, including a focus on CR&E
implementation under the ‘Addressing
Climate Change and Supporting the
Transition to a Low Carbon Economy’
pillar.
The SusCo is chaired by the Chief
Human Resources Officer and Corporate
Development Director and whose
membership includes the CEO, CFO,
CRO, Retail Bank Director, COO, Chief
Credit Officer and Chief Data Officer.
The Committee operates on delegated
authority from the ExCo. The SusCo is
responsible for the delivery of the Bank’s
Sustainability Strategy by ensuring that
there is sufficient oversight, alignment,
governance and challenge of activity
across key areas of focus for the Bank’s
overall sustainability programming.
In addition, the Committee also provides
oversight of all activities relating to
ESG factors such as climate change,
that are core to operating our business
in a responsible and sustainable way,
including: Regulatory Compliance, Risk,
international framework alignment,
sustainable finance (Green23) products
and propositions, business operations
and carbon impact, sourcing responsibly,
community impact and partnerships and
sustainability communications.
23 Green Products and Propositions are those
which address the Bank’s climate change
objectives.
PTSB Group Holdings plc - Annual Report 2023 At a high level, the Committee is
responsible for:
Strategy
• Leading on the implementation and
embedding of the Bank’s Board
approved Sustainability Strategy
(which includes a focus on CR&E risk),
ensuring that all activity is embedded
in the Bank’s ambition, purpose, culture,
corporate strategy and strategic
priorities;
• Identifying key stakeholder groups
that will be required to deliver the
Sustainability Strategy objectives;
• Assigning business owners to manage
and deliver sustainability programming
across the key areas of focus set out
within the Sustainability Strategy; and,
• Developing Sustainability Key
Performance Indicators (KPIs) and
processes that enable the Bank to
effectively measure, monitor and
manage them.
Sustainability Programme Direction
Group (PDG)
Supporting the SusCo, the Sustainability
PDG is made up of members from
the Bank’s Senior Leadership Team. It
includes enterprise-wide representation
to ensure a holistic and integrated
approach to support execution of the
Bank’s Sustainability Strategy. The
PDG is made up of eight workstreams,
including: Governance, Strategy and
Communications; Science Based Targets;
ESG Data Infrastructure and Models; ESG
Risk Management; Opportunities and
Enablement; External Reporting; Social
Impact; and, Business as Usual delivery.
TCFD recommendation: Actual
and potential impacts of climate-
related and environmental risks and
opportunities on business, strategy
and financial planning, where such
information is material.
A. Climate-related and
environmental risk and opportunities
over the short, medium and long
term
Central banks and financial regulators
widely acknowledge that climate change
is a source of financial stability risk.
Managing CR&E risks and opportunities
is a key area of focus for the Bank under
the ‘Addressing Climate Change and
Supporting the Transition to a Low Carbon
Economy’ Pillar of our Sustainability
Strategy.
There are two climate-related risk drivers,
these are Physical Risk and Transition Risk.
Both risk types may impact the financial
services sector to varying degrees over
the short, medium and long-term. The
extent to which the impact of Physical and
Transition Risk might impact a financial
services firm will vary depending on the
organisation’s business model, customer
base, location as well as the transition
process to a low-carbon economy.
Physical risk refers to the financial impact
of a changing climate, including more
frequent extreme weather events and
gradual changes in climate, as well as of
environmental degradation, such as air,
water and land pollution, water stress,
biodiversity loss and deforestation. This
can directly result in, for example, damage
to property or reduced productivity, or
indirectly lead to subsequent events, such
as the disruption of supply chains.
Physical Risk
Physical Risk, the risk of economic cost
and financial losses resulting from the
increasing severity and frequency of is
categorised as ‘Acute’ or ‘Chronic’:
• Acute Physical Risk - arises from
extreme weather events, such as floods,
storms, droughts and heatwaves; and,
• Chronic Physical Risk - arises
from longer-term gradual shifts in
climate patterns, such as increasing
temperatures, sea-level rises, water
stress, biodiversity loss, land use
change, habitat destruction and
resource scarcity.
Transition Risk
The risk of economic cost, financial
loss or an adverse outcome related to
the process of adjustment towards a
low-carbon and more environmentally
sustainable economy. Transition to a low-
carbon economy may require substantial
policy, legal, technology and market
changes. These changes may result in
a financial loss and reputational risk to
organisations, with the severity of this
depending on the scope and speed of
change required.
Transition risk may include:
• Policy Risks that come with the
evolution of policies and regulations
that promote the adaptation to a less
carbon intensive and more sustainable
economy, and those that constrain
actions that lead to climate instability
and harm the environment;
• Legal Risks that relate to litigation
claims against institutions and their
representatives who fail to mitigate and
adapt to climate change, and who fail
to disclose material climate related and
environmental information;
• Market Risks that arise through
changing demand and supply for
commodities, products and services;
and,
• Reputation Risk that relates to the
changing stakeholder perception
of institutions’ commitments to, or
detraction from, the transition to a
lower-carbon economy.
Physical and Transition Risk drivers impact
economic activities, which in turn impact
the financial system. There is a level of
uncertainty regarding the timing of both
climate-related Transition and Physical
Risk. Climate-related risks may materialise
in the short, medium and long-term and
as such, it is important for organisations
to take a forward-looking approach and
consider a longer than usual time horizon
when assessing CR&E risks.
At a Group level, Physical and Transition
Risk are considered through the following
time horizons:
From
(years)
To
(years)
Short-Term
Medium-Term
Long-Term
0
1
5
1
5
30
51
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Based on PTSB’s Qualitative Materiality Assessment, which was conducted in 2023, the Bank has identified key actions to mitigate
against the Physical and Transition Risk that may arise in the short, medium and long-term.
Physical Risk
Risk
Description
Actions to Mitigate
We are conscious of the
effect that climate change
has on the operations of
our business and the risks
associated with changes to
weather patterns such as
heatwaves, floods, wildfires
and storms. PTSB has 98
branch locations nationwide
and 9 administration offices.
Acute Physical Risk may
impact both our customers
and our own operations
through negatively impacting
collateral valuations for
properties in vulnerable
areas, regularly triggering the
Bank’s Business Continuity
Plan (BCP) due to lack of
forward planning or increased
regulatory expectations in
respect of understanding the
level of Physical Risk to which
the Bank is exposed to.
We are conscious of the
effect that climate change
may have on our business
and the risks associated with
longer-term shifts in climate
patterns such as rising sea
levels and increasing mean
temperatures.
Retail Mortgage Portfolios,
such is the Bank’s focus
(making up 94% of the asset
portfolio at December 31st
2023) can be impacted by
CR&E Physical Risks either
through persistent or chronic
changes in the environment.
Acute
Physical Risk
that arises from
extreme weather
events, such as
floods, storms,
droughts and
heatwaves.
Chronic
Own Operations
Physical Risk that
arises from longer
term gradual shifts
in the climate
patterns, such
as increasing
temperatures,
sea-level rises,
water stress,
biodiversity
loss, land use
change, habitat
destruction and
resource scarcity.
Chronic
Lending Portfolio
Physical Risk that
arises from longer-
term gradual shifts
in the climate
patterns, such
as increasing
temperatures,
sea-level rises,
water stress,
biodiversity
loss, land use
change, habitat
destruction and
resource scarcity.
Transition Risk
52
Horizon
Short to
Long-Term
The Bank considers ESG factors per loan origination
guidance in Credit Risk assessment on the Business
Banking portfolio, thereby considering the ESG risk
profile of a customer where appropriate.
In the Retail Portfolio for new Mortgage applications,
where the Building Energy Rating (BER) is available
for the property, this is captured in a newly developed
dedicated BER field.
Further, the retail collateral Eircode is captured in a
dedicated field, this is a requirement for unlocking any
additional data requirements from an external provider to
inform portfolio analysis.
The Bank will use this data captured to analyse the
potential Physical Risk exposure over the medium, long
term.
The Bank is considering ESG factors when planning
branch/data centre locations and managing third party
suppliers.
Medium to
Long-Term
The Bank has in place a Business Continuity
Management (BCM) Plan that considers adverse
weather conditions that may, in some cases, cause a
reduction in operational capacity.
PTSB owned properties are revalued at least on a yearly
basis reducing the risk of a large unforeseen property
valuation.
Further, CR&E risk is being considered in Internal Capital
Adequacy Assessment (ICAAP), specifically through an
Operational & IT Risk business disruption scenario.
Over the last number of years, PTSB has taken steps to
understand, manage and mitigate Physical CR&E risk.
Medium to
Long-Term
The Bank is considering the ESG profile of a customer
where appropriate within the Credit Risk assessment on
the Business Banking portfolio.
Within the Retail portfolio for new Mortgage applications
the BER and Eircode are being captured where available.
Further, upstream analysis is compiled in the Bank’s
Upstream Regulatory Registry, in order to identify,
upcoming regulatory requirements with which the Bank
must comply. This ensures that monitoring of ESG
regulatory changes are captured and prepared for.
PTSB Group Holdings plc - Annual Report 2023 Risk
Description
Actions to Mitigate
Regulatory
Compliance
(Current
Regulation)
Regulatory compliance risks
may arise from our ability
to adapt or comply with
climate-related regulations.
Emerging
Regulation
Regulatory compliance risks
may arise from our ability
to adapt or comply with
climate-related regulations.
Technology
Technology changes are
required to support and
accelerate the transition to
a low carbon economy. This
includes the development
of technologies to measure,
capture, avoid emissions
or support, for example,
agricultural, transportation
and distribution, and goods
and services business in
reducing their emissions
in line with the Irish
Government’s targets.
A Regulatory Compliance Framework is in place
which sets out how the Bank manages current and
emerging Regulatory Compliance Risk and details the
key principles, objectives, and primary components of
the Bank’s approach to Regulatory Compliance Risk
Management, while setting out the responsibilities
across the Bank’s Three Lines of Defence (3LOD).
Compliance perform detailed regulatory analysis
ensuring that upcoming regulation is captured and
analysed in the Bank’s Upstream Regulatory Register
so that all regulatory requirements with which the Bank
must comply are identified.
This work ensures that monitoring of ESG regulatory
changes are both captured and prepared for.
Further, Enterprise Risk Management perform horizon
scanning to ensure that the risks landscape is analysed
and that new and emerging risks that may impact the
Bank are identified.
A Regulatory Compliance Framework is in place
which sets out how the Bank manages current and
emerging Regulatory Compliance Risk and details the
key principles, objectives, and primary components of
the Bank’s approach to Regulatory Compliance Risk
Management, while setting out the responsibilities
across the Bank’s 3LOD.
The monitoring of these regulations follows the same
process as discussed in Current Regulation (please see
above).
In addition, the Bank is a member of external information
sharing forums, including the Banking and Payment
Federation Ireland (BPFI), through which it shares and
receives information related to Regulatory Compliance
Risk trends and threats and evolving industry best
practice.
The Bank has a Sustainability Strategy in place, which
gives consideration to CR&E risk. In addition, CR&E risk
was considered as part of the Bank’s annual Strategic
Planning Process (SPP). Ongoing integration will
mitigate strategic risk arising from climate Transition
Risk. Science based carbon emission reductions targets
(SBTs) are to be set by 2024 along with the development
of a corresponding Carbon Transition Plan that will
support of the identification of any new technologies.
The Bank’s Technology Strategy considers the Bank’s
Sustainability Strategy.
Further, new information will need to be captured in
respect of the level of vulnerability to Transition Risk
for Business Banking customers including the potential
impact of the requirement for new technology adaptation
over the coming years.
Horizon
Short to
Medium-
Term
Medium to
Long-Term
Medium to
Long-Term
53
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Description
Actions to Mitigate
Sustainability
(continued)
Risk
Market
Reputation
Market Risk is the risk of
losses in on and off-balance
sheet positions arising
from adverse movements
in market prices. Often,
Market Risk cannot be
fully eliminated through
diversification, though it can
be hedged against.
Reputation Risk is the risk
of brand damage and/or
financial loss arising from a
failure to meet stakeholder
expectations of the Bank or
the failure of organisational
structure and governance
arrangements within the
Group to embed desired
behaviours and culture.
PTSB is conscious of the
reputational impact (positive
or negative) that its policies
and actions on the transition
to a low carbon economy
might have. Not making
significant progress in
integrating ESG factors,
including climate-related
criteria into our business,
poses a significant reputation
risk for the Bank.
Negative public opinion may
adversely affect PTSB’s
ability to keep and attract
customers and corporate and
retail deposits and/or access
Capital Markets which in turn
may adversely affect the
Bank’s financial condition.
Horizon
Medium to
Long-Term
At present, the main driver of Market Risk in PTSB is
the movement in interest rates. As climate change
will continue to impact economic growth prospects
and, potentially threaten financial markets stability,
which in turn may have an effect on real interest rates,
consideration of its impact on Market Risk for the Bank is
being considered as part of its CR&E Risk Framework.
The Bank continues to monitor the relevant CR&E risk
indicators with a view to assessing their potential impact
on the Bank’s Market Risk profile over time.
The Sustainability Strategy focuses on green product
development designed to support customers to navigate
the transition to a low carbon economy.
Short to
Long-Term
PTSB was accepted as participating on-lender in the
Strategic Banking Corporation of Ireland new Retrofit
Loan Scheme. The Scheme is aimed at supporting
consumers and small private landlords who wish
to invest in and improve the energy efficiency of a
residential property, helping to mitigate Transition Risk.
Within its Business Banking Portfolio, the Bank does
not lend to high-risk industries from a Transition Risk
perspective, such as fossil fuel/oil firms. However, a just
transition that leaves no one behind is of key importance
to the Bank and so potential questions of limitation or
exclusion will have to be considered.
Climate-related and Environmental
Risk Opportunities
B. Impact of climate-related risks
and opportunities on businesses,
strategy, and financial planning.
During Q4 2022, the Bank refreshed its
Strategic Priorities, including the addition
of ‘Sustainable Business Growth’, outlining
the Bank’s commitment to building a
sustainable organisation that is fit for the
future.
At present, the Bank does not yet formally
assess how identified climate-related
issues have affected or will affect the
business, strategy, and its financial
planning.
However, as part of PTSB’s annual
strategic and financial planning cycle,
a standalone climate-related and
sustainability chapter was included within
the Bank’s Strategic Reference Pack.
The purpose of the Reference Pack
is to provide all Business Units with a
view of the most thematically important
issues and opportunities for both the
Bank and our customers. By providing
a direct reference to information on
climate-related and sustainability issues,
all Business Units were encouraged
to consider the impact of same when
defining their functional strategies over
the medium and long-term horizons.
54
PTSB Group Holdings plc - Annual Report 2023 Key areas considered during the Bank’s 2023 SPP included:
Strategy:
• Evolving the Bank’s approach to Sustainability Programme governance with a refreshed Sustainability
Committee membership, the establishment of a Programme Direction Group and individual workstreams
of activity led by Accountable Executives and Senior Leaders from all areas of the business.
CR&E Risk
Management
• Ongoing support of a professional third party services firm to provide strategic guidance and support in
relation to CR&E risk management.
Data
• Mobilising a dedicated, multi-year data workstream to advance data collation at source;
• Rolling out a climate data assessment and remediation programme to support the Bank in completing
future scenario analysis, stress testing, Key Risk Indicator (KRI) development, collateral valuations and
portfolio concentration analysis;
• Designing an integrated Data Remediation Plan intended to address key data gaps and ensuring that
critical data dependencies are prioritised (for example, BER Physical Risk data);
• Continuing to enhance actual data capture from counterparties; and,
• Undertaking additional data identification and collection for SME, to assist in the quantification of CR&E
risk for the Bank’s Lending Portfolio.
Products and
Services:
• Reviewing (Green34) sustainable finance product and proposition development, with particular emphasis
on the Bank’s most material Mortgage Portfolio which accounts for 94% of the book (as at 31 December
2023);
• Becoming a participating on-lender and obtaining €100m in funding through the Strategic Banking
Corporation of Ireland’s Retrofit Loan Scheme; and,
• Supporting our Business Banking customers in transition through our partnership with the Teagasc
Signpost Programme.
Disclosures:
• Increasing transparency relating to CR&E risk through disclosures such as the TCFD, CDP, Pillar 3, EU
Taxonomy and Non-Financial Reporting Directive (NFRD); and,
• Preparing for the Corporate Sustainability Reporting Directive (CSRD).
Metrics and
Targets:
Adaptation
and Mitigation
Activities/
Operations
(including types
of operations
and location of
facilities):
• Measuring and disclosing our carbon impact across Scope 1, 2 and 3 (including our financed emissions);
• Receiving limited assurance on the Bank’s carbon emissions data by an independent third party; and,
• Completing an ESG Risk Rating through Sustainalytics and achieving a Low Risk Rating.
• Own Operations:
• Purchasing 100% renewable energy;
• Rolling out energy smart metres across our branch locations to get information relating to consumption
in real time;
• Continuing to migrate our data centre to a new and more efficient building; and,
• Implementing LED lighting across our branch network as part of our ongoing branch refurbishment
process.
Supply Chain:
• Ensuring responsible procurement practices and embedding a Sustainable Supplier Charter, in line with
ISO20400.
Investment in
Research and
Development:
• Enabling sustainable finance thought leadership through our founding membership to the International
Sustainable Finance Centre of Excellence.
Resources and
Capacity Building:
• Delivering training and supports to the Board, Executive Committee and the Senior Leadership Team and
providing training to all colleagues through the introduction of a bank-wide Sustainability 101 course;
and,
• Provisioning adequate funding for the delivery of the Bank’s Sustainability Strategy and integration of
CR&E risk into all areas of the business.
Products and Services
34 Green Products and Propositions are those which address the Bank’s Climate Change objectives.
55
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Notwithstanding the fact that climate
change presents risk to financial
institutions, it also brings with it a
significant opportunity to meet new
customer needs and drive the commercial
agenda.
Ireland’s Climate Action Plan 2023
provides a detailed plan for taking
decisive action to achieve a 51% reduction
in overall greenhouse gas emissions by
2030 and setting the country on a path to
reach net zero emissions by no later than
2050.
Key areas of focus within the Plan include:
Powering Renewables; Building Better;
Transforming How We Travel; Making
Family Farms More Sustainable; Greening
Business and Enterprise; and, Changing
our Land Use.
The country’s financial institutions will
have a role to play in financing elements
of the Plan, while also supporting the
broader green transition through the
implementation of sustainable products
and services. Sustainable Finance is a
key area of focus within the Bank’s Board
approved
Sustainability Strategy under the
‘Addressing Climate Change and
Supporting the Transition to a Low
Carbon Economy Pillar’ and has also been
identified as a significant opportunity for
PTSB.
For more on the Bank’s products and
services that are supporting customers
in navigating the green transition, please
visit page 27.
C. Description of the resilience of
the organisation’s strategy, taking
into consideration different climate-
related scenarios, including a 2°C or
lower scenario.
Use of Climate Change Scenarios to
Assess Strategic Resilience
At present, the Bank does not yet formally
use climate-related scenario analysis to
assess business strategy resilience.
However, in 2022 the Bank completed
a high-level climate stress test and
sensitivity analysis leveraging the
macroeconomic and Climate Scenarios
Framework used as part of the 2022
ESG Climate Stress Test, with a primary
focus on the most material mortgage
portfolio (98% as at 31st December 2022).
The output of the results, showed that
56
Physical Risk is likely to have more of an
impact than Transition Risk in the short to
medium-term across the Bank’s Mortgage
Portfolio. This analysis assisted in building
knowledge in relation to CR&E risk present
in this Portfolio, while allowing for the
identification of future data requirements.
The Bank recognise that CR&E risk is
a cross-cutting risk, which may impact
or enhance other identified risks for
the Bank. In 2023, the Bank undertook
a qualitative CR&E risk Materiality
Assessment to assess the potential
impacts of CR&E risks (Physical and
Transition) across all Risk Categories in
the Bank’s Enterprise Risk Management
Framework (ERMF).
The outputs of the assessment identified
that CR&E risk may act as driver of (or
manifest through) other existing Risk
Categories over the short, medium or
long-term. Further, mitigating factors/
actions reducing potential impacts were
also considered. The impacts identified
have not yet been quantified.
A key next step for the Bank is to begin
to quantify the potential risk impact
across forward looking climate scenarios
and develop this analysis to identify the
quantitative impact across short, medium
and long-term horizons.
During 2023, CR&E risk was measured
as part of the Bank’s Operational & IT
Risks Pillar 2 Internal Capital Adequacy
Assessment (ICAAP). A CR&E Physical
Risk sub-scenario was assessed through
a business disruption scenario, in respect
of non-financial risk impacts.
CR&E risk will continue to be considered
as part of future ICAAP iterations, with
related scenarios to be enhanced as
appropriate, and as data availability to
support scenario development continues
to evolve.
Insights gained from the Bank’s Materiality
Assessment, which ensures that all
material risks are identified, monitored and
effectively managed, will further increase
the Bank’s understanding of CR&E risk,
strengthen the Banks ICAAP scenario
development processes and inform the
Bank’s Strategy.
Risk Management
PTSB’s ERMF sets out the approach for risk
identification, assessment, measurement,
monitoring, mitigation, and reporting. CR&E
risk management is integrated within the
Bank’s ERMF through the inclusion of a
CR&E Risk Framework and adopted across
the 3LOD Model.
At a Group level, Physical and Transition Risk
are considered through the following time
horizons:
• Short -Term 0 - 1 Year
• Medium -Term 1 - 5 Years
• Long -Term 5 - 30 Years
Each line of defence performs its duties
by identifying and assessing CR&E risks,
analysing the relevance of risks, evaluating
the impact on the Bank’s operations and
business and formulating control measures
and response strategies.
The First Line of Defence (1LOD - Business
Units and Functions), undertake frontline
commercial and operational activities and
their support function is responsible for
identifying, owning, managing, monitoring,
and mitigating against CR&E risk.
The Second Line of Defence (2LOD - Risk
and Compliance Function), ensure that
all CR&E risks are identified, assessed,
measured, monitored, managed, and
properly reported on by the relevant
business units from across the Bank.
As the Third Line of Defence (3LOD -
Group Internal Audit) provide independent
assurance to the Board over the adequacy,
effectiveness and sustainability of the
Bank’s internal control, risk management
and governance systems and processes,
thereby supporting both the Board
and Senior Management in promoting
effective and sound risk management and
governance across the Bank, in relation to
CR&E risk.
A suite of supporting documentation (Risk
Categories, Frameworks and Policies) is
maintained for key risk categories and
risk processes. The Bank has continued
to integrate CR&E risk into the Risk
Management Framework and associated
Policies, with further consideration for CR&E
risk ongoing with identified priority policies
to be updated in 2023 and 2024 as part of
annual policy review cycles. This supporting
documentation describes the activities and
PTSB Group Holdings plc - Annual Report 2023 tools required to support the ongoing risk
management process, and to promote a
comprehensive and consistent approach
to risk management across the Bank.
The Bank has identified that CR&E risk
may adversely impact or act as a driver
for several other Key Risk Categories as
defined in the ERMF.
environment across all Risk categories
in the CR&E Risk Qualitative Materiality
Assessment.
TCFD recommendation: Disclose
how the organisation identifies,
assesses and manages climate-
related risks.
A. Processes for identifying and
assessing climate-related and
environmental risks
Materiality Assessment
In 2023, the Bank undertook a qualitative
CR&E risk Materiality Assessment.
Through this Assessment, the Bank
identified CR&E risk as a risk that may act
as a driver of, or manifest through, other
existing Risk Categories.
Throughout 2023, the potential impacts
of CR&E Risk (Physical and Transition)
have been assessed by the Bank on a
qualitative basis considering the business
Potential Impacts of Risk Physical
Transition
Group Risk have considered whether the
impacts identified are likely to materialise
in the short, medium or long-term, defined
as 0-1 years, 1-5 years or > 5 years,
respectively. The impacts have not yet
been quantified. Plausible future climate
scenarios were not included as part of this
assessment.
Horizon
Short to
Long-Term
Credit Risk:
Physical Risk (for example, flooding/
sea level rises) may negatively
impact collateral valuations for
properties in vulnerable areas
thereby increasing their Loss Given
Default (LGD). Additionally, SMEs
with operations in vulnerable areas
particularly, agribusiness and
coastal manufacturing business, or
those with supply chains vulnerable
to Physical Risk (in Ireland and
abroad) may default on their loan
payments if they need to use funds
to adapt to, or remediate physical
damage to their operations that
would otherwise have been used to
repay the Bank.
Regulatory changes applicable to banks may
impact Credit Risk management and how Credit
Risk is assessed.
Financial firms may be required to further
integrate ESG factors (in addition to current
guidance) in future years. Policy changes
may also impact the Credit Risk Profile of
counterparties.
If market sentiment deteriorates as a result of the
transition, this may impact the financial position
of PTSB’s customers, both Retail and Business
Banking, and result in an increase in Expected
Credit Loss (ECL).
In addition, deteriorating market sentiment may
also impact collateral valuations as the housing
market may fall. If this occurs, it may result in an
increase in Loss Given Default (LGD).
There is also a risk that as market sentiment
changes, the level of insurance gaps, particularly
for properties located in areas more vulnerable to
Physical Risk, may increase.
Operational & IT
Risk:
Physical Risk may impact the Bank’s
business operations and may
trigger the Business Continuity Plan
(BCP) or impact IT (data centre
vulnerabilities).
This may also impact third party
suppliers depending on the
geographical locations of their
supply chain.
Further, if PTSB property is located
in areas vulnerable to Chronic
Physical Risk, this may impact the
value of the properties.
Regulatory, policy and technology changes may
impact Operational and IT Risk Management
in future as transformation to processes and
systems could be required to ensure compliance.
Short to
Long-Term
As market sentiment deteriorates, increasing
climate terrorism (for example, cybercrime or
rioting due to climate change inaction) may
increase in frequency.
Further, if market sentiment changes such that
the value of properties with poor Building Energy
Ratings (BERs) decrease in value, PTSB property
values may be impacted.
57
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Potential Impacts of Risk Physical
Transition
Market Risk:
Funding and
Liquidity Risk:
Reputational &
Conduct Risk:
Climate change, in particular
Chronic Physical Risk, may
have consequences in terms
of macroeconomic impacts (for
example, sovereign/counterparty
ratings; general economic impacts;
and, displacement etc.) which in
turn, could indirectly result in an
increase in market volatility and
adverse movements in asset/
collateral values.
Increasing costs associated with
Physical Risk could potentially
impact on deposit volumes,
adversely impacting savings levels
at a system level.
Increased market volatility driven
by climate change could see higher
collateral haircuts required by
market participants such as the
Central Bank of Ireland (CBI), which
may have an impact on collateral
values.
Physical Risk may impact the Bank’s
business operations or its portfolio
(in terms of collateral value, for
example, LGD and ECL).
If the Bank holds a high proportion
of vulnerable assets or regularly
triggers BCPs due to lack of forward
planning and identification of
vulnerabilities to Physical Risk (both
from a Credit and Operational Risk
perspective), then its reputation may
suffer and ultimately, its share price
and market share may be impacted.
Customer experience may also
be impacted where Physical Risk
impacts the Bank’s operations,
thereby, damaging the Bank’s
perceived reliability and reputation.
58
The transition to Net Zero could result in
increased market volatility impacting the Bank
in the form of either Interest Rate Risk or Credit
Spread Risk.
Horizon
Medium to
Long-Term
The transition to Net Zero could result in the
introduction of new regulatory metrics to capture
CR&E risk, increased prescribed outflows for
certain cohorts in the Liquidity Coverage Ratio
(LCR), or more severe/additional haircuts for
collateral impacting on the liquidity buffer value.
Medium to
Long-Term
As pressure mounts to reach Net Zero, regulatory
disclosure obligations will be increasingly
scrutinised by investors, the public and
potentially the media to identify firms who are not
contributing to the transition.
Short to
Long-Term
Data available to inform disclosures may be
incomplete as the data environment evolves over
time. The quality of the disclosures may therefore
need to improve over time and limitations in this
respect must be clearly articulated so as not to
mislead stakeholders and increase Reputational
risk.
A deteriorating market sentiment may impact the
macroeconomic environment, thereby reducing
lending appetite and as a result the Bank’s market
share.
If the Bank has a reputation for lagging
other institutions in terms of green product
development or supporting the government
in achieving Net Zero, Reputational Risk may
crystallise, and this may contribute to customer
attrition.
Climate litigation cases are also increasing with
a focus on historic emissions related damage
caused and commitments on emissions reduction
targets, the number and scope of these cases
may increase if market sentiment deteriorates.
PTSB Group Holdings plc - Annual Report 2023 Potential Impacts of Risk Physical
Transition
Model Risk:
If the Bank adapts an existing
model/develops or sources a new
model designed to assess the level
of Physical Risk to which the Bank
may be vulnerable it may prove
difficult to develop or validate due
to the little historical data available
and lack of benchmarking for CR&E
models.
Regulatory expectations may require that models
be adapted/developed or sources to facilitate
effective CR&E risk analysis.
There is a challenge for the Bank as CR&E risk is
relatively new and there is very limited historical
data available to use.
An inaccurate model may produce misleading
results as to the level of CR&E risk exposure to
the Bank which could lead to flawed decision
making which may manifest through an impact on
other risk categories.
Horizon
Short to
Long-Term
Business Risk:
The Bank needs to adjust its
Strategy to ensure that the Banks
customers are not primarily
concentrated in high Physical Risk
areas.
A just transition is of importance to
the Bank, so limitations or exclusions
will also have to be considered in the
context of PTSB customer centric
approach.
Compliance Risk:
If the Bank fails to comply with
Regulatory expectations requiring
the Bank to understand the level
of Physical risk to which the Bank
is exposed, this may result in
Compliance Risk.
The transition to Net Zero may require or force a
change to the Bank’s Strategy.
Short to
Long-Term
Executions of the Strategy may require significant
planning, cost and resources with the regulatory
expecting Banks to adequately consider CR&E
factors in strategy development.
Further, customer finances may be impacted, and
deposits and inflows may be reduced during the
transition, directly impacting the Banks baseline
plan and the associated Capital and Funding
Plans.
It is critical for the Bank to capture green product
market share as it is less likely to deteriorate in a
market downturn.
CR&E regulatory requirements are expanding. If
the bank fails to comply with CR&E regulations
this may result in Compliance Risk.
Short to
Long-Term
Mandatory disclosure reporting regulations
requiring alignment with the EU Taxonomy
are coming into force, such as Pillar 3 ESG
Disclosures and reporting under the Corporate
Sustainability Reporting Directive (CSRD),
requiring limited assurance.
Capital Adequacy
Risk:
If Physical Risk worsens over time,
the pace at which the regulator
may apply changes to capital
requirements may increase.
Changes to the regulatory framework (for
example new/higher capital buffers and/or new/
higher Bank-specific capital add-ons) via Pillar 2
are key risks to capital adequacy.
Medium to
Long-Term
The risk of higher, industry-wide capital
requirements is something over which the Bank
has limited control, but impacts can be better
managed through appropriate upstream scanning
and capital planning.
With regard to the potential for higher Pillar 2
add-ons, any failure to meet existing regulatory
requirements / expectations increase this risk.
59
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
Regulatory Compliance Framework
A Regulatory Compliance Framework is
in place which sets out how the Bank
manages current and emerging Regulatory
Compliance and Conduct Risks including
CR&E regulatory changes and guidance.
collateral valuations. The output of the
results, based on current analysis, showed
that Physical Risk is likely to have more of
an impact than Transition Risk in the short
to medium term on the Bank’s Mortgage
Portfolio.
As part of the Bank’s ongoing
management of Regulatory Compliance
Risk, the Bank monitors regulatory
changes and guidance (Upstream). The
Upstream Regulatory Compliance Team is
responsible for the management of these
regulatory developments, which arise
from changes in the external regulatory
environment.
Once a regulation takes effect, it is added
to the Regulatory Compliance Universe
which aims to identify and populate
ownership of all Regulatory Compliance
and Conduct Risk regulations which the
Bank is required to comply with.
Risk and Control Self-Assessment
(RCSA)
The Risk and Control Self-Assessment
(RCSA) is one type of formal assessment
of the risks and the effectiveness of
the controls to manage these risks,
including those aligned to the CR&E Risk
Categories.
The RCSA process supports the
monitoring of CR&E risk in selected
Business Units. Business Units are
required to review the accuracy and
completeness of these risks and
mitigating controls on an on-going basis,
and report their test results periodically.
Climate-related Stress Testing
During 2022 the Bank conducted a high-
level climate stress test and sensitivity
analysis leveraging the macroeconomic
and Climate Scenarios Framework used
as part of the European Central Bank
(ECB) Climate Stress Test, with a primary
focus on the Bank’s most material portfolio
(Retail Mortgages).
These stress tests considered the impact
on both customer default rates (ECL) and
subsequent losses incurred by the Bank
as a result of climate change. Transition
and Physical risk effects on the Mortgage
Portfolio as direct result of climate change
and associated policy/price responses
were factored into the estimates of
increased levels of default and reduced
In 2023, Physical Risk was discussed
as part of the Operational and IT Pillar 2
workshops, and specifically, the business
disruption scenario. Workshop discussions
also considered Physical Risk impact on
the PTSB Residential Portfolio.
Horizon Scanning and Information
Sharing
As part of the Bank’s ongoing assessment
of CR&E risk, the Bank is a member of
information sharing forums, including
the Banking and Payments Federation
of Ireland (BPFI), the Sustainable and
Responsible Investment Forum and the
National Climate Stakeholder Forum,
through which it shares and receives
information related to the latest Climate
Risk trends and threats and gets insight
into evolving industry best practices.
The Bank monitors regulatory changes
and guidance, including from the Central
Bank of Ireland and European Central
Bank.
B. Processes for managing climate-
related and environmental risks.
The management of CR&E risk is aligned
to key processes and components set
out in the Bank’s ERMF, which identifies
core risk management stages which
collectively ensure that the Bank
appropriately identifies and manages
current and emerging risks the Bank is
exposed to.
Climate-Related and Environmental Risk
Implementation Plan
The Central Bank of Ireland (CBI)
requested individual Lesser Significant
Institutions (LSIs) to submit a Board
approved comprehensive plan by June
2022 on how the Bank plans to address
supervisory expectations in relation
to CR&E risk. In line with this request,
the Bank submitted its CR&E Risk
Implementation Plan within the required
timeline, and throughout 2022 and
2023 deployed resources to ensure its
implementation.
The Bank has established strong
governance of CR&E risk through the
creation of a Sustainability Committee,
which operates as a sub-committee of the
Executive Committee; updated Board Risk
Committee (BRCC) Terms of Reference
(ToR) to include CR&E risk considerations,
formalisation of a CR&E risk definition and
a CR&E Risk Management Framework.
While the Bank is focused on short-term
action delivery and stepping up the pace
in embedding CR&E risk, it is mindful of
creating capacity and building a robust
long-term strategic approach to CR&E
risk, which aligns to best practice. This will
ensure there is comprehensive integration
within Strategy, Data, Risk Management
and Product Strategy, supported by
enabling activities such as training and
disclosures.
Risk Register
Risk Registers, which contain the details
of current and emerging risks from each
of the Group Risk functions, including
CR&E risk, utilise the ‘top down’ Risk
Identification and ‘bottom up’ Risk
and Control Self-Assessment (RCSA)
processes and form the basis of the
Bank’s Top and Emerging Risks Report.
Risk Appetite
Risk Appetite is set by the Board, and
represents the level and nature of risk
(within the Risk Categories) that the
Bank is willing to accept in pursuit of
its strategic objectives. A qualitative
CR&E Risk Appetite Statement has been
included in the Bank’s Risk Appetite
Statement confirming that the Bank’s
appetite for CR&E risk is Low. Through the
delivery of the CR&E Risk Implementation
Plan, CR&E metrics have been designed
including those related to Credit Risk and
Operational and IT Risk.
Physical Risk Analysis
The Bank has progressed Physical Risk
analysis in the Retail Lending Portfolio.
The Bank has utilised publicly available
flood mapping data, taken from the Office
of Public Works (OPW), to carry out
analysis on the Retail Mortgage Lending
Portfolio to identify areas of Physical Risk.
60
PTSB Group Holdings plc - Annual Report 2023 Frameworks and Policies. The supporting
documentation describes the activities
and tools required to support the ongoing
risk management process, and to promote
a comprehensive and consistent approach
to risk management across the Bank.
Materiality Assessment
As outlined above, in 2023, a Qualitative
Materiality Assessment for CR&E risk
was undertaken by the Bank. The aim
of this Assessment was to understand
the impact of CR&E Risk (Physical and
Transition Risk) on the Banks’s existing
risk categories in the ERMF.
Group Risk have considered whether the
impacts identified are likely to materialise
in the short, medium or long-term, defined
as 0-1 years, 1-5 years or > 5 years,
respectively. The impacts have not yet
been quantified. Plausible future climate
scenarios were not included as part of this
assessment.
Review of Policies:
The allocation of roles and responsibilities
across the 3LOD are clearly set out within
the CR&E Risk Framework.
Priority Policies have been identified for
consideration of CR&E enhancements,
with further updates to follow as part of
the Bank’s Policy Review Cycle.
Monitoring of CR&E requirements will
continue in business as usual as both,
CR&E risk, and the Bank’s own risk
management processes evolve.
For Ireland, these risk types correspond
to coastal erosion and fluvial and pluvial
flood risk. The Bank has mapped property
in the PTSB Retail Mortgage Portfolio into
low, medium and high risk buckets based
on defined risk thresholds and sensitivity
parameters.
At present, the Bank is not concerned
about the low level of risk identified.
PTSB will continue refining its Physical
Risk definitions, metrics and thresholds
over time based on emerging data/
techniques.
The Bank are sourcing data from an
external data provider to further enhance
mapping and assessing of CR&E risk
impact. This will help to continue
progression of CR&E analysis with the
most accurate and up to date CR&E risk
view in our Lending Portfolio.
C. Integration of processes for
identifying, assessing and managing
climate-related and environmental
risks into overall risk management.
CR&E risk issues are integrated across
all governance mechanisms through
delivery of the Board approved CR&E
Risk Implementation Plan. A CR&E Risk
Management Framework has also been
developed that is linked to the ERMF.
CR&E risk is included as a Risk Category
within the ERMF and has two sub-risk
categories; Physical Risk and Transition
Risk. Throughout 2023, the Bank has
continued to integrate CR&E risk into
the Risk Management Framework and
associated Policies.
Climate-related and Environmental Risk
as a Key Risk
CR&E risk is included as a Key Risk
Category within the ERMF and has two
sub-risk categories of Physical Risk
and Transition Risk. Over the last year,
the Bank has continued to integrate
CR&E risk into the Bank through a suite
of supporting documentation, such as,
the Risk Management Framework, the
CR&E Risk Framework and associated
Metrics and Targets
TCFD recommended disclosure:
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where such
information is material.
A. Metrics used to assess climate-
related and environmental risks and
opportunities in line with strategy
and risk management process.
PTSB is focussed on continuing to
disclose transparently and is committed
to measuring and managing the carbon
impact of our operations.
We measure our carbon impact across
Scope 1, 2 and 3 using the Greenhouse
Gas (GHG) Protocol, the world’s most
widely used greenhouse gas accounting
standard. In the measurement of Scope 3
Category 15 – Investments (our financed
emissions) we used the Partnership for
Carbon Accounting Financials (PCAF),
Financed Emissions Standard.
Scope 1 includes direct GHG emissions
from sources that are owned or controlled
by the Bank, such as natural gas
combustion and company owned vehicles.
Scope 2 accounts for GHG emissions from
the generation of purchased electricity,
heat and steam generated off-site. The
emissions are reported using both a
location-based method and a market-
based method.
Scope 3 includes all the Bank’s other
indirect emissions: Purchased Goods and
Services, Capital Goods, Other Fuel and
Energy, Transportation and Distribution,
Waste, Business Travel, Employee
Commuting (including home working) and
Investments (financed emissions).
Scope 3 categories which have been
deemed immaterial to the Bank include
Leased Assets, Processing of Sold
Products, Use of Sold Products, End-
of-Life Treatment of Sold Products and
Franchises. These categories will be
monitored annually to ensure that they
remain immaterial.
61
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Sustainability
(continued)
B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas
(GHG) emissions and the related risks.
A breakdown of our carbon impact across Scope 1, 2 and 3 can be found below:
Emissions
Scope 1
Scope 2 (Location-based value)
Scope 2 (Market-based value)
Scope 3
Total (Location-based value)
Total (Market-based value)
Scope 3 emissions breakdown
Purchased Goods and Services
Capital Goods
Other Fuel & Energy
Upstream Transportation and Distribution
Waste
Business Travel
Employee Commuting
Investments - Financed Emissions
2022 tCO2e
2023 tCO2e
1,188
2,502
0
841
2,217
0
230,682
342,035
234,372
231,870
345,093
342,876
2022 tCO2e
2023 tCO2e
49,232
16,941
1,360
5,123
8
60
19,117
662
335
1,827
7
167
3,934
5,840
154,024
314,081
Intensities
2022 tCO2e
2023 tCO2e
Scope 1 & 2 (Location-based value) tCO2e/FTE
Scope 1 & 2 (Market-based value) tCO2e/FTE
Total (Location-based value)/€million Revenue
Total (Market-based value)/€million Revenue
1.6
0.5
467.8
462.8
0.9
0.3
395.7
393.2
Notes:
•
Total Scope 1, 2 and 3 GHG emissions were previously reported as 227,179 in the PTSB Annual Report
2022. The total GHG emissions amount has been updated following a subsequent review of the
consumption data, and emission factors used within the computations as reported in our 2022 TCFD
Report.
• Data was calculated using The Greenhouse Gas Protocol: A Corporate Accounting and Reporting
Standard, Revised Edition, (‘GHG Protocol’) methodology and Partnership for Carbon Accounting
Financials (PCAF), Financed Emissions Standard.
• Emission factors were sourced from DEFRA’s Greenhouse gas reporting: conversion factors 2023, the
Commission of Utilities (CRU) 2022, Carbon Cube and Climatque.
• The CarbonCube® uses procurement spend data to calculate carbon emissions. Spend data is
categorised, and emissions factors are matched to the categorised spend to calculate emissions. This
data can then be enhanced over time with supplier-specific data, as it becomes available.
• We adopt the operational control approach on reporting boundaries. In 2023, the data covers 100% of
our operations in the Republic of Ireland.
• All 15 categories of Scope 3 emissions were evaluated and have been reported upon where associated
emissions have been identified.
• Category 15 includes the Bank’s Residential Mortgage Portfolio and no other lending activities. Financed
Emissions are calculated as a product of Carbon Intensity*LTV*Floor Area. LTV is calculated as
(Accumulated Balance Amount)/(Original Value Amount), generating value between 0 and 1.
Figures are rounded.
Intensity figures based on FTE of 2,255 and 3304 (for 2022 and 2023 respectively) and Revenue of
€501 million and €872 million for (2022 and 2023) respectively.
•
•
• Our approach will continue to evolve in line with industry developments and as data quality improves.
Scope 1 and 2
During 2023, we continued to make
progress in reducing our scope 1 and 2
carbon emission intensity through the
use of 100% renewable electricity by our
electricity providers, efficiencies in energy
use by the business through initiatives
aimed at reducing our carbon footprint
and the impacts of hybrid working with
66% of our organisation now availing of
our smarter working options. Although
our branch footprint increased in 2023,
we have decreased the direct emissions
associated with our energy usage by 14%.
Our carbon intensity has decreased by
17% since 2022 based on tCO2e/FTE
using Scope 2 (Location-based value).
Scope 3
As part of our ongoing commitment
to reduce our carbon footprint, during
2023, we progressed our data collection
processes for our Scope 3 emissions.
Through our partnership with Efficio, we
have used the Carbon Cube spend based
carbon footprint calculator, refining the
methodology of calculating emissions
through detailed classification of spend
categories for Purchased Goods and
Services, Capital Goods and Upstream
Transportation and Distribution.
Scope 3 – Financed Emissions
PTSB’s Portfolio is residential in nature
with 94% of the book (as at 31 December
2023) being secured on residential
property. As such, it is deemed a material
Portfolio for the Bank and a priority area
of focus when it comes to calculating our
investment-related emissions.
To calculate emissions associated with
the Residential Mortgage Portfolio, the
Bank used available BER codes that have
a kg CO2e/m2 identified, currently fewer
than 10%. To remedy this, a BER proxy
model was developed to estimate the BER
rating where no valid BER certificate was
available. This model relies on identifying
the property location by matching
property addresses to Eircodes and
available collateral characteristics (age,
dwelling type and location) to estimate
BERs and kg CO2e/m2.
62
PTSB Group Holdings plc - Annual Report 2023 The financed emissions were calculated
in accordance with the Partnership for
Carbon Accounting Financials (PCAF).
• Developing a corresponding Carbon
Transition Plan to help us to achieve our
targets.
The increase in financed emissions
during 2023 is a result of two factors.
Firstly, the full-year impact of the €6.7
billion Residential Portfolio that the Bank
acquired as part of the Ulster Bank
transaction in the Republic of Ireland
had an impact, resulting in an increase in
emission intensity year-on-year.
Secondly, through the data remediation
plan mentioned above, the Bank has a
more complete picture of BER spread
across the Residential Mortgage Portfolio,
which gives a more accurate kg CO2e/ m2
for all collaterals. The Bank is focussed
on improving data quality over time
and will disclose transparently on any
changes in methodologies or emissions as
appropriate.
C. Targets used to manage climate-
related and environmental risks
and opportunities and performance
against targets.
Science Based Targets (SBTs)
In 2021, we deepened our commitment to
long-term sustainability and committed
to new climate action goals by signing
Phase 2 of the Low Carbon Pledge45. The
refreshed Pledge focusses on setting
SBTs by 2024 and will include measuring
and reducing our carbon footprint in line
with the Paris Agreement and the latest
IPCC findings.
The first step to setting SBTs is
understanding our carbon footprint.
During 2023, we continued to access
our emissions across Scope 1, Scope 2
and the relevant categories found within
Scope 3, as outlined above. We will use
this as the Bank’s carbon baseline.
As we look to 2024 and beyond, we are
focussed on:
• Using our 2023 carbon baseline to set
SBTs aligned to the Paris Agreement
and IPCC findings and validated by the
Science Based Target Initiative (SBTi);
and,
45 The Low Carbon Pledge is the first dedicated pledge
generated by Irish business to set industry standards on
sustainability and reduce carbon emissions.
Remuneration
At present, consideration for CR&E risk is
not incorporated into Executive Pay.
Under the leadership of the Chief
Human Resources Officer and Corporate
Development Director, a Head of
Corporate Affairs and Communications;
Senior Manager, Sustainability and
Sponsorships; and, a Sustainability
Manager are in place to manage and
deliver all sustainability programming.
Similarly, under the leadership of the
Chief Risk Officer, an Enterprise Risk
Management Team; and, a Climate Risk
Manager are in place to manage and
deliver all CR&E risk programming.
Specific objectives aligned to the Banks
overall Sustainability Strategy (which
includes a focus on CR&E risk) are
included within team member objectives,
depending on their role within the
function.
Attainment of objectives is assessed
through a formal performance review
process that occurs at regular intervals
throughout the year. Delivering
on strategy, as well as the overall
performance in the role, determines the
level of monetary pay increase achieved.
For the last number of years, agreements
in place with the Irish State have
restricted the Bank’s ability to offer a
fully comprehensive Employee Value
Proposition, including bonuses or
incentives.
In December 2022, the Minister for
Finance agreed certain amendments to
the State agreements on remuneration
and as a result bonuses are now no longer
prohibited, subject to the amount of any
such remuneration in any 12-month period
not exceeding €20,000 in the aggregate.
During 2023, the Bank commenced the
design of an enterprise-wide Variable Pay
Scheme. The design of the Scheme will
take into account the need to link pay and
reward to the achievement of a number of
factors including our ESG agenda. Further
updates on the launch and structure of
the scheme will be included in future
updates.
63
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 The outlook for the Bank remains
strong, and the Group expects to deliver
sustainable profitability over the medium
term.
Basis of preparation
The financial review is prepared using
International Financial Reporting
Standards (IFRS) and non-IFRS
measures to analyse the Group’s financial
performance for the financial year ended
31 December 2023.
However, from time to time certain
material non-recurring items occur which
do not meet the definition of exceptional
items as set out in the accounting policy.
To assist the users of the financial
statements and to ensure consistency in
reporting with other financial institutions,
these items are disclosed separately from
underlying profit in the financial review.
These items are clearly identified as non-
IFRS items and reconciled back to the
IFRS income statement.
A reconciliation between the underlying
profit and operating profit on an IFRS
basis is set out on page 72.
Management has provided further
information on IFRS and non-IFRS
measures including their calculation in the
Alternative Performance Measures (APM)
section on pages 300 to 307.
Non-IFRS measures are used by
Management to assess the financial
performance of the Group and to provide
insights into financial and operational
performance on a consistent basis
across various financial years. They also
provide details regarding the elements of
performance which the Group considers
important in its performance assessment
and which it can influence.
Non-IFRS measures are however not a
substitute for IFRS measures and IFRS
measures should be preferred over non-
IFRS measures where applicable.
The Group has a tightly drawn accounting
policy for exceptional items (see note 1)
and exceptional items are considered to
include:
• Profit/loss on disposal of businesses;
• Gain on bargain purchase in respect of
business combinations;
• Profit/loss on material deleveraging
prior to 31 December 2021, including
any increase in impairment arising solely
due to the sale of NPLs becoming part
of the Group’s recovery strategy;
• Material restructuring costs; and
• Material transaction, integration
and restructuring costs associated
with acquisitions (including potential
liquidations).
Financial Review
The Group’s financial performance in 2023
has been shaped by the completion of the
Ulster Bank transaction, changed interest
rate environment and organic growth. The
changed interest rate environment has
resulted in a higher net interest margin for
the Bank due to higher yields on lending
and treasury assets, partially offset by a
higher cost of funds. In order to maximise
the opportunity presented by the Ulster
Bank transaction and market exits, the
Bank increased its resources over the
last two years in order to safely on-board
new customers. As a result, operating
expenses (excluding non-recurring
regulatory items) for 2023 increased by
25% to €495m, in line with management
expectations. Asset quality remains robust
and is benefitting from the strict lending
criteria in place over the last decade.
As such, the Bank has recorded a small
impairment release of €2m for the year.
Exceptional Items of €87m comprise
transaction costs and the initial expected
credit loss associated with the Ulster Bank
transaction together with a provision for
non-core items. The above are the main
items which result in the Group delivering
an overall profit after tax for the year of
€68m.
The Group continued to manage its
capital and liquidity positions prudently
during the year. The liquidity and capital
positions of the Group remain well above
all minimum regulatory requirements, with
transitional CET1 and total capital sitting
at 14.3% and 22.0% respectively.
Asset quality has continued to remain
strong during 2023. Our customers
have continued to manage the impacts
of inflation and higher interest rate
environment. The Group’s NPL ratio
remained at 3.3%, in line with 2022. The
Group continues to monitor and manage
carefully the impact of inflation on our
customers and any future expected credit
losses.
64
PTSB Group Holdings plc - Annual Report 2023 Basis of calculation
Percentages presented throughout the financial review are calculated using absolute values and therefore the percentages may differ
from those calculated using rounded numbers.
Management performance summary consolidated income statement
Year ended
Year ended
Table
31 December
2023
31 December
2022
€m
€m
Net interest income
Net fees and commissions income
Net other income
Total operating income (excl. exceptional items and other non-recurring items)
Total operating expenses (excl. exceptional items and other non-recurring items,
bank levy and other regulatory charges)
Bank levy and other regulatory charges
Underlying profit before impairment*
Impairment write-back on loans and advances to customers
Underlying profit before exceptional and other non-recurring items
Exceptional items comprise:
Gain on bargain purchase
Costs incurred in relation to Ulster Bank transaction
Impairment write back arising from deleveraging of loans
Restructuring and other costs
Other non-recurring items comprise:
Impairment charge on Ulster Bank transaction
Impairment charge on deleveraging of loans post 2021
Other items relating to Ulster Bank transaction**
Charges in relation to legacy legal cases
Other
Profit before taxation
Taxation
Profit for the year
* See table 8 on page 72 for a reconciliation of underlying profit to operating profit on an IFRS basis.
**
Expense offset by non-recurring income
1
3
4
5
6
7
7
620
42
6
668
(444)
(60)
164
2
166
(28)
-
(31)
5
(2)
(59)
(52)
-
-
(2)
(5)
79
(11)
68
362
42
5
409
(344)
(51)
14
31
45
265
362
(92)
8
(13)
(43)
(30)
(8)
(1)
(4)
-
267
(44)
223
65
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Management performance summary consolidated income statement - key highlights
• Total operating income (excl. exceptional items) has increased by €259m during 2023 primarily due to:
- Net interest income increased by €258m (71%) during 2023 to €620m. The increase is mainly driven by the migration of the
Ulster Bank portfolios in late 2022 and during 2023, in addition to the ECB interest rate increases. This is partially offset by
increases in wholesale funding and costs.
- Net fees and commission income is €42m for the year ended 31 December 2023, in line with 2022. Both fee and commission
income and expenses increased by €11m each, offsetting each-other.
- Net other income is €6m for the year ended 31 December 2023 compared to €5m at 31 December 2022. Net other income
primarily comprises gain on derivatives in relation to the Ulster Bank transaction, and a FX gain on Visa share sale post de-
recognition.
• Operating expenses (excl. exceptional items and other non-recurring items, bank levy and other regulatory charges) are
€444m for the year ended 31 December 2023 compared to €344m at 31 December 2022. The increase is driven by higher
resourcing costs, a one off cost of living support for colleagues, increased amortisation of capitalised digital costs spent in previous
years, and a one off increased DGS charge of €9m.
• Impairment is a write-back €2m on loans and advances to customers for the year ended 31 December 2023, compared to a write-
back of €31m for the year ended 31 December 2022. This reflects the positive macroeconomic outlook in Ireland and continued
customer resilience in response to higher interest rates and inflationary pressures.
• Exceptional items of €28m for the year ended 31 December 2023 comprise €31m relating costs incurred in the Ulster Bank
transaction, €5m relating to an impairment write-back arising from deleveraging of loans and €2m arising in respect of a previous
disposal of a business.
• Other non-recurring items amount to a charge of €59m for the year ended 31 December 2023. They comprise €52m relating to
the day 1 impairment charge on Ulster Bank assets which migrated in 2023, €2m in provisions relating to legacy legal cases, and
€5m in other charges which primarily relate to the write off of the investment in Synch Payments DAC of €4m.
• Profit before tax of €79m for the year ended 31 December 2023 compared with a profit before tax of €267m for the year ended
31 December 2022. This adverse variance is due to a one off gain on bargain purchase associated with the Ulster Bank transaction
being recognised in 2022.
Net interest income
€620m
Net interest margin
2.32%
Table 1: Net Interest Income
Interest income
Interest expense
Net interest income
Net interest margin (NIM)
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
778
(158)
620
417
(55)
362
2.32%
1.54%
Interest income
Interest income of €778m for the year ended 31 December 2023 increased by €361m (87%), compared to the prior year. This is
mainly driven by the following:
• increased income on assets whose reference rate is linked to the ECB marginal refinancing offer rate;
• organic growth of the performing loan book with higher new lending than redemptions and repayments; and
• the migration of Ulster Bank mortgage loans in Q4 2022, and the migration of the remaining Mortgage, SME and Asset Finance
businesses in 2023.
66
PTSB Group Holdings plc - Annual Report 2023 Interest expense
Interest expense increased by €103m to €158m for the year ended 31 December 2023, which reflects higher funding costs
associated with the increase in ECB interest rates during the year.
Table 2: Average balance sheet
Year ended 31 December 2023
Year ended 31 December 2022
Average
Balance
€m
Interest
€m
Average Yield/
Rate
%
Average
Balance
€m
Interest
€m
Average Yield/
Rate
%
Interest-earning assets
Loans and advances to customers
Debt securities and derivative assets
Loans and advances to banks
Total average interest-earning assets
Non-interest earning assets
Total Assets
Interest-bearing liabilities
Customer accounts
Debt securities in issue
Lease liabilities
Subordinated liabilities
Deposits by banks
Total average interest bearing liabilities
Non-interest-bearing liabilities
Total Liabilities
Total average equity attributable to
owners
Total equity and liabilities
Net Interest Margin
20,547
3,242
2,795
26,584
937
27,521
22,340
1,222
29
254
1,051
24,896
201
25,097
2,424
27,521
2.32%
3.22%
1.11%
2.90%
2.94%
0.20%
5.81%
3.41%
3.15%
3.33%
0.64%
661
36
81
778
778
43
71
1
8
35
158
158
15,099
2,849
5,521
23,469
20,171
628
29
252
1,377
22,457
1,885
1.54%
387
15
15
417
11
16
-
8
20
55
2.56%
0.53%
0.27%
1.79%
0.05%
2.55%
-
3.17%
1.45%
0.24%
Net interest margin
NIM increased by 78bps to 2.32% for the year ended 31 December 2023 compared to 1.54% for the prior year. The NIM of the Group
has grown due to increases in interest rates on lending and treasury assets. This is partially offset by increases in wholesale funding
and deposit costs.
Interest income/average interest earning assets
• Interest income on loans and advances to customers increased by €274m. This is driven by the pass-through of ECB rate increases
to mortgage customers on variable rates, new fixed lending and the addition of the remaining Ulster Bank assets during 2023.
• Interest income on debt securities and derivative assets increased by €21m due to lower yielding debt securities being replaced by
higher yielding assets, reflecting market movements.
• Interest income on loans and advances to banks increased by €66m due to higher yields on excess liquidity held with the Central
Bank during the second half of 2022, continuing into 2023. The average balance of loans and advances to banks decreased by
€2.7bn when compared to 2022. This balance consists of excess cash reserves with the CBI, and its movement year on year is
driven primarily by the payment to NatWest Group as part of the completion of the Ulster Bank transaction in quarter four of 2022.
67
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Interest expense/average interest bearing liabilities
• Interest expense on customer accounts has increased by €32m. This increase reflects the pass through of a portion of increased
ECB rates to deposit customers along with a higher average balance due to market exits.
• Interest expense on debt securities in issue increased by €55m during the year primarily due to the issuance of €1.15bn in senior
unsecured MTN debt during the second quarter of the year.
• The average balance of deposits by banks decreased due to a change in funding mix resulting in lower volumes of repurchase
agreements due to the strong liquidity position. The average balance of subordinated liabilities remained consistent with 2022.
Average equity attributable to owners
The average equity attributable to owners increased in the year due to the full year impact of the issuance of AT1 debt and new
shares as part of the Ulster Bank transaction in late 2022.
Net fees and
commissions income
€42m
Table 3: Net fees and commissions income
Retail banking and credit card fees
Brokerage and insurance commission
Other fees and commissions income
Fees and commission income
Fees and commission expense*
Net fees and commission income
Year ended
Year ended
31 December
2023
31 December
2022
€m
76
9
1
86
(44)
42
€m
65
9
1
75
(33)
42
*
Fees and commission expenses primarily comprises retail banking and credit cards fees
Net fees and commission income is €42m for the year ended 31 December 2023, in line with 2022 as growth in fee-paying customers
was offset by increased transactional activity on the expense side.
68
PTSB Group Holdings plc - Annual Report 2023
Net other income
€6m
Table 4: Net other income
Other income
Net other income
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
6
6
5
5
Net other income is €6m for the year ended 31 December 2023 compared to €5m at 31 December 2022. Other income is driven by
gains on derivative contracts linked to the Ulster Bank transaction.
Total operating
expenses (1)
€444m
Adjusted cost
income ratio
66%
(1) Excluding exceptional and other non-recurring items, bank levy and other regulatory charges.
Table 5: Total operating expenses
Staff costs
Wages and salaries including commission paid to sales staff
Social insurance
Pension costs
Total staff costs
Other general and administrative expenses
Administrative, staff and other expenses
Depreciation of property and equipment
Amortisation of intangible assets
Reversal of impairment on property and equipment
Total operating expenses (excluding exceptional and other non-recurring items, bank levy and
regulatory charges)
Bank levy
Other regulatory charges
Total operating expenses (excluding exceptional and other non-recurring items items)
Headline cost to income ratio*
Adjusted cost to income ratio**
Closing staff numbers***
Average staff numbers
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
165
19
17
201
176
377
27
40
-
444
22
38
504
75%
66%
3,330
3,055
124
15
13
152
141
293
21
31
(1)
344
22
29
395
96%
84%
2,614
2,422
* Defined as total operating expenses (excluding exceptional and other non-recurring items) divided by total operating income.
** Defined as total operating expenses (excluding exceptional, other non-recurring items, bank levy and regulatory charges) divided by total operating income.
*** Closing staff numbers are calculated on a FTE basis.
69
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Operating expenses
Staff costs
Staff costs have increased by €49m during 2023, driven by an increase in average FTE of 633 across the Bank during 2023, along
with increases as a result of performance related pay and a one off 2% cost of living payment for staff during 2023.
General and administrative expenses
Other general and administrative expenses have increased by €35m during 2023, driven by the costs associated with servicing the
Bank’s increased Branch network, and a significant investment in the Bank’s brand position, the first such investment in over twenty
years.
Amortisation of intangible assets
Depreciation has increased by €15 million when compared to 2023. This is mainly due to increased investment spend in recent years
being in excess of those assets fully depreciating from prior years. This is primarily driven by investment in the Bank’s Digital Banking
programme.
Adjusted cost income ratio
Operating costs (excluding exceptional and other non-recurring items, bank levy and regulatory charges) of €444m and operating
income of €668m for the year ended 31 December 2023 results in an adjusted cost income ratio of 66% for 2023, compared to an
adjusted cost income ratio of 84% for the year ended 31 December 2022. The adjusted cost income ratio has reduced during the year
as a result of the higher total operating income offsetting the higher operating costs.
Bank levy and other regulatory charges
Bank levy and other regulatory charges amounted to €60m for the year ended 31 December 2023. Other regulatory charges include
€28m for the Deposit Guarantee Scheme (DGS) (31 December 2022: €19m). The Single Resolution Fund fee for the year ended 31
December 2023 was €4m (31 December 2022: €5m), €4m for the Central Bank Industry Funding Levy (31 December 2022: €4m) and
€2m related to other regulatory charges (31 December 2022: €1m).
Impairment
€2m write back
Table 6: Impairment
Total impairment (charge)/write-back on loans and advances to customers
Year ended
Year ended
31 December
2023
31 December
2022
€m
2
€m
31
The impairment write-back is €2m on loans and advances to customers for the year ended 31 December 2023, compared to a write-
back of €31m for the year ended 31 December 2022. This reflects the positive macroeconomic outlook in Ireland and continued
customer resilience in response to higher interest rates and inflationary pressures.
70
PTSB Group Holdings plc - Annual Report 2023
Exceptional and other
non-recurring items
€87m
Table 7: Exceptional and other non-recurring items
Exceptional items
Gain on bargain purchase
Costs incurred in relation to Ulster Bank transaction
Impairment write-back arising from deleveraging of loans
Restructuring and other costs
Other non-recurring items
Impairment charge on Ulster Bank transaction*
Impairment charge on deleveraging of loans post 2021*
Other items relating to Ulster Bank transaction
Charges in relation to legacy legal cases**
Other
Exceptional items and other non-recurring items
*
**
Included in IFRS impairment charge
Included in IFRS administrative, staff and other expenses
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
-
31
(5)
2
52
-
-
2
5
(362)
92
(8)
13
30
8
1
4
-
87
(222)
Exceptional and other non-recurring items as viewed by Management for the year ended 31 December 2023 of a charge of €87m
comprise:
Costs incurred in relation to Ulster Bank transaction
Exceptional costs of €31m in relation to the Ulster Bank transaction, consist primarily of costs around the planning and execution of
the remaining migrations completed during 2023.
Impairment arising from the deleveraging of loans
€5m has been released in relation to warranty provisions held on deleveraging transactions that the Group executed in prior years.
Restructuring and other charges
Restructuring and other costs of €2m relate to costs arising in respect of a previous disposal of a business.
Other non-recurring items
Impairment charge on Ulster Bank transaction
Day 1 impairment charge of €52m on loans acquired from Ulster Bank.
Other items
Include the write off of the investment in associate for Synch Payments DAC of €4m.
71
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Table 8: Reconciliation of underlying profit to operating profit on an IFRS basis
Operating profit per IFRS income statement
Exceptional items
Non-IFRS adjustments
Other non-recurring items
Underlying profit before exceptional and other non-recurring items per management income
statement
Year ended
Year ended
31 December
2023
31 December
2022
€m
79
28
59
166
€m
267
(265)
43
45
The definition of underlying profit excludes exceptional items and other items that the Group view as non-recurring. In the current
year, non-recurring items include an impairment charge on the take on of the Ulster Bank Businesses and other non-recurring items.
Summary consolidated statement of financial position
Assets
Home loans
Buy-to-let
Total residential mortgages
Commercial mortgages
Consumer finance
Total loans and advances to customers (net of provisions)
Debt securities
Remaining asset balances
Total assets
Liabilities and equity
Current accounts
Retail deposits
Corporate and institutional deposits
Total customer accounts
Debt securities in issue
Remaining liabilities
Total liabilities
Total equity
Total equity and liabilities
Liquidity coverage ratio*
Net stable funding ratio**
Loan to deposit ratio***
Return on equity****
Table
31 December
2023
31 December
2022
€m
€m
9
11
12
13
14
15
19,574
18,370
590
657
20,164
19,027
371
892
199
367
21,427
19,593
3,256
3,072
3,177
3,163
27,755
25,933
9,329
12,320
1,316
22,966
1,512
858
25,336
2,419
27,755
220%
155%
93%
6.36%
8,983
11,589
1,158
21,730
658
1,147
23,535
2,398
25,933
178%
154%
90%
0.05%
Calculated based on the Commission Delegated Regulation (EU) 2015/61.
Defined as the ratio of available stable funding to required stable funding (Article 428b)
*
**
*** Defined as the ratio of loans and advances to customers compared to customer accounts as presented in the statement of financial position.
**** Defined as profit/(loss) for the year after tax (before exceptional and other non-recurring items) as a percentage of total average equity.
72
PTSB Group Holdings plc - Annual Report 2023
Summary consolidated statement of financial position - key highlights
• Loans and advances to customers (net of provisions) are €21,427m as at 31 December 2023, an increase of €1,834m from
€19,593m at 31 December 2022, which is mainly due to the migration of the Asset Finance, SME and remaining retail mortgage
portfolios from Ulster Bank during the year together with organic loan book growth as new lending offset repayments and
redemptions
• Debt securities are €3,256m as at 31 December 2023, an increase of €79m from €3,177m at 31 December 2022 as the Bank
reinvested maturing bonds at higher yields to ensure an appropriate mix of liquid assets and retail assets in its portfolio.
• Remaining asset balances are €3,072m as at 31 December 2023, a decrease of €91m from €3,163m at 31 December 2022. The
balance is broadly in line with the prior year.
• Customer accounts were €22,966m at 31 December 2023, an increase of €1,236m from 31 December 2022. This is due to an
increase in new customers to the Bank as a result of market exits and continued growth in the deposit market when compared to
the prior year.
• Remaining other liabilities decreased by €288m primarily due to a reduction in repurchase agreements at year end when
compared to 2022.
• Total equity increased by €21m from €2,398m to €2,419m due to the inclusion of current year profits offset by a reduction in value
of fixed assets reported through the revaluation reserve.
Table 9 (a): Summary of movement in loans and advances to customers
Gross loans and advances to customers 1 January
New lending*
Loans migrated**
Redemptions and repayments of existing loans
Write-offs and restructures
Net movement from non-performing and other
Gross loans and advances to customers 31 December
* New lending during the year is stated net of repayments during the year.
** Net of repayments
Table 9(b): Composition of loans and advances to customers
Residential mortgages:
Home loans
Buy-to-let
Total residential mortgages
Commercial
Consumer finance
Finance leases and hire purchase receivables
Total measured at amortised cost
Of which are reported as non-performing loans
Deferred fees, discounts and business combination related fair value adjustments
Provision for impairment losses
Total loans and advances to customers
31 December
2023
31 December
2022
€m
€m
19,804
14,745
2,337
1,490
2,697
5,063
(1,923)
(1,879)
(19)
(1)
(43)
(779)
21,688
19,804
31 December
2023
31 December
2022
€m
€m
19,557
18,340
749
824
20,306
19,164
437
499
446
239
401
-
21,688
19,804
718
309
(570)
650
310
(521)
21,427
19,593
73
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Total loans and advances
to customers (net)
€21,427m
Total loans and advances to customers (after provisions for impairment) of €21,427m at 31 December 2023 increased by €1,834m
when compared to the year ended 31 December 2022. This increase is due to the migration of assets from Ulster Bank and new
lending outpacing repayments and redemptions.
Total new lending in the financial year 2023 amounted to €2,834m, in line with the prior year. PTSB mortgage lending in FY23 was
€2,327m, representing an 11% year on year decrease. However, the mortgage market in Ireland reduced by 14% year on year due to a
material fall off in the switcher portion of the market as the year progressed. Therefore, PTSB’s mortgage drawdown market share is
up from 18.5% in 2022 to 19.2% in 2023.
SME Lending in 2023 is €167m, which is an 11% increase compared with 2022. PTSB participated in both the Future Growth Loan
Scheme and the SBCI Brexit Impact Loan Scheme. PTSB acquired the Asset Finance business from Ulster Bank during 2023 and it
recorded €223m of new lending.
The Group recorded gross new Term lending of €117m in 2023. This is a 22% increase compared to 2022.
During the year, the Bank completed the acquisition of the Lombard Asset Finance business (now known as PTSB Asset Finance)
from Ulster Bank. This business recorded new lending of €223m during the year and we are pleased to welcome an additional c.
18,000 customers to the Bank.
NPLs as a %
of gross loans
3.3%
NPLs
€718m
Table 10: NPLs
Home loans
Buy-to-let
Commercial
Consumer finance
Finance leases and hire purchase receivables
Non-performing loans
NPLs as % of gross loans
Foreclosed assets*
Non-performing assets (NPAs) **
NPAs as % of gross loans
31 December
2023
31 December
2022
€m
€m
403
267
20
16
12
718
3.3%
11
729
3.4%
342
270
23
15
-
650
3.3%
18
668
3.4%
* Foreclosed assets are defined as assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit
enhancements.
** Non-performing assets are defined as NPLs plus foreclosed assets.
NPLs as a percentage of gross loans was 3.3% at 31 December 2023, no change from 3.3% at 31 December 2022. We continue to
support our customers as they manage the impacts of inflation and higher interest rate environment during 2023.
74
PTSB Group Holdings plc - Annual Report 2023
Debt securities
€3,256m
Table 11: Debt securities
Government bonds
Corporate bonds
Total debt securities
31 December
2023
31 December
2022
€m
€m
3,256
-
3,256
3,128
49
3,177
Debt securities of €3,256m as at 31 December 2023 increased by €79m. This was due to the purchase of new Irish, French, Italian
and EU bonds offset by fixed rate maturities.
Remaining asset balances
Table 12: Remaining asset balances
Loans and advances to banks
Assets classified as held for sale
Other assets
Total
31 December
2023
31 December
2022
€m
€m
2,051
12
1,009
3,072
2,123
18
1,022
3,163
Loans and advances to banks decreased by €72m to €2,051m, remaining broadly in line with 2022.
Other assets primarily consist of deferred tax asset, property and equipment and prepayments. The balance decreased from 31
December 2022 primarily due to a decrease in prepayments and accrued income.
Liabilities
Customer accounts
€22,966m
Table 13: Customer accounts
Current accounts
Retail deposits
Total retail deposits (including current accounts)
Corporate deposits
Total customer deposits
Loan to deposit ratio*
31 December
2023
31 December
2022
€m
€m
9,239
12,320
21,649
1,316
22,966
93%
8,983
11,589
20,572
1,158
21,730
90%
* Defined as the ratio of loans and advances to customers compared to customer accounts as presented in the SOFP.
At 31 December 2023, customer accounts increased to €22,966m from €21,730m at 31 December 2022, mainly due to an increase in
retail deposits, and current accounts as customers continued to move from competitors exiting the Irish market. As a deposit based
lender, PTSB will continue to offer competitive current and retail deposits to maintain a strong loan to deposit ratio.
75
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Financial Review
(continued)
Debt securities in issue
€1,512m
Table 14: Debt securities in issue
Bonds and medium-term notes
Debt securities in issue
31 December
2023
31 December
2022
€m
€m
1,512
1,512
658
658
Debt securities in issued increased by €854m since 31 December 2022, as the Group issued €650m of Senior Unsecured Medium
Term Notes in April 2023, and €500m in June 2023. This is offset by a maturity of €300m.
Remaining liabilities
Table 15: Remaining liability balances
Deposits by banks
Accruals
Current tax liability
Provisions
Other liabilities
Derivative liabilities
Subordinated liabilities
Total
31 December
2023
31 December
2022
€m
€m
398
13
1
40
148
1
257
858
614
6
1
80
181
13
252
1,147
The remaining liability balances decreased by €289m in the year ended 31 December 2023 primarily due to a decrease in repurchase
agreements reported in the deposits by banks line, and a release in provisions, which was primarily related to the payment of stamp
duty as part of the Ulster Bank transaction.
76
PTSB Group Holdings plc - Annual Report 2023 Capital Management
Capital management objectives and
policies
The objective of the Group’s capital
management policy is to ensure that the
Group has sufficient capital to cover the
risks of its business, support its strategy
and to comply with prevailing regulatory
capital requirements at all times. The
policy requires the Group to minimise
refinancing risk by managing the maturity
profile of non-equity capital. The capital
adequacy requirements, set by the
Regulator, are used by the Group as the
basis for its capital management. The
Group seeks to maintain sufficient capital
to ensure that all regulatory requirements
are met.
Regulatory Framework
The Group’s regulatory requirements,
more commonly known as CRD IV, are
contained within EU Regulation 575/2013
(‘the CRR’), which is directly applicable
in all EU countries. Directive 2013/36/EU
(‘CRD IV’) has been transposed into Irish
law through S.I. No. 158 of 2014, as well
as various technical standards and EBA
guidelines. Under these requirements,
the Group’s total capital for Pillar 1 must
be adequate to cover its credit, market
and operational risks, including capital
buffers. The Group must also hold
sufficient capital to cover the additional
risks identified under the Pillar 2 process
including any add-on’s imposed on the
Group as part of the supervisory SREP
assessment.
Implementation of the CRD IV legislation
commenced on a phased basis from
1 January 2014. The CRD IV transition
rules resulted in a number of deductions
from CET1 capital being introduced on a
phased basis, all of which are now fully
implemented. The remaining exception to
this is the Deferred Tax Asset (dependent
on future profitability) deduction which,
in the case of the Group, is phased to 1
January 2024. The ratios outlined in this
section reflect the Group’s interpretation
of the CRD IV rules as published on 27
June 2013 and subsequent clarifications,
including ECB regulation 2016/445 on the
exercise of options and discretions.
Regulatory capital developments
In October 2021, the European
Commission published a legislative
proposal, in the form of amendments to
the CRR and CRD, to implement the final
revisions to the Basel Framework which,
among other things, will see changes
to the Credit Risk and Operational Risk
frameworks. The Commission expectation
is that the new rules will enhance the
European Union’s banking sector’s
resilience, increase financial stability and
provide the basis for stable funding of the
economy. The amendments will implement
the final Basel III standards, harmonise
supervisory authority powers, introduce
a lower requirement for banks adopting
an Internal Rating Based (IRB) approach
and bring ESG considerations into risk
assessment. The final elements of the
implementation of Basel III in the European
Union have been agreed and endorsed
by the Council and Parliament and will
be implemented in EU law. In December
2023, the preparatory bodies of the
Council and Parliament have endorsed the
banking package consisting of:
• a legislative act to amend the Capital
Requirements Directive (Directive
2013/36/EU); and
• a legislative act to amend the Capital
Requirements Regulation (Regulation No
(EU) 2013/575).
Co-legislators confirmed that the new
CRR rules will be applicable from 1
January 2025. In advance of this, the
provision included in the CRD will be
transposed into law by Member States.
The Central Bank increased the
Countercyclical Buffer (“CCyB”) to 1%
during 2023. A further increase of 0.5%
to the CCyB will be effective from 7 June
2024, increasing the CCyB to 1.5%. This
is in line with the Central Bank’s objective
of building up the CCyB to 1.5% when
risk conditions are deemed to be neither
elevated nor subdued.
On 26 September 2023, the Central Bank
informed the Group of the outcome of the
annual assessment of Other Systemically
Important Institutions (O-SIIs) in Ireland.
As a result of the assessment, the Central
Bank has assessed the Group as an O-SII
and requires the Group to maintain a 0.5%
O-SII buffer from 1 January 2025.
On 15 December 2023, the Central Bank
informed the Group of its Supervisory
Review and Evaluation Process (SREP)
assessment by way of the final SREP
letter. According to the outcome of the
SREP assessment, the Group’s Pillar 2
Requirement (P2R) is to be reduced by
20bps to 3.25%.
The Group monitors these changes and
other emerging developments as they
relate to regulatory capital to ensure
compliance with all requirements when
applicable.
Regulatory capital requirements
The Group’s 31 December 2023 capital
requirements have been updated to
reflect the 2023 SREP Assessment.
The Group’s Common Equity Tier1
(CET1) Capital Requirement of 9.83% (31
December 2022: 8.94%) is comprised of
a Pillar 1 minimum requirement of 4.5%,
P2R of 1.83%, Capital Conservation Buffer
(CCB) of 2.5% and CCyB of 1%.
The Group’s Total Capital Requirement
of 14.75% (31 December 2022: 13.95%)
is comprised of a Pillar 1 minimum
requirement of 8%, P2R of 3.25%, CCB of
2.5% and CCyB of 1%.
These requirements exclude Pillar 2
Guidance (P2G) which is not publicly
disclosed.
Capital ratios at 31 December 2023
At 31 December 2023, the regulatory
transitional CET1 is 14.3% (31 December
2022: 16.2%) and Total Capital ratio
is 20.0% (31 December 2022: 22.3%),
exceeding the Group’s 2023 capital
requirement of 9.83% CET1 and 14.75%
Total Capital.
The reduction in the transitional CET1 ratio
(-190bps) in the year is primarily due to
increasing RWAs as a result of net loan
book growth, the migration of remaining
Ulster Bank loan portfolios and the annual
phase-in of transitional prudential filters.
On a fully loaded basis, at 31 December
2023, the CET1 ratio is 14.0% (31
December 2022: 15.2%) and the Total
Capital ratio is 19.7% (31 December 2022:
21.3%).
77
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Capital Management
(continued)
The 31 December 2023 leverage ratio on a transitional basis and fully loaded basis is 7.3% and 7.2% respectively (31 December 2022:
8.0% and 7.7%). The decrease in the year is primarily due to increased balance sheet exposure as a result of net loan book growth and
the migration of remaining Ulster Bank loan portfolios. There is also a reduction in Tier 1 Capital driven by an annual decrease in the
transitional CET1 as noted below.
Table 16 outlines the Group’s regulatory (transitional) and fully loaded capital positions under CRDIV/CRR2.
Table 16: Regulatory capital
Capital Resources:
Common Equity Tier 1
Additional Tier 1
Tier 1 Capital
Tier 2 Capital
Total Capital
31 December 2023
31 December 2022
Transitional
Fully Loaded
Transitional
Fully Loaded
€m
€m
€m
€m
1,647
368
2,015
290
2,305
1,616
368
1,984
290
2,274
1,718
369
2,087
282
2,369
1,616
369
1,985
282
2,267
Risk Weighted Assets
11,546
11,546
10,627
10,627
Capital Ratios:
Common Equity Tier 1 Capital
Tier 1 Capital
Total Capital
Leverage Ratio*
14.3%
17.5%
20.0%
14.0%
17.2%
19.7%
16.2%
19.6%
22.3%
15.2%
18.7%
21.3%
7.3%
7.2%
8.0%
7.7%
*The leverage ratio is calculated by dividing the Tier 1 Capital by gross balance sheet exposure (total assets and off-balance sheet exposures
Table 17 sets out a reconciliation from the statutory shareholders' funds to the Group's regulatory CET1 Capital
Table 17: CET1 Capital
Total Equity
Less: AT1 Capital
Adjusted Capital
Prudential Filters:
Intangibles
Deferred Tax
IFRS 9 (Transitional adjustment)*
Calendar Provisioning
AT1 Distribution Accrual
Others
Common Equity Tier 1
31 December 2023
31 December 2022
Transitional
Fully Loaded
Transitional
Fully Loaded
€m
€m
€m
€m
2,419
(368)
2,051
(95)
(277)
-
(24)
(7)
(1)
2,419
(368)
2,051
(95)
(308)
-
(24)
(7)
(1)
2,398
(369)
2,029
(86)
(247)
41
(11)
(7)
(1)
2,398
(369)
2,029
(86)
(309)
-
(11)
(7)
-
1,647
1,616
1,718
1,616
*The CET1 transitional impact to the Group as a result of EU Regulation 2017/2395 mitigating the impact of the introduction of IFRS 9 own funds.
78
PTSB Group Holdings plc - Annual Report 2023
Transitional (regulatory) capital
The 31 December 2023 transitional CET1 capital decreased by €71m to €1,647m (31 December 2022: €1,718m). The decrease
is primarily due to annual phase-in of transitional adjustments for Deferred Tax Assets (-€30m) and IFRS 9 (-€41m), increased
prudential deduction for Intangible Assets (-€9m) and calendar provisioning (-€13m) partially offset by profit in the year (+€68m) less
AT1 coupon payments (-€43m).
Fully loaded CET1
The 31 December 2023 fully loaded CET1 capital of €1,616m (31 December 2022: €1,616m) is in line with prior year.
Total Capital
Total capital decreased by €64m to €2,305m (31 December 2022: €2,369m), primarily driven by the same factors impacting CET1
movements.
Minimum Requirement for Own Funds & Eligible Liabilities (MREL)
The Group’s Transitional MREL Minimum Regulatory and Combined Buffer Requirement at 31 December 2023 is 25.48% (31 December
2022: 24.48%) of Total Risk Exposure Amount (TREA) and 5.91% on a Leverage Ratio basis (31 December 2022: 5.91%). The MREL
Minimum Regulatory and Combined Buffer Requirement consists of SRB requirement of 21.98% and the Group’s CBR of 3.5% at 31
December 2023 comprising the CCB of 2.5% and CCyB of 1%.
The fully phased in MREL Minimum Regulatory and Combined Buffer Requirement (CBR) of 28.1% is effective from 1 January 2024.
The CBR is dynamic, updating as changes in regulatory buffers e.g. Countercyclical Buffer become effective.
The Group’s MREL position at 31 December 2023 is 32.9% on an RWA basis and 13.7% on a leverage basis. The Group completed the
2023 issuance plan and is on track to meet the final 1 January 2024 MREL Regulatory Requirements. The Group maintains an internal
management buffer over its MREL requirements at all times.
Risk weighted assets (RWAs)
Table 18 sets out the Group’s RWAs at 31 December 2023 and 31 December 2022.
Table 18: Risk Weighted Assets
RWAs
Credit risk
Counterparty credit risk*
Securitisation Risk
Operational risk
Other**
Total RWAs
31 December 2023
31 December 2022
Transitional
Fully Loaded
Transitional
Fully Loaded
€m
€m
€m
€m
9,693
9,693
8,742
8,742
136
-
873
844
136
-
873
844
177
11
700
997
177
11
700
997
11,546
11,546
10,627
10,627
*Counterparty credit risk includes Treasury, Repo & CVA RWAs
**Other consists primarily of Property & Equipment, Intangible Assets and Prepayments
The 31 December 2023 RWA’s increased by €919m to €11,546m (31 December 2022: €10,627m). The increase in Credit Risk RWAs is
primarily driven by net loan growth (c. +€951m) and an increase in Operational Risk RWAs (c. +€173m).
79
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Risk Management
The information in Section 3.1, 3.2 and 3.3
on pages 97 to 110 in Risk Management
identified as audited (with the exception
of the boxed parts of these sections
clearly identified as unaudited), forms
an integral part of the audited financial
statements as described in the basis
of preparation on page 191. All other
information in Risk Management is
additional information and does not form
part of the audited financial statements.
Risk Management and Governance
The nature of risk taking is fundamental
to a financial institution’s business profile.
It follows that prudent risk management
forms an integral part of the Group’s
governance structure.
Within the boundaries of the Board-
approved Risk Appetite Statement
(RAS), the Group follows an integrated
approach to Risk Management, to ensure
that all key risks faced by the Group are
appropriately identified, assessed and
managed. This approach ensures that
robust mechanisms are in place to protect
and direct the Group in recognising the
economic substance of its risk exposure
of its risk exposure.
The Group implements a Risk
Management process, which consists of
the following key aspects:
• Risk Identification;
• Risk Assessment and Measurement;
• Risk Mitigation and Control;
• Risk Monitoring and Testing; and
• Risk Reporting and Escalation.
Enterprise Risk Management
Framework
Within the Internal Control Framework
(ICF), the Enterprise Risk Management
Framework (ERMF) is the Group’s
overarching risk management framework
articulating the management process
governing risks within the following key
risk categories: Capital Adequacy Risk;
Liquidity and Funding Risk; Market Risk;
Credit Risk; Business Risk; Operational
Risk; Information Technology (‘IT’) Risk;
Model Risk; Compliance Risk (including
AML); Conduct & Reputational Risk,
Climate Risk and Environmental Risk.
The ERMF outlines the Group-wide
approach to the identification; assessment
and measurement; mitigation and control;
monitoring and testing; and, reporting
and escalation of breaches across the
outlined risk categories. The Group
80
The Group has a straight forward business
model, with an exclusive focus in Ireland,
delivering Retail and SME banking with a
low risk appetite. In light of this, the risk
appetite is not decomposed into individual
business unit-specific statements of risk
appetite.
Risk Governance
The Group’s risk governance structure
establishes the authority, responsibility,
and accountability for risk management
across the Group and enables effective
and efficient monitoring, escalation,
decision-making, and oversight with
respect to risks by appropriate Board and
management-level governing bodies.
The responsibilities set out below relate to
risk management activities. Further roles
and responsibilities are documented in the
Internal Control Framework (“ICF”), the
Board Manual and the committees’ ‘Terms
of Reference’.
The design of the Group’s risk governance
structure is informed by a set of risk
governance principles which are based on
relevant regulatory guidelines.
These principles include:
• Committee Structure: The number of
committees at Board and Management
levels reflect the nature and types of
risk faced by the Group. Criteria for
establishing risk sub-committees gives
due consideration to the purpose of the
committee; duration of the committee;
proposed membership; committee
reporting line and flight path for outputs
from the committee.
• Board Committees: Made up of Non-
Executive Directors (NEDs) whose role
is to support the Board in overseeing
risk management, and overseeing
and challenging Senior Management’s
decisions.
• Management Committee: Bring
together Senior Managers in the
Group who individually and collectively
possess the requisite skills, expertise,
qualifications, knowledge and
experience to exercise sound, objective
judgement, commensurate with the risk
profile of the Group.
manages, mitigates, monitors and reports
its risk exposure through a set of risk
management processes, activities and
tools.
The Board Risk and Compliance
Committee (BRCC) provides oversight and
advice to the Board on risk governance
and supports the Board in carrying out its
responsibilities for ensuring that risks are
properly identified, assessed, mitigated,
monitored and reported and that the
Group’s strategy is consistent with the
Group’s Risk Appetite.
Risk Appetite and Strategy
The Group’s Risk Appetite Statement
(RAS) documents are owned by the
Board, supported by the Chief Risk
Officer (CRO), and describe the Group’s
risk appetite at the enterprise level. The
RAS serves as a boundary to business,
support, and control function leaders;
enables a consistent approach to risk
management; endorses risk discipline;
and, integrates risk management into
decision-making at all levels of the Group.
The RAS further ensures the Group’s
risks are communicated clearly and well
understood by both Senior Management
and Group employees so that risk
management is continually embedded into
the Group’s culture.
The structure of the RAS enables the
Group to maintain robust discussions
of risk-taking and risk management
and provides a commonly understood
baseline against which management
recommendations and decisions can be
debated and effectively and credibly
challenged.
The RAS is an articulation of how the
Group’s appetite for, and tolerance of,
risk will be expressed. This comes in the
form of qualitative statements about the
nature and type of risk that the Group
will take on, and quantitative limits
and thresholds that define the range
of acceptable risk. The RAS includes
component risk appetite statements for
each of the key risk categories. The RAS
includes qualitative statements of risk
appetite for each risk category, as well
as quantitative measures which translate
the qualitative statements into actionable
metrics (RAS Metrics). There are also
supporting key risk indicators (KRIs) that
can be monitored and reported to ensure
prompt and proactive adherence with the
Board-approved.
PTSB Group Holdings plc - Annual Report 2023 • Independence Safeguards: The risk governance structure features safeguards to protect the independence of key relationships
between the Senior Executives and the Board. In this respect the ExCo may not override or modify decisions of the Asset and
Liabilities Committee (ALCo), Group Risk Committee (GRC) or the Group Credit Committee (GCC), but may appeal decisions to the
Board (or relevant Board committee). Additionally, the CRO is assigned the right to refer/appeal planned management action agreed
by ExCo risk sub-committees, where the CRO considers such action to be inconsistent with adherence to the Board-approved risk
appetite.
• Flow of Risk Information: The risk governance structure establishes independent reporting lines which facilitate effective risk
oversight by the Board via the BRCC.
• Communication of Risk Information: Risk information is prioritised and presented in a concise, contextualised manner, to enable
robust challenge and informed decision-making throughout the risk governance structure.
• Appropriateness: The number of overall governance committees/fora in the Group, the length of time per meeting, the number
of meetings per year, and the number of meetings each Director/Executive attends are appropriate to the Group’s resources and
business model. This is reviewed on a regular basis and the feedback of the committee members sought.
The diagram below depicts the Group’s risk governance structure.
Risk Governance Structure
Board
BRCC
BAC
REMCO
NOMCO
CEO
Executive Committee
ALCO
GRC
Customer
Committee
Strategic
Business
Tansformation
Committee
Resilience
Committee
ESMT
Sustainability
Committee
Colleague
Conduct
Committee
Tracker
Complaints
Review
Committee
Disclosures
Committee
Group Credit
Committee
Impairment
Reporting
Review
Forum
AMU Credit
Committee
Transactional
Committee
Model
Governance
Committee
Operational
Risk
Management
Committee
CIE
Resolution
Forum
Business
Information
Security &
Technology
Forum
Group Data
Governance
Committee
Market Information
Review Group (MIRG)
Board (Tier 1)
Board Committees (Tier 2)
ExCo and GRC (Tier 3)
ExCo Sub-Committees (Tier 4)
ExCo Indirect Sub-Committees (Tier 5)
Forums (Tier 6)
MA Steering Groups (Tier 6)
Meets as Requires
81
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Risk Management
(continued)
Key Risk Governance Roles and Responsibilities
Committee/Role
Key Responsibilities
Board
Responsible for the Group’s business
model and strategy, financial soundness,
key personnel decisions, internal
organisation, governance structure
and practices, risk management and
compliance obligations.
Board Risk and Compliance Committee
(BRCC)
Oversees and provides guidance to the
Board on risk governance and strategy.
This guidance includes recommendations
to the Board on current and future risk
exposure, tolerance and appetite. The
committee oversees Management’s
implementation of risk strategy including
capital and liquidity strategy, the setting
of risk and compliance policies and the
embedding and maintenance throughout
the Group of a supportive culture in
relation to the management of risk and
compliance.
A key role of the Board is to ensure that risk and compliance are properly managed in
the business. Key risk responsibilities of the Board include, but are not limited to:
• Understanding the risks to which the Group is exposed and establishing a
documented Risk Appetite for the Group;
• Defining the strategy for the ongoing management of material risks; and
• Ensuring that there is a robust and effective ICF that includes well-functioning
independent internal risk management, compliance and internal audit functions as
well as an appropriate financial reporting and accounting framework.
The Committee supports the Board in carrying out its responsibilities of ensuring that
risks are properly identified, assessed, mitigated, monitored and reported, and that the
Group is operating in line with its approved Risk Appetite. Key activities of the BRCC
include, but are not limited to:
• Reviewing and making recommendations to the Board on the Group’s risk profile,
both current and emerging, encompassing all relevant risks categories as described
in the Enterprise Risk Management Framework (ERMF);
• Reviewing and making recommendations to the Board in relation to the Group’s
ERMF, RAS and the Group Recovery and Resolution Plan;
• Monitoring and escalating positions outside Risk Appetite to the Board, within
agreed timeframes and approving and overseeing proposed Remediation Plans
aimed at restoring the Group’s risk profile to within the approved Risk Appetite;
• Reviewing and approving the key components of the Group’s Risk Management
Architecture and relevant supporting documents;
• Communicating all issues of material Group reputational and operational risk directly
to the Board;
• Reviewing and approving Credit Policy, Credit related strategy and any material
amendments to Credit Policy;
• Reviewing and making recommendations to the Board on the adequacy of capital
and liquidity in the context of the Group’s current and planned activities (via
reviewing relevant outputs from Internal Capital Adequacy Assessment Process
(ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP), including in
relation to proposed mergers, acquisitions or disposals;
• To oversee the Bank’s approach to complying effectively with its legal/regulatory
obligations on Anti-Money Laundering (AML) and Countering the Financing of
Terrorism & Financial Sanctions (CFT/FS);
• Assess the introduction and management of regulatory developments and horizon
risks in relation to Operational Resilience, Digital Operational Resilience and Third
Party resilience. Communicate material resilience issues to the Board as appropriate;
• Assess the impact of Climate-Related and Environmental Risk on the Bank’s overall
Risk Profile; and
• Promoting a sound Risk Culture across the Group.
82
PTSB Group Holdings plc - Annual Report 2023 Committee/Role
Key Responsibilities
Executive Committee (ExCo)
ExCo is the Senior Management
Executive Committee for the Group, and
is the custodian of the Group’s collective
Strategic Portfolio, Medium Term Plan
and Risk Management Architecture as
developed through the annual Strategic
Planning Process (SPP).
ExCo is the accountable body for the
Group’s operations, compliance and
performance; defining the Group’s
organisational structure; ensuring the
adoption, application and maintenance
of all standards set by the Board; and
a forum for Group-wide colleagues and
other functional issues and ensuring
that a robust and resilient operating
framework exists within which the
Group’s activities are undertaken.
The committee is chaired by the
Chief Executive Officer (CEO) who is
accountable to the Board.
Assets and Liabilities Committee (ALCo)
ALCo reviews, and is responsible for
overseeing, all activities relating to Asset
& Liability Management (ALM), Treasury
and Market Risks (including Liquidity Risk,
Interest Rate Risk, Treasury Counterparty
risk and Foreign Exchange (FX) Risk), and
Capital Management. ALCo is the body
accountable for the evaluation of other
potential drivers of earnings volatility,
including, but not limited to, competitive
and external market pressures, and for
approving optimisation and hedging
strategies against those risks. ALCo is a
sub-committee of ExCo.
In the context of Risk Management, ExCo is primarily responsible for:
• The oversight of strategic risk associated with the development and execution of the
Group’s Strategic Portfolio and Financial Plans. The Group Risk Committee (GRC) is
a Committee of ExCo with delegated responsibility for Group-wide risk management
issues. The ExCo is the ultimate point of escalation for Group-wide specific issues
save for those matters reserved for the Board or its Committees; and
• Ensuring that the operations, compliance and performance (through delivery of
the Strategic Portfolio and Medium Term Plan, as well as policies, practices and
decisions of the Group) are carried out appropriately, are correctly aligned to the
Bank’s Purpose and Ambition and the interests of its stakeholders (customers,
colleagues, and shareholders) while operating within applicable regulatory and legal
requirements.
Key activities of the ALCo include, but are not limited to:
• Approve the pricing for new products or material changes to the pricing for existing
products which have interest rate or capital implications, as recommended.
• Maintaining, monitoring and enforcing adherence to the Group’s Risk Management
Frameworks and Policies for all Liquidity, Market, and Capital related risks;
• Overseeing and monitoring the ALM, Treasury and Market and Capital risks to which
the Group is exposed and to consider and approve strategies to mitigate such risks;
• Maintaining and assessing the ALM, Treasury and Market, and Capital Risk profiles
against set limits and propose remediation plans to restore Risk Appetite where
required;
• Monitoring the minimum capital requirements set by the Group’s Regulators, and
the Basel III minimum Solvency rules, as implemented by the CRD IV Directive and
Regulations;
• Approve Funds Transfer Pricing (FTP) methodology, ensuring such process is
economically fair, transparent and incentivises appropriate behaviour in accordance
with FTP Policy; and
• Responsible for overseeing Resolution Planning activity which includes delivering
prescribed templates/annual submissions.
83
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
Committee/Role
Key Responsibilities
Group Risk Committee (GRC)
GRC is an ExCo sub-committee chaired
by the CRO, who has unfettered access
to the BRCC. It serves as a forum for
Group-wide risk management issues
and maintains oversight across all of
the Bank’s key risk categories, excluding
those which fall under the remit of the
ALCo.
Customer Committee
Customer Committee is a sub-committee
of ExCo and is chaired by the Retail
Banking Director. The purpose of the
Committee is to support commercial
growth while ensuring that fair customer
outcomes remain at the forefront of
decision making, in the context of
building customer trust and executing a
purpose-led, customer growth strategy.
Sustainability Committee (SusCo)
SusCo is led by the Board, and on
delegated authority from the ExCo, the
SusCo is in place to provide oversight of
all activity relating to the environmental,
social and governance (ESG) factors that
are core to operating our business in a
responsible and sustainable way.
The SusCo is chaired by the Chief
Human Resources Officer and Corporate
Development Directors and includes
representation from both Executive
Committee members and Senior Leaders
representing the business units across
the organisation.
84
The GRC monitors and enforces adherence to the Group’s Risk Frameworks, Risk
Policies and Risk Limits. It is the guardian of the Group’s Risk Register and Risk Appetite
and is responsible for monitoring the total risk position of the Group.
Key activities of GRC include, but are not limited to:
• Measuring and monitoring the total risk position of the Group and maintaining a Risk
Register of Top and Emerging risks facing the Group, together with an assessment
of the probability and severity of those risks;
• Monitoring and reporting on regulatory developments and upstream/horizon risks in
relation to all relevant risk categories and communicating all material issues to the
BRCC or the Board as appropriate;
• Monitoring and assessing the Group’s risk profile and action trackers against risk
appetite and recommending remediation plans to restore risk appetite where
required;
• Reporting any breaches of approved thresholds in accordance with agreed protocol;
• Recommending proposed changes to the Group’s risk appetite for Board approval;
and
• Maintaining, monitoring and enforcing adherence to the ERMF, for all key risk
categories excluding those which fall directly under the remit of the ALCo.
To ensure that consideration of the customer is a key part of its decision making
process, the Committee allocates sufficient time to facilitate meaningful discussions
of the customer, with the aim of improving customer experience, delivering better
outcomes and enabling relationship growth.
It has a number of key remits, namely to:
• Prioritise opportunities, resources and capabilities in order to deliver sustainable
commercial growth;
• Provide guidance to Executive Management (including ExCo and ExCo sub-
committees) on business and commercial proposals which may have a material
impact on customers and on the endorsement of such proposals;
• Review and action, where required, customer performance indicators aligned to the
Bank’s strategy;
• Review relevant significant customer events, issues and complaints, when escalated
by relevant sub-committees and forums, in order to provide guidance on significant
issues/events, and in order to delegate appropriate action by relevant sub-
committees;
• Review and action, where required, Conduct Risk indicators that exist within the
Bank against the Board-approved Conduct Risk Appetite and Principles; and
• Serve as the central oversight body for all significant customer matters ensuring fair
treatment of customers.
The SusCo is responsible for the delivery of PTSB’s Sustainability Strategy by ensuring
that there is sufficient governance, alignment, oversight and challenge of activity
across each of the key area of focus of the Bank’s Sustainability Programme.
Key activities of the SusCo include, but are not limited to:
• Leading on the implementation and embedding of the Bank’s Board approved
Sustainability Strategy, ensuring that all activity is embedded in the Bank’s ambition,
purpose, culture, corporate strategy and strategic priorities;
• Identifying key stakeholder groups that will be required to deliver on Sustainability
Strategy objectives;
• Assigning business owners to manage and deliver sustainability programming across
the key areas of focus set out within the Sustainability Strategy;
• Developing sustainability Key Performance Indicators (KPIs) and processes that
enable the Bank to effectively measure and manage them; and,
• Monitoring and reporting progress to the Board and Executive Committee at regular
intervals throughout the year.
PTSB Group Holdings plc - Annual Report 2023 Committee/Role
Key Responsibilities
Group Credit Committee (GCC)
GCC oversees and is accountable
for the execution and delivery of the
Group’s system of Portfolio Credit
Risk Management, encompassing the
identification, measurement, monitoring
and reporting of Portfolio Credit Risks.
GCC ensures that the appropriate
operating frameworks governing the
portfolio credit risk management
activities of the Group are approved and
are enforced. It operates as the forum
for Group-wide Portfolio Credit Risk
Management issues across the full Credit
Risk Management Lifecycle. GCC is a
sub-committee of GRC.
The GCC is responsible for developing and implementing portfolio credit policy
within the Group. The policy addresses all material aspects of the full credit lifecycle,
including Credit Risk assessment and mitigation, collateral requirements, collections
and forbearance and the risk grading of individual credit exposures. Key activities of
the GCC include, but are not limited to:
• Recommending the relevant portfolio credit risk elements of the Group’s RAS for
approval by the Board;
• Recommending approval following challenge of the proposed impairment charge and
approach to higher authorities (BRCC/BAC) for reporting periods;
• Monitoring adherence to the Group’s Credit Policy, including discretion limits and
structure for underwriting, scoring, collections, recoveries and provisioning within
the boundaries of the Group’s RAS (as approved by the Board);
• Monitoring the portfolio credit risks to which the Group is exposed;
• Maintaining and assessing the portfolio credit risk profile against set limits and
proposing remediation plans to restore risk appetite/limits where required;
• Reporting any breaches of approved limits in accordance with agreed protocol; and
• Acting as the gateway through which decisions required from higher authorities are
reviewed prior to submission (e.g. BRCC/Board) and they are the forum review of
Group-wide credit risk management issues.
Operational Risk Management
Committee (ORMC)
ORMC is a sub-committee of the Group
Risk Committee (GRC), established
with delegated authority to operate and
make decisions in accordance with the
Terms of Reference approved by GRC.
GRC retains overall responsibility for the
oversight of Operational and IT risks.
ORMC is responsible for supporting GRC in monitoring the Operational and IT risks
to which the Bank is exposed and for overseeing risk mitigation performance and
prioritisation related to the management and control of these risks. In fulfilling this
role, the ORMC reviews and discusses the outputs and results of the Risk and
Control Self-Assessment (RCSA) Process, Operational Risk Event Reporting and
various other assessments (including New Product Approval (NPAP) and Third
Party Risk Management (TPRM) assessments), monitoring and testing activities
to create awareness of commonly experienced Operational and IT risk matters, to
share learnings and to enhance the control environment across the Bank. The key
responsibilities of the ORMC include, but are not limited to:
• Oversee the implementation of the Bank’s Operational and IT Risk Management
Frameworks, including compliance with relevant Operational and IT risk policies and
procedures;
• Monitor the implementation of policies and ensure ongoing adherence through
operational controls;
• Review and approve Operational and IT policies, as agreed with the Chair of GRC,
(via delegated authority from GRC) and recommend approval of Operational and IT
Risk Frameworks to the GRC (and subsequently BRCC);
• Appraise Material Operational and IT risk events, identify and report on the
underlying root causes of these events, share lessons learned and ensure that
measures or controls have been put in place to mitigate the occurrence and severity
of any future risk events;
• Develop, review and recommend approval of scenarios relating to potential
Operational and IT risk events in order to inform the Group’s capital assessment
processes (e.g. ICAAP and Stress Testing) and submit these to the GRC for their
review and approval;
• Review and evaluate Operational and IT risk developments including peer, regulatory,
and industry developments, and external incidents that may impact the Bank
directly, or relate to potential risks.
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
Role of the Chief Risk Officer (CRO)
The CRO has overall responsibility
for overseeing the development
and implementation of the Group’s
Risk function, including overseeing
development of the Group’s risk
management structure, supporting
frameworks (e.g. Internal Control
Framework, Enterprise Risk Management
Framework), policies, processes, models
and reports, and ensuring these are
sufficiently robust to support delivery of
the Group’s strategic objectives and all of
its risk-taking activities.
The CRO has independent oversight of
the Group’s risk management activities
across all key risk categories. The CRO is
responsible for independently assessing,
monitoring and reporting all material risks
to which the Group is, or may become,
exposed. The CRO is a member of the
ExCo and directly manages the Group’s
Risk function.
The CRO is accountable for developing
and maintaining the Group’s RAS,
which the CRO submits to GRC for
recommendation to BRCC, who in turn
recommend approval to the Board. The
CRO is responsible for translating the
approved risk appetite into risk limits
which cascade throughout the Group.
Together with Management, the CRO
is actively engaged in monitoring the
Group’s performance relative to risk limit
adherence and reporting this to the Board.
The CRO’s responsibilities also encompass
independent review and participation in
the Group’s Strategic Planning Process
(SPP), capital and liquidity planning and
the development and approval of new
products. Specifically, the CRO is tasked
with:
Providing second line of defence
assurance to the Board across all key risk
categories;
• Providing independent advice to the
Board on all key risk issues, including
the risk appetite and risk profile of the
Group;
• Monitoring and enforcing Group-wide
adherence to frameworks, policies, and
procedures, with the aim of ensuring
that risk-taking is in line with Board
approved risk appetite;
• Monitoring material risks to which the
Group is, or may become, exposed,
and overseeing development of risk
mitigating responses as appropriate;
• Developing and submitting the
ICAAP, ILAAP, Recovery Planning and
Resolution Planning for Board approval;
and
• Developing and maintaining the Group’s
risk management structure.
• In connection with these
responsibilities, the CRO is assigned
the right of appeal over planned
management action agreed by ExCo
Risk Sub-Committees (such as ALCo
and the GCC) when the CRO considers
such action to be inconsistent with
adherence to the Board approved risk
appetite.
Three Lines of Defence
A ‘Three Lines of Defence’ model has been adopted by the Group as defined in the ICF for the effective oversight and management of
risks across the Group.
Line Of Defence
High-Level Roles And Responsibilities
First Line of Defence
First line functions and teams incur risks
as they undertake frontline commercial
and operational activities. They are
responsible for identifying, owning,
managing, monitoring and mitigating
these risks through the effective design
and operation of mitigating controls to
ensure compliance with internal and
external requirements.
Critically, the First Line of Defence
executes its business and operational
activities in a manner consistent with
the enterprise-wide risk appetite and
managers take risks appropriately.
First Line – Business Units
• Embedding the ICF and its supporting frameworks (e.g. Enterprise Risk
Management Framework) and sound risk management practices into standard
operating practices, including by creating clear links between maintaining and
delivering robust governance and risk and control processes to performance
management;
• Establishing appropriate governance structures to support the implementation
of the ICF and achieve the Bank’s strategic, business, operational, risk, and
assurance objectives;
• Complying in full and within the spirit and letter of relevant regulations and legal
obligations applicable to business and operational activities;
• Identifying, assessing, measuring, monitoring, mitigating, reporting and owning
all risks associated with business and operational activities across the Bank’s risk
categories in a manner consistent with the Bank’s Enterprise Risk Management
Framework;
• Cultivating a strong risk culture that encourages prompt identification and
escalation of issues and fostering an environment of continuous improvement
and open engagement;
• Providing assurance to relevant governance bodies on the management of risk in
their functions and the effective operation and reporting of relevant controls; and
• Ensuring fair customer outcomes in all aspects of the Bank’s operation and
decision-making.
86
PTSB Group Holdings plc - Annual Report 2023 Line Of Defence
High-Level Roles And Responsibilities
Second Line of Defence
The Group Risk Function is an
independent Risk Management function,
under the direction of the CRO, and is the
key component of the Group’s Second
Line of Defence. The Group Risk Function
is responsible for ensuring that all risks
to which the Bank is, or may become,
exposed to are identified, assessed,
measured, monitored, mitigated, and
reported on by the relevant units in the
institution.
Third Line of Defence
Group Internal Audit (GIA) comprises the
Third Line of Defence. It plays a critical
role by providing independent assurance
to the Board over the adequacy,
effectiveness and sustainability of the
Group’s internal control, risk management
and governance systems and processes,
thereby supporting both the Board
and Senior Management in promoting
effective and sound risk management
and governance across the Group. All
activities undertaken within, and on
behalf of, the Group are within the scope
of GIA. This includes the activities of risk
and control functions established by the
Group. The Head of GIA reports directly
to the Chair of the Board Audit committee
(BAC), thus establishing and maintaining
independence of the function.
Second Line – Group Risk Function
• Developing and monitoring the implementation of the Enterprise Risk
Management Framework, enterprise-wide Risk Appetite Statement and risk
policies, systems, processes and procedures;
• Assessing First Line Of Defence adherence to the enterprise risk management
framework, risk appetite, and risk limits to determine whether first line of defence
units meet the standards for their risk management roles and responsibilities;
• Reviewing, assisting, and, as appropriate, challenging the first line of defence risk
management activities, and escalating issues if risk management concerns are
not adequately addressed by first line of defence;
• Establishing, maintaining, and delivering a program of monitoring, testing, and
selected validation;
• Cultivating a strong risk culture that encourages prompt identification and
escalation of issues and fostering an environment of continuous improvement
and open engagement; and
• Providing comprehensive and understandable information, independent of the
First Line of Defence, to relevant governance bodies – through ongoing risk
management committee updates – on the state of the Bank’s overall risk and
control environment and the effectiveness of risk management, including risk
issues and risk management deficiencies, and adherence to the Bank’s risk
appetite, limits, and enterprise risk management framework.
Third Line – Group Internal Audit
• Developing a risk-based annual audit plan: developed in the final quarter of
each year, this plan sets out the program of audit reviews to be undertaken in
the following year, and is based upon a GIA’s own risk assessment. This plan
is cognisant of the bank’s strategy and the risks both to this, and within this,
strategy, and aims to provide meaningful input to assist in its controlled and
well-governed execution. Accordingly, risk-based evaluation of the bank’s risk
identification, assessment and evaluation and risk management and mitigation
approaches fall within this remit, as do assessments of adherence to policies and
procedures (including methodologies and standards), along with the controls in
place to ensure regulatory compliance;
• Reporting on identified risk management, governance and control weaknesses:
GIA reports on all identified issues to both business owners and Senior
Management, and to the Board of Directors (via the Board Audit Committee);
• Monitoring and reporting on the disposition of agreed remediating actions: As
required under professional standards, GIA also monitors the status of all issues
and actions previously raised, and reports on the progress being made by
business units in implementing agreed action plans; and
• Providing insights into risk, governance and control measures which may
strengthen the bank’s system of internal control in a carefully structured manner
such that GIA’s independence is preserved.
2. Principal Risks and Uncertainties
Risk registers, containing details of current
and emerging risks, from each of the
Group Risk functions utilise the “top-
down” and “bottom-up” Risk Identification
/ RCSA processes and form the basis
of the Group’s ‘Top and Emerging Risks’
report. The ‘Top and Emerging Risks’
report is presented to GRC, BRCC and
Board and is used to ensure identification,
measurement, management and
monitoring of all material risks.
In addition to the Top & Emerging Risks
update, the Risk function has also focused
on reporting on ‘Horizon’ risks. The
Horizon Risk report looks out to 25 years
to try and identify long-range risks. This
report is included in the CRO report which
is presented to the GRC, BRCC and Board.
The management of the risks associated
with the Ulster Bank transaction is
embedded and monitored across the suite
of existing key risk categories’ frameworks
and policies.
The following describes the risk factors
that could have a material adverse
effect on the Group’s business, financial
condition, results of operations and
prospects for the next 12 months and
over the medium term. The risk factors
discussed below should not be regarded
as a complete and comprehensive
statement of all potential risks and
uncertainties. There may be risks and
uncertainties of which the Group is not
aware or which the Group does not
consider significant, but which may
become significant.
87
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
The challenging conditions in global
markets arise due to factors including
the Ukraine-Russia war, high interest rate
environment, inflationary pressures, post
COVID-19 impacts, the growing threat
from cyber-attacks and other unknown
risks. As a result, the precise nature of
all risks and uncertainties that the Group
faces cannot be predicted as several of
these are outside of the Group’s control.
As at 30th September 2023, the Bank
considers three (3) emerging risks. The
emerging risks are:
• Macro-Economic – The OECD notes
that the “global economy is turning a
corner but faces a long road ahead to
attain strong and sustainable growth.”
While it sees “falling energy prices
and headline inflation, easing supply
bottlenecks and the reopening of
China’s economy, coupled with strong
employment and relatively resilient
household finances” all contributing to
a projected recovery, it reckons that
“the recovery will be weak by past
standards” and projects global growth
of 2.7% in 2023 and 2.9% in 2024, “both
well below the average growth rate in
the decade preceding the COVID-19
pandemic.” The IMF expects global
growth of 2.8% in 2023 and 3.0% in
2024. The ECB forecasts Euro area GDP
growth of just 0.9% in 2023, down from
3.5% in 2022, following a 0.1% decline
in Q1/23.
The CSO reported that Ireland entered
technical recession in the first quarter
of the year as a GDP decline of 0.1% in
Q4/22 was followed by a 2.8% decline
in Q1/23. However, modified domestic
demand (MDD), which better reflects
activity in the domestic economy,
grew by 0.1% on the quarter. Despite
the lacklustre performance in the
early part of the year, Davy forecasts
GDP growth of 5.5% and MDD growth
of 3.4% for 2023. The Central Bank
forecasts MDD will “grow by 3.7% this
year, and by 2.5% in 2024 and 2025.” In
contrast, the ESRI predicts that GDP will
grow at a mere 0.1%, citing “economic
headwinds such as rising interest rates,
slower than expected global trade
and persistent inflation.” It cautions
that “the decline in pharma-related
exports” evident in Q1/23 “should be
monitored closely”. Uncertainty in the
path of inflation and interest rates
has fuelled volatility in asset markets.
The evolving expectations around the
path of monetary policy will impact the
88
pricing of sovereign debt. If Ireland’s
growth instead declines or if there is an
asset price collapse, this would lead to
a recession.
• Adverse Technological Advances –
Emerging technologies, such as artificial
intelligence (A.I. or AI), industrial robots
and machine learning, are advancing
at a rapid pace. These developments
improve the speed and quality of
services and the last two years has
shown how businesses can mobilise
and innovate quicker than one could
have ever thought before. Lessons
learned will play an important role when
competing against competitors with
greater technological advances.
For the Bank, there is a high cost in
implementing and competing with
technological advances and customers
require face to face interaction for
certain products and services; leading
to difficult strategic choices between
quality and accessibility.
Continued advances in technology
can also give rise to fraud and the
ever evolving privacy compliance
environment. With an increased
knowledge of technology from
consumers and hackers, the risks
for cyber fraud are intensified. For
example deep fake technology is an
emerging threat in the technology
sector. Technology innovations enable
deep fakes to look and sound authentic
and convincing, leading to abuse and
misuse. Areas of concern are on-
boarding processes, payment/transfer
authorisation, account hijacking,
synthetic identities and impersonation
among others. Particular attention
needs to be paid to brand reputation
and the customer experience.
Further to this, AI technology is
increasingly becoming more common.
AI has the potential capability to
facilitate enhanced capacity to predict
economic, financial, and risk events;
impact the behaviour of financial
markets; improve risk management
and compliance; strengthen prudential
oversight; and equip central banks with
new tools to pursue their monetary and
macro prudential mandates. Separate
from other recognised AI-related risks
(model risk, conduct & compliance etc.),
AI and the evolving digital landscape
could lead to greater fluidity/reduced
stickiness of customer deposits.
• Global Conflict - Following the
invasion of Ukraine by Russia in 2022,
the possibility of further aggression
between NATO and non-NATO
states has increased. With some
commentators suggesting Ukraine’s
willingness to join NATO as a main
reason for Russia’s illegal invasion,
the World/EU may see retaliation from
Russia as more countries (particularly
in the EU) have applied for NATO
membership. As some countries remain
loyal, or sympathetic to Russia, there is
an increased risk of conflict in the EU/
across the globe. Despite perceived
Irish neutrality, a conflict within the EU/
EEA or across the globe would have
severe negative consequences for the
economy and the industry, affecting
nearly every risk category.
Business Risk
Business Risk is defined as the risk that
volumes may decline, margins may shrink
or management costs may increase,
arising from an underperforming Business
model and/or failure in the Group’s
strategic ambitions.
From the Group’s perspective, Business
Risk is further divided into two sub-risk
categories, as follows:
• Business Model Risk, which is defined
as the risk that the Group does not
generate a short-term financial return
to meet resolution tests (‘viability’)
and/or is unable to deliver minimum
acceptable returns to its shareholders
(‘sustainability’).
• Strategic Risk, which is defined as the
risk that results from a failure to prepare
for, or respond to, changes in the
external environment or market (usually
linked to factors such as the activities
of competitors, changing customer
preferences, product obsolescence,
technology developments and
regulatory changes).
Business Model risk is typically assessed
over a one-year horizon, while strategic
risk generally relates to a longer timeframe
and pertains to volatilities in earnings
arising from a failure to develop and
execute an appropriate strategy. Business
Units are responsible for the delivery of
their business plans and management
of such factors as pricing, sales/lending
volumes, operating expenses and other
variables that may impact earnings
volatility. Pricing decisions, and changes
thereto, are reviewed and approved by the
Bank’s Assets and Liabilities Committee.
The development of new markets,
PTSB Group Holdings plc - Annual Report 2023
products and services and significant
changes to existing ones is addressed
under the Group’s New Product Approval
process.
Business Unit strategy is developed within
the boundaries of the Group’s Strategy as
well as the Group’s Risk Appetite.
Economist Update
Introduction
Central banks across the globe spent
2023 raising interest rates to tame
inflation while hoping their efforts would
not tip their economies into recession.
The war in Ukraine and the conflict in the
Middle East created a difficult economic
and political backdrop. Inflation, though
reducing, continued to erode living
standards while the higher interest
rate environment created challenges,
particularly in the commercial proper-ty
sector.
Inflation Rates and Interest Rates
Having increased interest rates four times
in 2022, the ECB raised rates six further
times in 2023, bringing the repo rate from
0% in July 2022 to 4.5% in September
2023, its highest level in over 20 years.
The ECB commented: “Fading cost
pressures and the impact of the ECB’s
monetary policy should allow headline
inflation to fall from 5.4% in 2023 to 2.7%
in 2024 and 2.1% in 2025, reaching 1.9%
in 2026.”
Inflation moderated in Ireland also.
According to the CSO, the Consumer
Price Index (CPI) rose by 4.6% in 2023
compared with 8.2% in 2022 and 5.5% in
2021. The Central Bank acknowledged
that “headline inflation has fallen sharply
in 2023 as externally-driven price
pressures have eased” but cautioned that
“domestic price pressures – as reflected
in services inflation – are expected to be
more persistent, with the latter projected
to stay above 3% in 2025.”
Economic Outlook / Growth
According to the ECB, “the euro area
economy weakened in the second half of
2023, dragged down by tighter financing
conditions, subdued confidence and
competitiveness losses.” In December
2023, it forecast that “economic growth
will remain weak in the short term in the
face of tight financing conditions and low
export growth. As inflation falls, household
income recovers and foreign demand
strengthens, the economy should grow by
0.6% in 2023, by 0.8% in 2024 and by 1.5%
in 2025 and 2026.”
The ESRI noted that GDP declined by 2.7%
in 2023 in “the first episode of negative
GDP growth since 2012” but commented
that modified domestic demand (MDD)
“which captures consumption and
modified investment” increased 0.6%. The
Central Bank commented: “Improvements
in real income are projected to support
modest increases in Modified Domestic
Demand in 2024 and 2025.” However, it
noted that the “ongoing transmission of
tighter monetary policy to the economy
will weigh on growth, which is already
being limited by capacity constraints.”
The Department of Finance highlighted
the “softening in export growth” in 2023
and commented that this was “particularly
pronounced among goods exports”.
Government Finances
The NTMA reported that debt-to-GNI
declined from 97% in 2019 to 76% in
2023 and it expects it to continue “to
fall rapidly” in the coming years. It
commented that the “net debt position
is back below Euro Area average,
completing a more than decade-long
journey.” Ireland is rated in the AA
category by all the major rating agencies
following Moody’s upgrade to Aa3 in
2023. The NTMA announced a funding
range for 2024 similar to that for 2023
when it raised €7bn. It noted the fact that
the “vast majority of Irish debt is fixed rate
at average cost of 1.5%” with a weighted
average maturity greater than 10 years,
“one of the longest in Europe.”
Income tax grew by 7% and VAT by 9%
in 2023 while corporation tax grew by a
more modest 5% after many years of very
rapid growth. The Department of Finance
projects a current budget surplus of 2.7%
for 2024. The Government set up the
Future Ireland Fund and the Infrastructure,
Climate and Nature Fund to deal with
future funding needs and to ensure that
the large corporation tax receipts which
are likely to prove temporary in nature are
not available to meet current spending
needs. The Department of Finance
highlighted that corporate tax receipts
had increased “five-fold since 2015.”
While welcoming the establishment of
the Future Ireland Fund and noting its
“potential to put risky corporation tax
receipts to good use, with the result that
future generations have a smaller burden
to offset the costs of a rapidly ageing
population,” the Irish Fiscal Advisory
Council worried that the Government’s
breaching of the National Spending Rule
“using strong tax receipts in good times to
expand the budget quickly” risked “adding
to price pressures, getting bad value for
money, and potentially having to reverse
measures in a downturn.”
Employment
The ESRI notes that “after the strong
recovery from the COVID-19 pandemic,
the labour market has been operating
close to capacity since winter 2022.” It
projects the unemployment rate in Ireland
is likely to fall to 4.3% in 2024, down
from 4.4% in 2023. It also forecasts that
the number of people employed will rise
from 2.67m in 2023 to 2.71m in 2024, the
highest number ever recorded.
The Central Bank commented that
“the pace of employment growth has
slowed in 2023 but rising labour force
participation and continued net inward
migration point to ongoing strength in
labour market activity.” It expects “labour
market conditions … to remain tight
out to 2026” which “supports further
increases in nominal incomes, which, in
combination with falling inflation, implies
annual average real income growth of 1.7%
p.a. from 2023-2026.” It highlighted that
“lower vacancy rates are emerging” but
wage growth was “picking up … in part to
reverse real wage declines experienced
since 2021.”
Banking
Household deposits grew by €4.4 billion
or 2.9% in 2023. This, the Central Bank
commented, “was the smallest increase
in the value of household deposits in a
calendar year since 2017, … and marks
a significant decline on the €13.9 billion
increase recorded in 2020. Just €148
million of the 2023 deposit increase
related to overnight deposits, with
the remainder of the growth coming
from deposits with a fixed maturity or
redeemable at notice.”
The NTMA noted that “after slow initial
pass-through, Irish mortgage rates rose
back above EA average” by the end of
2023. “The weighted average interest rate
on new fixed rate mortgage agreements,
which constitute 81% of the volume of
new mortgage … was 4.14% in December
2023 … an increase of 153 basis points
over the previous 12 months.” According
to the Central Bank, “the weighted
average interest rate on new household
term deposits rose by 257 basis points,
and the volume of new business has
rebounded significantly” between July
2022, when the ECB started raising its
rates, and October 2023. It contrasted this
with household overnight deposit rates
which it said had “been particularly slow
89
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
to respond, increasing by only 10 basis
points” over the same period. Despite
the rate difference, it noted that “92% of
all household deposits were overnight
deposits” as of October 2023.
The Central Bank observed how the
changed “interest rate environment
and evolving structure of the domestic
banking sector have led to a substantial
increase in bank profitability over the
past year.” Return on equity “increased
from the low point of -6.2% in 2020 (at
the height of the pandemic) to … 12.6% in
2023H1.” It cautions that “higher inflation
and interest rates” are “likely to increase
impairments and slow loan growth” and
“banks with more rapid gains through the
loan-deposit spread … carry a greater
risk associated with loan losses in a rising
interest rate environment.” It notes that
a “significant volume of outstanding CRE
lending in banks is due to mature in the
short term” and some borrowers are likely
to be “unable to meet increased financing
costs” which would result in selling assets
into a market where “weaker occupier
demand may place additional downward
pressure on CRE prices.”
BPFI reported that while “the number
of first-time buyer drawdowns reached
a new peak at almost 26,000 (25,591)
valued at over €7.2 billion (7,219 million)
in 2023, the highest annual levels since
2007,” there was “an overall slowdown in
both mortgage drawdown and approval
activity, largely driven by a sharp drop in
re-mortgage/switching activity.” While
the total amount drawn down declined by
€2.0bn from €14.1bn in 2022 to €12.1bn in
2023, remortgaging activity declined by
€2.3bn from €3.6bn to €1.3bn. In 2024, it
expects “housing and mort-gage demand
to remain strong, notwithstanding the
expected slowdown in Irish economic
growth.”
Housing
The CSO reported that “there were 32,695
new dwelling completions in the whole of
2023, an increase of 10.0% from 2022.”
However, “the number of apartments
completed in 2023 was 11,642, up 28.0%
from 2022.” It noted that “47.4% of
completions were scheme dwellings, a
further 35.6% were apartments, and 17.0%
were single dwellings.” Nevertheless,
despite the significant increase in
housing output in recent years, it still
falls far short of demand. The Housing
Commission estimates that “Ireland may
need up to 62,000 homes built per year
90
until 2050” to accommodate Ireland’s
projected population growth and changing
household sizes.
The CSO commented that “close to
six in ten completions in 2023 were in
Dublin or the Mid-East (Kildare, Louth,
Meath, and Wicklow). Of all completions
in Dublin in 2023, some 71.9% were
apartments.” It also noted that “the
proportion of apartments being built has
been rising over recent years from 16.4%
of completions in 2019 to 35.6% in 2023”
and while “the number of completions in
urban areas in 2023 was 28,137, a rise of
12.6% from 24,992 in 2022 … there was
a decrease of 3.7% from 4,734 in 2022 to
4,558 in 2023” in rural areas.
Daft.ie reports that while there were
“almost 1,800 homes available to rent on
November 1st 2023 … a 64% increase
compared to the same date a year
previously”, it caveats “this sliver of good
news” by noting that “by any objective
measure, having just 1,800 homes on the
rental market for a country that has, as of
the April 2022 Census, at least 330,000
households in the private rental market
is far too little.” It cites the fact that there
were 23,000 more homes to rent thirteen
years earlier.
House Prices
The CSO reported that the Residential
Property Price Index rose by 2.9% in
the 12 months to November 2023, “with
prices in Dublin rising by 0.9% and prices
outside Dublin up by 4.4%.” The price
rise in November was the sixth monthly
increase in a row following declines in
the early months of the year. Meanwhile,
new dwelling prices “in the third quarter
of 2023 were 10.4% higher than in the
corresponding quarter of 2022”, widening
further the price gap between new and
existing houses.
Daft.ie notes that “there were just over
11,100 homes for sale in the country”
which is “very low compared to almost
any point over the past 15 years” and
opines that “housing prices are stabilising
not because supply has increased to meet
demand, but instead because demand
has fallen to meet it. Supply of newly
built homes for purchase has certainly
increased but the second-hand market,
which is the larger share of the market,
has been working in the other direction.”
The Society of Chartered Surveyors
Ireland (SCSI) expects residential property
prices to increase by an average of 1%
in 2024. SCSI noted that “36% of sales
instructions in Q4 2023 were landlords
selling their investment property, down
4% on last year”, while “76% of agents
are reporting a shortage of supply – an
increase of 10% on last year.” It noted that
“69% of agents say BER ratings are now
an important or very important factor in
relation to the level of an offer.”
The Housing Commission notes the
“financial viability challenges in the
delivery of homes” and seeks to
encourage “increased adoption of
modern methods of construction in public
housing delivery.” BPFI also expects
increased housing supply in 2024 but
comments that “afford-ability issues
remain as construction costs continue
to rise.” It highlights that “construction
costs in Ireland have increased by nearly
23% between the end of 2019 and the
third quarter of 2023” and worries that
“average home prices have increased
faster than the incomes of potential home
buyers in the past few years,” undermining
affordability.
Overall Position
“Falling inflation is set to prompt the
ECB to start cutting interest rates by
the second quarter of 2024”, according
to the majority of economists polled by
the Financial Times. However, the ECB
president, Christine Lagarde, dampened
such expectations saying it was
“premature to discuss rate cuts” as the
ECB kept the repo rate at 4% in January
2024.
Unemployment in the euro area is
expected to stay near its current historic
low of 6.5% in 2024 according to Statista.
The ECB cautions that “euro area financial
stability outlook remains fragile” and
comments that while bank profitability
has benefited so far from higher interest
rates, “headwinds associated with
deteriorating asset quality, lower lending
volumes and higher funding costs lie
ahead.” With elections in many countries
scheduled for the year, 2024 is likely to
see a continuation of the volatility that
has characterised the global outlook since
Covid struck in 2020.
The ESRI noted the “clear need for
substantial public investment in Ireland”
PTSB Group Holdings plc - Annual Report 2023 As CR&E risk continues to evolve, the
potential effect of Physical (Acute &
Chronic) and Transition risk on the Bank
will be continually reviewed, with the
assessment of effects as set out in the
CR&E risk materiality assessment to
develop over time as the Bank sources
critical data to facilitate quantitative
analysis.
While the Bank is focused on short-term
action delivery and stepping up the pace
in embedding CR&E risk, it is mindful of
creating capacity and building a robust
long-term strategic approach to CR&E
risk, which aligns to best practice. This
will ensure there is a comprehensive
integration within Strategy, Data, Risk
Management and Product Strategy,
supported by enabling activities such as
training and disclosures.
Credit Risk
Credit Risk is defined as the risk of
financial loss due to the failure of a
customer, guarantor or counterparty, to
meet their financial obligations to the
Bank as they fall due.
The Group’s customer exposures are
originated and managed in Ireland. The
Group’s principal exposure is to residential
mortgages secured firstly by a first
legal charge on the property. Economic
uncertainty, as well as the socio-political
environment and inflation adversely
impact or cause further deterioration
in the credit quality of the Group’s loan
portfolios. This may give rise to increased
difficulties in relation to the recoverability
of loans or other amounts due from
borrowers, resulting in further increases in
the Group’s impaired loans and impairment
provisions.
As losses from customer credit risk are
the principal financial risk to which the
Group is exposed more detailed analysis
of the risks, risk management policies and
current portfolio segmentation is provided
in section 3.1 of the Risk Management
Report.
as identified in the National Development
Plan (NDP) driven in large part by
population growth and Government
targets on greenhouse gas emissions.
However, it highlighted “the existence of
capacity constraints largely in the form
of labour shortages” and cautioned that
“an accelerated NDP risks generating
increased inflation in the construction
sector whereby the costs of delivery
increase.” This “conflict between the need
for public investment and the constraints
on in-vestment” is likely to dominate
political debate in Ireland in 2024 and
beyond.
Climate-Related & Environmental
Risk
PTSB is committed to the management of
Climate-Related & Environmental (CR&E)
Risk, aided by regulatory guidance,
to play our part as corporate citizens.
Understanding of how best to respond
to climate change is continually evolving
and with this our knowledge of associated
risks continues to develop.
Managing CR&E Risks and opportunities is
a key area of focus under the ‘Addressing
Climate Change and Supporting the
Transition to a Low Carbon Economy’ Pillar
of the Bank’s Sustainability Strategy.
Climate-Related and Environmental Risks
can be categorised into two Sub-Risk
Categories as follows:
1. Physical Risks - The risk of economic
cost and financial losses resulting from
the increasing severity and frequency of:
• Acute Physical Risk – arises from
extreme weather events such as floods,
storms, droughts and heatwaves.
• Chronic Physical Risk – arises from
longer-term gradual shifts in the
climate patterns, such as increasing
temperatures, sea-level rises, water
stress, biodiversity loss, land use
change, habitat destruction and
resource scarcity.
2. Transition Risk - The risk of economic
cost, financial loss or an adverse outcome
related to the process of adjustment
towards a low-carbon economy and more
environmentally sustainable economy.
Transitioning to a low-carbon economy
may require substantial policy, legal,
technology and market changes. These
changes may result in financial loss and
reputational risk to organisations, with the
severity of this depending on the scope
and speed of change required. Transition
Risk may include:
• Policy Risks that come with the
evolution of policies and regulations
that promote the adaptation to a less
carbon intensive and more sustainable
economy, and those that constrain
actions that lead to climate change and
harm the environment.
• Legal Risk that relates to litigation
claims against institutions and their
representatives who fail to mitigate
and adapt to climate change, and who
fail to disclose material climate and
environmental information.
• Market Risks that arise through
changing demand and supply for
commodities, products and services.
• Reputation Risk that relates to the
changing stakeholder perception of
institutions’ contribution to or detraction
from the transition to a lower-carbon
economy.
The management of CR&E risk is aligned
to key processes and components
set out in the Bank’s Enterprise Risk
Management Framework (ERMF), which
identifies core risk management stages
which collectively ensure that the Bank
appropriately identifies and manages
current and emerging risk the Bank is
exposed to. Consideration of the impact
of CR&E risk on each of the risk categories
has been considered as part of the Banks
2023 CR&E Risk Materiality Assessment.
Through this assessment, the Bank
recognises that CR&E risk is a cross-
cutting risk, which may impact or enhance
other identified risk.
Throughout 2022 and 2023 the Bank
have deployed resources to ensure the
implementation of the Board approved
CR&E Risk Implementation plan submitted
to CBI in June 2022, which addressed
the supervisory expectations in relation
to CR&E risk. The Bank has established
strong governance CR&E risk through the
creation of a Sustainability Committee,
which operates as sub-committee of the
Executive Committee.
The Banks Green Mortgage product,
which went to the market in 2022
delivered c€700m in green lending
in 2023. This is the first in a suite of
Sustainable Finance Product offerings,
with proposition development continuing
on future products.
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(continued)
Capital Adequacy Risk
Capital Adequacy Risk is the risk that the
Group does not have sufficient capital to
cover the risk exposures of its business,
support its strategy, and comply with
regulatory capital requirements at all
times.
The Group’s business and financial
condition could be negatively affected
if the amount of its capital is insufficient
due to:
• Materially worse than expected financial
performance;
• Increases in Risk-Weighted Assets;
• Excessive growth in asset volumes;
• Changes in the prescribed regulatory
framework; or
• The sales of assets.
The core objective of the Group’s capital
management framework is to ensure
it complies with regulatory capital
requirements (Capital Requirements
Regulation (CRR and CRR2), Capital
Requirements Directive IV (CRD IV) and
the Banking Recovery and Resolution
Directive (BRRD)) and that it maintains
sufficient capital to cover its business
risks and strategy.
As outlined in the Group’s RAS, the Group
undertakes an Internal Capital Adequacy
Assessment Process (ICAAP) to ensure
that it is adequately capitalised against
the inherent risks to which its business
operations are exposed and to maintain
an appropriate level of capital to meet
the minimum regulatory and Supervisory
Review and Evaluation Process (capital
requirements). The ICAAP is subject to
review and evaluation by the CBI as part
of its Supervisory Review and Evaluation
Process.
The management of capital within
the Group is monitored by the BRCC,
ExCo and ALCo in accordance with the
Board-approved capital adequacy risk
management framework.
Government Control and
Intervention
In 2011, the Minister for Finance of Ireland
became the owner of 99% of the issued
ordinary shares of the Group which
reduced to c.75% following the successful
capital raise in 2015. The completion
92
of the first phase the Ulster Bank
transaction, combined with the recent
disposal of an additional 5% tranche, has
further reduced the Minister for Finance’s
stake to c.57%.
The risk is that the Irish Government,
through its direct majority shareholding
of the Group, uses its voting rights
or intervenes in the conduct and
management of the business in a way that
may not be in the best interests of the
Group’s other stakeholders.
The Minister for Finance and the Group
entered into a Relationship Framework
Agreement dated 23 April 2015. The
Framework Agreement provides that the
Minister will ensure that the investment
in the Group is managed on a commercial
basis and will engage with the Group,
including in respect of the manner in
which he exercises his voting rights,
in accordance with best institutional
shareholder practice in a manner
proportionate to the shareholding interest
of the State in the Group.
Current and future budgetary policy,
taxation, the insolvency regime and other
measures adopted by the State to deal
with the economic situation in Ireland may
have an adverse impact on the Group’s
customers’ ability to repay their loans, the
Group’s ability to repossess collateral and
its overall pricing policy.
Liquidity and Funding Risks
Liquidity Risk is the risk that the Group
has insufficient funds to meet its financial
obligations and regulatory requirements
as and when they arise either through
inability to access funding sources or
monetise liquid assets.
Funding Risk is the risk that the Group is
not able to achieve its target funding mix,
is too dependent on particular funding
instruments, funding sources (retail/
wholesale) or funding tenors, fails to meet
regulatory requirements and, in extremis,
is not able to access funding markets or
can only do so at excessive cost and/or
Liquidity Risk.
These risks are inherent in banking
operations and can be heightened by
other factors including changes in credit
ratings or market dislocation. The level of
Liquidity Risk further depends on the size
and quality of the Bank’s liquidity buffer,
the maturity profile of funding, as well as
broader market factors such as depositor
and investor sentiment/behaviour.
It is likely that risks would be further
exacerbated in times of stress. Given the
nature of the Group’s retail focus which
stems from its business model, liquidity
and funding risk will arise naturally
due to the maturity transformation of
primarily short term contractual deposits,
albeit recognising their behavioural
stickiness, into longer term loans through
predominantly mortgage lending.
Market Risk
Market risk can be defined as the risk
of losses in on and off-balance sheet
positions arising from adverse movements
in market prices. Often market risk cannot
be fully eliminated through diversification,
though it can be hedged against.
From the Group’s perspective, Market
Risk consists of three components being
Interest Rate Risk, Credit Spread Risk and
foreign exchange (FX) Risk.
The Group’s RAS and the associated
Market Risk Framework set out the
Group’s approach to the management
of market risk, including the Group’s
approach to market risk identification,
assessment, measurement, monitoring,
mitigation and reporting. The Market Risk
Framework is approved by the BRCC on
the recommendation of the ALCo.
All market risks arising within the Group
are subject to strict internal controls and
reporting procedures and are monitored
by the ALCo, ExCo and BRCC on a regular
basis. Group Treasury is responsible for
the management of market risk exposures
on the balance sheet. Group Risk and GIA
provide further oversight and challenge
within the Market Risk Framework.
Model Risk
Model risk is defined by the Group as an
adverse outcome (incorrect or unintended
decision) that occurs as a direct result
of weaknesses or failures in the design,
implementation or use of a model. The
adverse consequences include financial
loss, poor business or strategic decision-
making, or damage to the Group’s
reputation.
PTSB Group Holdings plc - Annual Report 2023 In terms of risk appetite, the Group
expects that all material models function
as intended. The key factors which
influence model risk within PTSB include:
• Macroeconomic risk – the Group’s suite
of models is built on data that spans the
period immediately prior to the Global
Financial crisis through the recent
recovery. The degree to which the
impacts of a new economic downturn
will mirror the last is uncertain. The
degree of risk increases with the speed
and volatility of economic change;
• Regulatory change – the pace of
evolution of regulation and guidance
increases the burden of maintaining the
Group’s regulatory models;
• Competition for skills – significant
competition exists within the Irish
market for those with the experience
and expertise to build, implement and
interpret models; and
• Data – encouraging customers to share
their data, particularly in the area of
environment and sustainability is a
strategic area of focus for the Group in
enhancing model risk management.
Model risk is managed in accordance with
the Group’s Model Risk Framework. This
framework provides the foundation for
managing and mitigating model risk within
the Group. Accountability is cascaded
from the Board and senior management
via the Group RMF. This provides the basis
for the Group Model Risk Policy, which
defines the mandatory requirements for
models across the Group, including:
• the scope of models covered by the
policy, including model materiality;
• roles and responsibilities, including
ownership, independent oversight and
approval;
• key principles and controls regarding
data integrity, development, validation,
implementation, ongoing maintenance
and revalidation, monitoring, and the
process for non-compliance; and
• The model owner taking responsibility
for ensuring the fitness for purpose
of the models and rating systems,
supported and challenged by an
independent specialist function within
Risk that reports directly to the CRO.
The above ensures all models in scope
of policy, including those involved
in IFRS 9 and regulatory capital
calculation, are developed consistently
and are of sufficient quality to support
business decisions and meet regulatory
requirements.
The Group Model Governance Committee
(MGC), a sub-committee of the GRC, is
the primary body for overseeing model
risk. The Group RAS requires that key
performance indicators are monitored
for every model to ensure they remain
fit-for-purpose or appropriate mitigation
is in place. Material model issues are
reported monthly to Group and Board Risk
Committees with more detailed papers as
necessary to focus on key issues.
Operational Risk and IT Risk
Operational Risk is defined as the risk of
loss or unplanned gains resulting from
inadequate or failed processes, people,
and systems or from external events. This
includes business continuity; outsourcing
and third party; business process; fraud;
legal; people; property; change and data
management risk.
The ORMC monitors the Operational and
IT Risks to which the Group is exposed
to and oversees risk mitigation including
performance and prioritisation related
to the management and control of these
risks. In fulfilling this role, The ORMC
reviews and discusses the outputs and
results of the Risk and Control Self-
Assessment (RCSA) Process, control
testing and Operational Risk Event
Reporting and various other assessment,
monitoring and testing activities to create
awareness of commonly experienced
Operational and IT risk matters, to
share learnings and to enhance the
control environment across the Group.
Furthermore, the ORMC reviews and
monitors Operational and IT risk RAS, the
Operational and IT KRIs, emerging risks
and other relevant Operational and IT risk
metrics on an ongoing basis.
ORMC also monitors the oversight of
new or amended Third Party/Outsourcing
relationships, new products, and/or
significant changes to existing products
and Strategic Change that is implemented
across the bank and highlight any risks
where required.
IT Risk is defined as the risk of loss
due to a breach of confidentiality,
failure of integrity of systems and data,
inappropriateness or unavailability of
systems and data or inability to change
information technology (IT) within a
reasonable time and with reasonable
costs when the environment or business
requirements change (i.e. agility). IT
Risk includes risks associated with
poor IT governance, oversight and risk
management as well as security risks
resulting from inadequate or failed internal
processes or external events including
cyber-attacks or inadequate physical
security.
Operational & IT Risk oversee change
activity as part of formal engagement
on key change initiatives to ensure that
sound risk management practices are
in place and followed to identify and
manage risks and issues throughout
the Programme/Project lifecycle and
any residual Programme/Project risk is
transitioned to the relevant Business
Units RCSA as appropriate. Oversight
consists of attendance at Project Direction
Group (PDG) and Programme Steering as
defined in the Bank’s Strategic Change
Framework. Operational & IT Risk roles are
documented in Programme/Project Terms
of Reference.
Risks from both these risk categories are
inherently present in the Group’s business.
Any significant disruption to the Group’s
IT systems, including breaches of data
security or cyber security could harm
the Group’s reputation and adversely
affect the Group’s operations or financial
condition materially.
The Group has a low appetite for
Operational Risk and IT Risk and aims to
minimise the level of serious disruption or
loss caused by Operational or IT issues
to its customers, employees, brand and
reputation.
External Fraud remains at a high threat
level with many customers targeted/
responding to fraudulent SMS and
phone calls in circulation, divulging their
credentials to fake websites. There
has been a significant increase in this
activity since 2020 and PTSB have
been recognised as being to the fore in
seeking ways to protect our customers
and the bank. We continue to work on
our own initiative but also collectively
with many external stakeholders i.e.
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
other FI’s, BPFI, CBI, UCD Cyber Centre,
Gardaí, ComReg, Telco’s and Fintech to
reduce impact. The creation and launch
of “PTSB Protect” to our customer base
and added to our app as an opt-in solution
will inform customers using the service
of known fake SMS being received to
their Smart phone. PTSB Protect is the
first of such technology to be deployed
by any bank. We have also enhanced our
fraud monitoring capabilities in the card
transactions space with the ‘Foresight’
fraud scoring tool added to our strategies,
this is currently being embedded in our
systems. By continuing to innovate and
react to the ever changing environment,
we can continue to maintain best in class
status, whilst maintaining a balance
between providing a frictionless customer
journey but also managing the risk.
The external cyber threat environment
continues to evolve, and remains a
challenge to the Banking industry globally.
Continuous improvement in our cyber
defences is a strategic priority with
investment accordingly to enhance the
control environment.
In response to external events we are
focussed on;
• Enhancements to Vulnerability
Management and Penetration Testing;
• Information Security Awareness
communications, including increased
Board and ExCo-level communications
and awareness;
• Enhanced monitoring for threats; and
• Increased Information Security
Governance and associated reporting.
A new 2022-2024 Information and Cyber
Security Strategy was approved by the
Board Risk and Compliance Committee
in February 2022. This is to drive further
improvements in the Bank’s cyber defence
and preparedness, along with associated
governance.
Operational & IT Risk continuously review
Group Technology IT incidents, including
cyber, and there were no breaches of
data security or cyber security that
could significantly harm the Group’s
reputation and adversely affect the
Group’s operations or financial condition
materially.
94
Scenario testing is performed on an
annual basis, as outlined in the ERMF,
for critical processes including but not
limited to: Payments Systems Failure,
Information Security, Cyber Security,
Internal Fraud, Business Disruption and IT
Resilience to ensure existing processes
support timely recovery. Monitoring and
incident management processes are in
place to detect and recover from both
cyber-attacks and IT issues which may
affect the availability of critical IT systems.
Regular disaster recovery testing of
critical systems is conducted in order to
test IT resilience. Any changes made to
the Group’s IT systems or applications
are governed by a change management
process.
From a people perspective, Enterprise
Level programmes such as Individual
Accountability Framework (IAF), Payment
Centralisation, Branch Technology
Refresh, Microsoft 365, Service a Need
(SAN), Sun etc. are designed to ensure
People Risk is an integral consideration.
The development and embedding of
the Change Risk Second Line Oversight
continues with the creation of the new
Material Change Risk Assessment
(MCRA), enhanced Initial Impact
Assessment (IIA) and the SLOD quarterly
review of the Change Monthly ExCo
Update. This is in line with the Strategic
Portfolio project “Enterprise Change
Enhancements” (ECE) which has been
established following a Change Maturity
Assessment undertaken in 2021. This
project focuses on change governance
enhancements and to increase the Bank’s
change maturity. The project continues to
progress and has delivered a number of
items, including but not limited to:
• Project Stage Gates with required
change artefacts,
• Business & IT Change Readiness Forum
(BCRF) ,
• Prioritisation & Intervention (P&I) Forum,
and
• Management Deign Authority, (MDA
meeting).
The Group’s Operational Risk and IT Risk
Management Frameworks outline the
Group’s approach to managing Operational
and IT risks and are applicable Group-
wide. The framework defines the roles
and responsibilities for the oversight of
Operational and IT risks, along with the
ownership and processes in place for the
identification, assessment, mitigation,
monitoring, testing and reporting of
Operational and IT risks in the Group.
An RCSA methodology is used to:
• Identify, measure and control
Operational Risk, Information
Technology (IT) Risk, Compliance Risk,
Conduct and Reputational Risks across
the Group which aids the consistent
approach to risk management and aids
the business in their decision making
process.
• Support the ability to track any control
design or operational effectiveness
deficiencies that are identified through
the process. This ensures that
comprehensive remediation plans are
created, monitored and tracked through
to closure.
We have enhanced our processes in
this area as we progress plans and
have embedded a new Governance
Risk & Compliance (GRC) system for
the management of Operational and IT
risk. The RCSA methodology outlines
the actions, procedures, roles and
responsibilities relating to the Group’s
RCSA process. The RCSA should cover
all risks that could materialise/exist in the
respective business unit in relation to their
products, activities, people, processes,
systems, suppliers and business
objectives, including those detailed within
relevant Bank wide policies.
The Group acts to mitigate potential risks
found in existing procedures through the
use of controls. A control is any process,
policy, device, practice or other action
that mitigate potential risks found in
existing procedures.
Internal controls are tested on a continual
basis to provide assurance on the design
effectiveness and operating effectiveness
of controls captured in the RCSA process.
This system of internal control is designed
to provide reasonable, but not absolute,
assurance against the risk of material
errors, fraud or losses occurring. Effective
controls will work to reduce the likelihood
of a risk occurring and/or the impact
should the risk materialise.
PTSB Group Holdings plc - Annual Report 2023 Independent risk based control assurance
reviews are also undertaken mainly in
relation to key processes to provide an
assessment of how effective associated
risks are controlled and managed.
Weakness in the Group’s internal control
system or breaches/alleged breaches
of laws or regulations could result
in increased regulatory supervision,
enforcement actions and other disciplinary
action, and could have a material adverse
impact on the Group’s results, financial
condition and prospects. To quantify the
potential impact of weaknesses in this
regard, and to strengthen the Group’s
system of internal controls through the
consideration of unexpected events,
scenario analysis and stress testing are
conducted on a regular basis.
Risk culture is a component of the Bank’s
culture. A sound risk culture drives
and supports risk awareness, desired
behaviours and judgements about
risk-taking. It bolsters effective risk
management, promotes prudent risk-
taking, and ensures that any emerging
risks or risk-taking activities beyond
the Bank’s risk appetite are identified,
assessed, escalated and managed in
a timely manner. A key objective of the
Group’s Risk Management approach is
to create a culture of risk awareness
where all staff have an understanding of
Operational and IT risk and the role they
each play in ensuring that any impacts/
losses are minimised.
Third Party Service Providers
The Group may engage the services of
third parties to support delivery of its
objectives or to complement its existing
processes. The risk associated with these
activities is categorised as ‘Outsourcing
and Third Party’ risk and is defined as
the risk of loss or reputational damage
connected with the engagement and
management of Third Parties contracted
internally or externally (for example, for
the purposes of customer engagement,
data processing, systems development,
Cloud services or ICT systems), including
lack of third party diversification,
inadequate third party business continuity
plans or insufficient monitoring and
oversight of the engagement.
The Group’s Third Party Risk Management
Policy sets out the minimum requirements
and roles and responsibilities necessary
to ensure consistent and continuous
management of Third Party and
Outsourcing risks across the Group,
as defined in the Group’s ERMF, and
Operational and IT Risk Management
Framework. The policy outlines the
processes and controls required for
identifying, assessing, mitigating and
managing third party risks.
Conduct and Reputational Risk
Conduct Risk is the risk that the conduct
of the Group towards customers or the
market leads to poor customer outcomes,
a failure to meet customers’ or regulators’
expectations, or breaches of regulatory
rules or laws.
Conduct Risk can occur in every aspect of
the Group’s activities, including through:
• The strategy of the Group and how it is
executed;
• The way the Group is run and managed;
• The existence of group think or
localised cultures;
• The lack of psychological safety for
staff in facilitating a robust speak freely
process;
• The design type and pricing of
products/services offered, the
customers to whom they are offered
and the distribution channels used;
• The way sales are made or transactions
are executed;
• The post-sales fulfilment process
throughout the life of the product;
• The management of different customer
cohorts recognising that some
customers may require additional
assistance at a point in time or on a
permanent basis; and
• Interactions with customers throughout
the lifetime of the relationship, including
when customers make complaints
either directly or through the Financial
Services and Pensions Ombudsman or
where customer-impacting errors occur.
See note 32 and note 43 to the financial
statements for further information on
legacy legal cases.
The Group recognises that the
management and mitigation of Conduct
Risk is fundamental and intrinsically
linked to the achievement of our purpose
‘Working together to build trust with our
customers and communities’. It recognises
that Conduct Risk can occur in every
aspect of the Group’s activities and is
committed to continuing to achieve best
practice in this area.
The Group’s Senior Management are
responsible for the identification and
management of Conduct Risk in their
business areas and for ensuring fair
customer outcomes, and the Regulatory
Compliance function is responsible for
second line Conduct Risk oversight.
The Group is guided by a Conduct Risk
Management Framework, including
a Board-approved Risk Appetite and
Conduct Risk Principles. Its purpose is to
help ensure that the Group achieves its
strategic objectives by acting honestly,
fairly and professionally in the best
interests of its customers and the integrity
of the market, and acts with due skill, care
and diligence. In doing so, the Group is
placing the achievement of fair outcomes
for its customers at the heart of its
strategy, governance and operations.
Board and Senior Management have
ensured that there is regular reporting of
metrics and Key Risk Indicators against
the Conduct Risk Appetite as well as
events that could affect or have already
impacted on customers. The primary
governance body responsible for Conduct
issues is the Customer Committee (a sub-
committee of ExCo).
Reputational Risk is the risk of brand
damage and/or financial loss arising
from a failure to meet stakeholders’
expectations of the Group or the failure of
organisational structure and governance
arrangements within the Group to
embed desired behaviours and culture.
The reputation of PTSB is founded on
trust from its employees, customers,
shareholders, regulators and from the
public in general. Isolated events can
undermine that trust and negatively
impact the Group’s reputation. Negative
public opinion can result from the actual
or perceived manner in which the Group
conducts its business activities, from the
Group’s financial performance, the level of
direct and indirect Government support
or actual or perceived practices in the
banking and financial industry. It is often
observed that reputational risk is in fact
a consequence of other risks. Negative
public opinion may adversely affect
the Group’s ability to keep and attract
customers which in turn may adversely
affect the Group’s financial condition and
operations. The Group cannot be sure that
it will be successful in avoiding damage to
its business from reputational risk.
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
Compliance Risk
Compliance risk is the risk of material
financial loss or liability, legal or regulatory
sanctions, or brand damage arising from
the failure to comply with, or adequately
plan for, changes to official sector
policy, laws, regulations, major industry
standards, compliance policies and
procedures, or expectations of customers
and other stakeholders.
As a financial services firm, the Group is
subject to extensive and comprehensive
legislation and regulation by a number of
regulatory authorities. The Group moved
from a Less Significant Institution (LSI) to
an Other Systemically Important Institution
(OSII) in November 2023 and is directly
supervised by the Central Bank of Ireland,
as the National Competent Authority.
The Board is responsible for overseeing
the management of compliance risk, with
senior management having a primary
responsibility to effectively manage
compliance with applicable laws and
regulations and for ensuring that the
Group has and effectively employs the
resources, procedures, systems and
controls, including monitoring, necessary
to ensure compliance with all existing and
forthcoming legislation.
The Regulatory Compliance function is
responsible for second line oversight,
including the updating of the Regulatory
Compliance Framework. This Framework
supports the Group to achieve its
strategic priorities while managing
regulatory compliance risks within the
Board-approved Regulatory Compliance
risk appetite. In addition, it sets out how
the Group manages current and emerging
regulatory compliance risk, details the
key principles, objectives, and primary
components of the Group’s approach to
regulatory compliance risk management,
and sets out regulatory compliance risk
management responsibilities across the
three lines of defence model.
The Group is exposed to many forms of
risk in connection with compliance with
such laws and regulations, including, but
not limited to:
• The risk that changes to the laws and
regulations under which the Group
operates will materially impact on the
Group’s liquidity, capital, profitability,
product range, distribution channels or
markets;
96
• The risk that the Group is unable to
respond to the scale of regulatory
change and implement all required
changes in full or on time, or the
challenge of meeting regulatory
changes will impact the Group’s abilities
to undertake other strategic initiatives;
• The level of costs associated with the
regulatory overhead including, but not
limited to, the industry funding levy,
funding the resolution fund established
under the Single Resolution Mechanism
or levies in respect of applicable
compensation schemes (including the
Investor Compensation Scheme and the
Deposit Guarantee Scheme (DGS));
• Non-compliance with organisational
requirements, such as the requirement
to have robust governance
arrangements, effective processes to
identify, manage, monitor and report the
risks the Group is or might be exposed
to, and internal control mechanisms,
including sound administrative and
accounting procedures and effective
control and safeguard arrangements for
information processing systems;
• The possibility of mis-selling financial
products or the mishandling of
complaints related to the sale of
such products by or attributed to an
employee of the Group, including as
a result of having sales practices,
complaints procedures and/or reward
structures in place that are determined
to have been inappropriate or the risk
that previous practices are deemed
inappropriate when assessed against
current standards;
• Breaching laws and requirements
relating to data protection, the
detection and prevention of money
laundering, terrorist financing,
sanctions, bribery, corruption and other
financial crime; and
• Non-compliance with legislation relating
to unfair or required contractual terms
or disclosures.
Regulatory Developments
The level of regulatory change remains
high and continues to be an area of focus.
Sustainable Finance continues to
be a key priority for Governments
and regulators. The EU Action Plan
on Sustainable Finance and the EU
Green Deal, set out the EU’s strategy
to integrate ESG considerations
into its financial policy framework
and mobilise finance for sustainable
growth. A key part of the strategy is
the EU Sustainable Finance Disclosures
Regulation (SFDR) and accompanying
RTS, which requires enhanced disclosure
in a consistent manner of ESG factors
into decision making processes and
customer documentation for sustainable
investments. The Corporate Sustainability
Reporting Directive (CSRD) which
introduces more detailed reporting
requirements on companies in respect
of the impact of their activities on the
environment will be implemented on a
phased basis from the start of 2024,
however the European Sustainability
Reporting Standards (ESRS), for use by all
companies subject to the Directive, have
been delayed.
Legislative progress continues on the
implementation of the Basel III reforms,
which are aimed at enhancing prudential
regulatory standards, supervision and
risk management of banks. In line with
the objectives of the EU Digital Finance
Strategy, the Digital Operational Resilience
Act (DORA) will apply in full from January
2025. Also as part of this strategy the EC
has recently introduced draft legislation
aimed at increasing the availability and
use of Instant Payments in Euro, we
are expecting this to be adopted and
published early in 2024. The revised
Consumer Credit Directive and the revised
Distance Marketing Directive have both
been published and they come into effect
in 2025 and 2026 respectively.
The EC’s package of legislative proposals
designed to strengthen the EU’s anti-
money laundering and countering
the financing of terrorism (AML/CFT)
rules continue to be progressed. With
the continued conflict in Ukraine and
other geo-political developments, it is
anticipated that the EU sanctions regime
will be kept under review.
The Central Bank (Individual
Accountability Framework) Act 2023
(IAF) was signed into law to introduce
an Individual Accountability Regime for
Banks and other regulated entities, via a
Senior Executive Accountability Regime
(SEAR). The IAF also includes Conduct
Standards for Staff and enhancements
to both the Fitness and Probity and the
Administrative Sanctions Regimes which
came into operation in 2023. Regulations
PTSB Group Holdings plc - Annual Report 2023 prescribing responsibilities of different
roles and requirements on firms to clearly
set out allocation of those responsibilities
and decision making will apply from mid-
2024.
In light of the significant changes in the
retail banking landscape in Ireland the
Irish Government undertook a Retail
Banking Review. This Review issued
34 recommendations impacting the
Department of Finance, the Central Bank
and the sector itself. Following the Review,
legislation is progressing in relation to
Access to Cash.
The Central Bank has commenced a
review of the Consumer Protection Code
(CPC). A consultation paper, containing
draft requirements, is expected in March
2024, with the revised CPC expected to
be published later in 2024.
Regulators continue to emphasise the
importance of culture, conduct risk,
diversity practices, financial literacy,
operational and IT resilience, cyber
security, financial crime, digitalisation and
climate risk.
Group Risks
The Board has overall responsibility for the
establishment and oversight of the GRMF.
The Board has established the BRCC,
which is responsible for oversight and
advice on risk governance, the current risk
exposures of the Group and future risk
strategy, including strategy for capital and
liquidity management and the embedding
and maintenance of a supportive culture
in relation to the management of risk
throughout the Group. The BRCC, in turn,
delegates responsibility for the monitoring
and management of specific risks to
committees accountable to it such as the
GRC, GCC and the ALCo.
The BAC, consisting of members of
the Board, oversees how Management
monitors compliance with the Group’s risk
management policies and procedures
and reviews the adequacy of the Risk
Management Framework in relation to the
risks faced by the Group in consultation
with the BRCC. The BAC is assisted in
its oversight role by GIA. GIA undertakes
both routine and ad hoc reviews of risk
management controls and procedures, the
results of which are reported to the BAC.
In line with IFRS 7, the following risks to
which the Group is exposed are discussed
in detail below:
• Credit Risk;
• Liquidity Risk; and
• Market Risk (including foreign currency
exchange risk, credit spread risk and
interest rate risk).
The key financial risks arise in the
underlying subsidiary companies of
Permanent TSB Group Holdings plc
(PTSBGH). All of the Directors of PTSBGH
are also Directors of the Board of
Permanent TSB plc (PTSB).
3.1 Customer Credit Risk - Audited
Definition of Customer Credit Risk
Customer credit risk is defined as the
risk of financial loss due to the failure of
a customer, guarantor or counterparty, to
meet their financial obligations to the Bank
as they fall due. This risk includes but is
not limited to default risk, concentration
risk, migration risk, collateral risk and
climate risk.
Default Risk
Credit Default Risk is the risk that a
customer will not be able to meet the
required payments on their debt obligation
to the Bank when they become due. An
increase in the risk of default may be as
a result of one or a number of factors
including, but not limited to:
• Deterioration observed in an individual
borrower’s capacity to meet payments
as they become due;
• Deterioration observed or expected
in macroeconomic or general market
conditions;
• Regulatory change; and
• Environmental factors that impact on
the credit quality of the counterparty.
Concentration Risk
Concentration Risk is the risk of excessive
credit concentration to an individual,
counterparty, group of connected
counterparties, industry sector,
geographic area, type of collateral or
product type leading to above normal
losses.
Migration Risk
Migration Risk is the risk of loss due to
a ratings (internal/external) downgrade
which indicates a change in the credit
quality of an exposure.
Collateral Risk
Collateral Risk is the potential risk of loss
arising from a change in security value
or enforceability due to errors in nature,
quantity or pricing of the collateral.
Climate Risk
Climate Risk is the risk of defaults and
declines in the value of the Bank’s
collateral on customer loans due to
the impacts from climate change, and
the imposition of increased capital
requirements if the Bank’s borrowers
do not comply with the Stakeholder,
Regulatory and Legislative expectations
to contribute to the transition to a low
carbon economy.
Climate related risk modelling capability is
still evolving and in its infancy. However,
the Bank currently has low exposure to
SME lending when considering high risk
sector exposure to Climate Risk, with the
majority of the Bank’s portfolio comprising
Residential mortgages.
Lending officers consider Climate and
Sustainability Risks for each SME lending
application, and assessment criteria
for new Residential property lending
incorporate an evaluation of potential
physical risks including flood, subsidence,
coastal and environmental risks as part of
the valuation process. Lending should not
proceed where the Valuer identifies risks
at individual property level which might
potentially restrict the customer’s ability to
obtain home insurance.
Governance
Credit Risk Appetite defines the Group’s
tolerance for risk and its willingness
to grant credit based on product type,
customer type, collateral concerns and
various other risk factors. The Board is
ultimately responsible for the governance
of credit risk across the Group, setting
the Risk Appetite and ensuring that there
are appropriate processes, systems and
reporting lines in place to monitor and
manage risks against the appetite.
The BRCC, a sub-committee of the
Board provides oversight to the Board
on the setting and monitoring of the Risk
Appetite and risk governance. The Group
Credit Risk Management Framework
specifies those Credit policies that require
approval by the BRCC. Under the Group
97
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
Credit Risk Management Framework the
BRCC may also delegate to the GRC, who
in turn delegates to the GCC, the authority
to approve certain Credit policies,
subject to these policies remaining
within specified policy boundaries. Any
amendment to policy which results in
a policy breaching these boundaries
requires the BRCC’s approval.
The GCC is responsible for the execution
and delivery of the Group’s system of
Portfolio Credit Risk Management. The
Board has granted authority to the BRCC
to approve a delegated framework of
lending authority within which the GCC
and Credit function operate.
Credit Risk Management
The Group’s credit risk management
approach is focused on detailed credit
assessment at initial underwriting stage
together with early borrower engagement
where there are signs of pre-arrears or
delinquency with a view to taking remedial
action to prevent the loan defaulting.
Where a borrower is in pre-arrears, arrears
or default the Group will consider offering
treatments/options which apply to the
borrower’s circumstance cognisant of
affordability and sustainability.
The Group’s system of Portfolio Credit
Risk Management incorporates the
following key components:
• Credit policy;
• Lending authorisation;
• Credit risk mitigation;
• Credit risk monitoring;
• Arrears management and forbearance;
and
• Credit risk measurement.
Credit Policy
To aid in the management of credit
risk, the Group has put in place credit
policies which set out the core values and
principles governing the provision and
management of credit. These policies
take account of the Group’s Risk Appetite
Statement, applicable sectorial credit
limits, the Group’s historical experience
and resultant loan losses, the markets
in which the business units operate and
the products which the Group provides.
Each staff member involved in assessing
or managing credit has a responsibility
to ensure compliance with these policies
98
and effective procedures are in place to
manage the control and monitoring of
exceptions to policy.
guarantees etc., grouped broadly as
follows:
• real estate;
Lending Authorisation
The Group’s credit risk management
systems operate through a hierarchy of
lending authorities. Exposures above
certain predetermined levels require
approval by the GCC or the Board. Below
the GCC level, a tiered level of discretion
applies with individual discretion levels set
to reflect the relevant staff members’ level
of seniority, expertise and experience
and the Group’s operational needs. All
mortgage lending is currently approved
by experienced credit risk professionals
assisted by scoring models. For Group
unsecured personal lending portfolios,
scoring models and automated processes
are utilised to support the credit decision
process for those segments that present
a lower credit risk. Exposures that present
a higher credit risk, but remain within Risk
Appetite are manually reviewed prior to
approval.
Credit Risk Mitigation
The granting of a loan in the first
instance is always assessed based on
the borrower’s repayment capacity and
proven ability. Credit risk mitigation
forms a key supplementary element of
the credit granting process. Credit risk
mitigation includes the requirement to
obtain collateral, depending on the nature
of the product, as set out in the Group’s
policies and procedures. The Group
takes collateral as a secondary source,
which can be called upon if the borrower
is unable or unwilling to service and
repay the debt as originally assessed. At
portfolio level, credit risk is assessed in
relation to name, sector and geographic
concentration.
Collateral
The nature and level of collateral required
depends on a number of factors including,
but not limited to, the amount of the
exposure, the type of facility made
available, the term of the facility, the
amount of the borrower’s own cash input
and an evaluation of the level of risk or
probability of default (PD).
Various types of collateral are accepted,
including property, securities, cash and
• collateral financed under Asset Finance
agreements;
• financial collateral (lien over deposits,
shares, etc.); and
• other collateral (guarantees etc.).
Valuation Methodologies
The valuation methodologies for the
Group’s key mortgage portfolios of
collateral held are adjusted for costs to
sell, as appropriate:
Residential property valuations are based
on the CSO Residential Property Price
Index (RPPI) or on a recent valuation
from a professional valuer. In respect of
residential property securing performing
loan exposures of greater than €0.5m, the
Group policy is to ensure an independent
valuation is updated within the last 3
years. For residential property securing
NPL exposures of greater than €0.3m, the
Group policy is to ensure an independent
valuation is updated within the last year.
Commercial property valuations are based
on opinions from professional valuers,
the Investment Property Database
Index, local knowledge of the properties,
benchmarking similar properties and
other industry-wide available information,
including estimated yields discount
rates. In respect of commercial property
securing performing loan exposures of
greater than €0.5m, the Group policy
is to ensure an independent valuation
is updated within the last 3 years. For
commercial property securing NPL
exposures of greater than €0.3m, the
Group policy is to ensure an independent
valuation is updated within the last year.
The valuation methodologies outlined
above are determined as close to the
statement of financial position date as is
feasible and are therefore considered by
the Group to reflect its best estimate of
current values of collateral held.
The Group’s requirements in respect of
collateral in relation to (i) completion; (ii)
taking of security; (iii) valuation; and (iv)
ongoing management are set out in credit
policies.
The following table details the loan
balance distribution by indexed Loan
to value (LTV) band for the Group’s
residential mortgage portfolio (home loan
and buy-to-let).
PTSB Group Holdings plc - Annual Report 2023 Residential Mortgage Exposures by Indexed LTV
31 December 2023
Less than 70%
71% to 90%
91% to 100%
Subtotal
Greater than 100%
Subtotal
Total Residential Mortgages
Commercial
Consumer finance
Finance leases and hire purchase receivables
Total loans and advances to customers
Deferred fees, discounts and business combination related fair value adjustment
Gross loans and advances to customers
31 December 2022
Less than 70%
71% to 90%
91% to 100%
Subtotal
Greater than 100%
Subtotal
Total Residential Mortgages
Commercial
Consumer finance
Finance leases and hire purchase receivables
Total loans and advances to customers
Deferred fees, discounts and business combination related fair value adjustment
Gross loans and advances to customers
Home loans
Buy-to-let
€m
€m
Total
€m
16,261
3,105
86
19,452
105
105
19,557
422
136
59
617
132
132
749
16,683
3,241
145
20,069
237
237
20,306
437
499
446
21,688
309
21,997
Home loans
Buy-to-let
€m
€m
Total
€m
15,602
2,499
103
18,204
136
136
18,340
414
197
61
672
152
152
824
16,016
2,696
164
18,876
288
288
19,164
239
401
-
19,804
310
20,114
Credit Risk Monitoring
Credit Risk Appetite Metrics and Limits
are designed to align with the strategic
objectives of the Group to maintain stable
earnings growth, stakeholder confidence
and capital adequacy. This is achieved
through setting concentration limits
for higher risk product and business
segments, ensuring new business
meets pricing hurdle rates and through
monitoring default rates and losses.
Limits are also set in the context of the
peer group and regulatory and economic
landscape, to ensure the Group does not
become an outlier in the market. Monthly
updates are presented to the GCC and the
BRCC which include an overview, trends,
limit categories and detail of mitigation
plans proposed where a particular
parameter is close or at its limit.
Credit Risk Appetite is considered an
integral part of the annual planning/
budget process and reviewed at various
checkpoints in the year to ensure the
appetite is being met and is not expected
to be breached during the budget time
frame.
Arrears Management and Forbearance
Forbearance occurs when a borrower
is granted a temporary or permanent
concession or agreed change to a loan
(“forbearance measure”) for reasons
relating to the actual or apparent financial
stress or distress of that borrower.
Forbearance has not occurred where the
concession or agreed change to a loan
does not arise from actual or apparent
financial distress.
The Group is committed to supporting
customers that are experiencing financial
difficulty and seeks to work with those
customers to find a sustainable solution
through proactive arrears management
and forbearance. Group credit policy
and procedures are designed to comply
with the requirements of the CBI Code of
Conduct on Mortgage Arrears (CCMA),
which sets out the framework that must
99
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Risk Management
(continued)
be used when dealing with borrowers in
mortgage arrears or in pre-arrears.
The Group’s forbearance strategy is built
on two key factors namely affordability
and sustainability. The main objectives
of this strategy are to ensure that arrears
solutions are sustainable in the long-
term, that they comply with all regulatory
requirements and where possible keep
customers in their home.
Types of forbearance treatment currently
offered by the Group include short
term temporary arrangements (such
as a payment moratorium) and term
appropriate treatments (such as reduced
payment, arrears capitalisation and term
extension). Requests for concessions
in recent years are arising as a result of
temporary cash flow problems and an
inability to repay at contractual maturity,
whereas during the 2008 financial crisis
such requests reflected more in-depth
long-term affordability issues. This is
further reflected in the change in the
volume and nature of forbearance
measures availed.
A request for forbearance is a trigger
event for the Group to undertake an
assessment of the customer’s financial
circumstances prior to any decision to
grant a forbearance treatment. Where a
borrower has been granted a forbearance
treatment, the loan is considered to
have experienced a significant increase
in credit risk (SICR) and is classified as
Stage 2 for Expected Credit Loss (ECL)
assessment purposes under IFRS 9. The
customer assessment may also result in
the customer being classified as Stage
3, credit impaired as a result of the
requirement for a specific impairment
provision.
Further deterioration in the individual
circumstances of the borrower or where
expected improvement in the borrower’s
circumstances fails to materialise may
result in non-compliance with the revised
terms and conditions of the forbearance
measure. In such circumstances the
Group may consider a further forbearance
request to secure some level of repayment
on the loan.
The effectiveness of forbearance
measures over the lifetime of the
arrangements are subject to ongoing
management and review. A forbearance
measure is considered to be effective if
the borrower meets the modified terms
and conditions over a sustained period of
time resulting in an improved outcome for
the borrower and the Group.
Credit Risk Measurement
Applications for credit are rated for
credit quality as part of the origination
and loan approval process. The risk,
and consequently the credit grade,
is reassessed monthly as part of a
continuous assessment of account
performance and other customer related
factors.
Credit scoring plays a central role in
the ratings process. Credit scoring
combined with appropriate portfolio
risk segmentation is the method used
to assign grades, and in turn the PDs
to individual exposures under each
framework.
The Group, as approved by the Central
Bank of Ireland, has adopted the
standardised approach for calculation
of Risk Weighted exposure amounts for
the Buy-to-let non-standard mortgage,
Commercial, Corporate and SME
portfolios. The standardised approach
has been applied to the recently acquired
Pepper portfolios.
The following information has not been subject to audit by the Group’s independent auditor.
The table below illustrates the relationship between the credit risk rating grades and PD percentages.
Credit Risk Rating Grade
Excellent
Satisfactory
Fair
Non-performing
PD %
0% ≤ PD <1.44%
1.44% ≤ PD < 4.62%
4.62% ≤ PD < 100%
100%
IFRS 9 Stage 1 and Stage 2 classification is not dependent solely on the absolute probability of default. The IFRS 9 Stage 1 and
Stage 2 classification is also dependant on the perceived significant increase in credit risk (SICR) which is the relative movement
in the IFRS 9 probability of default since initial recognition. Therefore, there is no direct relationship between the credit risk rating
grades and the IFRS 9 stage classification. However, the following relationship between the credit risk rating grades and the IFRS
9 stage classification can primarily be expected to exist:
• Satisfactory and Excellent risk profiles can primarily be expected to be classified as IFRS 9 Stage 1;
• Fair risk profile can primarily be expected to be classified as IFRS 9 Stage 2; and
• Non-performing will align to IFRS 9 Stage 3 or defaulted accounts.
100
PTSB Group Holdings plc - Annual Report 2023 Credit Exposure
Maximum exposure to credit risk before collateral held or other credit enhancements
The table below outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the
Group’s financial assets as at the statement of financial position date.
Cash at bank
Items in course of collection
Loans and advances to banks
Other assets
Derivative financial instruments
Debt securities
Loans and advances to customers
Year ended
Year ended
Notes
31 December
2023
31 December
2022
14
14
15
17
16
19
22
€m
71
40
€m
58
40
2,051
2,123
60
36
3,256
21,427
26,941
1
-
3,177
19,593
24,992
Further detail on loans and advances to customers is provided in note 38, Financial Risk Management.
The following tables outline the Group’s exposure to credit risk by asset class
Debt securities
The Group is exposed to the credit risk on third parties where the Group holds debt securities (including sovereign debt). These
exposures are subject to the limitations contained within the Board approved policies, with sovereign debt restricted to those
countries that have an External Credit Assessment Institution (ECAI) rating of investment-grade.
The following table gives an indication of the level of creditworthiness of the Group’s debt securities and is based on the ratings
prescribed by Moody’s Investor Services Limited and Standard and Poor’s for the EU. There are no impaired debt securities as at 31
December 2023 or at 31 December 2022, with the exception of the corporate bond.
Debt securities neither past due nor impaired
Rating
Aaa
Aa1
Aa2
Aa3
A1
A2
Baa1
Baa2
Baa3
Total
31 December
2023
31 December
2022
€m
€m
309
30
356
1,578
-
-
432
-
103
49
110
250
-
1,734
-
497
456
81
3,256
3,177
101
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Risk Management
(continued)
The following table discloses, by country, the Group’s exposure to sovereign and corporate debt as at:
Country
Ireland
Portugal
Spain
France
EU
Italy
Austria
Belgium
Total
31 December
2023
31 December
2022
€m
€m
1,559
1,783
448
432
356
309
103
30
19
456
497
250
81
110
-
-
3,256
3,177
Loans and advances to banks
The Group has a policy to ensure that loans and advances to banks are held with investment grade counterparties, with any
exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the
Group’s loans and advances to banks and is based on the internally set rating that is equivalent to the rating prescribed by Moody’s
Investor Services Limited and Standard & Poor’s for the CBI.
31 December
2023
31 December
2022
€m
€m
1,687
1,620
75
231
2
56
-
199
286
10
-
8
2,051
2,123
Rating
Aaa
Aa2
Aa3
A1
A2
Ba1
Total
102
PTSB Group Holdings plc - Annual Report 2023
Asset Quality
The following tables provide detail of asset quality by Product and IFRS 9 stage.
31 December 2023
Home loans
Buy-to-let
Total residential
mortgages
Commercial
Consumer
finance
Finance
leases and
hire purchase
receivables
Asset quality*
€m
€m
€m
€m
€m
€m
Total
€m
12,576
6,413
68
19,057
208
942
763
1,913
9
409
15
433
-
-
1
1
12
718
Stage 1
Excellent
Satisfactory
Fair
Stage 2
Excellent
Satisfactory
Fair
Stage 3
Defaulted
Total measured at
amortised cost
12,283
5,578
-
17,861
187
793
313
1,293
54
151
3
208
19
60
195
274
12,337
5,729
3
18,069
206
853
508
1,567
32
40
45
117
-
73
227
300
403
267
670
20
198
235
5
438
2
16
27
45
16
19,557
749
20,306
437
499
446
21,688
* The information in the shaded box has not been subject to audit by the Group’s Independent Auditor.
31 December 2022 (re-
stated)
Asset quality*
Home loans
Buy-to-let
Total residential
mortgages
Commercial
Consumer
finance
Finance
leases and
hire purchase
receivables
€m
€m
€m
€m
€m
€m
Stage 1
Excellent
Satisfactory
Fair
Stage 2
Excellent
Satisfactory
Fair
15,499
1,260
153
16,912
242
602
242
1,086
149
53
4
206
85
139
124
348
15,648
1,313
157
17,118
327
741
366
1,434
Stage 3
Defaulted
Total measured at
amortised cost
342
270
612
18,340
824
19,164
22
6
-
28
3
90
95
188
23
239
103
206
-
309
1
14
62
77
15
401
-
-
-
-
-
-
-
-
-
-
* The information in the shaded box has not been subject to audit by the Group’s Independent Auditor.
Total
€m
15,773
1,525
157
17,455
331
845
523
1,699
650
19,804
103
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
The tables below set out the asset quality of loans for which the Group has entered formal temporary and permanent forbearance
arrangements with customers for the years ended 31 December 2023 and 2022.
Where a borrower has been granted a forbearance treatment, the loan is considered to have experienced a significant increase in
credit risk and is classified as Stage 2 for Expected Credit Loss assessment purposes under IFRS 9.
31 December 2023
*Stage 2
Excellent
Satisfactory
Fair
Stage 3
Defaulted
Total measured at amortised costs
Home loans
Buy-to-let
Total residential
mortgages
Commercial
€m
€m
€m
€m
38
66
53
157
236
393
-
1
17
18
61
79
38
67
70
175
297
472
-
-
1
1
6
7
*The information in the shaded box has not been subject to audit by the Group’s Independent Auditor.
31 December 2022 (re-stated)
Home loans
Buy-to-let
Total residential
mortgages
Commercial
€m
€m
€m
€m
*Stage2
Excellent
Satisfactory
Fair risk
Stage 3
Defaulted
Total measured at amortised costs
22
57
51
130
228
358
-
3
28
31
68
99
22
60
79
161
296
457
1
-
1
2
6
8
Total
€m
38
67
71
176
303
479
Total
€m
23
60
80
163
302
465
*The information in the shaded box has not been subject to audit by the Group’s Independent Auditor.
Loan Impairment
Under IFRS 9 an entity is required to
track and assess changes in credit risk
on financial instruments since origination
and determine whether the credit risk on
those financial instruments has increased
significantly since initial recognition. The
change in credit risk should be based on
the change in the risk of default and not
changes in the amount of ECL which may
be expected on a financial instrument.
The standard is a 3-stage model for
impairment, based on changes in credit
risk quality since initial recognition:
Stage 1
Financial assets that have not had a SICR
since initial recognition are classified as
Stage 1. For these assets, 12-month ECL is
recognised. 12-month ECL is the expected
credit losses that result from default
events among the Stage 1 population
within 12 months of the reporting date.
It is not the expected cash shortfalls
over the 12-month period but the entire
credit loss on an asset weighted by the
probability that the loss will occur in the
next 12 months. Therefore, all financial
assets in scope will have an impairment
provision equal to at least 12-month ECL.
Stage 2
Financial assets that have had a SICR
since initial recognition but that do not
have objective evidence of impairment
are classified as Stage 2. For these
assets, lifetime ECL is recognised, being
the expected credit losses that result
from default events among the Stage 2
population over the expected life of the
financial instrument.
At each reporting date, the Group has
relied on the following measures to
identify a SICR in relation to an exposure
since origination, and classification as
Stage 2 within the IFRS 9 ECL framework:
• Delinquency – greater than 30 days
past due;
• Forbearance – reported as currently
forborne in accordance with European
Banking Authority (EBA) NPL guidelines;
• Risk Grade – accounts that migrate to a
risk grade which the bank has specified
as being outside its Risk Appetite for
origination;
• Change in remaining lifetime PD –
accounts that have a remaining lifetime
PD that is in excess of the risk at which
the bank seeks to originate risk. For the
purposes of this assessment, credit risk
is based on an instrument’s lifetime PD,
not the losses expected to be incurred;
• Absolute level of 12-month PD –
accounts that have a 12 month PD that
is in excess of 20% at the reporting
date; and
• PD at maturity - for interest only
exposures, all secured exposures
in excess of 70% LTV have been
assessed as presenting an increased
risk of default at maturity and are
consequently classified as Stage 2.
104
PTSB Group Holdings plc - Annual Report 2023 The assessment of SICR is performed on a
relative basis and is symmetrical in nature,
allowing credit risk of financial assets to
move back to Stage 1 if the increase in
credit risk since origination has reduced
and is no longer deemed to be significant.
Transition from Stage 3 to Stage 2
Movements between Stage 2 and
Stage 3 are based on whether
financial assets meet the definition of
default as at the reporting date.
Certain long-term forbearance
treatments may transition from Stage
3 to Stage 2 in line with the definition
of default but would not be expected
to transition from Stage 2 to Stage 1
without an unwind of the forbearance
treatment e.g. part capital and interest
treatments.
Transition from Stage 2 to Stage 1
Exposures that are no longer 30
days past due do not transition
automatically to Stage 1 (i.e. without
probation) and, other criteria needs to
be met.
Forborne exposures where certain
criteria are met transition from Stage 2
to Stage 1 (e.g. no longer classified as
EBA forborne).
Stage 3
Financial assets that have objective
evidence of impairment at the reporting
date are classified as Stage 3, i.e. are
credit impaired. For these assets, lifetime
ECL is recognised.
The definition of default used in the
measurement of ECL for IFRS 9 purposes
is aligned to the regulatory definition
of default used by the Group for credit
risk management purposes, and which
has been approved for use for capital
management. For the Group’s main
Mortgage Portfolio, the definition of
default approved for use under the
Targeted Review of Internal Models (TRIM)
from 31 December 2018 is also applied
under IFRS 9. This definition of default
has been designed to comply with the
Regulatory requirements and guidelines
on default, NPLs and forbearance.
IFRS 9 does not define default but
incorporates a rebuttable presumption
that default has occurred when an
exposure is greater than 90 days past
due. The Group did not rebut this
presumption for any portfolio.
Under the Group’s definition of default,
an exposure is considered defaulted and
is classified as Stage 3 credit-impaired
where an account is greater than 90 days
past due on any material credit obligation
or is otherwise assessed as unlikely to
pay. Where a material amount of principal
or interest remains outstanding at the
reporting date, the counting of days past
due commences from the first date that a
payment, or part thereof, met materiality
thresholds and became overdue.
Key indicators of unlikely to pay include:
• Accounts that have, as a result of
financial distress, received a concession
from the Group with respect to terms or
conditions. Such exposures will remain
in Stage 3 until certain exit conditions
are met and for a minimum probationary
period of 12 months before moving to a
performing classification;
• Accounts that have, as a result of
financial distress, received a concession
from the Group with respect to terms or
conditions which result in a significant
terminal payment. Such exposures must
fulfil additional conditions in relation to
that terminal payment before moving to
a performing classification; and
• Accounts where the customer is
assessed as otherwise unlikely to
pay, including bankruptcy, personal
insolvency, assisted voluntary sale,
disposal etc.
Exception to the general three stage
impairment model
Purchased or Originated Credit Impaired
(POCI) are excluded from the general
3 stage impairment model in IFRS 9.
POCI assets are financial assets that
are credit impaired on initial recognition.
POCI assets are recorded at fair value
at original recognition and interest
income is subsequently recognised on
a credit-adjusted effective interest rate
(EIR) basis. ECLs are only recognised
or released to the extent that there is a
subsequent change in expected credit
losses. Following the wind-down of the
Newbridge Credit Union (NCU) portfolio in
2023, the group does not have any assets
accounted for on a POCI basis under IFRS
9 at 31 December 2023.
Low credit risk exemption
A low risk exemption can be availed of
for financial instruments under IFRS 9
for which the Group can demonstrate
objective evidence that these financial
instruments are not subject to a SICR.
The Group considers credit risk on a
financial instrument low if it meets the
following conditions:
• Strong capacity by the borrower
to meet its contractual cash flow
obligations in the near term;
• Adverse changes in economic business
conditions in the longer term may, but
will not necessarily, reduce the ability
of the borrower to fulfil its contractual
cash flow obligations; and
• External rating of investment grade or
an internal credit rating equivalent.
Modified financial assets
Where a financial asset is modified or
an existing financial asset is replaced
with a new one, an assessment is
made to determine if the financial asset
should be derecognised. If the terms
are substantially different, the Group
derecognises the original financial
asset and recognises a new asset at
fair value and recalculates a new EIR
for the asset. The date of renegotiation
is consequently considered to be the
date of initial recognition for impairment
calculation purposes, including for the
purpose of determining whether a SICR
has occurred. However, the Group also
assesses whether the new financial
asset recognised is deemed to be credit
impaired at initial recognition, especially
in circumstances where the renegotiation
was driven by the debtor being unable
to make the originally agreed payments.
Differences in the carrying amount are
also recognised in profit or loss as a
105
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
gain or loss on derecognition. If the
terms are not substantially different,
the modification does not result in
derecognition and the date of origination
continues to be used to determine SICR.
ECL Framework
The Group’s IFRS 9 models leverage
the systems and data used to calculate
expected credit losses for IRB purposes.
In particular, key concepts such as the
definition of default and measurement
of credit risk (i.e. ranking of exposures
for risk) have been aligned across
the impairment (accounting) and IRB
frameworks. IFRS 9 models, however,
differ from IRB models in a number of
conceptual ways (e.g. the use of ‘through
the cycle’ (TTC) for IRB versus ‘point in
time’ for IFRS 9 inputs, 12 month ECL time
horizon for IRB versus lifetime for IFRS 9
Stage 2 & 3) and, as a result the Group did
not leverage the outputs of its IRB models,
but instead developed statistical models,
which are based on the IRB scorecards
but otherwise tailored to the requirements
of IFRS 9.
Measurement
For all material portfolios, the Group
has adopted an ECL framework that
is cognisant of industry best practice,
as set out in the Global Public Policy
Committee (GPPC) paper, and reflects
a component approach using PD, Loss
Given Default (LGD) and Exposure at
default (EAD) components calibrated for
IFRS 9 purposes. To adequately capture
life-time expected losses, the Group also
modelled early redemptions as a separate
component within the ECL calculation.
IFRS 9 PD
For estimating 12 month and lifetime
default, the Group uses a statistical model
methodology that allows the Group to
estimate the risk that a loan will default
at a given point in time, through grouping
exposures with similar risk characteristics
and measuring the historic rate of default
for exposures of this type. This technique
effectively provides a TTC measure of
likelihood of default. To translate this TTC
probability to a Point in Time probability
106
life, adjusted as applicable for expected
prepayments.
For certain revolving credit facilities that
do not have a fixed maturity (e.g. credit
cards and overdrafts), the expected life
is estimated based on the period over
which the Group is exposed to credit risk
and where the credit losses would not be
mitigated by Management actions. For
instruments in Stage 2 or Stage 3, loss
allowances will cover expected credit
losses over the expected remaining life of
the instrument.
Effective Interest Rate
The discount rate used by the Group
in measuring ECL is the EIR (or ‘credit-
adjusted effective interest rate’ for POCI
financial assets) or an approximation
thereof. For undrawn commitments, the
EIR, or an approximation thereof, is applied
when recognising the financial assets
resulting from the loan commitment.
Write-off policy
The Group writes off an impaired financial
asset (and the related impairment
allowance), either partially or in full, when
there is no realistic prospect of recovery
or on foot of a negotiated settlement.
Indicators that there is no prospect of
recovery include the borrower being
deemed unable to pay due their financial
circumstances or the cost to be incurred
in seeking recovery is likely to exceed the
amount of the write-off. In circumstances
where the net realisable value of any
collateral has been determined and there
is no reasonable expectation of further
recovery, write-off may be earlier than
collateral realisation. Write-off on those
financial assets subject to enforcement
activity will take place on conclusion of
the enforcement process.
In subsequent periods, any recoveries
of amounts previously written off are
credited to the provision for credit losses
in the income statement.
Governance
The Group has a detailed framework
of policies governing development,
and to reflect forward looking information
(FLI) at the balance sheet date, the
Group calibrates the starting point for the
projection to the current Observed Default
Rate (ODR). The Group then uses an
economic response model to reflect future
expected macroeconomic conditions.
Behavioural scorecards, containing key
loan performance indicators for each
customer are used for the purpose of
grouping exposures with similar risk
characteristics as described above. A PD
is calculated for each group (internally
referred to as risk grades) which drives
the PD used for the ECL process. All
components of PD, risk grade, ODR
and economic response model are
independently monitored by the Group’s
Model Risk Team to confirm ongoing
fitness for purpose.
IFRS 9 LGD
For the Group’s key mortgage portfolios,
LGD assumes that the Group will have
recourse to collateral in the event that an
exposure fails to return to a performing
state. The LGD model incorporates the
probability of each defaulted account
returning to performing together with the
estimated loss rate should they return to
performing and the estimated loss rate
should they not return to performing. The
Group has the same approach for LGD
estimation for both 12 month and lifetime.
IFRS 9 EAD
For performing loans, the EAD is
calculated for each future period based
on the projected loan balance (after
expected capital and interest payments)
at that future period. A Credit Conversion
Factor (CCF) is then applied to calculate
the percentage increase in balance from
the point of observation to the point of
default including accrued missed interest
payments and any related charges. The
CCF is segmented by the accounts’
repayment type.
Expected life
When measuring ECL, the Group must
consider the maximum contractual period
over which the Group is exposed to
credit risk. All contractual terms should
be considered when determining the
expected life, including prepayment
options, extension and rollover options.
For most instruments, the expected life
is limited to the remaining contractual
PTSB Group Holdings plc - Annual Report 2023 monitoring and validation of Models.
Model Governance Committee (MGC)
oversees the execution of this framework
and approves model developments and
notes model validation reports prior to
their consideration by the GRC and/or the
ALCo and the BRCC, where appropriate.
The GCC is responsible for oversight
of changes to credit policies, data or
post model adjustments that would
affect model outcomes. The Impairment
Reporting Review Forum (IRRF), a sub-
committee of the GCC, is accountable
for the review and recommendation for
approval of the monthly and cumulative
year-to-date actual impairment charge for
the Group.
IFRS 9 ECL methodologies are subject to
formal review by IRFF and approval by the
GCC on a monthly basis and by the BRCC
on a half-yearly basis. The adequacy of
ECL allowance is reviewed by the BAC on
a half-yearly basis.
Forward looking information (FLI)
IFRS 9 requires an unbiased and
probability weighted estimate of
credit losses by evaluating a range of
possible outcomes that incorporates
forecasts of future economic conditions.
Macroeconomic factors and FLI are
required to be incorporated into the
measurement of ECL as well as the
determination of whether there has been
a SICR since origination.
Measurement of ECLs at each reporting
period should reflect reasonable and
supportable information.
The requirement to incorporate a range
of unbiased future economic scenarios,
including macroeconomic factors, is a
distinctive feature of the ECL accounting
framework, which increases both the
level of complexity and judgement in the
measurement of allowance for credit
losses under IFRS 9.
The Group has developed the capability to
incorporate a number of macroeconomic
impacts and scenarios into the ECL
models.
The process to determine the FLI applied
in the ECL models leverages existing
ICAAP processes while recognising that
IFRS 9 scenarios are not stress scenarios.
The methodology to incorporate
multiple economic scenarios into the
ECL models considers, amongst other
things, the Group’s SPP and the views of
policy makers on longer term economic
prospects and key risks In developing the
methodology, the Group has referenced
publicly available information for key
macroeconomic indicators including
the Residential Property Price Index
(RPPI), unemployment, interest rates,
GDP and publicly available external
macroeconomic forecasts including
from the Department of Finance
(DoF), the Central Bank of Ireland,
the ESRI, the European Commission
and the IMF. The Group employs the
services of an independent economist
to determine forecast macroeconomic
scenarios. The governance and
oversight process includes the review
and challenge by ALCo of FLI and its
onward recommendation to the BRCC for
approval.
In general, a review and update of
macroeconomic variables takes place
at least bi-annually. Macroeconomic
scenarios were most recently updated
in December 2023. There are three
main changes from forward looking
indicators utilised in December 2022: a
marginal downgrading of GDP for 2024,
an improvement in unemployment in the
first two years of the forecast to reflect
a continued strength in the employment
market and a change in the phasing of
interest rates given higher than expected
ECB rate increases in 2023.
The Group has adopted three
macroeconomic scenarios for ECL
purposes. The Group’s approach applies
extreme-but-plausible economic
scenarios (i.e. underpinned by historical
evidence) to estimate the distribution of
ECL to which the Group is exposed. The
central scenario is at the 50th percentile
of the distribution of scenarios (implying
a 50% probability that the actual outcome
is worse than the central forecast and
a 50% probability that the outcome is
better). The Upside scenario is at the 5th
percentile and the Downside scenario is
at the 95th percentile. IRRF reviewed the
scenario probabilities and recommended
them to the BRCC, where they were
approved. Using statistical techniques
combined with expert credit judgement,
the Group then formulates an unbiased
probability weighted estimate of ECL at
the reporting date (see note 2, Critical
accounting estimates and judgements for
further detail).
Expert Credit Judgement
The Group’s ECL accounting framework
methodology, in line with the requirements
of the standard, requires the Group to
use its experienced credit judgement
to incorporate the estimated impact of
factors not captured in the modelled ECL
results, in all reporting period dates (see
note 2, Critical accounting estimates and
judgements for further detail).
At 31 December 2023, the impairment
provision included €135m of
Management’s adjustments to modelled
outcomes (December 2022: €137m).
3.2 Funding and Liquidity Risk -
audited
Funding Risk is the risk that the Group is
not able to achieve its target funding mix,
is too dependent on particular funding
instruments, funding sources (retail/
wholesale) or funding tenors, fails to meet
regulatory requirements and, in extremis,
is not able to access funding markets or
can only do so at excessive cost and/or
Liquidity Risk.
Liquidity Risk is the risk that the Group
has insufficient funds to meet its financial
obligations as and when they fall due,
resulting in an inability to support normal
business activity and/or failing to meet
regulatory liquidity requirements. These
risks are inherent in banking operations
and can be heightened by a number
of factors, including over reliance on
a particular funding source or product
type, changes in credit ratings or market
dislocation.
The level of risk is dependent on the
composition of the balance sheet,
the maturity profile and the quantum
and quality of the liquidity buffer. It is
likely that these risks would be further
exacerbated in times of stress. Given the
nature of the Group’s retail focus which
stems from its business model, Liquidity
and Funding risk will arise naturally due
to the maturity transformation of primarily
short term contractual deposits (albeit
recognising behavioural stickiness)
into longer term loans (predominantly
mortgage lending). With 90% of the
107
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Risk Management
(continued)
balance sheet being deposit funded at the
year end, exposure to a potential deposit
run represents the primary liquidity and
funding risk.
The following information has
not been subject to audit by the
Group’s independent auditor.
(i) Regulatory Compliance
The Group is required to comply
with the liquidity requirements of
the CBI and the full spectrum of
European regulatory requirements
including CRR2, CRD V and associated
Delegated Acts such as the Liquidity
Coverage Ratio (LCR) Delegated Act.
The primary ratios calculated and
reported are the LCR and the Net
Stable Funding Ratio (NSFR). In
addition, supplementary liquidity and
funding metrics are measured and
monitored on a regular basis.
Under the Bank Recovery and
Resolution Directive (BRRD), the
Group is required to adhere to
a binding MREL requirement as
determined by the CBI, which
represents a quantification of the
eligible liabilities required to act as
a buffer in the event of a resolution
scenario. The Group has a senior
unsecured issuance strategy to
ensure ongoing compliance with the
MREL requirement.
ii. Risk Management, Measurement and
Monitoring
Group Treasury are responsible for the
day to day management of the Group’s
liquidity position and ensuring compliance
with the regulatory requirements. In
carrying out this responsibility, the
principal objective is to ensure that
adequate liquid assets are available
at all times to meet the operational
and strategic liquidity needs of the
Group under both normal and stressed
conditions. Liquidity management
focuses on the overall balance sheet
structure together with the control of risks
arising from the mismatch in contracted
maturities of assets and liabilities,
undrawn commitments and other
contingent liabilities.
Liquidity risk is measured on a daily basis
using a range of metrics against the
internally as well as regulatory prescribed
limit framework. The Group primarily
monitors its liquidity position through
108
the LCR. The objective of the LCR is to
promote the short-term resilience of the
liquidity risk profile of banks. It achieves
this by ensuring that banks have an
adequate stock of unencumbered high-
quality liquid assets (HQLA) that can
be converted easily and immediately in
private markets into cash in order to meet
the liquidity needs for a 30-calendar day
liquidity stress scenario.
NSFR and Liquidity Stress Survivability
constitute additional core liquidity and
funding metrics within the overarching
Liquidity and Funding Risk Management
Framework that are measured, monitored
and reported within the Group.
The Group also actively monitors
a comprehensive suite of Key Risk
Indicators (KRIs) and Early Warning
Indicators (EWIs) covering a range of
market wide and Group specific events.
The purpose of these metrics is to provide
forewarning of any potential liquidity
trigger events, ensuring the Group has
sufficient time to intervene and mitigate
any emerging risk.
The Contingency Funding Plan (CFP)
outlines the strategy and action plan
to address liquidity crisis events. The
CFP identifies processes and actions
incremental to the existing daily liquidity
risk management and reporting framework
to assist in making timely, well-informed
decisions. Stress testing forms a key pillar
of the overall liquidity and funding risk
framework and is conducted from both
an economic and normative perspective
(as guided by the EBA). Overall, the Group
takes a prudent approach in setting the
inflow and outflow parameters at a level
which is appropriate for each stress
scenario with due consideration of the
Group’s business model, liquidity and
funding risk exposures and the liquidity
risk drivers, including those outlined in
the EBA SREP Guidelines. The stress
testing framework is designed to reflect
the liquidity and funding impact under
idiosyncratic, systemic and combined
stresses.
The full suite of liquidity and funding
metrics and stress test results are
regularly reported to the ALCo, the BRCC
and the Board. In addition, the Group
Internal Liquidity Adequacy Assessment
(ILAAP) provides a holistic view of the
Group’s liquidity adequacy. The ILAAP
examines both the short and long term
liquidity position relative to the internal
and regulatory limits. Through the
ILAAP process, the Board attests to the
adequacy of the Group’s liquidity position
and risk management processes on an
annual basis.
iii. Liquidity Risk Management
Framework
The exposure to liquidity and funding risk
is governed by the Group’s Liquidity and
Funding Risk Management Framework
and underlying policies, RAS and
associated limits. The framework and
policies are designed to comply with
regulatory standards with the objective
of ensuring the Group holds sufficient
counterbalancing capacity to meet its
obligations, including deposit withdrawals
and funding commitments, as and
when they fall due under both normal
and stressed conditions. The process
establishes quantitative rules and
targets in relation to the measurement
and monitoring of liquidity risk. The
Liquidity and Funding Risk Management
Framework is approved by the BRCC on
the recommendation of the ALCo. The
effective operation of liquidity policies
are delegated to the ALCo, while Group
Risk and GIA functions provide further
oversight and challenge and ensure
compliance with the framework.
The Liquidity and Funding Risk
Management Framework outlines the
mechanisms by which liquidity and
funding risk is managed within the Board
approved Risk Appetite and is in line with
the overarching liquidity and funding risk
principles as follows:
• Liquidity: maintain a prudent liquid
asset buffer above the internally
determined or regulatory mandated
(whichever is greater) liquidity
requirement such that the Group
can withstand a range of severe yet
plausible stress events; and
• Funding: develop a stable, resilient and
maturity-appropriate funding structure,
with focus on customer deposits
augmented by term wholesale funding
sources.
iv. Minimum Liquidity Levels
The Group maintains a sufficient liquidity
buffer comprising both unencumbered
High Quality Liquid Assets (HQLA) and
non-HQLA liquidity capacity to meet LCR
and stress testing requirements.
The Group measures and monitors the
NSFR which is designed to limit over-
reliance on short-term funding and
promote longer-term stable funding
sources.
PTSB Group Holdings plc - Annual Report 2023 v. Liquidity Risk Factors
Over reliance and concentration on any
one particular funding source can lead
to a heightened liquidity impact during
a period of stress. The Group relies
on customer deposits to fund its loan
portfolio. The ongoing availability of these
deposits may be subject to fluctuations
due to factors such as the confidence
of depositors in the Group, and other
certain factors outside the Group’s control
including, for example, macroeconomic
conditions in Ireland, confidence of
depositors in the economy in general and
the financial services industry, specifically
the competition for deposits from other
financial institutions.
The availability and extent of deposit
guarantees are of particular importance
especially for a Retail bank. The Irish
Deposit Guarantee Scheme (DGS)
protects deposits up to a balance of
€100,000. The national DGS together
with the establishment of the European
Deposit Insurance Fund is designed
to maintain depositor confidence and
protect against a potential deposit run. A
significant change to the operation of the
DGS could adversely affect the Group’s
ability to retain deposits under a severe
stress event.
The Group remains active in capital
markets, be it secured or unsecured
transactions, and any restrictions on
the Group’s access to capital markets
could pose a threat to the overall funding
position. The inability to adequately
diversify the funding base could lead
to over concentration on the remaining
funding sources.
The Group maintains a significant
liquidity buffer split between HQLA
sovereign bonds, deposits placed with
the Central Bank and ECB eligible retained
securitisations which can be monetised
quickly to safeguard against a liquidity
event. While the quantum of the buffer is
sufficient to provide capacity to withstand
a significant liquidity stress event there
is a concentration in Irish based assets
which could reduce overall capacity in
the event of an idiosyncratic Irish stress
event.
A clear and defined strategy has been
developed to ensure an encumbrance
level consistent with its economic plan
is maintained by the Group. Disruption
to unsecured funding sources and a
requirement to revert to an overreliance
on secured funding channels could
potentially pose a threat to this ratio and
unsecured creditors.
A series of liquidity and funding EWIs are
in place in order to alert the Group to any
potential liquidity trigger event therefore
allowing sufficient time for mitigating
actions to be taken.
vi. Credit Ratings
The Group’s credit ratings have been
subject to change and may change
in the future, which could affect its
cost or access to sources of financing
and liquidity. In particular, any future
reductions in long-term or short-term
credit ratings could: further increase
borrowing costs; adversely affect access
to liquidity; require the Group to replace
funding losses arising from a downgrade,
which may include a loss of customer
deposits; limited access to capital and
money markets; and trigger additional
collateral requirements in secured funding
arrangements and derivatives contracts.
These issues are factored into the Group’s
liquidity stress testing.
During 2023, Standard & Poor’s upgraded
PTSB Plc’s and PTSB Group Holdings
senior unsecured credit ratings. These
upgrades reflect: the continued progress
on reducing the stock of NPLs; and the
potential material opportunities following
the completion of the Ulster Bank
transaction.
The ratings for Permanent TSB plc are as
follows:
• Standard & Poor’s (S&P): Long-Term
Rating “BBB+” with Outlook “Stable”;
• Moody’s: Long-Term Rating “A2” with
Outlook “Positive”;
• Fitch: Long-Term Rating “BBB-” with
Outlook “Positive”; and
• DBRS: Long-Term Rating “BBBL” with
Outlook “Positive”.
The ratings for Permanent TSB Group
Holdings plc are as follows:
• Standard & Poor’s (S&P): Long-Term
Rating “BB+” with Outlook “Stable”;
• Moody’s: Long-Term Rating “Baa2” with
Outlook “Positive”;
• Fitch: Long-Term Rating “BB+” with
Outlook “Positive”; and
• DBRS: Long-Term Rating “BBH” with
Outlook “Positive”.
For further details on liquidity and funding
risk see note 38.
3.3 Market Risk - audited
Market Risk can be defined as the risk
of losses in on and off-balance sheet
positions arising from adverse movements
in market prices. From the Group’s
perspective, market risk consists of three
components being Interest Rate Risk, FX
Risk and Credit Spread Risk. Often market
risk cannot be fully eliminated through
diversification, though it can be hedged
against.
The Group’s RAS and the associated
Market Risk Framework set out the
Group’s approach to management
of market risk. The Framework is
approved annually by the BRCC on the
recommendation of the ALCo.
All market risks arising within the Group
are subject to strict internal controls and
reporting procedures and are monitored
by the ALCo and the BRCC on a regular
basis. Group Treasury is responsible for
the management of market risk exposures
on the balance sheet. Group Risk and GIA
provide further oversight and challenge
of Group Treasury’s compliance with the
Market Risk framework and associated
Policies.
(i) Interest rate risk
Interest rate risk is the risk to earnings
or capital arising from a movement in
the absolute level of interest rates, the
spread between rates, the shape of the
yield curve or in any other interest rate
relationship. The risk may be subdivided
into gap, option and basis risk. In line
with regulatory standards, the approved
Interest Rate Risk in the Banking Book
(IRRBB) methodology determined that the
Group’s interest rate risk exposure must
be derived from both an earnings (accrual)
(Earnings at Risk (EaR)) and economic
value of equity perspective (EVE).
The Group separately calculates the
contractual Basis Risk exposure which is
factored into the Pillar II ICAAP process.
The risk position is added to the most
severe of EVE or EaR risk levels in order to
ensure all material sources of Interest Rate
Risk are capitalised for.
109
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 (ii) Foreign Exchange Risk
Foreign currency exchange risk is the
volatility in earnings resulting from
the retranslation of foreign currency
denominated assets and liabilities.
Consistent with its business model as
a domestically focused Retail bank, the
Group is predominantly exposed to GBP
and USD positions arising from customer
deposits denominated in these currencies
or branch bureau activities.
Derivatives (FX swaps and forwards) are
executed to minimise the FX exposure.
Overnight FX positions are monitored
against approved notional limits. It is the
responsibility of both Group Treasury
and Group Risk to measure and monitor
exchange rate risk and maintain the
exposure within approved limits.
The aggregate euro denominated 31
December 2023 FX position was €0.7m
(31 December 2022 €0.8m).
(iii) Credit Spread Risk
Credit Spread Risk in the Banking Book
(CSRBB) is the risk from market-wide
changes to credit and liquidity spreads
for a given credit quality on an institution’s
banking book. It excludes idiosyncratic
credit spread risks.
In line with revised regulatory standards,
the CSRBB methodology the Group’s
credit spread risk exposure is derived on
both an earnings (Earnings at Risk (EaR))
and economic value of equity perspective
(EVE). This risk is measured on the
Group’s bond portfolio and own debt
issuances.
The Group’s CS01 (impact of 0.01%
movement in credit spreads) as at 31
December 2023 was €0.6m.
Risk Management
(continued)
The following information has
not been subject to audit by the
Group’s independent auditor.
In defining the level of interest rate risk
the Group applies the most severe of the
six scenarios prescribed by the Basel
and EBA Guidelines on the Management
of IRRBB, for EVE and applies the most
negative of a 200bps upwards or
downwards shock for EAR models, with
both calculations subject to interest
rate flooring assumptions. The results
are measured and reported against the
Board approved risk limits.
The Group also monitors PV01 (impact
of 0.01% movement in interest rates),
duration mismatches and NII sensitivity
when assessing interest rate risk.
The aim of modelling several types
of interest rate shock scenarios is to
measure the Group’s vulnerability to
loss under multiple stressed market
conditions.
The Bank executed €1.2bn of fair value
interest rate swaps in 2023 hedging
certain issued senior and subordinated
debt. These swaps reduced the Bank’s
exposure to downward shocks from an
EAR perspective.
The 31 December 2023 interest rate
risk level, based on the EVE calculation
(more severe than EAR) in the Parallel
Down scenario (200bps downward
shift in market rates), was calculated as
€118m (31 December 2022: €116m in
the EAR calculation). The risk position
under the EVE metric has increased as
the Bank has increased the behavioural
maturity of Retail Non-Maturity Deposits
from 6 to 7 years. This lengthened the
Bank’s liability profile and increased its
exposure to downward shocks from a
value perspective.
Based on the internally derived Basis
Risk calculation methodology, the
31 December 2023 risk level stands
at €19m (31 December 2022 €19m).
The following interest rate floors are
applied in calculating EAR and Basis
Risk: 0% for the ECB Refinance Rate
and Retail Deposits; -50bps for the
ECB Deposit Rate.
110
PTSB Group Holdings plc - Annual Report 2023
Directors’ Report
The Directors present their Annual Report
and audited Group and Company Financial
Statements to the shareholders for the
year ended 31 December 2023.
Results
The Group’s profit for the year was €68m
(2022 profit: €223m) and was arrived at
as presented in the consolidated income
statement.
Dividends
No dividends were paid in 2023.
Review of the Business and Likely
Future Developments
A detailed review of the Group’s business
activities, performance for the year and
an indication of likely future developments
are set out in the Strategic Report.
Information on the KPIs and principal risks
and uncertainties of the business are
provided as required by the Companies
Act 2014. The Group’s KPIs are included in
the Strategic Report section. The principal
risks and uncertainties are outlined under
“risk factors” in the Risk Management
section and under “Longer Term Viability”
within the Board Audit Committee section
of the Corporate Governance Statement.
Accounting Policies
The material accounting policies, together
with the basis of preparation of the
Financial Statements are set out in note 1
to the Consolidated Financial Statements.
Corporate Governance
The Corporate Governance Statement,
as outlined in the Corporate Governance
section, forms part of the Directors’
Report.
Principal Risks and Uncertainties
Information concerning the principal risks
and uncertainties of the Group are set
out in the risk management section of the
Strategic Report on page 87 of the Annual
Report.
Financial Instruments
The financial instruments and use thereof
are outlined in the Risk Management
section, financial risk management note
38 and Derivative financial instruments
note 16.
Going Concern
The Group’s Financial Statements have
been prepared by the Directors on a going
concern basis having considered that it is
appropriate to do so. The going concern
of the Group has been considered in Note
1 of the financial statements and further
information on the assessment of the
going concern position is also set out in
the Governance Statement on page 150
under the Board Audit Committee’s 2023
significant financial reporting judgments
and disclosures.
Longer Term Viability
Taking account of the Group’s current
position and principal risks, the Directors
have assessed the prospects of the
Group over the period 2024-2026. The
Directors confirm that it is their reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over this period.
Further detail on the assessment of the
Group’s longer term viability is set out in
the Corporate Governance Statement
on page 150 under the Board Audit
Committee’s 2023 significant financial
reporting judgements and disclosures.
Directors’ Compliance Statement
As required by section 225(2) of the
Companies Act 2014, the Directors
acknowledge that they are responsible for
securing the Company’s compliance with
its relevant obligations (as defined in that
legislation). The Directors have drawn up a
compliance policy statement and have put
in place arrangements and structures that
are, in the Directors’ opinion, designed
to secure material compliance with the
relevant obligations. A review of these
arrangements was conducted during the
year.
Statement of Relevant Audit
Information
In preparing and approving the 2023
Annual Report and in accordance with
Section 330 (1) of the Companies Act
2014, each of the current Directors of the
Company confirm that;
• So far as the Directors are aware, there
is no relevant audit information of which
the statutory auditors are unaware; and
• The Directors have taken all steps
that they ought to have taken to make
themselves aware of any relevant audit
information and have established that
the statutory auditors are aware of that
information.
Audit Committee
In accordance with Section 167(3)(a) of
the Companies Act 2014, the Directors
confirm that the Board has established an
Audit Committee.
Directors
The names of the Directors, together
with a detailed description of the key
strengths, skills, expertise and experience
of each Director are set out in the Board
of Directors section on pages 123 to 128
of the Annual Report. In January 2022,
the Board Chairperson Robert Elliott
advised the Board that he would not seek
an extension to his term of office which
would expire on the 31 March 2023. Mr
Elliott’s successor, Julie O’Neil joined the
Board as an Independent Non-Executive
Director on 17 January 2023 and
succeeded Robert Elliott as Chairperson
on 31 March 2023. Andrew Power
completed his term of office and retired
as an Independent Non-Executive Director
at the Company’s AGM on 19 May 2023.
On the 12 December 2023, Catherine
Moroney and Rick Gildea were appointed
as Independent Non-Executive Directors
and Ken Slattery retired from the Board as
an Independent Non-Executive Director.
Further information on the appointment
processes are included in the Nomination,
Culture and Ethics Committee section of
the Corporate Governance Statement.
With the exception of Andrew Power
who, having completed his term of office,
retired as an Independent Non-Executive
Director at the Company’s AGM on 19
May 2023, all of the directors stood and
were re-appointed by election at the 2023
Annual General Meeting (AGM). All of the
Directors will stand for re-appointment by
election at the Group’s 2024 AGM.
Information on Directors’ remuneration
is detailed in the Directors’ Report on
Remuneration on pages 169 to 174 of
the Annual Report and Directors’ and
Secretary interests in shares are outlined
in note 44 to the financial statements.
Other than the Directors’ and Secretary’s
interests as set out in note 44, there
were no other interests disclosed to the
Company in accordance with the market
abuse regulations occurring between the
period under review and up to 5 March
2024.
Share Capital and Shareholders
Under the terms of the Credit Institutions
(Stabilisation) Act 2010 (the “Act”) the
Minister for Finance could, in certain
circumstances, direct the Company to
undertake actions that could impact on
the pre-existing legal and contractual
rights of shareholders. The Act had an
original expiry date of 31 December 2012.
111
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Directors’ Report
(continued)
However, the Act was subsequently
extended to 31 December 2014 but has
not since been extended. The expiry of
the Act does not affect any order already
made, or the variance, termination,
enforcement, variation or revocation of
any existing order nor does it affect the
ability of the Minister to impose certain
conditions on any financial support
provided under or in connection with the
Act.
Relationship Framework with the
Minister for Finance
The Minister for Finance of Ireland
owns and controls 57.4% (2022: 62.4%)
of the Company’s issued ordinary
share capital. Under the terms of the
Relationship Framework entered into
between the Minister for Finance and
the Company, the Minister for Finance
expects the Board and Management
team of the Group to conduct the Group’s
commercial operations in a prudent and
sustainable manner which seeks to create
a commercially oriented credit institution
that recognises the need to encourage
and enforce implementation of lessons
learned from the financial crisis.
The Minister for Finance recognises that
the Group remains a separate economic
unit with independent powers of decision
and that its Board and Management
team retain responsibility and authority
for determining the Group’s strategy and
commercial policies (including business
plans and budgets) and conducting its
day-to-day operations. The Minister for
Finance will ensure that the investment
in the Group is managed on a commercial
basis and will not intervene in day-to-
day management decisions of the Group
(including with respect to pricing and
lending decisions).
Transactions and arrangements between
the Group and the Minister for Finance
or associates of the Minister for Finance
will be conducted at arms-length and on
normal commercial terms. The Minister will
not, in their capacity as a shareholder of
the Company, take any action that would
have the effect of preventing the Group
from complying with its obligations under
applicable law and regulations, including,
but not limited to, the Listing Rules and
will not propose or procure the proposal of
a shareholder resolution which is intended
to circumvent the proper application of
regulatory requirements.
The Minister engages with the Group,
including with respect to the manner
in which the Minister’s voting rights
112
are exercised in accordance with best
institutional practice and in a manner
proportionate to the shareholding interest
of the State in the Group. The views of
the Minister for Finance and the DOF are
expected to be appropriately considered
by the Group as part of any consultation
process under the Relationship
Framework. However, the Board and
Management team have full responsibility
and authority for determining the Group’s
strategy and commercial policies.
The Relationship Framework also
provides that the Minister for Finance and
the Group will review the Relationship
Framework from time to time when either
party reasonably considers that changes
to the Relationship Framework or to the
State Agreements (as defined therein)
would be necessary or desirable to
ensure that the Relationship Framework
continues to reflect certain principles
specified in the Relationship Framework
and to enable the Group to continue
to comply with its obligations under
applicable law and regulations, including,
but not limited to, the Listing Rules.
The Relationship Framework also imposes
restrictions on the Group undertaking
certain actions without where specified,
providing information to, consulting with,
or obtaining the consent of the Minister
for Finance. The principal restrictions are
set out in the Relationship Framework, a
copy of which is available on the Group
website www.permanenttsbgroup.ie.
The Board is satisfied that the Company
has complied with the relevant
independent provisions set out in the
Relationship Framework. The Board is also
satisfied, in so far as it is aware, that the
Minister for Finance has complied with the
relevant independence provisions set out
in the Relationship Framework.
PTSB completed the acquisition of Ulster
Bank’s performing non-tracker residential
mortgage business (€5.2bn of €6.1bn) in
November 2022, micro SME business of
€0.1bn in February 2023, the remaining
mortgage assets (€0.9bn) in May 2023
and the asset finance business (€0.5bn) in
July 2023. On 7 November 2022, the Bank
entered into a shareholder co-operation
agreement with NatWest Group plc and
the Minister for Finance of Ireland in
relation to a number of matters including
orderly sale arrangements in relation to
both the shares held by the Minister and
the shares issued to RBS AA Holdings
(UK) Limited, a subsidiary of NatWest
Group plc. The shareholder cooperation
agreement does not provide Natwest
Group plc with any direction or control
rights or significant influence with regard
to the business of the Group.
Authorised Share Capital
The authorised share capital of the
Company is €775,000,000 divided into
1,550,000,000 ordinary shares of €0.50
each.
Issued Ordinary Shares
At 31 December 2023, the Company had
545,589,119 ordinary shares of €0.50 each
in issue (2022: 545,589,119). Ordinary
shares represent 100% of the Company’s
issued share capital value. In November
2022, 90,893,627 ordinary shares were
issued to RBS AA Holdings (UK) Limited,
a subsidiary of NatWest Group plc (since
reduced in June 2023 as part of a share
disposal). Each ordinary share carries one
vote and the total number of voting rights
at 31 December 2023 is 545,589,119
(2022: 545,589,119).
At 31 December 2023, the Company
holds, through an employee benefit trust,
4,580 (2022: 4,580) ordinary shares of
€0.50 each.
Additional Tier 1 Equity Securities
On 26 October 2022, the Company issued
€250m of AT1 securities. On 25 November
2020, the Company issued €125m of AT1
securities. These AT1 Securities contain
no conversion rights into ordinary shares
of the Company. No new AT1 securities
were issued in 2023.
European Union Bank Recovery and
Resolution Directive
The BRRD was implemented into Irish law
by the EU (Bank Recovery and Resolution)
Regulations 2015. BRRD provides
European national resolution authorities
with comprehensive and effective powers
for dealing with failing banks and certain
investment firms. BRRD grants a set of
early intervention powers to the Irish
national resolution authority (CBI) that
include the write-down or cancellation of
equity and/or the conversion of certain
eligible liabilities into equity. Further
information on BRRD is available on the
CBI website: https://www.centralbank.ie/
regulation/how-we-regulate/resolution-
framework.
Variation of Rights
Whenever the share capital is divided
into different classes of shares, the rights
attached to any class may be varied or
abrogated with the consent in writing of
PTSB Group Holdings plc - Annual Report 2023 the holders of three-quarters in nominal
value of the issued shares of that class or
with the sanction of a special resolution
passed at a separate General Meeting
of the holders of the shares of the class,
and may be so varied or abrogated either
whilst the Company is a going concern or
during or in contemplation of a winding-
up.
Allotment of Ordinary Shares
Subject to the provisions of the Articles
of Association relating to new shares,
the shares shall be at the disposal of the
Directors and (subject to the provisions of
the Articles and the Acts) they may allot,
grant options over, or otherwise dispose
of them to such persons on such terms
and conditions and at such times as they
may consider to be in the best interests
of the Company and its shareholders,
but so that no share shall be issued at a
discount and so that, in the case of shares
offered to the public for subscription, the
amount payable on application of each
share shall not be less than one-quarter of
the nominal amount of the share and the
whole of any premium thereon.
Holders of Ordinary Shares Resident
in the USA
The Board may at its discretion give
notice to Relevant US Holders calling for a
disposal of their shares within 21 days or
such longer period as the Board considers
reasonable. Relevant US shareholders
are those shareholders who hold less
than 25,000 shares of any class in the
capital of the Company (including, without
limitation, shares at any time in the future
represented by American depositary
shares) in any manner described in Rule
12g-3-2(a)(1) of the Exchange Act or in
any amendment to such rule or equivalent
rule promulgated by the SEC under
the Exchange Act (including directly or
through or as a nominee). The Board may
extend the period within which any such
notice is required to be complied with
and may withdraw any such notice in
any circumstances the Board sees fit. If
the Board is not satisfied that a disposal
has been made by the expiry of the 21
day period (as may be extended), no
transfer of any of the shares to which the
notice relates may be made or registered
other than a transfer made pursuant to
a procured disposal of the said shares
by the Board, or unless such notice is
withdrawn. As previously stated, the
intention of the Board in any exercise of
this power is, subject to legal, fiduciary
and regulatory requirements and costs,
to take account of the relative size of the
holdings of the US resident persons and
apply the power first to those smallest
holdings of shares.
Refusal to Transfer
The Directors in their absolute discretion
and without assigning any reason therefor
may decline to register:
• any transfer of a share which is not fully
paid save however, that in the case of
such a share which is admitted to listing
on London or Euronext Dublin Stock
Exchanges, such restriction shall not
operate so as to prevent dealings in
such share of the Company from taking
place on an open and proper basis;
• any transfer to or by a minor or person
who is adjudged by any competent
court or tribunal, or determined in
accordance with the Company’s
Articles, not to possess an adequate
decision-making capacity;
• any instrument of transfer that is not
accompanied by the certificate of the
shares to which it relates and such
other evidence as the Directors may
reasonably require to show the right of
the transferor to make the transfer;
• the instrument of transfer, if the
instrument of transfer is in respect of
more than one class of share; and
• any transfer of shares in uncertificated
form only in such circumstances as are
permitted or required by Section 1086
of the Companies Act 2014.
General Meetings
Under the Articles of Association, the
power to manage the business of the
Company is generally delegated to the
Directors. However, the shareholders
retain the power to pass resolutions at a
general meeting of the Company which
may give direction to the Directors as to
the management of the Company.
The Company must hold a general
meeting in each year as its AGM in
addition to any other meetings in that year
and no more than fifteen months may lapse
between the date of one AGM and that of
the next. The AGM will be held at such time
and place as the Directors determine. All
General Meetings, other than AGMs, are
called Extraordinary General Meetings.
Extraordinary General Meetings shall
be convened by the Directors or on the
requisition of members holding, at the date
of the requisition, not less than five per cent
of the paid up capital carrying the right to
vote at General Meetings and in default
of the Directors acting within 21 days to
convene such a meeting to be held within
two months, the requisitionists (or more
than half of them) may, but only within three
months, themselves convene a meeting.
No business may be transacted at any
General Meeting unless a quorum is present
at the time when the meeting proceeds to
business. Three members present in person
or by proxy and entitled to vote at such
meeting constitutes a quorum.
In the case of an AGM or of a meeting
for the passing of a special resolution or
the appointment of a director, a minimum
of 21 clear days’ notice, and in any other
cases a minimum of 14 clear days’ notice
(assuming that the shareholders have
passed a resolution to this effect at the
previous year’s AGM), needs to be given
in writing in the manner provided for in the
Company’s Articles of Association to all the
members (other than those who, under the
provisions of the Articles of Association or
the conditions of issue of the shares held
by them, are not entitled to receive the
notice) and to the Auditor for the time being
of the Company. The Company’s Articles
of Association may be amended by special
resolution passed at a General Meeting of
shareholders. Special resolutions must be
approved by not less than 75% of the votes
cast by shareholders entitled to vote in
person or by proxy.
Substantial Shareholdings
As at 31 December 2023, the Directors have been notified of the following substantial
interests in the voting rights of Ordinary shares held:
Name
Interest
Minister for Finance of
Ireland
57.4%
313,382,197 shares
RBS AA Holdings (UK)
Limited
11.7%
63,614,171 shares
Sretaw Private Equity
Unlimited Company
6.8%
37,100,000 shares
Date Notified
2 June 2023
2 June 2023
17 Oct 2023
113
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Directors’ Report
(continued)
There were no other changes to
substantial interests in the voting rights of
ordinary shares reported to the Directors
as at 5 March 2024.
Voting Rights of Ordinary Shares
No person holds securities carrying
special rights. There are no particular
restrictions on voting rights. The Company
is not aware of any agreements between
shareholders that may result in restrictions
on the transfer of its shares or on voting
rights.
Voting rights at General Meetings of
the Company are exercised when the
Chairperson puts the resolution at issue
to the vote of the meeting. A vote may be
decided on a show of hands or by poll.
A vote taken on a poll for the election
of the Chairperson or on a question of
adjournment is also taken forthwith and a
poll on any other question or resolution is
taken either immediately, or at such time
(not being more than 30 days from the
date of the meeting at which the poll was
demanded or directed) as the Chairperson
of the meeting directs. Where a person
is appointed to vote for a shareholder as
proxy, the instrument of appointment must
be received by the Company not less than
48 hours before the time appointed for
holding the meeting or adjourned meeting
at which the appointed proxy proposes to
vote, or, in the case of a poll, not less than
48 hours before the time appointed for
taking the poll.
Voting at any General Meeting is by a
show of hands unless a poll is properly
demanded. On a show of hands, every
member who is present in person or by
proxy has one vote regardless of the
number of shares held. On a poll, every
member who is present in person or by
proxy has one vote for each share of
which they are the holder. A poll may
be demanded by the Chairperson of
the meeting or by at least five members
having the right to vote at the meeting or
by a member or members representing
not less than one-tenth of the total voting
rights of all the members having the right
to vote at the meeting or by a member or
members holding shares in the Company
conferring a right to vote at the meeting,
being shares on which an aggregate sum
has been paid up equal to not less than
one-tenth of the total sum paid up on
all the shares conferring that right. It is
current standing practice at the AGM that
voting is conducted on a poll.
The holders of the ordinary shares
have the right to attend, speak, and ask
114
questions and vote at General Meetings
of the Company. The Company, pursuant
to Section 1105 of the Companies Act
2014 and Regulation 14 of the Companies
Act 1990 (Uncertificated Securities)
Regulations 1996 (S.I. 68/1996), specifies
record dates for General Meetings,
by which date shareholders must be
registered in the Register of Members of
the Company to be entitled to attend and
vote at the meeting.
Pursuant to Section 1104 of the
Companies Act 2014, a shareholder, or a
group of shareholders who together hold
at least 3 per cent of the issued share
capital of the Company, representing at
least 3 per cent of the total voting rights
of all the members who have a right to
vote at the meeting to which the request
for inclusion of the item relates, have the
right to put an item on the agenda, or to
modify an agenda which has been already
communicated, of a general meeting. In
order to exercise this right, written details
of the item to be included in the general
meeting agenda must be accompanied
by stated grounds justifying its inclusion
or a draft resolution to be adopted at the
general meeting together with evidence of
the shareholder or group of shareholders’
shareholding must be received, by the
Company, 42 days in advance of the
meeting to which it relates.
The Company publishes the date
of its AGM on its website www.
permanenttsbgroup.ie on or before 31
December of the previous financial year
or no later than 70 days before the date of
the AGM.
Director Appointments
Save as set out below, the Group has
no rules governing the appointment and
replacement of Directors outside of the
provisions thereto that are contained
in the Articles of Association. Under
the Relationship Framework entered
into between the Company and the
Minister for Finance, the Board must
consult with the Minister for Finance for
the appointment or re-appointment of
the CEO or Chairperson. Upon receipt
of written notice from the Minister for
Finance, the Board shall appoint up
to two nominees of the Minister for
Finance as Directors of the Company
and the appointment(s) shall be deemed
to take effect on the date of the next
Board meeting following receipt of the
aforementioned notice (and regulatory
approval). In 2018, the Board received
written notice from the Minister for
Finance of his intention to appoint two
Directors to the Board. In this regard
Marian Corcoran was appointed to the
Board on 24 September 2019 and Paul
Doddrell was appointed to the Board on
26 November 2020.
Powers Granted to Directors at the
AGM
The following is a description of the
resolutions passed by members in
connection with powers granted to the
Directors:
Ordinary Remuneration of Directors
At the AGM held on 14 May 2019,
shareholders authorised that the
Directors may from time to time
determine in accordance with the Articles
of Association of the Company, the
aggregate ordinary remuneration of the
Directors for serving as Directors of the
Company at an amount not exceeding
€750,000. Ordinary remuneration
represents the total of basic fees paid to
Non-Executive Directors of the Company.
Allotment of Shares
The Investment Association has issued
guidance which generally supports
resolutions seeking authority to allot up
to a separate and additional 33.33% of a
company’s issued share capital (excluding
treasury shares) in addition to the 33.33%
authority already supported where the
additional authority is applied to allot
shares pursuant to a rights issue.
At the 2023 AGM held on 19 May
2023, the Directors were generally and
unconditionally authorised, pursuant
to section 1021 of the Companies Act
2014, to exercise all of the powers of the
Company to allot and issue all relevant
securities of the Company (within the
meaning of section 1021 of the Companies
Act 2014) up to an aggregate nominal
amount of €181,844,853 representing
66.66% of the issued ordinary share
capital of the Company as at 30 March
2023 of which €99,922,426 (representing
the separate and additional 33.33% of
the issued ordinary share capital of the
Company (excluding treasury shares)
as at 30 March 2023 referred to above
may be applied to allot shares pursuant
to a rights issue. The authority conferred
commenced on the 19 May 2023 and will
expire at the conclusion of the 2024 AGM
or 19 August 2024 (whichever is earlier)
unless and to the extent that such power
is renewed, revoked, or extended prior
to such date; provided that the Company
may before such expiry make an offer or
agreement which would or might require
relevant securities to be allotted after
PTSB Group Holdings plc - Annual Report 2023 such expiry, and the Directors may allot
relevant securities in pursuance of such
an offer or agreement as if the power
conferred by this Resolution had not
expired.
Disapplication of Pre-emption
Rights
At the 2023 AGM held on 19 May 2023,
the Directors were authorised to allot
equity securities (within the meaning of
section 1023(1) of the Companies Act
2014) for cash as if Section 1022(1) of the
Companies Act 2014 did not apply to any
such allotment, such power to be effective
from 19 May 2023 and shall expire at the
conclusion of the 2024 AGM or 19 August
2024 (whichever is earlier) unless and to
the extent that such power is renewed,
revoked, or extended prior to such date;
and such power being limited to:
(a) the allotment of equity securities in
connection with any offer of securities,
open for a period fixed by the Directors,
by way of rights issue, open offer or other
invitation to or in favour of the holders
of ordinary shares and/or any persons
having a right to subscribe for equity
securities in the capital of the Company
(including, without limitation, any persons
entitled or who may become entitled
to acquire equity securities under any
of the Company’s share option scheme
or share incentive plans then in force)
where the equity securities respectively
attributable to the interests of such
holders are proportional (as nearly as
may reasonably be) to the respective
number of ordinary shares held by them
and subject thereto the allotment in any
case by way of placing or otherwise of
any securities not taken up in such issue
or offer to such persons as the Directors
may determine; and generally, subject to
such exclusions or other arrangements
as the Directors may deem necessary or
expedient in relation to legal or practical
problems (including dealing with any
fractional entitlements and/or arising in
respect of any overseas shareholders)
under the laws of, or the requirements of
any regulatory body or stock exchange in,
any territory;
(b) and/or the allotment of equity
securities up to a maximum aggregate
nominal value of €13,639,727, which
represents approximately 5% of the issued
ordinary share capital of the Company
as at the close of business on 30 March
2023.
The Directors were also empowered to
allot equity securities (within the meaning
of Section 1023(1) of the Companies Act
2014) for cash as if Section 1022(1) of the
Companies Act 2014 did not apply to any
such allotment, such power to be effective
from 24 June 2022 and shall expire at
the conclusion of the 2023 AGM or 24
September 2023 (whichever is earlier)
unless and to the extent that such power
is renewed, revoked, or extended prior to
such date and such power being limited
to:
(a) the allotment of equity securities
up to a maximum aggregate nominal
value of €13,639,727, which represents
approximately 5% of the issued ordinary
share capital of the Company as at the
close of business on 30 March 2023; and
(b) used only for the purposes of financing
(or refinancing, if the authority is to be
used within six months after the original
transaction) a transaction which the
Directors determine to be an acquisition
or other capital investment of a kind
contemplated by the Statement of
Principles on Disapplying the Pre-Emption
Rights most recently published by the
Pre-Emption Group and in effect prior to
30 March 2023.
Market purchases of own Shares
At the 2023 AGM held on 19 May 2023
members gave the Company (and its
subsidiaries) the authority to make
market purchases and overseas market
purchases provided that the maximum
number of ordinary shares authorised to
be acquired shall not exceed:
(a) 5% above the higher of the average
of the closing prices of the Company’s
ordinary shares taken from the Euronext
Dublin Daily Official List and the average
of the closing prices of the Company’s
ordinary shares taken from the London
Stock Exchange Daily Official List in each
case for the five business days (in Dublin
and London, respectively, as the case may
be) preceding the day the purchase is
made (“the Market Purchase Appropriate
Price”), or if on any such business day
there shall be no dealing of ordinary
shares on the trading venue where the
purchase is carried out or a closing price
is not otherwise available, the Market
Purchase Appropriate Price shall be
determined by such other method as the
Directors shall determine, in their sole
discretion, to be fair and reasonable; or, if
lower,
(b) the amount stipulated by Article 3(2)
of Commission Delegated Regulation (EU)
2016/1052 relating to regulatory technical
standards for the conditions applicable
to buy-backs and stabilisation (being the
value of such an ordinary share calculated
on the basis of the higher of the price
quoted for: (i) the last independent trade;
and (ii) the highest current independent
purchase bid for any number of such
ordinary shares on the trading venue(s)
where the purchase pursuant to the
authority conferred by this Resolution
will be carried out). The authority will
expire on close of business on the date
of the 2024 AGM of the Company or
on the 19 August 2024 (whichever is
earlier) unless previously varied, revoked
or renewed. While the Directors do not
have any current intention to exercise
this power, this authority and flexibility
was sought as it is common practice
for companies on the Official List of the
Euronext Dublin and/or London Stock
Exchanges. Furthermore, such purchases
would be made only at price levels which
the Directors considered to be in the best
interests of the members generally, after
taking into account the Company’s overall
financial position. In addition, the authority
being sought from members would
provide that the minimum price (excluding
expenses) which may be paid for such
shares would be an amount not less than
the nominal value of the shares;
(c) the amount stipulated by Article 3(2)
of Commission Delegated Regulation
(EU) 2016/1052 relating to regulatory
technical standards for the conditions
applicable to buy-backs and stabilisation
(being the value of such an ordinary
share calculated on the basis of the
higher of the price quoted for: (i) the last
independent trade; and (ii) the highest
current independent purchase bid for
any number of such ordinary shares on
the trading venue(s) where the purchase
pursuant to the authority conferred will
be carried out). The authority will expire
on close of business on the date of the
2024 AGM of the Company or on the 19
August 2024 (whichever is earlier) unless
previously varied, revoked or renewed.
While the Directors do not have any
current intention to exercise this power,
this authority and flexibility was sought as
it is common practice for companies on
the Official List of the Irish and/or London.
115
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Directors’ Report
(continued)
Re-Allot Treasury Shares
At the 2023 AGM held on 19 May 2023,
members gave the Company (and its
subsidiaries) the authority to re-allot
treasury shares pursuant to Section
1078 of the Companies Act 2014 and
the re-allotment price range at which
treasury shares may be re-allotted is as
follows: (a) the maximum price at which
a treasury share may be re-allotted off-
market shall be an amount equal to 120%
of the Treasury Share Appropriate Price;
and, (b) the minimum price at which a
treasury share may be re-allotted off-
market shall be an amount equal to 95%
of the Treasury Share Appropriate Price
(provided always that no treasury share
shall be re-allotted at a price lower than its
nominal value). This authority will expire at
the conclusion of the next annual general
meeting of the Company or at midnight
(Irish Time) on the 19 August 2024
(whichever is earlier), unless previously
varied, revoked or renewed.
Post Balance Sheet Events
Events after the reporting period are
described in note 48 to the financial
statements.
Accounting Records
The measures taken by the Directors to
secure compliance with the Company’s
obligation to keep adequate accounting
records are the use of appropriate
systems and procedures and the
employment of competent persons.
The accounting records are kept at the
Company’s registered office, 56-59 St
Stephen’s Green, Dublin 2.
Subsidiary Undertakings
The principal subsidiary undertakings and
the Company’s interests therein are shown
in note 46 to the financial statements.
Independent Auditor
KPMG Chartered Accountants and
Statutory Audit Firm was appointed as
external auditor at the Group’s AGM on
19 May 2023 following an external tender
process and recommendation from the
Board. In accordance with section 383
(2) of the Companies Act 2014, the
Auditor, KPMG Chartered Accountants
and Statutory Audit Firm, will continue in
office.
Board Diversity Report
The Board Diversity Report, as set out in
the Corporate Governance Statement (see
page 143) is deemed to be incorporated
into this part of the Directors’ Report.
Disclosure Notice
The Company did not receive a disclosure
notice under section 33AK of the Central
Bank Act 1942 during 2023.
Political Donations
The Directors have satisfied themselves
that there were no political contributions
during the year, which require disclosure
under the Electoral Act, 1997.
Location of Information required pursuant
to Listing Rule 6.1.77
Listing Rule
Information Included*
LR 6.1.77
(12)
LR 6.1.77
(14)
The Trustees of the Employee
Benefit Trust have elected to
waive dividend entitlements.
As stated on page 92 the
Minister for Finance has
entered into a Relationship
Framework with the Company.
A copy of the Relationship
Framework is available at
www.permanenttsbgroup.ie
* No information is disclosable in respect of
Listing Rules 6.1.77(1), (2), (3), (4), (5), (6), (7),
(8), (9), (10), (11), and (13).
Non-Financial Statement
For the purposes of Statutory Instrument 360/2017 EU (Disclosure of Non-Financial and Diversity Information by certain large
undertakings and groups) Regulations 2017, the following sections of this Annual Report and any cross references made in the
Directors’ Report are deemed to be incorporated into this part of the Directors’ Report:
Reporting requirements
Policies and standards which govern
our approach
Risk management and additional information
Environmental
matters
Climate Risk Framework
Environmental Policy
Statement
Addressing Climate Change and Supporting the Transition to a Low Carbon
Economy, page 27
Climate-related and Environmental Risk Management, page 27
Sustainable Products and Services, page 27
Carbon Impact and the Transition to a Low Carbon Economy, page 28 and
29
Energy Usage, page 29
Waste Management and the Circular Economy, page 30
Sustainable Sourcing and Procurement, page 30
Biodiversity, page 31
Environmental Policy Statement, page 45
Task Force on Climate Related Financial Disclosure (TCFD) Report, page 48
EU Taxonomy Regulation, page 46
CDP (formerly the Carbon Disclosure Project) Rating, page 47
ESG Risk Rating, page 45
116
PTSB Group Holdings plc - Annual Report 2023
Reporting requirements
Policies and standards which govern
our approach
Risk management and additional information
Social and
Employees
Individual Accountability
Framework (IAF)
Colleague Conduct Policy
Code of Ethics
Conflict of Interest Policy
Speak Freely (whistleblowing)
and associated procedures
Board Diversity Policy
Colleague Conduct Policy
Diversity, Equity and Inclusion
Strategy
Human rights
Social matters
Human Rights
Dignity and Respect Code
Equality Through Diversity
and Inclusion Charter
Enhanced Customer Support
Charter
Community Policy
Employee Volunteering Policy
Community Fund Constitution
Enhancing our Culture and Investing in our People, page 35
High Performance Culture, page 35
Pay and Reward, page 36
Ways of Working (Hybrid Working), page 20, 36
Employee Health, Safety and Wellbeing, page 36
Engagement and Development page 37
Colleague Recognition, page 37
Diversity, Equity and Inclusion, page 37
Gender Pay Gap, page 39, 45
Representative Body Relationships and Employee Consultation, page 39
Individual Accountability Framework (IAF), page 43
Colleague Conduct, page 44
Code of Ethics, page 44
Conflict of interest, page 44
Speak Freely (whistleblowing), page 19, 44
Board Diversity Policy, page 143
Colleague Conduct Policy, page 44
Living Our Purpose and Ensuring Strong Corporate Governance, page 43
Human Rights, page 44
Elevating our Social Impact and Connecting with Local Communities, page
32
Financial Wellbeing, page 32
Accessibility of our Products and Services, page 32
Social and Affordable Housing, page 33
Social Finance Foundation, page 33
Community Fund, page 33
Employee Volunteering, page 33
Community Partnerships, page 33
Anti-bribery Policy
Anti-bribery Policy Statement
Anti-money laundering and
counter
terrorist financing Policy
Speak Freely (whistleblowing)
Financial Crime Compliance, page 44
Data Protection, page 42
Responsible Conduct and Culture, page 44
Operational Risk, page 93
Risk Overview, pages 80
Principal Risks, pages 87
Our Strategy, page 13
Our Business Model, page 16
Non-financial Highlights, page 3
Impact in Action, page 23
Addressing Climate Change and Supporting the Transition to a Low Carbon
Economy, page 27
Elevating our Social Impact and Connecting with Local Communities, page
32
Enhancing our Culture and Investing in our People, page 35
Championing Our Customers and Creating a Bank that is Fit for the Future,
page 40
Anti-corruption
and anti-bribery
Description of
principal risks
and impact of
business activity
Description of the
business model
Non-financial
key performance
indicators
On behalf of the Board:
Julie O’Neill
Chair
Eamonn Crowley
Chief Executive
Nicola O’Brien
Chief Financial Officer
Conor Ryan
Company Secretary
117
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Chair’s Introduction
Dear Reader,
2023 was a transformational year for PTSB as we work
towards our ambition of being Ireland’s best personal and
business bank through exceptional customer experiences.
I am privileged to have been appointed
Chairperson of the PTSB Board and while
I am very pleased to present my first
statement on corporate governance in
this annual report, I do so with sadness
following the passing of my predecessor
Robert Elliott in December 2023.
Robert was a remarkable Chairperson
whose contribution to the Group was
transformational as he led the Board and
supported the Executive Committee in the
acquisition of certain parts of the Ulster
Bank’s business, positioning the Group for
sustainable growth and success into the
future. He had a profound impact on the
organisation, those who he worked with
and he will be greatly missed.
There were a number of changes to the
Board during 2023 with the retirement
of Ken Slattery, Andrew Power and the
appointment of Catherine Moroney and
Rick Gildea. I want to express my deep
appreciation to Ken and Andrew for their
invaluable contribution to the Board over
their tenures and look forward to working
with Catherine and Rick over the years
ahead.
It was against the backdrop of the Ulster
Bank transaction that I re-joined the
Board of the Bank in January 2023 having
previously served as a Board Director from
2014-2020. My first observations on re-
joining the Board is just how far the Bank
has come in such a short period of time, in
particular under the leadership of Eamonn
Crowley who was appointed as CEO in
2020. It is tangible to see how both the
commercial ambition and culture of the
organisation has moved on significantly
during that time. There is a mindset within
the Bank to build trust with customers
and to deliver on the bank’s ambition to
be Ireland’s best personal and business
bank through exceptional customer
experiences. We are making progress in
that regard, but there is more to do.
Corporate governance is important for
me. It is how the organisation is effectively
directed and controlled to deliver value
for shareholders while being mindful of
the impact on customers, colleagues,
communities and our environment. As the
Ulster Bank transaction was drawing to
a close in H1 2023, the Board recognised
the growing importance of PTSB within
the Irish retail banking landscape and
the associated increase in shareholder,
regulatory, economic and societal
expectations on it. Both the Board and
I felt the time was right to undertake a
thorough review of the bank’s governance
arrangements to ensure that it was
positioned for sustainable growth and that
it had both the capability and capacity to
do so safely.
This review required an enterprise wide
assessment of the Bank and I was very
pleased with the manner in which the
wider senior management team at the
bank collaborated in bringing forward a
Board approved plan to deliver:
1. Improvements in the effectiveness
of governance arrangements at
the Board and the Executive level.
Implementation of the Individual
Accountability Framework (IAF) will
be leveraged to improve clarity of
accountabilities and responsibilities,
ensuring there are no gaps and that
risk ownership and responsibilities for
meeting regulatory obligations are clear
across the business and the three lines
of defence.
2. Improvements in strategic planning,
including through completion of a
strategy refresh, building greater
strategic capability (setting and
monitoring), and process enhancements
(e.g., related to capital and liquidity
planning).
3. Enhancements to and better
embedding of risk management
processes and capabilities across
the Bank, including strengthening,
capability and capacity across the first
and second lines of defence.
118
4. Evolving data and technology
strategies which underpin the overall
business strategy, including through
anticipating future needs and ensuring
the Bank has a resilient operational
base, including through its approach to
third party risk management.
5. Ensuring sustainability is embedded
within the Bank’s strategic planning
processes and embedding an
integrated approach to delivery of the
Bank’s sustainability strategy.
I look forward to working with my
Board colleagues over the coming
months to ensure that we deliver on the
commitments we have set for ourselves
and to hold ourselves to the standards
of corporate governance expected of a
systemically important pillar bank.
The following report sets out the detail
to our approach to corporate governance
principles and practices, how we
implement and endeavour to achieve
compliance with the UK Corporate
Governance Code and how our Board and
its Committees operated during the year.
The reports from the Chairs of the Board
Audit, Risk and Compliance, Nomination
Culture and Ethics, and Remuneration
Committees on pages 148, 158, 153 and
161 respectively highlight the key activities
and areas of focus for each Committee.
Julie O’Neill
Chairperson
PTSB Group Holdings plc - Annual Report 2023 where, based on market benchmarking,
the maximum employer contributions were
increased up to 16% linked to increases in
each employee’s own contributions and
subject to certain age-based eligibility
criteria. In carrying out these reviews,
the Remuneration Committee paid due
cognisance to existing State Agreements
relating to remuneration and the Group’s
ability to provide competitive reward
arrangements to retain and motivate
executive talent in an increasingly
competitive marketplace. Given the
particular challenges faced in attracting
and recruiting the most senior talent,
in 2022, the Board approved increases
in the Executive Directors’ maximum
pension contribution to 16%, or 20% in
the case of the CEO. Given the difficulties
experienced in respect of senior talent
acquisition, and aligned with the current
approach for members of the Bank’s
Executive Committee, it was also agreed
to exempt the Executive Directors,
including the CEO, from the age-related
eligibility criteria.
CBI Corporate Governance Code
The 2015 Central Bank of Ireland
Corporate Governance Requirements
for Credit Institutions (the “CBI Code”)
imposes statutory minimum core
standards upon credit institutions, with
additional requirements upon entities
designated as High Impact Institutions.
The Company’s retail banking subsidiary,
PTSB, was subject to the provisions of
the CBI Code during the reporting period.
PTSB has been designated as a High
Impact Credit Institution under the CBI
Code and is subject to the additional
obligations set out in Appendix 1 of the
CBI Code. PTSB has also been designated
as LSI for the purposes of the Capital
Requirements Directive (SI 158/2014) and
is subject to the additional obligations set
out in Appendix 2 to the CBI Code. A copy
of the CBI Code is available on the CBI’s
website www.centralbank.ie.
Compliance Statement with UK
Corporate Governance Code and
Irish Annex
The Company’s shares are admitted to
trading on the Main Securities Market of
Euronext Dublin and the London Stock
Exchange and the Company must comply
or explain against the provisions of the
2018 UK Corporate Governance Code
(the “UK Code”) and the Irish Corporate
Governance Annex (the “Irish Annex”). A
copy of the UK Code is available on the
UK Financial Reporting Council’s website
www.frc.org.uk and the Irish Annex is
available at www.euronext.com/en/
markets/dublin.
Details of how the Group applied the main
principles and supporting provisions of
the UK Code are set out in this Corporate
Governance Statement, the Business
Model and Strategy section, the Risk
Management section and in the Directors’
Report on Remuneration. These also
cover the disclosure requirements set
out in the Irish Annex, which supplement
the requirements of the UK Code with
additional Corporate Governance
provisions. The Board confirms that the
Company has complied with the detailed
provisions of the UK Code and Irish
Annex during 2023, save as set out in the
following paragraphs which at this time
are classified as indefinite in nature.
Committee Independence
Provision 24 and 25 of the UK Code
requires both the audit and risk committee
(where established) to consist of
Independent Non-Executive Directors.
Paul Doddrell’s membership of the
Board Audit Committee ceased at the
end of 2023 and this committee now
consists entirely of independent non-
executive directors. Paul Doddrell and
Marian Corcoran are members of the
Board Risk and Compliance committee
which is chaired by and has a majority
of independent non-executive directors
within their membership. The Board
believes it appropriate to ensure that the
aforementioned committees consist of
members with appropriate knowledge,
experience and skills and, notwithstanding
the basis of their appointment, can
demonstrate effective contribution
through an independent mind-set. The
Board believes it is in the best interest of
the Bank to utilise Mr Doddrell’s and Ms
Corcoran’s considerable risk management
experience on the Board Risk and
Compliance Committee.
Remuneration
Provision 33 of the UK Code requires that
the Remuneration Committee should have
delegated responsibility for setting the
remuneration for all executive directors
and the Chairperson. However, under
EBA guidelines on sound remuneration
practices, the Remuneration Committee
is designated as being responsible for the
preparation of decisions to be taken by
the Board regarding the remuneration for
executive directors and other identified
staff. The Board’s view is that, from
a regulatory perspective, the Group
is compelled to comply with the EBA
guidelines and therefore its remuneration
policy reflects this position.
Provision 38 of the UK Code states that
pension contribution rates for executive
directors, or payments in lieu, should
be aligned with those available to the
workforce. Since 2019, the Board has
approved certain enhancements to staff
defined contribution pension schemes
119
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Stakeholder Engagement
“How the Board ensures effective engagement with, and
encourages participation from the Company’s Stakeholders”
Stakeholder Engagement
A key role of the Nomination, Culture
and Ethics Committee is to ensure
there is effective engagement with
and participation from the Bank’s key
stakeholders. Reputation management is
an integral part of the corporate affairs
strategy for the Bank.
Sustainability Materiality
Assessment
The Bank takes a number of factors into
consideration when assessing where to
prioritise resources for its sustainability
activity. These include, but are not
limited to: the Bank’s business model and
strategy; principal risks; sector issues;
public policy and regulation; and, the
impact of the Bank’s activities on wider
society.
To understand the issues that are
important to stakeholders, in 2021 the
Bank engaged a sample of stakeholders
to complete a comprehensive Materiality
Assessment of the Bank’s Sustainability
programming.
The assessment offered insight into
the relative importance of specific
Environmental, Social and Governance
(ESG) issues relevant to conducting
business in a responsible way, and
assisted the Bank in building out a
Sustainability Strategy which was
launched in November 2021. Central to
the Bank’s Sustainability Strategy is a
focus on climate change and supporting
the transition to a low carbon economy.
Reference to the Bank’s stakeholders
includes the Bank’s customers (personal
and small business), colleagues (Board,
management, employees and unions),
the Bank’s investors, suppliers, society
(community partners and industry
influencers) and the Bank’s regulators.
Outside of the materiality exercise, the
Bank interacts with stakeholders at
regular intervals during the year through
the following:
• Customers – Voice of the Customer
Programme, focus groups, surveys, in
person through the branch network
and through the Bank’s online digital
channels (website, App, customer
contact centres etc.);
• Colleagues – Every Voice Counts
employee engagement survey, regular
micro-pulse surveys, team meetings,
virtual and in person networking
forums, internal intranet platform, a
Bank-wide communications platform
and app, in-house digital screens, four
Employee Resources Groups, People
Experience Council and other channels
as appropriate;
• Investors – AGM and shareholder
services, financial reporting, roadshows,
industry conferences and other
channels as appropriate;
• Suppliers – Regular supplier
engagement processes and procedures,
supplier on boarding and contracting
and other channels as appropriate;
• Society – Community Partners, Media,
Government Officials and industry
influencers such as the BPFI and Irish
Banking Culture Board; and
• Regulators – Regular engagement and
regulatory reporting and other channels
as appropriate.
Focus for 2024
During 2024, the Bank will complete
an exercise in double materiality in line
with Corporate Sustainability Reporting
Directive (CSRD) Regulation. The exercise
will assess both stakeholder impact
and financial materiality of the issues
that are critical to our business and will
form an integral part of our stakeholder
engagement strategy for the year.
In Addition the Bank is committed to
building on the progress achieved and to
continue to rollout a series of proactive
engagements amongst key stakeholders
that will allow the Bank to cultivate
relationships, gain trust and build further
the reputation of the Bank. The Bank’s
120
Corporate Development and HR Function
will continue to ensure that feedback from
colleagues, customers and communities
is measured effectively in line with the
Bank’s Purpose and that key insights are
brought to the Nomination, Culture and
Ethics Committee on a regular basis.
Shareholder Engagement
Transparent and frequent communication
with the Group’s shareholders is a key
priority. The Group has an Investor
Relations team, headed by the CFO, and
there is a comprehensive schedule of
investor engagement which the CEO and
CFO participate in on behalf of the Board,
along with selected Senior Executives
and representatives from the Investor
Relations team. All engagements are
structured in such a way as to ensure
market sensitive information is not
disclosed. The Group also has an active
market engagement programme in place
where it reports financial results live
through a webcast twice a year (typically
in March and July) and updates the
market on trading twice a year typically
in May and October. The Group publishes
all results, including the webcasts to a
dedicated Investor Relations section on
its website. The Group also reports other
relevant information to the market on a
timely basis. Following the release of full-
year results, the CEO and CFO facilitate a
roadshow which provides an opportunity
for institutional shareholders to provide
feedback directly.
The Investor Relations team, together with
the CEO and the CFO, provide regular
updates to the Board on the types of
activities mentioned above, along with
market reactions, in order to ensure that
the members of the Board are aware of
the views of the investment community
and are considered in their decision
making. The CEO, CFO and Chairperson
seek regular engagement with major
shareholders. The Group’s shareholder
engagement strategy will continue to
evolve as the level of free float increases,
but will always apply best practice in this
regard.
PTSB Group Holdings plc - Annual Report 2023 Workforce Engagement
The UK Corporate Governance Code places an obligation on boards to keep workforce engagement mechanisms under review so
that they remain effective. Furthermore, the Code also states that where the Board chooses to implement alternative arrangements to
those set out in the Code, it should explain in its Annual Report what alternative arrangements are in place and why it considers that
they are effective.
There are currently a number of ways the Board engages with the Group’s workforce and hears the employee ‘Voice’ on an on-going
basis through alternative arrangements to those set out in the UK Code. A summary of these alternate arrangements are outlined in
the below table:
Mechanism
Detail
Board and Committee Meetings
During 2023 the Board met in total on 18 occasions and this facilitated regular Board
engagement with subject matter experts from across the Bank.
Nomination, Culture and Ethics
Committee
Dedicated Board Committee with accountability for culture, behaviour, ethics and reputation
management oversight in the Bank.
Biannual review of employee ‘Speak Freely’ concerns raised through a Colleague Conduct
Report.
Employee Events
Attendance at and participation in employee events on an on-going basis.
Examples include the Employee Resource Group initiatives such as the Diversity, Equity and
Inclusion 23 – 25 Strategy Launch, Gold Accreditation from the Irish Centre for Diversity
Launch, Better Balance Webinars, Values in Practice Awards and Sustainability events.
Board members also attended / participated in the bank’s ‘People Leader’s conference’
(in-person event attended by all people managers) and the ‘All together now’ summit event
(in-person all-colleague event) which presented the Bank’s business strategy and brand
repositioning to colleagues.
Employee Representative
Bodies
CFO and HR Director bi-annual engagements with Employee Representative Bodies to
update them on the organisational trading position, the Bank’s purpose and strategy together
with opportunities and challenges being faced.
Other Executive and Senior Leadership Team members meet the Employee Representative
Bodies on an as needed basis depending on the agenda and business requirements.
Employee Surveys
The Employee collective voice is shared with the Board Nomination, Culture and Ethics
through a variety of employee surveys that are run throughout the year.
Examples include the Every Voice Counts annual survey, Every Voice Counts Micro-pulse
surveys and the Irish Banking Culture Board (Éist).
Employee Engagement Group
The Company Secretary (Board Nominee) attends the People Experience Council (PEC) to
support the Board and gain a greater understanding of culture / employee sentiment.
Nomination Culture and Ethics Committee met with the Bank’s People Experience Council in
November 2023.
121
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Stakeholder Engagement (continued)
Board Decision Making
The Board has a clear understanding of
the Bank’s key stakeholders and how
the operations of the Bank effect the
environment and communities in which
it operates. The Bank’s Stakeholder
Engagement Programmes facilitate a
clear and unfettered information flow
to and from the Board. This allows the
Board to make informed decisions that are
both in the best interest of the Company
and facilitate a clear understanding of
how decisions impact on the Bank’s
stakeholders, wider community and
environment.
A key focus for the Nomination Culture
and Ethics Committee is to ensure that
directors are able to make a positive
contribution to the long term sustainable
success of the Company. Directors are
more likely to make good decisions
and maximise the opportunities for the
Company’s success if the right skillsets
and breadth of perspectives are present
on the Board. The Nomination Culture
and Ethics Committee, aligned with the
Bank’s Purpose and Ambition, considers
the appropriate skillsets and perspectives
and sets them out in a Board approved
Suitability Matrix. Appointments to the
Board are recommended in accordance
with the Suitability Matrix. The key
skillsets and experience that each of the
Directors bring to the Board are set out in
the Board Biographies section.
Directors’ Report
The Directors’ Report and the Statement
of Directors’ Responsibilities forms part of
the Corporate Governance Statement.
A People Experience Council was incepted
in 2020 to support the embedding of
culture with a mandate and a set of
accountabilities. Their role is to lead out
on Culture across the Bank, provide a
collective voice (qualitative data) to the
organisation and solicit People Experience
Leads across their functions to champion
organisational engagements. Leads are
made up of colleagues from all areas
of the business, representing a diverse
group of employees at all levels. The
Nomination Culture and Ethics committee
identified an opportunity for the Board
to engage with this group and to be
updated on the employee sentiment
and mood on the ground. As part of this
group, the Board not only gains a deeper
understanding of the drivers behind the
employee engagement survey results
(PTSB Every Voice Counts survey, IBCB
Éist survey), they also gain diverse
perspectives on what actions will address
the areas for development and also
any emerging areas of discontent from
employees. It is intended that attendance
by Non-Executive Directors will continue
indefinitely.
All material organisational changes are
discussed and consulted on in advance
with employee representative bodies.
It is important in the context of these
discussions that colleagues understand
the financial and strategic position of
the Bank over its 5 year planning period
and where appropriate, aligned to
engagement protocols, provide member
representations. During 2023, the CFO
attended engagement sessions with
Employee representative bodies to explain
and provide context to the Bank’s current
and medium term outlook as part of
negotiations on reward.
Having reviewed the series of employee
engagement during 2023, the Nomination,
Culture and Ethics Committee was
satisfied that this engagement was
effective and in compliance with the UK
Code.
122
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board of Directors
A key focus for the Board is to ensure that directors are able to make a positive contribution to the long term sustainable success
of the Company. Directors are more likely to make good decisions and maximise the opportunities for the Company’s success if the
right skillsets and breadth of perspectives are present on the Board. The Nomination Culture and Ethics Committee, aligned to the
Group’s Purpose and Ambition, considers the optimal knowledge, experience and skills requirements of the Board and sets them out
in a Board approved Suitability Matrix. Appointments to the Board are guided by the Board Assessment and Suitability Policy, Board
Diversity Policy and Board Suitability Matrix. The key knowledge and experience that each of the Directors bring to the Board is set
out in the Biographies below.
JULIE O’NEILL (68)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
17 January 2023
Nationality:
Irish
Committee Membership:
Remuneration Committee,
Nomination, Culture and Ethics
Committee (Chair)
Principal External
Appointments:
Director at XL Insurance
Company SE and Architas Multi-
Managers Europe.
EAMONN CROWLEY
(54)
CHIEF EXECUTIVE
OFFICER
Appointed to Board:
10 May 2017
Nationality:
Irish
Committee Membership:
None
Principal External
Appointments:
PTSB nominee director of
the Banking and Payments
Federation Ireland (BPFI) and Irish
Banking Culture Board (IBCB).
Key Strengths, Skills and Experience
Julie is an accomplished business leader with extensive
executive and board experience, having held a number of
senior government positions, including Secretary General of
both the Department of Transport and the Department of
Marine and Natural Resources and previously held a number
of other prominent Non-Executive Director roles, including:
Chairperson of the Convention Centre Dublin and Non-
Executive Director, AXA Life Europe and Ryanair Group plc.
Julie previously served a six-year term on the Permanent
TSB Group Holdings plc Board (2014 to 2020) as an
Independent Non-Executive Director, the latter 4 years as
the Board’s Senior Independent Director. During this period
she played a significant role as a Board member in guiding
positive transformation of the Bank. Julie’s has extensive
business and leadership experience and brings an in-
depth knowledge of the Bank and wider banking/insurance
industry to the Board.
• Certified Bank Director
• Bachelor of Commerce
• MSc Policy Analysis
Key Strengths, Skills and Experience
Eamonn brings to the Board extensive international banking,
accounting, corporate treasury and leadership experience
with a significant customer focus which is reflected in the
Bank’s Purpose, Ambition and Strategy to build trust and
grow a sustainable Bank for the longer-term.
Eamonn was appointed CEO in June 2020. Before joining
PTSB as Chief Financial Officer in 2017, Eamonn worked
as Chief Financial Officer at Bank Zachodni WBK S.A. (“BZ
WBK”), Banco Santander’s publicly listed Polish retail and
commercial bank. (BZ WBK was formerly 70% owned by AIB.
Banco Santander acquired that AIB stake in 2010.) During
his period as CFO, Eamonn executed the merger of BZ
WBK with Kredyt Bank to form Poland’s number three bank,
placed over 20% of the bank on the Warsaw Stock Exchange
through a Euro 1.2bn secondary IPO and led the acquisition
of a controlling stake in Poland’s number one Consumer
Bank. Prior to joining Santander, Eamonn worked for the AIB
Group in a variety of different roles.
• MBA Smurfit Business School
• Certified Accountant (FCCA) and Member of Association
of Corporate Treasurers
123
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board of Directors (continued)
NICOLA O’BRIEN (53)
CHIEF FINANCIAL
OFFICER
Appointed to Board:
4 August 2022
Nationality:
Irish
Committee Membership:
None
Principal External
Appointments:
None
RONAN O’NEILL (70)
SENIOR INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Appointed to Board:
26 July 2016
Nationality:
Irish
Committee Membership:
Audit Committee (Chair)
Nomination, Culture and Ethics
Committee
Principal External
Appointments:
None
RUTH WANDHÖFER,
(48)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
30 October 2018
Nationality:
German/British
Committee Membership:
Audit Committee
Remuneration Committee
Principal External
Appointments:
Director at: RTGS Global Ltd;
Aquis Exchange Plc and Leximar
Ltd (personal consultancy
company).
124
Key Strengths, Skills and Experience
Nicola is a qualified Chartered Global Management Accountant
(CGMA) and finance professional with significant banking and
leadership experience having worked in the Retail Banking
sector in Ireland for more than 25 years. Nicola brings a wealth
of commercial, strategic, financial, operational and regulatory
knowledge to the Bank together with experience in delivering
large complex programmes successfully.
Nicola was appointed CFO in August 2022, having spent more
than 5 years with the Bank in a number of senior leadership
positions, prior to joining PTSB her career spanned 18 years in
the Irish Financial service sector (Bank of Ireland) holding senior
finance leadership roles across Retail Ireland, Group Customer
Operations and Group Finance.
• ACMA & CGMA
• Certificate in Company Direction (IOD)
Key Strengths, Skills and Experience
Ronan, a chartered accountant, brings to the Board extensive
banking and leadership experience with a particular
competency in finance, risk and treasury. His strong strategic
and corporate development insights enable Ronan to provide
challenge and support to the development of the Bank’s
organisational change programmes. His previous experience as
a member of the Group Risk Committee at AIB is of particular
benefit to the Board Audit Committee which Ronan chairs.
Prior to retiring from AIB in 2013, Ronan was Chief Executive
Officer of AIB (UK) plc and a member of the AIB Group
Leadership Team. Ronan had responsibility for SME Business in
the UK and the retail banking business of First Trust in Northern
Ireland. He put in place a strategic plan to revitalise AIB’s UK
and NI businesses and oversaw its implementation.
• Fellow Chartered Accountants Ireland
• Certified Bank Director
• Bachelor of Commerce from UCD
• Fellow, Institute of Bankers
Key Strengths, Skills and Experience
Ruth has substantial banking and leadership experience with
extensive knowledge of both regulatory and market strategy,
and together with her insight on regulatory and financial
technology innovation provides invaluable insight for the Board
as it provides oversight for the Group’s digital and payments
transformation programmes.
Ruth was MD and Global Head of Regulatory and Market
Strategy at Citi from 2007 to 2018 where she drove regulatory
and industry dialogue in addition to developing product/market
strategy in line with the evolving regulatory and innovation
landscape. Prior to joining Citi, Ruth was Policy Advisor for
Securities Services and Payments at the European Banking
Federation.
• MA in Financial Economics (UK)
• MA in International Politics (FR)
• LLM in International Economic Law (UK)
• PhD Finance
• Certified Bank Director
PTSB Group Holdings plc - Annual Report 2023 MARIAN CORCORAN,
(59)
NON-EXECUTIVE
DIRECTOR
Appointed to Board:
24 September 2019
Nationality:
Irish
Committee Membership:
Risk and Compliance Committee
Nomination, Culture and Ethics
Committee
Principal External
Appointments:
Director HP International Bank
DAC, Director of IDA Ireland,
Chair DCU Educational Support
Services DAC, and Director of
MC2 Change Limited (personal
consultancy company)
DONAL COURTNEY
(59)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
3 October 2018
Nationality:
Irish
Committee Membership:
Audit Committee
Risk and Compliance Committee
(Chair)
Principal External
Appointments:
Director at Iput plc and Special
Olympics Ireland
Key Strengths, Skills and Experience
Marian has broad experience in technology and business
transformation, executive leadership and strategy
development. Marian brings to the Board wide-ranging
experience in advising and leading transformational
programmes in multiple industries including banking.
Marian’s experience of risk management brings invaluable
experience to the Board Risk and Compliance Committee.
Marian’s cross-industry skills in stakeholder management,
risk management, corporate governance and technology-
enabled transformation benefits the Board as the Group’s
strategy and change programmes evolves at an ever
increasing pace. Marian has a strong track record in
championing inclusion and diversity.
Marian is an experienced non-executive director and a
former executive director and partner in Accenture Ireland.
Marian has extensive experience in strategy delivery,
delivery of technology-enabled change and business
transformation both locally and internationally. During her
career in Accenture Ireland she operated in a number of key
senior executive positions including as Executive Director
on the Board. Marian was also a member of the Irish Public
Service Pay Commission.
• Chartered Director
• Certified Bank Director
• Professional Certificate in Leadership Coaching
• BSc Biotechnology
Key Strengths, Skills and Experience
Donal is highly experienced finance, accounting and risk
professional across leasing, lending and property financing
with a particular competence in financial reporting,
governance and internal controls. Donal brings to the Board
experience in asset financing and funding vehicle structures
such as collateralised loans and securitisations. Donal has
extensive risk and audit experience holding audit and risk
committee chair positions at IPUT plc and formerly at Dell
Bank International and Unicredit Bank Ireland plc.
Donal is a former SVP and CFO at Capmark Bank Europe, a
licensed real estate financing bank with operations in UK,
France and Germany. Prior to this, Donal held Executive
Director roles with the Irish operations of Orix Corporation,
Airbus Industrie and GMAC Commercial Mortgage where he
gained extensive experience in the aircraft leasing, financing
and commercial property sectors. Donal is a qualified
Chartered Accountant and started his career with Arthur
Andersen where he went on to become a practice manager
in its financial services division working with a broad range
of clients across the leasing and banking industries.
• Fellow of Chartered Accountants Ireland
• BBS Trinity College, Dublin
• Certified Bank Director
• Accredited Funds Professional, Institute of Bankers
• Certificate in Sustainability Strategy, Risk and Reporting
from Chartered Accountants Ireland
125
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board of Directors (continued)
PAUL DODDRELL (56)
NON-EXECUTIVE
DIRECTOR
Appointed to Board:
26 November 2020
Nationality:
British
Committee Membership:
Nomination, Culture and Ethics
Committee
Risk & Compliance Committee
Principal External
Appointments:
Director at Cabot Financial
Ireland Ltd, Coastline Housing
Limited and 3 to 48 Ltd (personal
consultancy company)
CELINE FITZGERALD
(61)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
30th March 2021
Nationality:
Irish
Committee Membership:
Nomination, Culture and Ethics
Committee
Remuneration Committee (Chair)
Principal External
Appointments:
Director at: VHI Health And
Wellbeing DAC; VHI Health And
Wellbeing Holdings DAC; and;
Chair, Pieta House CLG.
Key Strengths, Skills and Experience
Paul has significant executive leadership experience
spanning finance, asset servicing, lending, operations, sales
with specific management expertise in business strategy
development and execution; risk management and change
management. Paul’s strategic insights and experience
particularly in the area of mortgage servicing and credit
provide core skills which the Board requires.
Paul is a highly experienced financial services executive and
Board member who has successfully operated at executive
management level in a number of organisations globally.
Paul served as Pepper Group’s Managing Director for
Shared Services, and led the successful establishment and
growth of Pepper’s financial services operations in Ireland.
Previously Paul held a number of key executive roles at GE
Capital. Paul is currently a Non-executive Director and chair
of the Audit and Risk committees at Cabot Financial Ireland.
• Chartered Management Accountant – ACMA, CGMA
• Certified Six Sigma Master
• BA(Hons) Business Studies
• Certified Bank Director
Key Strengths, Skills and Experience
Celine is a former Non-Executive Director at the commercial
semi-state company Ervia and has previous senior executive
experience in the telecommunications (senior executive at
Vodafone 1999 – 2007) and the managed services (CEO of
Rigney Dolphin 2007 - 2012) industries. Celine was a Non-
Executive Director on the VHI Main Board between 2010 and
2020 and was General Manager at the charity Goal between
2016 and 2018. Celine has also contributed her time to many
other charitable foundations and is the current Chair of the
charity Pieta House.
Celine is an experienced senior executive and Independent
Non-Executive Director and has led culture transformation
in challenging environments. Celine has had practical
experience of handling ethical challenges in the charity
sector during her time as Managing Director of Goal. Celine
has an in-depth understanding of strategic differentiation to
deliver customer value. Celine’s knowledge and experience
will be of significant benefit for the Board in its role to
lead on evolving an open ethical, risk aware and inclusive
culture which is focussed on building trust with customers,
colleagues and communities.
• BA Management
• Chartered Director
• Certified Bank Director
126
PTSB Group Holdings plc - Annual Report 2023 ANNE BRADLEY (64)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
30th March 2021
Nationality:
Irish
Committee Membership:
Audit Committee
Risk and Compliance Committee
Principal External
Appointments:
Director at: Northern Trust
International Fund Administration
Services Ireland Ltd and
Pieta House CLG.
CATHERINE MORONEY
(61)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
12th December 2023
Nationality:
Irish
Committee Membership:
Audit Committee
Risk and Compliance Committee
Principal External
Appointments:
Council member Dublin Chamber
of Commerce; Director at
Cynergy Bank (UK) Limited,
and Saburai Consulting Limited
(personal consultancy company)
Key Strengths, Skills and Experience
Anne’s experience is centred on transformation and business
change and her cross industry knowledge and experience
will support the Board as the Group continues to implement
its digital transformation strategy while maintaining
resilient and reliable IT systems. Anne’s has extensive
experience in technology and has operated at senior levels,
leading on IT resilience, emergency response, technology
evaluation, crisis management, operational efficiency and IT
infrastructure.
Anne worked with Aer Lingus/IAG Group until 2020 where,
during a 40 year career she held a number of senior
executive roles. Between 2015 and 2018 she was Director of
IT with Aer Lingus and thereafter Head of Group IT Delivery/
Digital Development (2018 -2020) with IAG Group. Anne
was an Independent Non-Executive Director at Bus Eireann
from 2015 to 2018 and more recently joined the Board of
Northern Trust International Fund Administration Services
Ireland Ltd.
• Fellow of the BCS The Chartered Institute for IT
• Chartered Director
• Certified Bank Director
Key Strengths, Skills and Experience
Catherine brings extensive experience in business banking
to the Board as the Bank further develops its business
banking proposition. Catherine has also held a number of
non-executive board positions and committee chair/member
roles including audit, risk and remuneration committees
where she has gained valuable skill and expertise in leading
customer-facing businesses with a focus on strategic
planning, business growth, innovation, transformation and
sustainability programmes.
Catherine is an accomplished business leader who has
spent a large portion of her career at senior executive level
in the Irish financial services sector (AIB Bank).
RICK GILDEA (71)
INDEPENDENT NON-
EXECUTIVE DIRECTOR
Appointed to Board:
12th December 2023
Nationality:
USA and UK
Committee Membership:
Risk and Compliance Committee
Remuneration Committee
Principal External
Appointments:
Trustee at The Shakespeare
Globe Trust
Key Strengths, Skills and Experience
Rick Gildea's background in corporate banking (JP Morgan
Chase) brings deep experience of client coverage and risk
management together with capital markets expertise to the
Board.
Rick spent a large portion of his career at senior executive
level in investment and corporate banking roles in London
and New York, prior to pursuing a non-executive career.
Most recently, Rick was an independent Non-Executive
director at Alpha Bank (a domestic and international bank
listed on the Stock Exchange in Athens) where he chaired
the remuneration committee and was a member of the risk
committee with a particular focus on non-performing loan
risk management.
127
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board of Directors (continued)
CONOR RYAN (52)
COMPANY SECRETARY
Conor was appointed Company Secretary in 2017. As Company Secretary and Head of Corporate
Governance, Conor is responsible for advising the Board, through the Chairperson, on all
governance matters. The role of Company Secretary is to align the interests of different parties
around the boardroom table, facilitate dialogue, gather and assimilate relevant information, and
support effective decision-making. Conor is a fellow and past president the Chartered Governance
Institute in Ireland (ICSA) and a Certified Bank Director.
2023 Board Meeting Attendance and Directorships
Member
Appointed
Ceased
Number of Years on
Board
2023 meetings
Number of
Directorships held
Non-Executive Directors
Julie O’Neill
17 Jan 2023
Ronan O’Neill
26 Jul 2016
Donal Courtney
03 Oct 2018
Ruth Wandhöfer
30 Oct 2018
Marian Corcoran
24 Sep 2019
Paul Doddrell
26 Nov 2020
Anne Bradley
30 Mar 2021
Celine Fitzgerald
30 Mar 2021
Rick Gildea
12 Dec 2023
Catherine Moroney
12 Dec 2023
-
-
-
-
-
-
-
-
-
-
Andrew Power
26 Sep 2016
19 May 2023
Robert Elliott
31 Mar 2017
30 Mar 2023
1.0
7.5
5.3
5.3
4.4
3.1
2.8
2.8
0.0
0.0
6.8
6.0
18/18
18/18
18/18
17/18
18/18
16/18
18/18
18/18
1/1
1/1
8/8
7/7
Ken Slattery
30 Aug 2013
12 Dec 2023
10.3
18/18
Executive Directors
Eamonn Crowley
10 May 2017
Nicola O’Brien
04 Aug 2022
-
-
6.7
1.4
18/18
18/18
4/3
2/1
5/2
7/3
6/3
7/2
4/2
5/2
4/1
4/2
6/2
4/2
6/3
9/1
2/1
Notes:
PTSB is the sole direct subsidiary of PTSBGH. During 2023, the composition of the Boards of PTSBGH and PTSB were identical. Meetings of the Boards of PTSB and
PTSBGH run concurrently. Concurrent Board meetings or consecutive Board meetings of PTSB or PTSBGH held on the same day are counted as a single attendance
above.
Number of Directorships: the first number stated is the total number of directorships held and the second number is the number of directorships as counted under
Article 91(3) and (4) of Directive 2013/36/EU (for the purposes of calculating these directorships, multiple directorships within a group are counted as a single
directorship and directorships in organisations which do not predominantly pursue commercial objectives are also not included). Directorships are those held at 31
December 2023 or at time of cessation from the Board. A full listing of each Board member’s external directorships are available in the Group’s Pillar 3 Disclosures
Report available at https://www.permanenttsbgroup.ie/investors/result-centre/year/2023.
128
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Leadership and Effectiveness
Division of Responsibilities
The roles and responsibilities of the Board collectively, the Executive and Non-Executive Directors, the Chairperson, Senior
Independent Director and Company Secretary, are clearly laid out and documented in a Board Manual, which is reviewed and
updated on a regular basis by the Board and at least annually.
The Chairperson
Julie O’Neill’s responsibility as Board Chairperson is to ensure the efficient and effective working of the Board. Her role is to lead
and manage the business of the Board, promoting the highest standards of corporate governance, ensuring accurate, timely
and clear information for the Board, and to lead the process for the annual performance evaluation of the Board, its Committees
and the Non-executive Directors. The Chair promotes a culture of openness and debate by facilitating the effective contribution
of Non-Executive Directors in particular, and ensuring constructive relations between Executive and Non-Executive Directors.
The Chair has a strong working relationship with the CEO, Eamonn Crowley, and acts as a confidential sounding board for the
Directors. Julie O’Neill is also Chair of the Nomination Culture and Ethics Committee.
The Senior Independent Director
Ronan O’Neill is the Board’s Senior Independent Director and his primary role is to support the Chairperson on all governance
related matters. In addition, he specifically leads the annual appraisal of the Chairperson’s performance, acts as an intermediary
for other Directors, and ensures that the views of the Non-Executive Directors are heard. He is available to shareholders, should
they wish to raise any matter directly.
The CEO
The Board delegates executive responsibility to Eamonn Crowley, the CEO, for the Bank’s operations, compliance and
performance. The role of the CEO is to select and lead an effective team to manage the Bank. The executive management
team is called the Executive Committee (ExCo), details of which are set out on pages 130 to 131. The CEO is responsible for
the formulation of the Group’s strategic, operating and financial plans, for review and presentation to the Board, and for the
implementation of these plans. The CEO is also required to provide information and insight to the Board that is reliable, relevant,
timely, clear and balanced, in order to assist the Board in monitoring the performance of the Group and in making well informed
and sound decisions.
The Company Secretary
Conor Ryan, Company Secretary and Head of Corporate Governance, assists the Chairperson in promoting the highest standards
of corporate governance. The Company Secretary supports the Chairperson in ensuring Directors receive timely and clear
information so they are appropriately equipped for constructive debate and informed decision making. The Company Secretary is
a central source of guidance and advice on Board policy, procedure and governance. All Directors have access to the advice and
services of the Company Secretary and Head of Corporate Governance.
129
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Leadership and Effectiveness (continued)
Executive Committee
EAMONN CROWLEY
CHIEF EXECUTIVE
GER MITCHELL
CHRO & CORPORATE
DEVELOPMENT
DIRECTOR
NICOLA O’BRIEN
CHIEF FINANCIAL
OFFICER
Ger has been a member of the Executive Committee since 2012. Ger is an experienced
commercial leader who has held a number of senior retail, commercial and customer roles
prior to his appointment as HR Director in 2017. In 2020 Ger’s role was expanded to include
‘Corporate Development’ which brings the strategic disciplines of; marketing, brand, corporate
affairs, customer experience, sustainability and communications together with organisation
design, talent development, people experience and culture evolution. The HR and Corporate
Development Function leads the embedding of the Bank’s Purpose; to build trust by making a
difference in the lives of customers, colleagues and communities, every day. HR and Corporate
Development lead a number of strategic programmes focused on Brand, Culture and Reputation;
Customer Strategy and Experience; Enterprise Transformation, including Hybrid Workplace; and
Sustainability.
ANDREW WALSH
LEGAL COUNSEL
Andrew has extensive legal advisory experience, in both private practice and in-house roles.
Andrew joined the Bank in 2014 and became a member of the Executive Committee in 2015.
Prior to joining the Bank, Andrew was a partner in a leading corporate Irish law firm, where
he worked for over 10 years. While in private practice, Andrew advised a number of Irish and
international banks and financial services institutions.
In his role as Legal Counsel, Andrew leads the Bank’s Legal function. The Legal function is
responsible for overseeing all legal aspects of the Bank’s business, as well as inputting into the
Bank’s strategic decisions and identified growth opportunities. The Legal function also provides
support to ensure that the Bank’s operations, products and service strategies are designed to
consistently adhere to legislative/regulatory requirements and best practice.
Claire, a Chartered Accountant with over 20 years’ experience, joined the Bank in 2021 as the
Bank’s Head of Group Internal Audit from KPMG, where her most recent role was Managing
Director, Risk & Regulatory Consulting. In this role Claire led major risk transformation projects
and the delivery of internal audit services to a portfolio of financial services clients for over six
years. Prior to her role as Managing Director, Risk & Regulatory Consulting, Claire held a number
of senior roles including: Retail Division Audit Partner in the Group Internal Audit division of Bank
of Ireland and Deputy Group Secretary of Bank of Ireland.
Internal Audit provides independent assurance to the Board over the adequacy and
effectiveness of the governance, risk management and control processes in operation
across the Bank. Claire is a regular attendee at Group Executive Committee meetings but, in
accordance with good governance practice, has no voting rights. Claire has a direct reporting
line to the Chairperson of the Board Audit Committee.
CLAIRE HEELEY
HEAD OF INTERNAL
AUDIT
130
PTSB Group Holdings plc - Annual Report 2023 BARRY D’ARCY
CHIEF RISK OFFICER
Barry D’Arcy was Chief Risk Officer of KBC Bank Ireland and a member of the KBC Ireland
Executive Committee and Board of Directors. Barry had undertaken a number of roles in KBC
Ireland including Head of the Finance function of the bank. Barry has accumulated extensive
experience in his career across the financial services and technology industry. Barry holds a
Bachelor of Business Studies from the University of Limerick and is a member of the Chartered
Institute of Management Accountants.
Barry in his role of Chief Risk Officer is responsible for the risk, compliance and regulatory
activity of PTSB
TOM HAYES
CHIEF TECHNOLOGY
OFFICER
Tom is an experienced business transformation and technology leader with deep experience in
leading Digital change and operational resilience. Tom joined the Bank in 2017 from AIB where
he had most recently held the role of Head of Digital Transformation Delivery. Tom had held
various senior technology leadership roles at AIB including: Head of Customer Engagement
Technology, AIB Digital and Group Head of IT Infrastructure & Operations.
PTSB Group Technology has responsibility for the development and implementation of the
Bank’s Technology strategy, the implementation of the Digital Transformation roadmap and
the full portfolio of IT Change Delivery. This involves close collaboration across the Bank and
especially with the Retail Banking and Group Operations teams to design and deliver on the
Bank’s Digital Transformation. The Division also has responsibility for the day-to-day critical
technology operations, resilience and protection of technology enabled customer services.
PATRICK FARRELL
RETAIL SALES
DIRECTOR
Patrick has over 25 years’ experience across the banking industry. Patrick joined the Bank in
December 2018 as Retail Banking Director. Patrick has previously held senior management roles
in Strategy, Product and Proposition Development, Marketing, Private Banking and, Retail Sales
and Service Distribution.
The Retail Banking Division is responsible for all sales and service channels and the Bank’s
product management strategy. The Function has multi-channel oversight across sales and
service with a focus on improving customer experience, meeting customer needs and wants,
enabling income growth and delivery. The division closely collaborates with the Corporate
Development and HR Team on customer propositions and experience.
PETER VANCE
CHIEF OPERATING
OFFICER
Peter joined the Bank as Chief Operating Officer (COO) in 2021 with 25 years’ experience in
Financial Services. As COO, Peter is responsible for Group Change & Transformation, Enterprise
Service Delivery including Payments, Financial Crime, Collections & Recoveries as well as other
key functions.
Prior to joining PTSB, Peter held senior positions as Head of Group Operations and Executive
Head of Direct Sales & Service Channels in AIB. In this role, Peter was responsible for leading
multiple activities in both Ireland and the UK including; Payments, Treasury services, Financial
Crime, SME Lending and the Customer Service Centre.
131
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Governance Structure, Roles and Responsibilities
Board
CEO
Nomination, Culture & Ethics Committee
Audit Committee
Risk & Compliance Committee
Remuneration Committee
Executive Committee
Customer Growth
Committee
Sustainability
Committee
Assets and Liabilities
Committee
Risk
Committee
Board
The Board retains accountability for corporate governance within the Group at all times. The Board
has reserved for itself a documented schedule of matters for its own approval. The Board delegates
executive responsibility to the CEO for the Group’s operations, compliance and performance. The
CEO is the principal executive accountable to the Board for the day to day management of the
Group. The CEO has established the Executive Committee whose terms of reference are approved
by the Board.
OP Risk
Committee
Credit
Committee
Without prejudice to the powers delegated to it, the Board, directly or through its Committees, has exclusive powers regarding a
number of matters including acting on behalf of the shareholders to oversee the day-to-day affairs of the business, ensuring the
Group’s sustainability by collectively directing the company’s affairs, whilst meeting the appropriate interests of its shareholders,
customers, colleagues and other key stakeholders. In addition to business and financial issues, the Board will determine the business
strategies and plans that underpin the corporate strategy, whilst ensuring that the Group’s organisational structure and capability
are appropriate for implementing the chosen strategies. The Board must deal with challenges and issues relating to corporate
governance, sustainability and corporate ethics.
Board
• Sets and oversees performance against strategy.
• Ensures business activity aligns with the Company’s stated
Purpose, Ambition, Values and Culture.
• Set and oversees all risk, financial, compliance and
performance standards.
• Demonstrates leadership (sets the tone from the top)
Nomination, Culture and
Ethics Committee
Julie O’Neill (C)
Marian Corcoran
Celine Fitzgerald
Ronan O’Neill
Paul Doddrell
Audit
Committee
Ronan O’Neill (C)
Donal Courtney
Anne Bradley
Ruth Wandhöfer
Catherine Moroney
• Reviews structure, effectiveness
and composition of the Board.
• Oversees internal financial controls.
• Reviews full year and half-year
management appointments.
• Oversees succession planning
and performance for directors and
senior management.
• Review/monitors the design,
implementation and effectiveness
of the Company’s Purpose,
Ambition and Values.
• Oversees the Company’s Culture,
Ethics, Diversity, Workforce
Engagement, and Responsible
Business Programmes.
• Oversees all relevant matters
pertaining to the external auditors.
• Monitors the output of internal
audit findings.
• Monitors the effectiveness of the
Internal Audit Function.
• Reviews discoveries of fraud and
violations of laws and regulations
as raised by the head of GIA.
In line with its legal and regulatory obligations, the Board
has established Audit, Risk, Remuneration and Nomination
committees as described below. Being composed of
the same members and in managing a common agenda,
Board Committee meetings of the Company and PTSB run
concurrently.
Risk and Compliance
Committee
Donal Courtney (C)
Marian Corcoran
Paul Doddrell
Anne Bradley
Rick Gildea
Catherine Moroney
Remuneration Committee
Celine Fitzgerald (C)
Julie O’Neill
Ruth Wandhöfer
Rick Gildea
• Oversees financial and non-financial
• Oversees remuneration and reward
risks.
recommendations to the Board on
the Company’s appetite for risk.
strategies.
• Ensures remuneration strategy
is aligned with the Company’s
appetite for risk.
• Oversees credit, funding and liquidity
• Oversees senior management
policies.
reward.
• Reviews the Company’s regulatory
• Monitoring relevant external
obligations and treatment of
customers.
benchmarks for posts within the
scope of Committee.
• Review and provide guidance to the
Board on the Company’s capital and
liquidity position for use in strategic
decision making.
• Oversight and guidance to the Board
on Recovery and Resolution Planning.
• To assess the impact of Climate and
Environmental Risk on the Group’s
overall Risk Profile.
• Reviews all new Director and senior
financial statements.
• Monitors and makes
Catherine Moroney joined the Board Audit Committee and Board Risk Compliance Committee on her appointment on 12 December 2023.
Rick Gildea joined the Remuneration Committee and Board Risk and Compliance Committee on his appointment on 12 December 2023.
Ruth Wandhofer moved from Board Risk and Compliance Committee to Board Audit Committee on 31 December 2023.
Paul Doddrell moved from the Board Audit Committee to the Nomination, Culture and Ethics Committee on 31 December 2023.
Celine Fitzgerald assumed the Remuneration Committee Chair position on the 23 February 2024.
132
PTSB Group Holdings plc - Annual Report 2023
Executive Committee
The Executive Committee reports upward through the CEO to the Board, and where delegated, has the power to act on behalf of the
Board. The Executive Committee advise the Board on matters ranging from business performance, strategy, planning, policy, people
and culture, investment and risk. The Executive Committee is accountable for the operations, compliance and performance of the
Group. It is responsible for delivery of all delegated governance commitments. The terms of reference of the Executive Committee are
approved by the Board.
The Executive Committee has established a number of sub-committees made up of senior management with relevant expertise to
address the delegated obligations of each sub-committee. The duties of these sub-committees are based on providing organisational
direction on behalf of the Executive Committee. Each Executive Committee member provides relevant leadership to the sub-
committees, making sure objectives are met. The relevant Executive Committee member ensures the Executive Committee is updated
on all material matters considered by the sub-committees. The Group Risk Committee has responsibility for oversight of bank-wide
risk management and internal control issues and all members of the Executive Committee are members of the Group Risk Committee.
Executive Committee
• Developing and implementing (as approved by the Board) the Group’s Strategy, Strategic Direction and Operating Model
• Allocating, and re-allocating, the Group’s resources (financial and people) to ensure that commitments are executed and
delivered
• Accountable for the Group’s operations, compliance and performance
• Oversees day-to-day management of the Group
• Forum for Group-wide functional issues
Risk
Committee
Assets and
Liabilities
Committee
Credit
Committee
Operational
Risk
Management
Committee
Customer
Committee
Sustainability
Committee
Resilience
Committee
• Manages assets
and liabilities,
treasury
investments, capital
management and
asset allocation
• Manages risks,
hedging and ALM
systems
• Refresh and
recommend to Risk
and Compliance
Committee for
approval a number
of Treasury and
Liquidity related
Policies
• Reviews the
ongoing capital
adequacy for the
Group
• Reviews the output
from internal capital
stress testing
programmes
• Oversees the
Capital Risk related
activities and
supporting Policies
• Oversight of
Group wide Risk
Management and
internal control
Issues
• Developing the
structure and
content of the
Group’s Risk
Management
Architecture
• Maintains, monitors
and enforces
adherence to
risk policies and
frameworks
• Recommends
changes to risk
appetite and
internal capital and
liquidity levels
• Measure and
monitor the total
risk position of
the Group and to
maintain a Risk
Register of top risks
facing the Group,
together with an
assessment of the
probability and
severity of those
risks
• Monitor and report
on Operational
Resilience, Digital
Operational
Resilience and
Third Party
resilience activities
and risk profile
• Oversees the
development and
implementation
of the Bank’s
Resilience
strategy and
Digital Operational
Resilience Strategy
and related
activities
• Oversight of
Group third party
and outsourcing
relationships,
including
performance,
issues management
and risks
• Recommends
• Monitors the
• Prioritise
• Oversight of
development and
implementation
of the Group’s
Sustainability
Strategy and
related KPIs
• Monitor and report
progress against
Sustainability
objectives
• Oversees the
Sustainability
related activities
and provide
support and
guidance into
sustainability
activities across the
Group
relevant Portfolio
Credit Risk
elements of the
Group’s RAS for
approval by the
Board
• Monitors adherence
to the Group’s
Credit Policy and
Framework
• Monitors the
portfolio Credit
risks to which the
Group is exposed
• Escalation point for
customer lending
decisions
• Maintains and
assesses the
portfolio Credit Risk
profile against set
limits and approves
(within governance)
remediation plans
to restore Risk
Appetite where
required
• Reports any
breaches of
approved limits in
accordance with
agreed protocol
Operational and
IT risks to which
the Company is
exposed
• Oversees risk
mitigation,
performance and
prioritisation related
to the management
and control of risk
• Reviews and
discusses the
outputs and results
of control testing
• Creates awareness
of commonly
experienced
operational & IT
risk matters, to
share learnings and
enhance the control
environment across
the Company
• Review and monitor
KRIs and the
operational and
IT Risk Appetite
Statement
• Review emerging
risks and other
relevant operational
and IT risk metrics
opportunities,
resources and
capabilities to
deliver sustainable
commercial growth
• Oversight of
significant business
propositions and
strategies that have
a material customer
impact
• Approval body
for product
governance
arrangements
• Review body for
all high impact
customer events,
issues and
complaints
• Monitor and report
on customer
performance
indicators aligned
to the Group’s
strategic pillars
• Monitor and report
on conduct risk
indicators against
the Board approved
risk appetite
and conduct risk
principles
• Serve as the central
oversight body
for all significant
customer matters
ensuring fair
treatment of
customers
133
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Leadership and Effectiveness
“The Board has overall governance responsibility for the operations of the Group”
Board Role and Responsibilities
The Board as a whole is collectively responsible for the leadership, strategic direction and policy, operational performance, financial
matters, risk management and compliance of the Bank. The Board exercises leadership, integrity and judgement in directing the
Bank, based on transparency, accountability and responsibility. The Board is also the focal point for the implementation of best
practice corporate governance within the Bank. All Directors must take decisions objectively in the interests of the Bank. The key
responsibilities of the Board as a whole are to:
Key Responsibilities of the Board
Customers
Ensure the Bank’s culture, systems and practices build trust and promotes the fair and
transparent treatment of customers, both existing and new.
Deliver a positive customer-focused culture that is both embedded through adherence to the
Bank’s purpose, ambition and values and can be effectively demonstrated through regular
updates from Management.
Culture and Diversity
Setting the Bank’s purpose, ambition and values, and monitoring culture and alignment to the
Bank’s purpose and values.
Strategy
Embedding the Bank’s Organisational Culture and Diversity, Equity and Inclusion Programmes.
Question, challenge, assist in the development of, and approve the strategic and operating
plans proposed for the Bank by Management. Ensure that an appropriate level of balance exists
between its strategic contribution and that of its monitoring and policing activity.
Identifying the ESG factors considered material to the business and ensuring they are
monitored and managed as part of the Bank’s strategic formulation.
Stakeholders
Ensuring regular engagement and effective communication with stakeholders in order to
understand their views on governance and performance against strategy.
Shareholders
Ensuring directors develop a clear understanding on the views of shareholders.
Risk Appetite and Risk
Management
Define the strategy for the ongoing management of material risks and ensure that the Board
is sufficiently briefed on major risk factors (both current and emerging) by ensuring there is a
robust and effective internal control framework that includes well-functioning risk management,
compliance and internal audit functions as well as an appropriate financial reporting and
accounting framework.
Provide leadership for the Bank within a framework of prudent, ethical and effective controls
which enable risk and compliance to be assessed and managed.
Capital Structure
Set and oversee the amounts, types and distribution of both internal capital and own funds
adequate to cover the risks of the Bank.
Be accountable, particularly to those who provide the Bank’s capital.
People and Reward Strategy
Ensure that there is a remuneration framework that is in line with the risk strategies of the Bank.
Ensure that there is a robust and transparent organisational structure with effective
communication and reporting channels.
Ensure that Management create and develop a performance culture that drives sustainable
value creation and not expose the Bank to excessive risk of value destruction.
Ensure that workforce policies and practices are consistent with the Company’s values and
support its long-term sustainable success and that the workforce is able to raise any matters of
concern.
Oversight
Make well informed and high quality decisions based on a clear line of sight into the business.
Ensure that the Bank has a robust finance function responsible for accounting and financial
data.
Governance Arrangements
Review regularly the appropriateness of its own governance arrangements and conduct internal
as well as external evaluation of the Board’s effectiveness.
Review corporate governance matters such as Group Frameworks, terms of reference and
succession plans.
134
PTSB Group Holdings plc - Annual Report 2023 Directors must act in a way they
consider, in good faith, would promote
the success of the Bank for the benefit
of shareholders as a whole and, in
doing so, have regard (amongst other
matters) to the likely consequences of
any decision in the long-term; the need to
foster the Bank’s business relationships
with customers, suppliers and others;
interests of the Bank’s employees;
impact of the Bank’s operations on the
community, environment and tax payer;
and desirability of the Bank maintaining a
reputation for high standards of business
conduct.
Board Decisions
There is an effective Board to lead and
control the Bank with members who
have diverse expertise in various aspects
of the Bank’s business. The Board has
reserved to itself for decision, a formal
schedule of matters pertaining to the
Bank and its future direction, such as
the Bank’s commercial strategy, major
acquisitions and disposals, Board
membership, the appointment and
removal of senior executives, executive
remuneration, trading and capital budgets,
risk management and compliance
frameworks. This schedule is updated on
a regular basis and at least annually. On
an annual basis, the Board approves a
Risk Appetite Statement (RAS) together
with its strategic, operating and financial
plans. The RAS is a description of the level
and types of risk the Bank is willing to
accept or to avoid, in order to achieve its
business objectives.
The Board delegates day-to-day
management of the Bank to the CEO.
The Board relies on the Risk Appetite and
the delivery of strategic, operating and
financial plans to be implemented by the
CEO, the Bank’s Executive Management
Committee and their Management sub-
committees. All strategic decisions are
referred to the Board. Documented rules
on management authority levels and on
matters to be notified to the Board are
in place, supported by an organisational
structure with clearly defined authority
levels and reporting responsibilities.
Board Focus Areas and Priorities
As in previous years, the Board adopted
a set of objectives closely aligned to the
Bank’s purpose, ambition and strategic
objectives. A key focus for the Board
during 2023 was providing enhanced
oversight on the execution of the
remaining elements (circa. €1.5bn of a
mortgage book and an Asset Finance
business, and new colleagues) of the
transaction announced at the end of
2021 to acquire certain elements of the
Ulster Bank Retail and SME franchise.
The Board ensured that the Bank’s
human and financial resource allocation
was being prioritised to ensure safe
execution of the transaction with Ulster
Bank while also maintaining secure and
resilient systems to support customers.
This included providing oversight on the
execution of the Bank’s digital banking
programme which is transforming front
end and back end systems to support
customers and colleagues, improve
the Bank’s competitiveness and deliver
value to shareholders. The Board
focused on maturing the Bank’s SME
Strategy to complement the acquisition
of the Lombard and Ulster asset finance
business which will be supported through
digital enablement and personal customer
service. The Board continued to focus
on the execution the Bank’s sustainability
strategy and preparing for new ESG
disclosure requirements.
In 2023 following the completion of
the acquisition of substantial parts of
the business of Ulster Bank, the Group
launched its new brand repositioning
and business strategy to better reflect
the enhanced position of the Bank in the
Irish market. In repositioning the Bank
for the future, the Bank was rebranded
from Permanent TSB to PTSB. The new
brand promise, ‘Altogether More Human’,
underpins the Group’s brand position and
delivery of a better banking experience for
customers. Aligned to the new brand and
business strategy, the Board evolved the
Bank’s Purpose ‘Working together to build
trust with our customer and communities’,
and its Ambition ‘To become Ireland’s
best personal and business Bank through
exceptional customer experiences’.
As set out in the Chairperson’s
introduction to governance on page 118,
following the completion of the Ulster
Bank business asset acquisition, the
Board led a thorough review of the Bank’s
governance, strategy and operations
in recognition of PTSB’s increased
importance in the Irish retail banking
landscape and the associated regulatory,
shareholder, economic and societal
expectations on it. A comprehensive
forward-looking plan was developed
and approved by the Board. The plan
is constructed to drive organisational
improvement across the Bank through
10 interrelated themes, with 30 actions
to be delivered over an 18 month period.
The Board believes execution of the Plan
will deliver a more sustainable business,
with strengthened core capabilities and
enablers to support success and meet
stakeholder expectations.
A key focus in 2024 will be the execution
of the aforementioned Board plan.
Through these and other actions, the
Board aims to deliver a sustainable
business model strongly underpinned
by its financial, technology, human
resources capabilities and effective
risk management. The Board will also
ensure it has considered the strategic
assumptions it is reliant upon and the
risks to and from the strategy, to enable it
to build resilience against future shocks.
Furthermore, the Board is ensuring the
Bank is taking a longer-term view on its
investments in people and technology,
seeking to anticipate future change, both
expected (e.g., technological, climate)
and unexpected (e.g., through building
resilience and improving agility).
“The Board is responsible
for setting, approving and
overseeing the implementation
of the overall business strategy
taking into account the Bank’s
long-term financial interests
and sustainability”
135
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Leadership and Effectiveness (continued)
Strategy Development
The Board has responsibility for
developing the Bank’s purpose, ambition,
values and strategy, ensuring these are
the drivers of the Bank’s evolving culture.
The Bank’s strategy is reviewed and
refreshed annually. In December 2023,
the Board approved a refreshed Strategic
Direction for the Bank. Throughout 2023,
this Strategic Direction was developed
and refined with significant input from
the Board. This includes a refreshed
Purpose, Ambition and Brand Promise
for the Bank, as well as a clearly defined
10-year direction of travel to deliver on
its Ambition. The Bank’s four approved
strategic priorities (Connected Customer
Experience; Sustainable Business Growth;
Secure and Resilient Foundations; and,
Cultural evolution) remain the primary
communication mechanism for the Bank’s
Strategy, both internally and externally.
When aligned to the Bank’s Purpose and
Ambition, the strategic priorities will frame
and drive delivery of the Bank’s strategy in
the medium-term.
The annual strategy refresh is undertaken
as part of the Bank’s Strategic Planning
Process, which links Strategic, Financial,
Resource and Change Delivery plans
to the Bank’s Risk Appetite Statement,
ICAAP, ILAAP, Recovery Plan and
Resolution Plan.
The role of the Non-Executive Directors
is to help Management: develop,
constructively challenge and critically
review proposals on strategy; oversee
and monitor strategy implementation;
and, address any weaknesses identified
regarding its implementation. While there
is a formalised strategy development and
approval process as set out below, there
is also regular and ongoing discussion
and challenge of strategy development
and execution at Board meetings. The
effectiveness of the strategy development
process is a key element of the annual
Board review where feedback is sought on
the process’ effectiveness during the year
in review.
3 Stage Annual Strategy
Development Process
Strategy Session 1 (October 2023)
This is a standalone strategy meeting
which addresses key strategic themes
in the external market and internal
environment in which the Bank operates.
The session is structured around
presentations from management and
external partners. For example, in
136
2023, the meeting included interactive
presentations on: the regulatory
environment in which the Bank is
operating; shareholders’ views on PTSB;
and, domestic macro-economics and
the evolving global financial context. The
first strategy session outlines the point
of departure for the Bank, as well as key
risks and challenges facing the Bank over
the planning period. The Board discusses
and debates the key areas of strategic
focus for the Bank over the coming years
and discusses the relevant priorities of
the Bank, reflecting on the alternative
viewpoints provided from external
partners during the session. This is a key
opportunity for Non-Executive Directors to
provide feedback and input to the Bank’s
Strategic Plan before the first advanced
draft is presented to Board at Strategy
Session 2 (alongside the related draft
Financial and Change Delivery plans).
Strategy Session 2 (Late November
2023)
At the second Board Strategy meeting,
advanced drafts of the Bank’s Strategic
Plan (including Strategic Direction,
Financial Plan and Change Delivery plan)
are presented to the Board for further
discussion, input and iteration. The
Bank’s Executive Management team sets
out how Board feedback from Strategy
Sessions 1 has been addressed and
incorporated into each respective plan.
This session provides an important
governance checkpoint for the Board
has to provide input and challenge to the
plans in advance of formal approval of
each respective plan by year end. This
session also provides an opportunity for
the Second Line of Defence to present
their challenge and assessment of the
proposed plans. Similarly to the first
Strategy Session, this meeting includes
deep-dives into key strategic programmes
or themes.
Final Sign-Off (Mid-December 2023)
Following completion of the second
strategy session, and through continued
engagement with the Bank’s Management
Team, the final draft Strategic, Financial,
Resource and Change Delivery plans are
presented to Board for formal Approval.
This takes place in mid-December as part
of the agenda for the standing monthly
Board meeting.
The Board is responsible for overseeing
the implementation of the overall business
strategy. On an ongoing basis throughout
the year, the Board receives management
updates on key strategic programmes
of work as well as on agreed KPIs and
reporting metrics.
Independence
The independence status of each Director
on appointment is considered by the
Board. In addition, the independence
status of each Director is reviewed
on an annual basis to ensure that the
determination regarding independence
remains appropriate. In determining
independence, the Board will consider
guidance on independence provided
within the UK Code.
The Board has carried out its annual
evaluation of the independence of each
of its Non-Executive Directors, taking
account of the relevant provisions of the
UK Code, namely whether the Directors
are independent in character and
judgment and free from relationships or
circumstances which are likely to affect,
or could appear to affect the Directors’
judgment.
With the exception of Marian Corcoran
and Paul Doddrell, who were each
nominated for appointment to the
Board under the terms of a Relationship
Framework with the Minister for Finance
of Ireland, the Board is satisfied that each
of the current Non-Executive Directors
fulfil the independence requirements of
the UK Code. The Chairperson meets the
UK Code requirement to be independent
on appointment.
Each of the Chairperson and all of
the Non-Executive Directors bring
independent challenge and judgement
to the deliberations of the Board through
their character, objectivity and integrity.
Board Size and Composition
The composition of the Board and
its Committees is reviewed by the
Nomination, Culture and Ethics
Committee and the Board annually to
ensure there is an appropriate mix of
knowledge, experience and skills. This
detailed assessment considers tenure,
succession planning, Board diversity and
assessment of the continued collective
suitability of the Board. The Board has
a target size of 12 Directors. In addition
to having Directors with a broad range
of knowledge, experience and skills, a
principal consideration used to determine
the size of the Board is the ability to
resource all of the Board’s Committees
with at least four Non-Executive Directors
and without need for over reliance on any
one Director or small group of Directors.
PTSB Group Holdings plc - Annual Report 2023 Save where a Director is nominated for
appointment by the Minister for Finance
under the Relationship Framework, the
Board requires that all Non-Executive
Directors are Independent Non-Executive
Directors. The Board believes there is
an appropriate combination of Executive
and Non-Executive Directors such there
is sufficient independent challenge and
oversight of management and that no
individual or small group of individuals can
dominate Board decision making.
At 31 December 2023, the Board
comprised twelve Directors: the
Chairperson, who was independent on
appointment, the CEO, the CFO and
ten Non-Executive Directors, eight of
whom have been determined by the
Board to be independent Non-Executive
Directors. Changes to the Board during
2023 included the appointment of Ms
Catherine Moroney and Mr Rick Gildea as
Independent Non-Executive Directors on
12 December 2023. Biographies of each
of the Directors are set out in the Board of
Directors section on pages 123 to 128. The
wide range of knowledge, experience and
skills encapsulated in the biographies are
harnessed to the maximum possible effect
in the deliberations of the Board. Having
Directors with diverse backgrounds in
areas such as risk management, banking,
change management, digital/IT, strategy,
finance, culture evolution, change
management and auditing provides both
subject matter expertise and facilitates a
broad spectrum of review and challenge
at Board meetings, particularly when
addressing major issues affecting the
Bank.
Decisions on Board membership are
taken by the Board or by shareholders
with recommendations coming from
the Nomination, Culture and Ethics
Committee.
Term of Office
The term of office of Non-Executive
Directors is three years, (with an option
for a further three years) and is subject to
satisfactory performance that is reviewed
annually. In accordance with the UK
Code, all Directors are required to seek
re-appointment by election at the AGM.
Non-Executive Directors will automatically
retire from the Board after six years. It
is always at the discretion of the Board
to invite a Non-Executive Director to
continue for a further 3 year period
and any term beyond this will only be
exercised in exceptional circumstances.
The Chair is proposed for re-appointment
by the Directors on an annual basis. The
term of office of the Chair is six years.
Julie O’Neill who joined the Board on 17
January 2023 succeeded Robert Elliott
as Chair when he stepped down from the
Board on the 31 March 2023. All members
of the Board will stand for re-election at
the 2024 AGM.
Executive Directors’ service contracts are
reviewed by the Remuneration Committee
and approved by the Board. Existing
Executive Directors’ contracts provide
for a rolling 6 month notice period for all
Executive Director Board appointments
from 2020. Holders of Executive office
in the Company will vacate the office of
Director on ceasing to hold Executive
office. Directors who hold any directorship
in a subsidiary of the Company will vacate
said directorship on ceasing to be a
Director of the Company and no Director
will receive compensation for loss of
office as a Director of a subsidiary of the
Company.
2023 Board Performance Evaluation
The Board seeks to improve its
performance and the effectiveness of
its activities on an ongoing basis. Board
and committee assessments are a critical
part of driving continuous improvement
in Board performance. A well-executed
assessment can help the Board provide
real insights into how it operates and how
directors work with one another.
The Board has a formal and rigorous
performance evaluation process to
assess the effectiveness of the Board,
its Committees, the Chairperson and
individual Directors. The performance
evaluation is conducted internally on an
annual basis, and externally facilitated
every three years. An externally facilitated
evaluation of performance last took
place in 2021 and will take place again in
2024; the 2023 approach was internally
coordinated by the Office of the Company
Secretary under instruction and guidance
from the Chairperson.
The evaluation of the Board and its
Committees considers the balance of
skills, experience, independence and
knowledge of the Board, its diversity,
including gender balance, how the Board
works together as a unit, and other factors
relevant to its effectiveness. In addition,
the evaluation ensures that Board
committees have the requisite expertise
to properly discharge their duties.
A revised approach to the 2023 internal
evaluation was discussed and agreed by
the Chairperson, some of the changes for
2023 included the following:
• New Board and Board Committee
questionnaires with questions focused
on key areas of Board effectiveness
including Board Composition;
Succession; Training; Induction;
Engagement with Management;
Meetings; Board Information; Board
Oversight; Strategy; Culture; and
Risks. The development of questions
was based on peer reviews, desktop
industry research, regulatory notices/
speeches and feedback from the Board
and Committee Chairpersons.
• Each Board Committee discussed the
findings of their individual Committee
questionnaire in January 2024; the
outputs of these discussions were
included in the Board Evaluation Report
presented to the Nominations, Culture
and Ethics Committee and the Board in
February 2024.
• The Chairperson reviewed the survey
results and discussed with each
Director their own responses as part of
their regular engagement and as part of
Directors annual performance review.
Feedback from these meeting’s also
informed the final version of the Board
training plan for 2024.
Year 1 –
External
Externally
facilitated Board
evaluation
Year 2 –
Internal
Internal Board
Performance
evaluation
facilitated by
Governance &
Secretariat Team
facilitated Board
Year 3 –
Internal
Internal Board
Performance
evaluation
facilitated by
Governance &
Secretariat Team
Board
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Leadership and Effectiveness (continued)
2023 Board Performance Process
Stage 1.
Agree the approach with the
Chairperson.
• Review the existing board evaluation process (qualitative and quantitative) and propose
amendments to the Chairperson.
• After discussion and agreement by the Chairperson to the final process, engage with
individuals and teams to set out the evaluation process.
Stage 2.
Gather information and
insights from questionnaires
and interviews.
Stage 3.
Individual Board Committees
reviewed the results of their
Committee questionnaire.
Stage 4.
At the February 2024
Nomination, Culture and
Ethics Committee and Board
meetings, outputs from all
the internal assessments
were considered.
• Issue a self-assessment governance questionnaire to the Board/Board Committees and a
more focussed questionnaire to ExCo (on ExCo perception of Board Governance).
• Arrange 1 to 1 performance meetings in between the Chairperson and Non-Executive
Directors. These meetings also assessed the training requirements for individual directors
and collectively for the Board.
• The Senior Independent Director (SID) engaged with Directors to seek feedback on the
Chairperson’s Performance.
• The Chairperson completed the annual performance evaluation of the CEO and reported on
same to Nomination, Culture and Ethics Committee.
• During January 2024, each Board Committee held a meeting and discussed the results of the
individual committee assessments. Feedback and actions from these meetings informed the
overall Board Evaluation and actions to improve Board and Board Committee effectiveness.
• Considered feedback from the Board, Board Committee and ExCo Questionnaires.
• Considered a suite of governance obligations including but not limited to Director
Independence; a Board and Committee tenure report; an attendance schedule for 2023
Board and Board Committee meetings; an assessment of external directorships and time
commitments; a review of conflicts of interest and, certification of director fitness and probity
requirments.
• Considered the Performance evaluation of the Chairperson, Non-Executive Directors,
Executive Directors and CEO.
• Reviewed and closed the 2022 Board Action Plan.
• Reviewed and recommend approval of 2023 evaluation findings to Board and to
subsequently approve an action plan to address the findings.
As set out in the Chairperson’s
introduction to governance on page 118,
following the completion of the Ulster
Bank business asset acquisition, the
Board led a thorough review of the Bank’s
governance, strategy and operations and
this included reflection upon the Board’s
own governance arrangements. The Board
believes there is further room to improve
the effectiveness of its own operations
and will continue to monitor and assess its
own performance in that regard. Key focus
areas in 2024 will include.
Outcomes and Actions of 2023
Board Performance Evaluation
During a meeting held on 20 February
2024, the Nomination Culture and Ethics
Committee received a report from the
Company Secretary on the performance
evaluation of the Board for 2023. The
Committee was satisfied the Chairperson,
the Non-Executive Directors, and the
Executive Directors contributed effectively
to Board debate and discussion and
demonstrated a knowledge and
understanding of the business, its risks
and material activities. The performance
of the Chairperson was evaluated by the
Senior Independent Director based on
feedback gathered as part of the Board
questionnaire and individual feedback
from non-Executive and Executive
Directors. The review confirmed that Ms
Julie O’Neil had made a strong start to her
role as Chairperson of PTSB, leveraging
her previous experience with the Bank,
developing effective internal and external
stakeholder relationships, and evolving
the operating rhythm of the Board. The
feedback noted Ms O’Neill as an effective
Chairperson with a measured approach
guiding the Board into a new phase post
the acquisition of parts of the Ulster Bank
of Ireland’s business. The Board confirmed
its continued support for Julie O’Neill in
the role of Chairperson and her proposed
re-election at the 2024 Annual General
Meeting (AGM).
Areas discussed by the Committee
included Board composition, Board
succession planning, Board induction,
Board oversight of the business and
its risks, culture, Board meetings and
information flows to the Board. The
Board noted the improvements that
had been made in these areas over the
previous 12 months. The Committee
carried out a detailed assessment of
individual and collective Board strength
taking into account the longer term
strategic direction of the Bank and its
evolving risk profile. Arising from this,
the committee considered and made a
number of recommendations concerning
Board training/development and the
future knowledge, experience and skills
requirements of the Board.
138
PTSB Group Holdings plc - Annual Report 2023 2024 Board Performance Themes and Focus Areas
Theme
Risk
Culture
Strategy
2024 Actions and Outcomes
Continue to prioritise oversight on the effectiveness of the Bank’s risk management framework with focus
on ensuring the effective utilisation of the three lines of defence model. The Board recognise that mind-
set and behaviour is a critical ingredient to driving an effective risk management and internal control
environment and has requested Board Risk and Compliance Committee support to ensure it is setting the
right tone on risk culture expectations for the Bank.
Enhanced focus on developing, maintaining and monitoring the desired culture of the Bank now that it has
become a larger organisation through the Ulster Bank transaction.
Ensuring strategy execution is a core focus on the Board agenda with simple and clear KPIs (business
performance and capability) to support Board oversight and challenge. Ensuring the Bank’s Strategic
Planning process continues to evolve and that it is fully resourced to do so.
Board Reporting
The Board should continue to encourage the timely delivery of management reporting to the Board with a
focus on ensuring the right level of strategic insight is provided to support effective decision making.
Sustainability
Ensuring that the Bank’s Sustainability agenda is getting the right level of management and Board oversight
and the Bank continues to moving at pace to fully integrate sustainability within its strategy planning
process.
Succession
Planning
Ensuring the future knowledge, experience and skills for both Board and the Executive Committee (aligned
to strategic direction and risk profile) are understood and there are effective succession plans in place.
Board Operating
Rhythm
Meetings of the Board and its committees are optimised to ensure both Board and Management time is
used effectively.
Director Induction and On-Going
Business Awareness
On appointment to the Board or to any
Board Committee, all Directors receive
a comprehensive induction training
schedule tailored to their individual
requirements. The induction, which is
designed and arranged by the Company
Secretary in consultation with the
Chairperson (and approved by the
Board Nomination, Culture and Ethics
Committee), will include meetings with
Directors, Senior Management and key
external advisors, to assist Directors in
building a detailed understanding of the
Group’s operations, management and
governance structures, including the
functioning of the Board and the role
of Board Committees and key issues
facing the Group. Directors will also be
encouraged, where appropriate, to make
site visits to see the Group’s operations
first hand. Where appropriate, additional
business awareness briefing sessions and
updates on particular issues identified
in consultation with the Chairperson and
Non-Executive Directors will be arranged
by the Company Secretary. These will
be held regularly to ensure that Non-
Executive Directors have the knowledge
and understanding of the business to
enable them to contribute effectively at
Board meetings. The business awareness
and development needs of each Non-
Executive Director will be reviewed annually as part of the performance evaluation
process.
2023 Board Training and On-Going Business Awareness
Board Training Sessions
A number of Board training sessions were facilitated during 2023 to support on-
going business awareness and Director development. Topics for Board training
sessions are recommended by the Board Nomination, Culture and Ethics Committee
and include a balance of technical, governance and professional development.
Training delivered during 2023 included: Cyber Security; ESG Regulations and
Disclosures; Carbon Emissions Deep Dive; Asset Finance Marketplace; Operational
Resilience; Individual Accountability Framework including SEAR; and AML/CTF
training.
Board Briefings
In addition to formal Board training sessions, a number of Board briefings were
presented to the Board during 2023. The purpose of these briefings is to ensure
Directors have the knowledge and understanding of the business to enable
them to contribute effectively to meetings, by providing insight into impending
changes which may impact on the Board’s responsibilities, the Bank’s progress
in implementing such changes, or to present industry updates. Board briefings
presented during 2023 included: macro-economic outlook; capital and liquidity
planning; recovery planning simulation exercise; market abuse update; legal and
regulatory developments; geopolitical developments; Department of Finance
Retail Banking Review, Brand and Marketing deep dives; Investor/Shareholder
perspectives; and, Technology developments.
Individual Director Development
An individual training plan is developed for each Director on appointment and
reviewed annually by the Chairperson. The purpose of individual training plans is to
support individual Director development. Each Director is required to undertake the
Institute of Bankers Certified Bank Director programme. Directors are also offered
the option of attending suitable external educational courses, events or conferences
designed to provide an overview of current issues of relevance to their work on
the Board. Led by the Chairperson, the Non-Executive Directors met without the
Executive Directors present.
139
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Leadership and Effectiveness (continued)
Board Meetings
The table on page 128 shows Board
membership and directors’ meeting
attendance during 2023. There were
11 scheduled Board meetings for 2023
(including 2 strategy sessions). All
scheduled Board meetings were held in-
person. In addition to scheduled meetings,
additional meetings of the Board, and
some of its Committees (detailed in each
Committee report) were held throughout
the year to receive updates and deal
with time-critical matters. There were 7
additional Board meetings held in 2023.
Agendas and papers are circulated to
Directors electronically via a secure online
Board portal in sufficient time to facilitate
review by the Directors.
At each of the scheduled Board meetings
the directors received reports from
the Chairperson, Board Committee
Chairpersons, the Chief Executive
Officer, the Chief Financial Officer, the
Chief Risk Officer and other members
of the executive management team, as
appropriate. Other senior executives
attended Board meetings throughout the
year to present reports to the Board. This
provided the Board with an opportunity to
engage directly with management on key
issues. The Board is particularly focussed
on strategy, customer experience,
commercial/financial performance
and risk/compliance matters at each
of its meetings. The minutes of Board
committees are made available to all
Directors through a designated reading
room in the Board portal. The Board portal
also contains an extensive document
repository and is the primary method of
communication with Directors.
The Board, Board Committees and the
Bank’s Executive Committee operating
rhythm supports a proactive and focused
agenda planning and paper preparation
process. This process includes pre-
meetings of the Board between the
Chairperson, CEO and Company Secretary
to ensure the Board and Executive
Management are aligned on Board
agendas.
Board Committees
The Board has established four permanent
Committees to assist in the execution of
its responsibilities. These Committees are:
• Audit
• Risk & Compliance
• Nomination, Culture & Ethics
• Remuneration
Other Committees are formed from time to
time to deal with specific matters. During
2021, the Board established a committee
of the Board to provide support on the
corporate transaction to acquire certain
elements of the Ulster Bank business in
Ireland. This committee operated until
September 2023 when it was closed post
the migration of the final element of the
Ulster Bank business. The committee
operated within a Board approved
terms of reference and consisted of
the following members: Julie O’Neill
(Chairperson), Eamonn Crowley, Marian
Corcoran, Anne Bradley, Paul Doddrell,
Ronan O’Neill and Donal Courtney; Robert
Elliot ceased to be a member on 31 March
2023 when he retired from the Bank.
At the end of 2023, the Board Audit,
Remuneration and Nomination Culture
& Ethics committees were composed of
Independent Non-Executive Directors
and the Board Risk and Compliance
Committee was composed of a majority
of Independent Non-Executive Directors.
The Membership and the Chairpersonship
of each committee are reviewed annually.
Each of the Board Committees has
a Terms of Reference, under which
authority is delegated by the Board,
and which are reviewed annually. The
Terms of Reference of each Committee
are available on the Bank’s website
https://www.permanenttsbgroup.ie/
document-centre. The Board Committee
Chairpersons are expected to attend the
AGM and be available to answer questions
from shareholders.
140
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Risk Management and Internal Control
Board responsibilities
The Board has overall responsibility for
maintaining a system of risk management
and internal control which provides
reasonable assurance of effective and
efficient operations, internal financial and
operational control, and compliance with
laws and regulations.
The Group’s business involves the
acceptance and management of a range
of risks, consistent with its corporate
purpose. The Group’s system of risk
management and internal control is
designed to ensure the delegation of
responsibility for risk oversight and
management is appropriate to the nature
and type of risk faced by the Group.
Provision 29 of the UK Code requires the
Board to review annually the effectiveness
of the Group’s system of risk management
and internal control. This requires a review
to cover all material controls including
financial, operational and compliance
controls. Monitoring of risk management
and internal control is an ongoing part
of the governance process at Board
Audit and Board Risk and Compliance
Committee meetings. The Board Audit
Committee reviews a control environment
report on a regular basis which provides
a holistic perspective of the control
environment within the Group. The Board
Audit Committee also receives reporting
at each meeting from the Head of Group
Internal Audit (GIA) on the effectiveness of
the control environment through reporting
on findings that arise from internal audit
activity. On a bi-annual basis, the Board
Audit Committee reviews the interim
and final Audit Opinion prepared by the
Head of GIA. The Audit Opinion considers
the adequacy and effectiveness of the
governance, risk and control environment
within the Group and specifically how
they relate to individual business areas,
it also takes into account the strategies,
objectives and risks of the organisation.
The Board Audit Committee reviews the
internal controls in place over financial
reporting in order to provide reasonable
assurance the half-year and full-year
accounts materially presents a true and
fair view of the Group’s financial position
and performance. The Board Risk and
Compliance Committee receive updates
at each meeting from the Bank’s Chief
Risk Officer and Head of Compliance
concerning the Bank’s operational and
compliance controls.
The Chairs of the Board Audit Committee
and Board Risk and Compliance
Committee report on all material risk and
control related matters to the Board at
each scheduled meeting, as does the
Chief Risk Officer who attends a material
portion of each Board meeting.
The Board has a particular focus on
ensuring that appropriate governance
structures are in place to address issues
raised through internal review and by
feedback from stakeholders, including
regulators. There was no significant failure
of the Group’s system of risk management
and internal control during 2023 leading to
a material financial loss.
Internal Control Procedures
The Group’s internal control procedures
are designed to safeguard the Group’s net
assets, support effective management of
the Group’s resources, and provide reliable
and timely financial and operational
reporting both internally, to Management
and those charged with governance, and
externally to other stakeholders. They
include the following:
• An organisational structure with formally
defined lines of responsibility and
delegation of authority;
• As set out in the Risk Management
Section a ‘Three Lines of Defence’
model has been adopted by the
Group for the effective oversight
and management of risks across the
Group, with GIA being the Third Line of
Defence;
• A corporate governance structure
has been defined showing the key
governance and decision making bodies
of the Group; each governance body
has a terms of references that sets out
its key areas of responsibility;
• The preparation and issue of financial
reports, including the consolidated
Annual Report, is managed by the
Group Finance department with
oversight from the Board Audit
Committee. The Group’s financial
reporting process is controlled using
documented accounting policies and
reporting formats issued by the Group
Finance department to all reporting
entities (including subsidiaries) within
the Group in advance of each reporting
period end. The Group Finance
department supports all reporting
entities in the preparation of financial
information. Its quality is underpinned
by arrangements for segregation of
duties to facilitate independent checks
on the integrity of financial data. The
financial information for each entity is
subject to review at reporting entity and
Group level by Senior Management. In
addition to reviewing and approving the
full year Annual Report, the Interim and
Annual Report are also reviewed by the
Board Audit Committee in advance of
being presented to the Board for their
review and approval;
• Comprehensive budgeting systems are
in place, with annual financial budgets
and a five year medium term financial
plan prepared and considered by the
Board. Actual results are monitored and
there is monthly consideration by the
Board of progress against budgets and
forecasts;
• There are clearly defined capital
investment control guidelines and
procedures set by the Board;
• Responsibilities for the management
of credit, investment and treasury
activities are delegated within limits to
line management. In addition, Group
and divisional Management have been
given responsibility to set operational
procedures and standards in the areas
of finance, tax, legal and regulatory
compliance, human resources and
information technology systems and
operations;
• GIA’s responsibility for the independent
assessment of the Group’s corporate
governance, risk management and
internal control processes. The Head of
GIA reports directly to the Chairperson
of the BAC;
• The reviews by the Board Audit
Committee on the scope, nature
and independence of the work of
undertaken by GIA;
• The reviews by the Board Audit
Committee of progress with the internal
audit programme of work. The Head
of GIA reports regularly to the BAC in
private session. The BAC also reviews
the Interim and Annual Report and the
nature and extent of the external audit.
There are formal procedures in place for
the external auditors to report findings
and recommendations to the Audit
Committee. Any significant findings or
identified risks are examined so that
appropriate action can be taken;
• Under the Group’s Internal Control
Framework, there are divisional control
frameworks in place within each
business unit under which Executive
Management reviews and monitors, on
an on-going basis, the controls in place,
141
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Risk Management and Internal Control (continued)
channels by creating a psychologically
safe environment in which to do so. In
addition, the Group also has in place
a Colleague Conduct Policy, which
outlines the standards of responsibility
and ethical behaviour to be observed
by all the Group’s employees. The Board
Nomination, Culture and Ethics Committee
receives regulator reporting on key
themes and issues reported through the
Speak Freely process.
Internal Control over Financial
Reporting
The Group operates a Financial Control
Framework (a divisional framework of
the Group’s Internal Control Framework)
over financial reporting to support the
preparation of the consolidated financial
statements. The effectiveness of the
Group’s systems of control over financial
reporting are reported on to the Board
Audit Committee on an annual basis. The
main features are as follows:
• A comprehensive set of accounting
policies are in place relating to the
preparation of the interim and annual
financial statements in line with IFRS, as
adopted by the EU;
• A control process is followed as part
of the interim and annual financial
statements preparation, involving the
appropriate level of Management review
of the significant account line items,
and where judgments and estimates are
made, they are independently reviewed
to ensure that they are reasonable
and appropriate. This ensures that
the consolidated financial information
required for the interim and annual
financial statements is presented fairly
and disclosed appropriately;
• The Interim and Annual Report are
subject to detailed review and approval
through a process involving Senior and
Executive finance personnel;
• Summary and detailed papers are
prepared for review and approval
by the BAC covering all significant
judgmental and technical accounting
issues together with any significant
presentation and disclosure matters;
and
• A GIA function with responsibility for
providing independent, reasonable
assurance to key internal committees
and Senior Management, and to
external stakeholders (regulators and
external auditors), on the effectiveness
of the Group’s risk management and
Internal Control Framework.
both financial and non-financial, to
manage the risks facing that business;
• The monitoring of regulatory
compliance within the Group by the
Head of Regulatory Compliance who
reports to the CRO and who also
provides regular updates to the Board
Risk and Compliance Committee; and,
• Established systems and procedures
to identify, control and report on
key risks. Exposure to these risks is
monitored at Board level by the Board
Risk and Compliance Committee. As
a standing item on both Board Risk
and Compliance Committee and Board
agendas, the CRO regularly reports on
all material issues related to activity
within the Group’s risk and control
environment. The CRO is a member of
ExCo, Chairs the Group Risk Committee
and has reporting lines to the CEO
and Chairperson of Board Risk and
Compliance Committee.
The Board Risk and Compliance
Committee reviews the compliance
and risk management programmes and
monitors the risk profile of the Group. The
Board Risk and Compliance Committee
supports the Board in carrying out its
responsibilities for ensuring that risks are
properly identified, reported, assessed
and controlled, and that the Group’s
strategy is consistent with the Group’s
Risk Appetite.
The Remuneration Committee is
responsible for oversight of the Group’s
remuneration and reward strategies. It
ensures the remuneration strategy is
aligned with the Group’s appetite for
risk, business strategy, values, culture
and ambitions, and oversees Senior
Management reward.
The Nomination, Culture and Ethics
Committee is responsible for the
culture, behaviour, ethics and reputation
management oversight in the Group.
The Board is committed to nurturing a
Speak Freely culture where it is safe and
acceptable for all to raise any concerns
that they may have about practices,
processes or behaviours that do not meet
these standards or align with the Group’s
Ambition, Purpose and Values. The
Group’s Speak Freely Procedure protects
colleagues who wish to raise a concern,
or to make a protected disclosure, relating
to an actual or potential wrongdoing in
the workplace. Speak Freely focuses
on encouraging colleagues to raise
a concern via a number of different
142
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Diversity Report
PTSB recognises the benefits of having a diverse Board and sees
diversity at Board level as an important element in delivering on
the Bank’s stated Purpose and Ambition.
Diversity
A diverse and inclusive culture is essential
to the long-term success of PTSB and
enables the Group to respond to diverse
customer and wider stakeholder needs.
The Group embraces diversity at all levels
of the organisation and appreciates the
different perspectives and unique value
each Board member and employee brings
to the role and the value that creates for
the business, colleagues, community and
wider stakeholders. Further details on the
Group’s Organisational Culture, Diversity
and Inclusion Programmes are set out on
page 37
Board Diversity Policy
The Board has a Diversity Policy which is
reviewed annually. The Board Diversity
Policy sets the target for gender diversity
and also sets guidance on the appropriate
mix of financial versus non-financial
knowledge and experience on the Board
as well as the geographic location/
background of Directors. The Policy also
describes how the Board will consider
other key metrics when carrying out
succession planning activities or Board
recruitment/refreshment. The Board
Diversity policy is published on the Group’s
website: https://www.permanenttsbgroup.
ie/document-centre.
The Group recognises the benefits of
having a diverse Board whose members
reflect a wide range of knowledge,
skills and experience with differences in
educational and professional background,
ethnicity, gender, age, cognitive and
personal strengths, and other qualities, in
order for the Board to be able to discharge
its duties and responsibilities effectively,
in addition to having a diverse senior
leadership and executive management
succession pipeline. The Group sees
diversity at Board level as an important
element in delivering on the Bank’s stated
Purpose and Ambition.
The Board also recognises how diversity
of thought is necessary to provide
the range of perspective, insight and
challenge which enhances collective
decision-making and reflects positive
behaviour, conduct and culture of the
Board and the wider Group. A diverse
Board includes and makes good use of
differences in the knowledge, experience
and skills (in particular those identified
as relevant to the business and culture of
PTSB) as set out in the Board Suitability
Matrix, including regional and industry
experience, education and professional
experience, together with other diversity
aspects of Directors. These differences
are considered in determining the
optimum composition of the Board, and
where possible, balanced appropriately.
In December 2023, the Board Diversity Policy was reviewed and updated setting the following target and guidance principles for
2024:
Area of Diversity
Rationale
Guidance or Target
Knowledge
Experience and
Skills
Board Suitability
Matrix
The Board aims to engage a broad
set of qualities and competencies
when recruiting Board members
to achieve a variety of views
and experiences and to facilitate
independent opinions and sound
decision-making within the Board.
Target:
A majority of Non-Executive Directors, the Board Chairperson
together with the Chairpersons of the Audit and Risk and
Compliance Committee should have core relevant banking and/
or financial services knowledge and experience (obtained working
for a financial institution or through the provision of services to a
financial institution).
The Board regularly reviews the
knowledge, experience and skills
of the Board to ensure they are
aligned with the current, emerging
and future needs of the Bank.
Note:
Knowledge examines achievement
in education, training and practice.
Experience looks at the practical
and professional experience
gained.
Skills focus on personal attributes,
how the person is capable of
behaving and acting.
Skills:
• Authenticity
• Decisiveness
• Communication
• Judgement
• Customer and Quality
Orientated
• Leadership
• Loyalty
• External Awareness
• Persuasive
• Teamwork
• Sense of Responsibility
• Integrity
• Independence of Mind
• Innovative
• Neurodiversity
Knowledge and Experience:
• Retail Personal and/or Business
Banking
• Culture and Ethics
• Sustainability
• Customer Advocacy/Experience
• Accounting/Auditing and Model
Governance
• Risk Management
• Governance and Oversight
• Technology (including Cyber/
Resilience/Artificial Intelligence/
Digital Evolution/Fintech)
• Organisational Change
• Strategy Development/Execution
• Legal and Regulatory (Ireland and
EU)
• Capital Markets/Treasury/Investor
Relations
• ESG/Sustainability/Climate
• Data and Analytics
• Workforce capability and strategy
143
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Diversity Report (continued)
Area of Diversity
Rationale
Guidance or Target
Target 1:
The Board will be gender balanced (50% between Directors
identifying as male or as female). Where the Board (or Board
Committee) has an uneven number of Directors, a rounding down
of the majority gender is deemed to have achieved balance.
Target 2:
At least one of the Chairperson, Chief Executive Officer, Senior
Independent Director or Chief Financial Officer) positions will be
held by a female (including those self-identifying as a female).
Target:
Between 20% - 30% of the Non-Executive Directors should be in
a position to draw on current or recent knowledge and experience
obtained from having lived or worked outside of Ireland.
Guidance:
For each Director appointment, the Board will consider age,
ethnicity and other demographics of the Group’s customer
and colleague base together with relevant Board composition
benchmarking data to inform the design of any role profiles. In
doing so, the Board will have regard to the requirements under the
FCA Listing Rules and the Parker Review in respect of non-white
ethnic minority representation on the Board. Consideration will also
include latest Irish census data on non-white ethnic minorities.
Gender
Geographic
Location
Age and Ethnicity
The Board understands that
gender is an essential component
of Board diversity facilitating a
more independent mindset at
Board bringing together richer
more informed debate and
challenge.
Cognisant of its role model
ambitions for the rest of the Bank,
the Board ensures that gender
diversity is extended to Senior
Board positions within the Bank.
The Board should be comprised
of directors who understand the
social, economic, business and
cultural environment in which the
Group operates. However, the
Board also understands the benefit
of having an ‘external’ perspective,
to draw learnings and insights from
other jurisdictions and cultures to
support independent and effective
decision making.
The Board recognises that in
addition to tenure of knowledge
and experience, value should
also be placed on the timing of
when knowledge and experience
is acquired. This is ever more
relevant where rapidly evolving
developments in technology,
innovation and customer behaviour
will play an ever greater role in
delivering the Group’s Ambition.
The Board also recognises the
importance that diversity on the
Board brings particularly given
the diverse age and ethnic profile
of the Group’s customer and
colleague base.
The Board recognises the challenges in setting diversity targets that it may not be in a position to achieve in the medium term.
Therefore, at this time, in the interests of ensuring the Board has the appropriate balance of knowledge, experience and skills to
deliver the Group’s stated purpose and ambition, and having regard to the latest benchmarking data on non-white ethnic minorities
in Ireland being the geographical provenance of the Group’s customer and colleague base, the Board has not set a target for having
at least one member of the Board from a non-white ethnic minority background in its Diversity Policy. Notwithstanding this, when
considering Board appointments, the Board will have regard to the requirements under the UK FCA Listing Rules and the Parker
Review in respect of non-white ethnic minority representation on the Board. The Group is committed to having a diverse Board, to
achieving the targets and guidance set out in its Diversity Policy and to ensuring an open and fair recruitment and selection process
that reflects relevant metrics of diversity for each Director appointment in the best interests of the Group and its stakeholders.
144
PTSB Group Holdings plc - Annual Report 2023 increasing diversity and inclusion across
the rest of the Group.
The Board broadly achieved gender
balance with regard to its Committee
composition and has regard to wider
diversity aspects among the members of
the Board Committees.
The Board continues to review and
monitor progress on diversity of
the Executive Committee the senior
leadership team and throughout the
wider Group as part of its commitment to
improve gender diversity and other wider
diversity aspects of the workforce.
The Board has not set a target for having
at least one member of the Board from
a non-white ethnic minority background
in its Diversity Policy as now required
under the UK FCA Listing Rules as the
Board recognises the challenges in setting
diversity targets that it may not be in a
position to achieve in the medium term.
The Board exceeded its objective of
requiring a majority of Non-Executive
Directors, the Board Chairperson together
with the Chairpersons of the Audit and
Risk and Compliance Committees to
have relevant banking and/or financial
experience and is satisfied that all
Directors have attained the required
financial literacy threshold. The Board
diversity ratio of Non-Executive Directors
with experience gained from living or
working outside of Ireland to bring an
external perspective and insights from
other jurisdictions and cultures stood
at 30% in line with its target range of
between 20-30%. The other diversity
aspects including age, nationality and
independence are displayed in line with
the guidance for Board appointments as
set out in the Board Diversity Policy.
Objective of Board Diversity Policy
The Board is mindful of its commitment
to having a diverse Board and recognises
the importance of age, ethnicity and other
demographics of the Group’s customer
and colleague base which inform the
design of the role profile for each Director
appointment, in addition to gender,
knowledge, experience and skills. All
Board appointments are made on merit, in
the context of the aggregate knowledge,
experience and skills that the Board as
a whole requires to be effective. The
Nomination, Culture and Ethics Committee
discuss and agree annually all measurable
objectives for achieving diversity on
the Board and recommends them to
the Board for adoption. When setting
diversity objectives, the Nomination,
Culture and Ethics Committee considers
relevant Board diversity benchmarking
data published by competent authorities
including the Central Bank of Ireland
and the European Banking Authority,
national census data and other relevant
international bodies and organisations.
At any given time, the Board may seek
to improve one or more aspects of
its diversity and measure progress
accordingly.
How the Board Diversity Policy was
implemented during 2023
All Board appointments are made on
merit, in the context of the knowledge,
experience and skills that the Board as a
whole requires to be effective and having
regard to the Diversity Policy. The balance
and mix of appropriate knowledge,
experience and skills of Non-Executive
Directors are taken into account when
considering a proposed appointment and
is reviewed annually by the Board.
The Board Nomination Culture and Ethics
Committee carries out an evaluation of
Board performance annually. A part of that
review considers the succession planning,
composition and diversity needs of the
Board. In November 2023, the Committee
carried out a detailed analysis of Board
and Committee composition, Board
Independence levels, Board diversity
analysis, review of the Board Suitability
Matrix (desired mix of knowledge,
experience and skills) and potential
retirements over the following two year
period. This comprehensive assessment
allows the Board to plan for knowledge,
experience, skills and other diversity
needs of the enlarged Group for the future
in line with its strategic priorities and
evolving risk profile.
The behaviours likely to be demonstrated
by potential Non-Executive Directors
are also considered when interviewing
for new appointments to ensure an
environment in which a range of
perspective, insight and challenge which
enhances collective decision-making
and reflects positive conduct and culture
of the Board is expected, achieved and
maintained in the Boardroom. In reviewing
Board composition, the Nomination,
Culture and Ethics Committee considers
the benefits of diversity, including gender,
and looks to ensure there is appropriate
representation from other industry
sectors. In addition to core financial
services knowledge and experience, the
Board also can draw from expertise in
technology, change and risk management,
customer advocacy, aviation, healthcare,
ESG/sustainability and climate risk,
capital markets, workforce planning
and remuneration, communications and
charities sector strategy development and
governance.
The Board considers the skills, experience
and expertise, including education
and professional background, in areas
relevant to the operation of the Board.
All candidates for appointment need
to demonstrate the financial literacy
required for a proper understanding of
the Group’s activities and associated
risks. The Nomination, Culture and Ethics
Committee seeks to ensure a proportion
of the Board has a deep understanding
of financial products and has established
guidelines to ensure Board candidates are
selected on merit, based on their skills,
competencies, qualifications and ability to
commit sufficient time to the role, and in
line with the Board Diversity Policy.
2023 Board Diversity Progress
At 31 December 2023 the Board female/
male stood at 58:42 (60:40 for Non-
Executive Directors) against a gender
diversity target of 50:50.This exceeds the
new UK FCA Listing Rules target to have
at least 40% female representation on the
Board.
The Board has also met and exceeded
its diversity target of having at least one
senior board position held by a female
with both the Chairperson and Chief
Financial Officer positions held by females
during the year, exceeding the UK FCA
Listing Rules and is also in line with the
role model ambitions of the Board in
145
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Diversity Report (continued)
Nationality
Age Profile
Independence
1
1
1
Irish
British
German
US
2
1
2
2
9
4
5
8
40-49
50-59
60-69
70+
Independent Non-Executive Directors
Non-Executive Directors
Executive Directors
2023 Board Diversity Measures
This section outlines the key diversity and inclusion metrics for Board and Executive Management at 31 December 2023, being the
chosen reference date within the accounting period as required by the Listing Rules LR9.8.6 (9)-(11). This section also includes detail
of tenure, age, skills and experience. All information on the Board and Executive management gender identity and ethnic background
was manually gathered
Gender Identity
Men
Women
Other categories
Not specified/prefer not to say
Number of
board members
Percentage of
the board
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
Number in
executive
management
% of executive
management
5
7
-
-
42%
58%
-
-
2
2
-
-
8
2
-
-
80%
20%
-
-
Note: Executive Directors are counted in both Board and Executive Management disclosures. Company Secretary included in Executive Management disclosure.
Ethnic Background
Number of
board members
% of the board
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
White British/Irish or other White (including minority-
white groups)
12
100%
Mixed/Multiple Ethnic Groups
Asian/Asian British/Irish
Black/African/Caribbean/Black British/Irish
Other ethnic group, including Arab
Not specified/ prefer not to say
-
-
-
-
-
-
-
-
-
-
4
-
-
-
-
-
10
100%
-
-
-
-
-
-
-
-
-
-
Note: Executive Directors are counted in both Board and Executive Management disclosures. Company Secretary included in Executive Management disclosure.
146
PTSB Group Holdings plc - Annual Report 2023 2024 Board Diversity Priorities
Area of Diversity
Board Objective
2024Board Action
Gender
Alignment to
customer and
colleague base
Board Diversity
Policy
Board
Recruitment and
Selection and
Suitability
The Board remains committed
to maintaining gender
diversity on the Board.
• Board Gender Diversity Target maintained at least 50% female; and,
• Encourage initiatives that promote broader inclusive gender diversity
across the Group, in line with the Organisational Culture, Diversity and
Inclusion Programmes.
The Board acknowledges the
Group has a diverse customer
and colleague base and
should take account of same
in considering the diversity
requirements of the Board.
The Board recognises
there are many aspects of
diversity such as age, social
and ethnic backgrounds,
gender, cognitive and
personal strength, skills
and experience, and the
importance of ensuring wider
diversity is considered for
Board appointments.
The Board remains committed
to having a diverse range of
knowledge, experience and
skills, including education
and professional background,
in areas relevant to the
operation of the Board, while
ensuring that the recruitment
and selection process for
members of the Board is an
open and fair process.
• The Board Diversity Policy recognises the importance of ensuring the
Board has a clear line of sight on the diverse makeup of the Group’s
colleague and customer base when considering appointments to the
Board;
• Customer diversity metrics such as age, ethnicity and gender will
influence how the Board thinks about its own construct; and,
• Receive reports on actions taken by the Bank to foster a more
inclusive, equitable and diverse organisation including colleague
surveys and customer experiences.
• Consider the aspects of diversity relevant to the operation of the
Group, such as gender, age, cognitive, social/ethnic background,
personal strengths, education and professional background;
• Ongoing review of the Board Diversity Policy to ensure all relevant
aspects of diversity are included in the Policy;
• Ongoing review the Board Suitability Matrix to ensure that the diverse
range of knowledge, skills and experience required by the Group is
represented at Board level; and
• Encourage initiatives that promote broader inclusive gender diversity
at Board level, in addition to ensuring a diverse senior leadership and
executive management succession pipeline.
• Maintain a majority of Non-Executive Directors, including the Board
Chairperson, together with the Chairpersons of the Audit and Risk
Committees, to have banking and/or financial experience and this will
also be taken into account when recommending appointments;
• Between 20% - 30% of the Non-Executive Directors should be in
a position to draw on current or recent knowledge and experience
obtained from having lived or worked outside of Ireland given the
Bank’s strategic priorities and evolving risk profile;
• Retain the requirement that all candidates for appointment need to
demonstrate the financial literacy required for a proper understanding
of the Group’s activities and associated risks;
• Ensure that a proportion of the Board has a deep understanding of
financial products;
• Review Board recruitment and selection procedures, to ensure
Board candidates are selected on merit, based on their knowledge,
experience and skills, and have the ability to commit sufficient time to
the role, with due regard to relevant aspects of diversity; and
• Undertake an assessment of individual and collective suitability, taking
into account relevant aspects of diversity to determine the continued
individual and collective suitability of members of the Board.
Board Succession
Planning
The Board is responsible for
overseeing succession plans
for the Board and Senior
Executives.
• Review Succession Plans of the Board and Senior Executives ensuring
they are sufficiently robust; that talent management and development
plans are in place with live talent maps to ensure a diverse pipeline of
successors at senior leadership team level;
• Ensure the Group pipeline of successors takes account of the Group’s
diversity measures and ambitions; and,
• Ensure Board succession planning reflects the requisite time for the
selection, recruitment and appointment process.
147
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
As the Committee now focusses on 2024
and beyond, particular attention will be
given to working closely with the Board
Risk and Compliance Committee on
assessing the impact of interest rates and
cost of living challenges on customers and
the subsequent risk to loan impairment
that may arise therefrom.
Ronan O’Neill
Chairperson, Board Audit Committee
Corporate Governance Statement
Board Audit Committee
The Audit Committee ensures that the financial and internal
control policies, practices and decisions of the Group
are carried out appropriately, and are properly aligned to
strategy and the interests of its Shareholders.
Dear Reader,
I am pleased to present my report
as Chairperson of the Board Audit
Committee (the “Committee” or “BAC”).
The Committee, as defined in its Terms
of Reference primarily ensures the proper
implementation of the Group’s financial
and internal control policies, practices
and decisions. It aims to align these
with Group strategies and shareholder
interests, while operating within applicable
regulatory and legal requirements.
2023 was a key year for the Group in
the context of the completion of the
Ulster Bank transaction, migration of
the Lombard asset finance business
and launch of ‘PTSB Asset Finance’.
In this context it was important for
the Committee to ensure the control
environment within the acquired
businesses, particularly controls that
supported financial reporting were
robustly challenged for the purposes of
ensuring this Annual Report represented a
true and fair view of the Group’s financial
position and performance.
At the Group’s AGM in May 2023, KPMG
were appointed as External Auditor’s
following a competitive tendering process
in 2022. Both I as Chair and the Audit
Committee have worked closely with
KPMG through the preparation of the
financial statements to understand the
issues being raised through the audit
process and ensuring the audit process
and external auditors were effective in
that regard. I have been very pleased with
the level of detailed work and challenge
carried out by the external auditors who,
in their first audit, have the opportunity to
examine the Bank’s control environment
with fresh perspective.
A key area of focus for the Committee
during 2023 was to fully integrate
preparations for a series of sustainability
related reporting obligations that would
(or have) come into effect over the
short to medium term. This included
understanding and defining an integrated
approach to disclosures relating to Pillar
3 (ESG disclosures), EU Taxonomy,
TCFD, NFRD and CSRD. It was pleasing
to see how the Bank’s Sustainability
Committee was leading an integrated and
coordinated approach to sustainability
within the Bank with external reporting a
key pillar within the Bank’s Sustainability
Programme. It is clear that a key challenge
for the Bank will be ensuring that data
is ready to support the necessary
disclosures and I am pleased with the
progress we have made to date in this
regard.
Through the year I have continued to
work closely with both the Head of Group
Internal Audit and Chief Financial Officer
who are both key accountable executives
to the Board Audit Committee. I am
pleased with the progress the Bank has
made over the last 12 months, but there
is more to be done to reflect the fact that,
post the acquisition of the Ulster Bank
businesses, PTSB is a larger and more
systemically important bank that with
appropriate balance sheet growth will
revert to ECB supervision. This will require
focus to ensure the Bank’s systems of
risk management and internal control
continue to adapt to both the internal and
external environment and this evolution of
the Bank’s systems and mindset will be a
key focus for both the Audit and Risk and
Compliance Committees in 2024.
148
PTSB Group Holdings plc - Annual Report 2023 Composition and Operation
The Board Audit Committee (‘BAC’) consists of five Non-Executive Directors. The
biographical details of each member are set out on pages 123 to 128. Neither the
Board Chairperson nor the CEO is a member of the Committee. The Board requires
the Chairperson of the BAC to have recent and relevant financial experience. The
Chairperson of the Committee is responsible for leadership of the Committee and for
ensuring its effectiveness. Together the members of the Committee bring a broad
and diverse range of relevant knowledge and experience contributing to effective
governance.
The members of the BAC meet together at the start of each scheduled meeting in
private session. The head of GIA is then invited to join the meeting so the Committee
can review and discuss internal audit activity without senior management present.
Subsequent attendance by senior management, the external auditors and others is by
invitation only and managed to ensure the ongoing independence of the Committee.
The Board requires that a minimum of one member is common to the BAC and the
Board Risk and Compliance Committee. Donal Courtney and Anne Bradley are members
of both Committees.
2023 Committee Meeting Attendance
Member
Appointed
Ceased
Number of
Years on the
Committee
2023 Meeting
Attendance
Ronan O’Neill*
02 Nov 2021
Donal Courtney
03 Oct 2018
Anne Bradley
30 Mar 2021
Ruth Wandhöfer**
31 Dec 2023
Catherine Moroney
12 Dec 2023
-
-
-
-
-
2.2
5.3
2.9
0
0
Paul Doddrell
26 Nov 2020
31 Dec 2023
3.1
Andrew Power
26 Sep 2016
19 May 2023
6.8
9/9
9/9
8/9
0/0
0/0
9/9
4/4
* Chairperson
** Appointed to Committee after last meeting of
the year had been held
Role and Responsibilities
The BAC monitors the effectiveness and
adequacy of internal control, internal
audit and IT systems and reviews the
effectiveness of risk management
procedures, in addition to reviewing
the integrity of the Company’s internal
financial controls. The BAC monitors
and reviews the effectiveness of the
Group’s Internal Audit (GIA) function and
also considers the external auditor’s
independence and objectivity and the
effectiveness of the audit process. The
BAC also reviews discoveries of fraud
and violations of laws and regulations as
raised by the head of GIA.
The BAC monitors the integrity of the
Financial Statements of the Company,
reviewing significant financial reporting
judgements contained therein, to ensure
that they give a “true and fair view” of
the financial status of the Group and
to recommend to the Board whether to
approve the Annual and Interim Reports
and also to recommend to the Board
that it believes that the Annual Report,
taken as a whole, is fair, balanced
and understandable and provides the
necessary information for shareholders to
assess the Group’s position, performance,
business model and strategy.
In considering whether the Annual Report
is fair, balanced and understandable, the
Committee reviewed the Annual Report
and considered whether the Financial
Statements were consistent with the
financial review elsewhere herein. The
Committee also reviewed governance
and approval processes in place within
the Group as they were relevant to the
Financial Statements. These included
the completion by Management of
disclosure checklists to ensure all required
disclosures required by applicable
company law, listing requirements and
accounting standards are included in the
draft Annual Report which was reviewed
by various Executives and Management of
the Group.
The Committee also had regard to the
significant judgements relating to the
Financial Statements that are set out
in this report. Each of these significant
issues were addressed in papers received
by the Committee from Management and
in the report received by the Committee
from the external auditors and were
discussed in the Committee’s meeting
with the external auditors.
The BAC also had regard to the
assessment of internal control over
financial reporting, details of which are
outlined in the Risk Management and
Internal Control section of the Corporate
Governance Statement.
Matters considered by the
Committee in 2023
During 2023, the Committee spent a
significant amount of time considering
those issues set out in the Significant
Financial Reporting Judgments and
Disclosures and, recommending for
approval to the Board, the Annual Report
and Interim Report.
During 2023, the Committee also:
• Reviewed GIA activity throughout the
year, including a review of performance
against the 2023 internal audit plan;
• Reviewed the Group’s Pillar 3 policy and
disclosures;
• Approved the GIA Charter, resourcing
model and considered the effectiveness
of the function;
• Reviewed External Auditor
independence and effectiveness;
• Approved the new Task Force on
Climate-Related Financial Disclosures
Report;
• Reviewed the continued recognition of a
Deferred Tax Asset (DTA) on tax losses
carried forward;
• Approved changes in accordance
with International Financial Reporting
Standards (IFRS) and International
Accounting Standards (IAS);
• Reviewed impairment provisions;
• Reviewed control environment reports
• Reviewed the effectiveness of internal
control over financial reporting;
• Approved the Internal Audit Plan for
2024;
149
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Board Audit Committee (continued)
Recognition and Recoverability of
Deferred Tax Assets
The Committee considered the extent of
DTAs recognised by the Group in respect
of unutilised tax losses, and in particular,
the future profits of PTSB against which
losses may be utilised in future years.
The Committee noted that the Group’s
performance and strategic outlook has
improved, as outlined in more detail
under “Going Concern” and “Longer Term
Viability” below.
Accordingly, in line with the requirements
of IAS 12 “Income Taxes,” Management
have formed the view that the carried
forward tax losses within PTSB could
be utilised against future profits which
will be generated by PTSB. This requires
significant judgments to be made about
the projection of long-term profitability
because of the period over which
recovery extends.
Having considered the above, the
Committee agreed with Management’s
assessment that it was probable that
the level of DTAs recognised in the
financial statements at 31 December
2023 would be recovered. The Committee
noted that IFRS does not allow for
the DTA recognised to be discounted
notwithstanding that it will likely take a
significant number of years to be fully
recovered.
Impairment review of the Group’s
subsidiary undertaking
The Company carries its investment
in its subsidiary undertaking at cost
less impairment and reviews whether
there is any indication of impairment at
each reporting date. Impairment testing
involves comparing the carrying value
of the investment to its recoverable
amount. The recoverable amount is the
higher of the investment’s fair value or its
value in use (VIU). An impairment charge
arises if the carrying value exceeds the
recoverable amount.
Management provided the Committee
with a paper that detailed the recoverable
amount of the investment. The Committee
reviewed the paper and calculations and
is satisfied with the recoverable value of
the subsidiary and that no impairment was
required.
IT Access
Certain matters in relation to IT access
controls have been communicated to the
BAC through the external audit process.
The Committee is however satisfied there
are sufficient mitigating controls in place
from a financial reporting perspective.
Going Concern
Note 1 of the financial statements
includes details of the going concern of
the Group and Company, which outlines
the Directors’ view that the Group will
continue as a going concern for a period
of 12 months following the signing of this
report.
In making the judgment, the Committee
was provided with detailed papers
containing Management’s considerations
of the risks and uncertainties as they may
pertain to going concern. The Committee
reviewed these judgments, and agree
with Management’s view that the Group
continues on a going concern basis and
that there are no material uncertainties.
Longer Term Viability
In accordance with the requirements of
the UK Corporate Governance Code, the
Directors are required to issue a viability
statement of the prospects of the Groups
taking in account Group’s current and
projected financial position taking in
account the principal risks facing the
Group.
The period over which we consider
longer-term viability
The Directors have assessed the viability
of the Group over the three year term
which falls within the time horizons
considered for the Group’s strategic
planning and the regulatory stress testing
frameworks employed by the Group.
The Directors are satisfied that this is an
appropriate period of assessment.
Assessing the governance and
prospects of the Company and Group
In making this assessment, the Directors
have assessed the key factors that are
likely to affect the Group’s business
model and medium term plan which
have been stress tested and sensitised
for a downside scenario to reflect the
challenges that the Group is facing,
primarily on the Group’s capital, solvency
and liquidity position while taking into
account other principal and emerging
risks.
• Reviewed the governance and
approval arrangements underlying
the fair, balanced and understandable
assessment of the Annual Report;
• Assessed the Longer Term Viability and
Going Concern Statements;
• Reviewed the disclosures on
compliance with the UK Corporate
Governance Code;
• Reviewed non-impairment provisions
including legacy, legal and compliance
liabilities; and
• Reviewed the basis, background and
level of Non-Audit fees paid to PwC and
KPMG.
Financial Reporting and Significant
Financial Judgments and
Disclosures
During the year, the BAC reviewed the
External Auditors’ findings, and the
following significant financial judgments
made, the related disclosures for the 2023
Financial Statements as set out on the
current and the following page.
Expected Credit Loss Provisions
The Committee considered the Group’s
methodology including assumptions and
parameters for generating the Group’s
allowance for Expected Credit Loss (ECL)
for its secured portfolios. The Committee
discussed with Management in detail
any changes and revisions made to the
Group’s IFRS 9 ECL models, macro-
economic scenarios, significant increase
in credit risk, and post model adjustments.
Multiple scenarios
The Committee reviewed and approved
the macro-economic scenarios for use
in IFRS 9 ECL estimation, which included
the central scenario used for financial
planning purposes, a more favourable
scenario, and an adverse scenario.
Expert credit judgements
At 31 December 2023, the impairment
provisions included €135 million of
Management’s adjustments to modelled
outcomes. A key focus of the Committee
during the year was an assessment of the
level and rationale for such adjustments.
The Committee concluded that a robust
governance framework existed to monitor
provisioning adequacy and that the
assumptions and judgements applied
by Management were appropriate.
The Committee was satisfied that the
provision and related disclosures in the
financial statements were appropriate.
150
PTSB Group Holdings plc - Annual Report 2023 The Board has reviewed the Medium Term
Plan (MTP) and the outputs from stress
testing of capital and liquidity positions
both pre and post management actions.
The Directors have carried out a robust
assessment of the emerging and principal
risks facing the Group, including those
that would threaten its business model,
future performance, solvency or liquidity.
The stress testing is designed to explore
the resilience of the Group to the potential
impact of principal risks set out in the
Annual Report, including in particular
funding and liquidity, capital adequacy,
the economic environment, regulatory
risks and or a combination of these risks.
A description of the Group and Company's
principal risks together with the approach
to risk identification and control are set
out in the Risk Management section.
The Medium Term Plan is reviewed
annually and with increased frequency
when necessitated by significant changes
in the external environment and is
approved by the Board each year.
The Medium Term Plan closely aligns
to Group’s Risk Appetite Statement and
Risk Management Framework and details
the Group’s future profitability, cash flow
projections, capital requirements and
the Group’s key performance measures.
Management’s performance against the
medium term plan is reviewed on an
ongoing basis by the Board.
The Group made a profit for the 2023
financial year. While the Group remains
strongly capitalised and has significant
liquidity at the year-end, the future
projections in the medium term plan
which were sensitised for a downside
scenario indicate no breaches in either
regulatory capital and liquidity positions
in the viability period of assessment to
December 2026.
The assumptions underpinning the stress
testing to determine the resilience of the
Group’s balance sheet, profitability and
robustness of the business model were
significantly conservative. While, the
downside scenario marginally pushes out
profitability, there were no breaches of
regulatory requirements with a marginal
recourse to internal buffers in the viability
period.
There are certain key assumptions that
are critical to the viability of the Group and
these are outlined below:
Funding & Liquidity
The Group continued to have sufficient
liquidity throughout 2023, and its liquidity
position remains strong at 31 December
2023 with the Group holding a significant
liquidity buffer. The Group has no reliance
on ECB funding and is 90% deposit
funded with plans to diversify its funding
profile over the horizon of the next three
years.
A key assumption in determining the
longer-term viability is that the Group will
continue to be able to access the required
liquidity and funding across all channels
during the period of assessment.
The Group continues to undertake a
number of initiatives to improve its
liquidity position in the areas of deposits,
collateral optimisation, and wholesale
markets activity.
The Directors and Management are aware
that the Group’s ability to monetise its
contingent counterbalancing capacity is
dependent on the underlying collateral
remaining eligible.
Our funding plans assume, based on our
interaction with wholesale markets and
deposit trends that the required liquidity
and funding will be available to the Group
over the medium term.
Capital Adequacy
Capital Adequacy:
The Group made a profit for the year
ended 31 December 2023. Directors and
Management have reviewed the MTP
and based on this, the Directors and
Management are satisfied that the Group
is well positioned to continue to deliver
profits in future years.
Directors and Management have
considered the forecast sufficiency of this
capital base, and its ability to withstand
additional stress scenarios such as
the economic environment in Ireland
deteriorating. At present, we do not have
full certainty as to how our minimum
regulatory capital requirements will evolve
over the period to 2026; however, we
expect to be in a position to meet those
requirements in the medium term.
Reasonable Expectation of longer-term
viability
Based upon the above assessment, the
Directors have a reasonable expectation
that the Group and Company will be able
to continue in operation and meet its
liabilities as they fall due over the three-
year period of their assessment to 31
December 2026.
Provisions for Liabilities
The Committee considered the provisions
made in the Financial Statements in order
to assess the appropriateness of the
underlying liabilities.
Management presented a paper outlining
the requirements of IAS 37 and the
basis of the provisions proposed. The
Committee is satisfied that the provisions
represent the best estimate of the
potential liabilities at 31 December 2023.
Relationship with External Auditors
The Group’s External Auditors are KPMG
who were appointed by shareholders in
2023. Due to the mandatory firm rotation
requirements, the outgoing External
Auditors, PwC resigned in 2023 following
the completion of the 2022 audit. The
BAC provides a link between the Board
and the external auditors, independent
of the Company’s Management. The
external auditors regularly attend BAC
meetings and the Committee meets with
the external auditors at least once a year
without Management present to discuss
their remit and any issues arising from the
audit.
The BAC reviewed the external audit plan
prior to the commencement of the 2023
audit. The BAC met with the external
auditor to review the findings from the
audit of the Group financial statements.
The BAC has an approved policy on the
provision on non-audit services by the
external auditor. The policy seeks to
ensure that processes are in place to
make sure that the independence and
objectivity of the external audit process
is not compromised. This includes
monitoring the nature and extent of the
services provided by the external auditor
through its quarterly review of fees paid
to the external auditor for audit and
non-audit work, seeking confirmation
from the external auditor that they are
in compliance with relevant ethical
and professional guidance and that, in
their professional judgment, they are
independent of the Group.
151
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Corporate Governance Statement
Board Audit Committee (continued)
The BAC reviews all fee arrangements
with the external auditor. Fees paid
in respect of audit, other assurance
services, tax advisory services and non-
audit services are outlined in note 8 to the
financial statements.
As set out in the Risk Management
Section a ‘Three Lines of Defence’ model
has been adopted by the Group for the
effective oversight and management of
risks across the Group, with GIA being the
Third Line of Defence.
In line with the Institute of Internal
Auditors (IIA) Standards (1300), the Head
of GIA is required to develop and maintain
a quality assurance and improvement
programme that covers all aspects of
internal audit activity. An internal quality
assessment must be completed on an
annual basis with an independent external
assessment undertaken every five years
to evaluate the Internal Audit Function’s
conformance with IIA Code of Ethics and
Standards. The Group’s Internal Audit
function was reviewed by the Chartered
Institute of Internal Auditors (IIA) in 2021
and an action plan has been approved
by the BAC to address the findings
of the IIA Report and the BAC is kept
apprised with updates on same. The
Audit Committee was satisfied that during
2023, GIA demonstrated flexibility and
responsiveness to enable the function
to focus on current and emerging risks,
inclusive of audit requirements driven by
both legislation and regulation, auditable
processes within the Group and alignment
with IIA Standards. A comprehensive
assessment of the current GIA resource
model and skills was also completed in
2023 aligned with the strategic plans and
priorities of the Group, with an emphasis
on ensuring adequate resources and skills
in place to provide assurance in relation
to the current and emerging risk profile
of the Group. Through these measures
the Audit Committee has assessed
the effectiveness of internal audit
function and is satisfied that the quality,
experience and expertise of the function
is appropriate to the needs of the Group.
Other assurance services are services
carried out by the auditors by virtue
of their role as auditors and include
assurance related work, reporting to the
regulator and other assurance services.
In line with best practice, the auditors
do not provide services such as system
design and valuation work which could
be considered inconsistent with the audit
role.
The amount of fees payable to external
auditors for their audit services for
the year 2023 was €1.8m (excluding
VAT) payable to KPMG Ireland. €1.6m
(excluding VAT) was paid in respect of
non-audit services, which relate to various
assurance works. The Company’s external
auditor generally performs these services.
The Committee note that additional fees
were paid to KPMG during 2023 before
they were appointed as external auditors.
The external auditor is required to rotate
audit partner every five years. The current
audit partner is Frank Gannon who was
appointed in 2023. The Committee also
reviews the effectiveness, independence,
and objectivity of the external auditor. The
Committee also considered a paper by
Management regarding auditor’s efficiency
and effectiveness.
The BAC reviews the effectiveness of the
external auditor through discussion and
assessment of its performance. The BAC
has concluded that it was satisfied with
the external auditor’s performance.
Review of Group Internal Audit
The BAC approves the annual work
programme for the GIA function and
ensures that it is adequately resourced
and has appropriate standing within the
Group. The Head of Internal Audit has a
direct reporting line to the Chairperson
of the BAC and the BAC meets with the
Head of Internal Audit on a regular basis
without the presence of Management.
The BAC receives regular reports from
GIA, which include summaries of the key
findings of each audit in the period. The
BAC ensures co-ordination between GIA
and the external auditor.
152
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Nomination, Culture and Ethics Committee
The Board Nomination, Culture and Ethics Committee
evaluate the skills and characteristics required of Board
members and to ensure the tone on culture and leadership is
set from the top.
Dear Reader,
As Chairperson of the Board Nomination,
Culture and Ethics Committee (The
“Committee”), I am pleased to present
the report of the Committee for the year
ended 31 December 2023. This report
has been prepared by the Committee
and approved by the Board. The report
provides further context and insight
into the role and responsibilities of the
Committee together with a description of
the work undertaken during 2023 as set
out below.
On 30 March 2023, Robert Elliott
retired as Chairperson of the Board
and the Nomination, Culture and
Ethics Committee, and I took over as
Chairperson on 31 March 2023. In May
2023, Andrew Power stepped down from
the Board at the conclusion of the Annual
General Meeting (AGM). In December
2023, Ken Slattery retired from the
Board and the Nomination, Culture and
Ethics Committee having completed his
term of office, and Paul Doddrell was
appointed a member of the Committee.
PTSB benefited greatly from Robert,
Andrew and Ken’s experience, diligence
and exceptional commitment over their
tenure and, on behalf of the Board, I thank
them sincerely for their contribution to the
Group.
Arising from the planned departures,
the Committee oversaw the recruitment
and selection of two new independent
Non-Executive Directors; Catherine
Moroney and Richard (Rick) Gildea who
were appointed to the Board in December
2023. The Committee also oversaw the
appointment of the Group’s new Chief Risk
Officer, Barry D’Arcy who joined in October
2023. I would like to acknowledge David
Curtis who held the position of Interim
CRO during the appointment process and
thank him for his commitment during the
period and throughout his long career with
PTSB.
The Committee continues to engage in
a meaningful way to shape and support
evolution of the Group’s espoused
culture which is to have a customer-
centric, open, inclusive, risk integrated,
growth culture characterised by integrity,
innovation and accountability. In this
regard the Committee has heard from
many of the Group’s colleagues and
held discussion and debate on matters
such as the execution of the Group’s
sustainability strategy, risk culture and
integration to ensure good customer
outcomes, continuing to review and
embed a psychologically safe environment
for colleagues to ‘speak freely’ and
moving towards the next stage of the
Group’s Diversity and Culture maturity
journey. The Committee has also actively
engaged in understanding and supporting
colleague wellbeing through attendance at
People Experience Council (representative
group on culture evolution and colleague
wellbeing) discussing feedback from
management on the outcome of the
Group’s Every Voice Counts colleague
surveys and visiting colleagues in their
work locations.
A key focus for the Committee in 2023
following the successful completion of
the transaction with Ulster Bank was
reflecting upon the Bank’s Culture and
evolution over the last number of years.
Listening to feedback from colleagues
across the enlarged organisation with
a focus on building upon culture of
accountability, trust with customers and
communities, and sharing in the success
of PTSB, the Bank has evolved its Purpose
and Ambition which are the anchors of the
Bank’s refreshed business strategy and
new PTSB brand.
During 2023, the Board and Executive
Committee undertook a period of
reflection with a view to identifying
actions to strengthen the Group’s core
capabilities; to deliver on its strategic
ambition while ensuring the resilience
existed to effectively manage both
known and unknown/emerging risks
and to ensure the Bank remained safe
and secure. One of the target outcomes
was to enhance the effectiveness
of Board and Executive Committee
operations. The Committee has been
actively involved in oversight on a
series of actions underway and planned
to strengthen Board and Executive
Committee capabilities taking into
account the enlarged Bank, refreshed
strategy and evolving risk profile. This
included a robust assessment of the
knowledge, skills and experience of
the Board and Executive Committee to
support its strategy for growth into the
future, enhancing induction, training
and development plans and succession
planning. The Committee will continue
to provide oversight in the delivery of
those actions through enhancements
to the Board and Executive Committee
selection and recruitment process and,
in strengthening the governance process
for assessment of suitability of Senior
Executives within the Bank In 2023
the Committee amended its Terms of
Reference to review and recommend
to Board all Executive Committee and
all pre-approved control function (PCF)
appointments.
Another key areas of focus for the
Committee was the oversight on
implementation of the Central Bank
(Individual Accountability Framework)
Act 2023 (IAF) which the Group
sees as a positive development in
supporting the building of trust with
customers and colleagues through
enhanced governance, performance
and accountability and which reflects
the culture, purpose and values of the
Group. The Committee oversaw the
development and implementation to
date of the IAF through an extensive
programme of work as it prepared for the
introduction of new Conduct Standards
at end December 2023 and the Senior
Executive Accountability Regime in 2024
and beyond. The Committee approved
a new Conduct Standards Policy and
reviewed and approved updates to the
Fitness and Probity Policy, Colleague
Conduct Policies, and endorsed the
updates to the Executive sub-committee
‘Colleague Conduct Committee’ to
provide oversight of all conduct related
matters. The implementation and
embedding of IAF within the Group
will remain a key area of focus for
the Committee in2024 with oversight
153
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Nomination, Culture and Ethics Committee (continued)
Composition and Operation
The Committee is composed of a majority of Independent Non-Executive Directors. The
Board requires that the Board Chairperson and the Senior Independent Director (SID)
are members of the Committee.
2023 Committee Meeting Attendance
Member
Appointed
Ceased
Julie O’Neill*
17 Jan 2023
Ronan O’Neill
26 Jul 2016
Marian Corcoran
30 Mar 2021
Celine Fitzgerald
30 Mar 2021
Paul Doddrell**
31 Dec 2023
-
-
-
-
-
Robert Elliott***
31 Mar 2017
30 Mar 2023
Ken Slattery
28 Sep 2020
12 Dec 2023
3.3
Chairperson from 31 March 2023
Appointed to Committee after last meeting of the year had been held
*
**
*** Resigned as Chairperson on 30 March 2023
Number of
Years on the
Committee
2023
Meeting
Attendance
0.9
7.6
2.7
2.7
0
6
6/6
6/6
6/6
6/6
0/0
2/6
6/6
Responsibilities of the Committee
The Board Nomination, Culture and
Ethics Committee is responsible for
bringing recommendations to the
Board regarding the appointment of
new Directors and of a new Board
Chairperson. The Board Chairperson
does not attend the Committee when
it is dealing with the appointment of a
successor to the Board Chairperson.
Decisions on Board appointments are
taken by the full Board. All Directors are
subject to re-appointment by election by
the shareholders at the first opportunity
after their appointment. The Committee
keeps under review the leadership
needs of the Group, both Executive and
Non-Executive, with a view to ensuring
the continued ability of the Group to
compete effectively in the marketplace.
The Committee is also responsible for
reviewing the effectiveness of the Board’s
operations, including the Chairperson
and composition of Board Committees.
The Committee also has responsibilities
for supporting the Board on oversight
on culture, ethics, and reputation
management and employee engagement.
Executive Committee Appointments
Chief Risk Officer
The Committee oversaw the appointment
of Barry D’Arcy as Chief Risk Officer (CRO)
and member of the Executive Committee
in October 2023. A comprehensive
induction, training and development
plan for Mr D’Arcy was approved by the
Committee who will provide oversight of
the implementation thereof. In his new
role, Barry is responsible for leading,
managing and overseeing all Risk and
Compliance related matters of the Group
and strengthening the Company’s risk
management and compliance functions
reflecting the emphasis the Group places
on how it manages risk and complies
with regulations. The CRO reports on all
material risks to which the Group is or may
become exposed and provides support
and challenge to the by the First Line of
Defence in executing their responsibilities
under the Bank’s Enterprise Risk
Management Framework.
of elements of the Senior Executive
Accountability Regime which comes into
effect from 1 July 2024.
The Committee reviewed the Diversity,
Equity & Inclusion (DE&I) strategy 2023-
2025 and the programme of work which
resulted in the Group receiving Gold
Accreditation from the Irish Centre for
Diversity during the year; a significant
achievement which the Committee
commends.
In 2023, the Committee oversaw the
annual performance evaluation of the
Board, its Committees and individual
Directors, to understand how effectively
they were performing while providing
assurance to the regulatory authorities,
stakeholders and investors of our
commitment to the highest standards of
governance and probity. The Committee
also carried out a detailed assessment
of Board and Senior Management
succession plans, a review of the Board
Collective Suitability Assessment including
the Composition of the Board, Committee
structure and composition with a view to
aligning the Board skills with the strategic
direction and risk profile of the Group, The
Committee also approved enhancements
to Board Training and Development plans
having regard to the future requirements
of the Board and, a more holistic approach
to performance evaluation/reflection with
a focus on enhanced Board effectiveness
The Committee approved a revised Board
Diversity policy that takes account the
importance of all diversity metrics in
assessing the suitability of members of
the Board to deliver the Group’s Purpose
and Ambition.
Julie O’Neill
Chairperson, Board Nomination, Culture
and Ethics Committee
154
PTSB Group Holdings plc - Annual Report 2023 Succession Planning
The Committee undertakes regular
reviews of both Board and Board
Committee composition and ensures
there is a comprehensive approach to
ensuring regular and planned refreshment
of Board and Board Committee
membership. Arising from succession
planning reviews in 2021 and 2022 the
Committee agreed the need to identify
replacements for Non-Executive Directors
Andrew Power and Ken Slattery resulting
in the appointments of Rick Gildea and
Catherine Moroney in December 2023.
Full details of the appointment process for
these positions are set out below.
In January 2023, Julie O’Neill was
appointed as an Independent Non-
Executive Director and Chairperson
designate pending the planned retirement
of Robert Elliott on 30 March 2023.
The Committee maintained its focus
on the Executive Committee (ExCo)
talent pipeline and senior management
succession plans reflecting the Board’s
responsibility to ensure appropriate
plans are in place. The Committee
oversaw the progress with development
of robust talent management and
succession planning for ExCo members
which included the development of a
diverse pipeline of successors at senior
leadership team level in line with the
talent management, development and
succession planning programmes within
the Group and which reflect the DE&I
ambitions of the Group. This included
talent mapping to identify strengths,
development needs and future potential of
identified successors internally and talent
maps for potential external successors
identified for certain ExCo roles.
Director Appointments
A key function of the Committee is
succession planning for the Board. There
were a number of new appointments
to the Board during the year including
the Board Chairperson on 31 March
2023 and two new Independent
Non-Executive Directors; Catherine
Moroney and RickGildea appointed on
12 December 2023. Catherine Moroney
was appointed a member of the Board
Audit Committee and the Board Risk and
Compliance Committee. Rick Gildea was
appointed a member of the Board Risk
and Compliance Committee and the Board
Remuneration Committee. Further details
on the appointment process is set out
below.
Board Chairperson
Following regulatory approval and
endorsement by the Board, Ms Julie
O’Neill was appointed as Independent
Non-Executive Director on the Board on
the 17 January 2023 and took over as
Board Chairperson on the 31 March 2023,
following the conclusion of Mr Robert
Elliott’s term of office as Chairperson. A
full description of the recruitment and
selection process for the appointment of
Julie O’Neill as Chairperson is set out on
pages 131-132 of the 2022 Annual Report.
Independent Non-Executive Directors
Following a Board succession planning
process conducted in 2022, a preferred
candidate was identified to replace to
replace Ken Slattery. Mr Slattery was due
to retire at the conclusion of the Group’s
2023 Annual General Meeting (AGM)
along with Andrew Power each director
having concluded their respective terms
of office. A preferred candidate was
identified who met requirements of the
role profile following a comprehensive
recruitment and selection process
supported by executive search firm
Odgers Bernston. The candidate was
then endorsed by the Board but sadly
passed away in January 2023 before their
appointment could be completed.
In February 2023, recruitment specialists
Odgers Berndston (Odgers) were
re-engaged to support the candidate
identification process to replace Ken
Slattery and Andrew Power on the Board.
Note: Neither the Company nor any
of the Directors have any commercial
relationship with Odgers outside of
recruitment services that are provided
from time to time to fill designated Board
and Senior Management positions.
The Nomination Culture and Ethics
Committee carried out a collective
suitability assessment to understand
the knowledge and experience gaps on
the Board taking into account planned
departure of Ken Slattery and Andrew
Power from the Board. Having reviewed
the Board Suitability Matrix (the desired
mix of knowledge, experience and skills
on the Board) and identifying the desired
mix of knowledge, experience and skills on
the Board, and being mindful of the Bank’s
business model expansion following the
acquisition of certain aspects of the Ulster
Bank business, it was agreed that the
strength of the Board should be enhanced
through the addition of knowledge and
experience in the area of core financial
services with a focus on business banking
together with governance, regulatory,
remuneration frameworks/policies, and
capital markets. In addition, considering
the future strategic direction of the Bank
in light of its balance sheet trajectory
which could over time bring it back
under ECB supervision, it was agreed the
Board could be strengthened through
knowledge and experience in the areas of
Single Supervisory Mechanism (SSM) and
ECB requirements in the broader sense,
with a preference for a candidate who
could bring a European perspective and
diversity of experience gained from living
or working outside of Ireland.
Arising from the recruitment and selection
process, two candidates were identified to
fill the board vacancies. Following detailed
assessment of the two candidates,
recommendations were brought to the
Committee who agreed that Catherine
Moroney and Rick Gildea met the
requirements of the role profiles for the
vacancies on the Board. This position was
then endorsed by the Board, and following
regulatory approval by the Central Bank of
Ireland, they were each appointed to the
Board on 12 December 2023.
155
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Nomination, Culture and Ethics Committee (continued)
Committee Composition
During 2023 the Committee undertook a
review of Committee composition in light
of changes to the Board and the need to
refresh the knowledge and experience
of the Board’s Committees following the
planned departures of Andrew Power and
Ken Slattery at the end of their respective
terms of office together with the
appointment of Rick Gildea and Catherine
Moroney to the Board in December 2023.
The Committee also reviewed committee
composition in light of the UK Code
requirement for the Audit Committee to
consist of Independent Non-Executive
Directors (as described on page 97 of
the 2022 Annual Report). Arising from
this review, Catherine Moroney and Rick
Gildea joined the Risk and Compliance
Committee. Ruth Wandhofer moved
from the Board Risk and Compliance
Committee to the Audit Committee,
joined there by Catherine Moroney. Rick
Gildea joined the Board Remuneration
Committee. Paul Doddrell moved from the
Audit Committee to the Board Nomination,
Culture and Ethics Committee. No Director
is a member of more than two Board
standing Committees. Celine Fitzgerald
succeeded Ken Slattery as Chairperson
of the Remuneration Committee on the
23 February 2024 following receipt of
regulatory approval.
Induction, Training and Professional
Development
The Board recognises the high calibre and
the varied level of knowledge, skills and
experience of the Board. The Committee
reviewed and enhanced the approach
to induction, training and professional
development of the Board members with
a view to aligning the Board skills with
the strategic direction and risk profile
of the Group thereby enhancing the
collective knowledge of the Board. It aims
to achieve this by prioritising training
topics around the risks and opportunities
from emerging themes, tailoring individual
training and development plans for
Board members to enhance the core
skills identified following the Collective
Suitability Assessment by building on the
education and professional development
opportunities through externally facilitated
professional programmes. It will also seek
to deepen the Board’s knowledge of the
business through increased exposure to
subject-matter experts both internally and
externally through the Board approved
training programme. The Committee also
oversee the comprehensive induction,
training and development plans for new
Board members and Executive Committee
appointments, in addition to induction and
handover arrangements for transition of
Committee chair roles to existing Board
members.
Board Performance Evaluations
In 2023, led by the Chairperson,
the Committee oversaw the annual
performance evaluation of the Board and
its Committees and individual Directors.
Enhancements have been made to the
process undertaken for the 2023 annual
Board performance evaluation reflecting
actions identified to enhance Board and
Board Committee effectiveness and the
resulting recommendations are set out in
page 137 of this report.
As required under the UK Corporate
Governance Code, an externally
facilitated Board performance evaluation
will take place every three years. The
last externally facilitated evaluation of
performance took place in 2021; and the
next scheduled external Board evaluation
will be conducted on 2024 performance.
Matters considered by the
Committee in 2023
• Review of the work undertaken to
identify actions required to strengthen
the foundations, capabilities and build
resilience within the enlarged Group
following the acquisition of certain parts
of the Ulster Bank businesses with
particular focus on enhancing the Board
and Executive Committee effectiveness
through reflection, dynamics, innovation
and strategic thinking/maturity.
• Review of the succession plans
for Board and Senior Management
positions across the Group;
• Review of Talent Acquisition,
Management, Development and
Succession Planning programmes
within the Group;
• Review of its own Terms of Reference;
• Provided oversight to the Sustainability
Committee, as a sub-committee of
the Executive Committee, on reporting
to the Nomination, Culture and Ethics
Committee on Responsible and
Sustainable Business matters from time
to time including the approval of the
Sustainability Strategy 2023-2025 and
Sustainability Programme of Work;
• Assessed planned vacancies on the
Board and approved role profiles
for new Board members and Board
Committee Chair roles, supporting the
recruitment and selection process;
• Reviewed the Report on benchmarking
of diversity practices and gender pay
gap at Board and Management level
across the EU relative to the Group;
• Approval of the recruitment process
and appointment for a number of Senior
Management positions;
• Reflection of the evolution of the
Group’s culture over recent years which
culminated in a simplified Culture
Charter;
• Review on reports concerning the
Group’s Brand and Reputation including
the launch a new PTSB Brand identity;
• Review and approval of Board
Policies (Diversity, Conflict of Interest,
Assessment and Suitability, Induction,
Training and Professional Development,
Succession Planning);
• Review and approval of the Group’s
Fitness and Probity Policy;
• Review of updates to the Group’s Speak
Freely Policy and Procedure, Dignity
and respect Code, Protected Disclosure
Code and Equality through Diversity,
Equity and Inclusion, and Grievance
Procedures;
• Review and approval of updates to
the Group Colleague Policies and
Procedures incorporating requirements
under the IAF including the Code of
Ethics Policy; Colleague Conduct Policy,
Conflict of Interest Policy, Colleague
Disciplinary Procedures, and the
introduction of a new IAF Conduct
Standards Policy;
156
PTSB Group Holdings plc - Annual Report 2023 • Review of Colleague Conduct related
• Review of Corporate Affairs, Reputation
Management and Communication
(including Stakeholder Engagement)
updates;
• Review of the Corporate Sponsorship
programmes;
• Reviewed progress on the Group’s
Sustainability Strategy
• Consideration of the IBCB DECiDE
Framework and ethical decision making
• Review of the Board Collective
Suitability Assessment including
the Board Effectiveness and Board
Suitability Matrix; and
• Oversight of the Group’s programme
for implementing the Central Bank
(Individual Accountability Framework)
Act.
activity within the Group;
• Review and approval of the Resourcing
and Selection Policy for the Group;
• Review of the effectiveness of the
Directors, the Board and that of its
Committees;
• Approval of the 2022 Board Evaluation
action plan together with regular
updates thereon, and approval of the
2023 Board Evaluation approach;
• Review of the size and composition of
the Board and that of its Committees
together with a review of the
Succession Planning requirements for
the next two years;
• Consideration of workforce engagement
mechanisms under the UK Code;
• Review of the Annual Report
Disclosures relating to the Nomination,
Culture and Ethics Committee;
• Review of Diversity, Equity and
Inclusion, Learning and Talent, and
Employee Survey updates;
• Reviewed progress on the Group’s
Diversity, Equity and Inclusion and
Organisation Culture programmes of
work including the DEI Strategy for
the period 2023-2025, gender gap
and gender pay gap strategy which
focused on the areas of leadership
development, SMART Working
Framework, HR Policy and Procedural
enhancements and Better Balance
Employee Representative Group, and
enhancements following the Irish Centre
for Diversity Gold Accreditation;
157
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Risk and Compliance Committee
The Committee supports the Board in ensuring
risks are properly identified, reported, assessed,
and controlled, and that the Bank’s strategy is
consistent with risk appetite.
Defence. A key priority for the Committee
was ensuring any risks that remained post
migration were appropriately transferred
into business as usual activity or to
standalone workstreams and monitored to
closure.
Another key development for the Group
was the launch of a new PTSB Brand
and Visual Identity in October 2023 with
the stated ambition to be a full-service
personal and business bank focussed
on meeting customer needs with an
“altogether more human” approach.
The Committee supported the Board
in monitoring the Group’s business
readiness for Brand launch and ensuring
the commitment to customers (both
existing customers and new) could be
delivered. The Committee provided both
support and challenge to Management
on customer service levels, customer
impacting errors, wait times for customer
assistance and management of customer
complaints.
Advising and supporting the Board
in ensuring there is effective risk
management and risk governance
across the Group is a key priority for
the Committee. During 2023 the Board
and Executive Committee undertook
a period of reflection with a view to
identifying actions to strengthen the
Group’s core capabilities; to deliver on
its strategic ambition while ensuring the
resilience exists to effectively manage
both known and unknown/emerging risks
and to ensure the Bank remains safe
and secure. One of the target outcomes
is to develop a further enhanced
approach to risk management across
the three lines of defence supported by
a robust approach to the identification,
assessment, management, monitoring
and reporting of risk and the embedded
and connected supporting processes and
technology. BRCC has been proactively
involved in the process and is supportive
Dear Reader,
As Chairperson of the Board Risk and
Compliance Committee (the “Committee”
or “BRCC”), I am pleased to report on the
Committee’s activities for the year ended
31 December 2023.
A number of key achievements for the
Group, which were transformational for
PTSB’s future growth, were overseen by
the Committee during 2023 requiring
proactive risk management to ensure
safe delivery. The transaction with
Natwest to acquire certain parts of the
Ulster Bank business was completed
during 2023, bringing with it a significant
uplift in customers, colleagues and
Branch footprint, as well as introducing
a new asset class to PTSB through the
acquisition of the Ulster Bank Asset
Finance business. The Committee
supported the Board in overseeing the
risks associated with these migrations
(mortgage, SME and Branches) and
with the acquisition of the Asset
Finance business, ensuring there was
appropriate consideration of the risks
with controls and mitigating actions in
place. Cross committee membership
between the Committee and Board Sun
Committee (established in May 2021 to
provide guidance and support to the
Board on the Ulster Bank transaction,
ceased in September 2023) ensured
a robust governance framework with
proactive oversight. Areas of focus for
the Committee included the impact of
the Ulster Bank transaction on capital
levels over the Group’s five year planning
period, IRRBB, CTF and AML risk, material
outsourcing, resourcing and organisational
capacity (for the end state Bank),
enterprise-wide planning, dependency
management and prioritisation. The
Committee played a central role in
assessing the programme risks and how
these would be mitigated and received
regular updates on risk assessments,
customer impact assessments, business
readiness assessments and inflight
reviews carried out by the Three Lines of
158
of the actions identified and will continue
to regularly engage with Management
to oversee delivery. In addition, BRCC
was proactively involved in monitoring
how the Group delivers its Climate Risk
Strategy, ensuring it is underpinned by
a robust Data Strategy which is a key
dependency. A continuing focus in 2023
will be the implementation of Central Bank
Guidelines on Operational Resilience and
Outsourcing together with preparation
for the implementation of the Digital
Operational Resilience Act (DORA) and the
Group’s implementation of the Individual
Accountability Framework and Senior
Accountable Executives Regime.
In October 2023, the Group’s new CRO
Barry D’Arcy joined the Group and is
already providing valuable insights and
advice to the Committee and Board. I look
forward to working closely with Barry
over the coming years. I would like to
thank David Curtis who held the position
of interim CRO during the appointment
process for his hard work and commitment
during this period and throughout his long
career with PTSB.
Donal Courtney
Chairperson, Board Risk & Compliance
Committee
PTSB Group Holdings plc - Annual Report 2023 resilience of the Group, the incidence
and management of material risk events
and the importance of having automated
processes, where practical and of
effective controls.
The Committee independently monitors
the extent to which the Group complies
with relevant rules and procedures.
This includes raising and maintaining
awareness of, for example, financial
regulations, compliance procedures and
fraud and anti-corruption measures. The
Company has internal policies, rules and
procedures which provide assurance
that Management complies with relevant
laws and regulations regarding customers
and business partners. The Committee
remain focused with on its oversight
responsibilities for Anti-Money Laundering
and Counter-Terrorist Finance activities.
In addition to meeting legal requirements,
the Committee reviews its own Terms
of Reference annually and its own
effectiveness, recommending any
changes considered necessary to the
Board.
Matters considered by the
Committee in 2023
During 2023, the Committee continued
to focus considerable attention on the
Group’s systems of risk management
and internal control and supported work
undertaken by the Three Lines of Defence
to further embed the Group’s Internal
Control Framework. The Committee
undertook regular reviews of the Group’s
systems of risk management and internal
control during the year. In addition to the
monthly reporting from the CRO, Head
Composition and Operation
The BRCC is composed of a majority of Independent Non-Executive Directors. Neither
the Board Chairperson nor the CEO is a member of the BRCC. The Board ensures that
the Chairperson of the Committee has relevant risk management and/or compliance
experience. The Board requires that at least one member of the Committee is common
to each of the Board Audit (Donal Courtney, Anne Bradley, Catherine Moroney) and the
Board Remuneration Committees (Rick Gildea). The Committee holds a member only
session at the start of each meeting following which the Committee invites the CRO for
a private session with the Committee if required. Thereafter other members of Senior
Management are invited to attend, as required.
2023 Committee Meeting Attendance
Member
Appointed
Ceased
Number of
Years on the
Committee
2023 Meeting
Attendance
Donal Courtney*
3 Oct 2018
Catherine Moroney
12 Dec 2023
Rick Gildea
12 Dec 2023
Marian Corcoran
29 Oct 2019
Paul Doddrell
26 Nov 2020
Anne Bradley
30 Mar 2021
Ruth Wandhöfer
30 Oct 2018
-
-
-
-
-
-
-
*Chairperson
Responsibilities of the Committee
The Committee is responsible for
monitoring adherence to the Group
Risk Appetite Statement (RAS). Where
exposures exceed levels established in
the RAS, the Committee is responsible
for ensuring that appropriate remediation
plans are developed. This is facilitated by
the periodic review of a key risk indicators
report calibrated to the RAS.
The Committee is responsible for
monitoring compliance with relevant
laws, regulatory obligations and codes
of conduct. This is facilitated by regular
reporting on compliance risks to the
Committee. The Committee reviews
the regulatory agenda and receives
updates on activities to implement new
and updated regulation together with
monitoring engagement with the Group’s
Regulators.
5.3
0
0
4.3
3.1
2.8
5.2
12/12
0/0
0/0
11/12
12/12
11/12
11/12
The Committee is responsible for
oversight and advice to the Board on
risk governance, current risk exposures,
future risk strategy, including strategy for
capital and liquidity management, setting
of compliance policies and principles and
the embedding of a supportive culture
in relation to the management of risk
and compliance. The BRCC supports the
Board in carrying out its responsibilities
for ensuring risks are properly identified,
reported, assessed and controlled, and
that the Group’s strategy is consistent
with the Group’s Risk Appetite. The
Committee seeks to review key aspects
of the Group’s risk profile and provide
appropriate challenge on the adequacy
of their management. The Committee
continues to focus on the operational
159
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Risk and Compliance Committee (continued)
of Regulatory Compliance and Head of
GIA, the Committee also considered a
wide range of risk related frameworks and
reports. Among the matters considered by
the Committee during 2023 were:
• Ulster Bank transaction Risk and Capital
Assessments;
• Monitoring of conduct risk and
vulnerable customers;
• Reviews of the Group’s Resolution
Planning capabilities and
documentation;
• Oversight for the remediation of SREP
related Risk Mitigation Plans;
• Monitoring of technology and change
risk,
• Health and Safety update;
• AML Risk including Project Sun (Ulster
Bank business acquisition) related risks;
• MLRO Reports;
• Monitoring of upstream Regulatory
developments;
• Risk Appetite reviews;
• Oversight and approval of the Group’s
Non-Performing Asset Strategy;
• Recovery Planning Preparedness and
Scenario Planning;
• Spotlights on Technology, Cyber
Security and IT resilience;
• Climate and Environment Risk
Management;
• Review of Funding Plans and Deposit
Strategies;
• Monthly Monitoring of top risks and
quarterly reviews thereto;
• Complaints management progress
reports;
• Reviews on Material Risk Events and
Customer Impacting Errors;
• Payments Strategy;
• ICAAP and ILAAP design and approval;
• ICAAP and ILAAP utilisation in decision
making;
• A review of the Group’s provision
models and expected credit loss
outcomes;
• Updates on embedding of the Group’s
Risk and Control Self-Assessment
process;
• Risk Appetite breaches and remediation
plans;
• Operational and IT Risk Monitoring
Reports;
• Data Protection Officer’s Report;
• Reviews of obligations and activity
under the CBI Code on Lending to
Related Parties;
• Approval of a Climate Risk Framework;
and,
• Approval of a Credit Risk Framework
and consideration on a number of SME
credit propositions.
Governance in Action: Ulster Bank
Transaction
Throughout 2023, the Committee
supported the Board in assessing the
Bank’s readiness to take on business from
Ulster Bank; the Committee reviewed and
recommended detailed risk assessments
and customer impact assessments
relating to the migration of Mortgage
customers, SME loans, Branches and
the Asset Finance business ensuring
adequate controls and mitigating actions
were in place to address any risks. In
considering Management’s assessments,
the Committee considered whether
there were any risks or customer impacts
that would prevent the migrations from
taking place in advance of the Board
being asked to approve a decision to
proceed. The Committee challenged
and supported Management to ensure
there were adequate contingency plans
in place. In supporting Management’s
recommendations to procced to the
Board, the Committee ensured the
Group was adequately prepared which
contributed significantly to the successful
completion of the transaction in Q3 2023.
160
PTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Remuneration Committee
The Board Remuneration Committee ensures that PTSB’s
remuneration policies, practices and decisions serve to align the
interests of its employees with those of its shareholders; operate within
the applicable regulatory and legal requirements; and, are free from
any form of bias relating to gender, age, social or ethnic background.
Dear Reader,
As Chairperson of the Board
Remuneration Committee (the
“Committee” or “RemCo”), I am pleased
to present the Directors’ Remuneration
Report for the year ended 31 December
2023 which has been prepared by the
Committee and approved by the Board.
The Committee’s report contains certain
regulatory information required under the
applicable legislation in respect of the
Bank’s status as a listed company and
credit institution, as well as under the
EBA Guidelines on Internal Governance,
the amended EU Directive on the
encouragement of long-term shareholder
engagement, as transposed in Ireland
(the “Shareholder Rights Directive”, or
the “Directive”) and the UK Corporate
Governance Code.
The Directors’ Remuneration Report also
provides further detail on the composition
of the Committee and its role and
responsibilities and a description of the
work undertaken by the Committee during
the year. Also included are details of
the Remuneration Policy criteria and the
components of the Bank’s reward offering,
with a focus on the Bank’s Directors
(Executive and Non-Executive).
In 2023, the Committee continued
to oversee the way in which the
Bank’s Remuneration policy, and its
implementation, serves to reward
individual performance (what our
colleagues achieve but also the manner in
which they achieve their objectives). As
a Committee, we also reviewed how our
approach to pay and benefits contributes
to the strengthening of Bank culture,
including risk culture. The Committee
also considered the manner in which the
Bank reward the delivery of the long-term
sustainability of its business and aligns
remuneration with the long-term interests
of shareholders, investors and other
interested parties, and with the public
interest, as well ensuring fulfilment of
regulatory obligations.
In line with its responsibilities under
the terms of the Shareholder Rights
Directive, the Bank publishes its Directors’
Remuneration Policy (the “Policy”), as
applicable to the Board of Directors. The
Policy is published in full on the Bank’s
website: www.permanenttsbgroup.ie.
During 2023, our Directors’ remuneration
was implemented in accordance with the
approved Policy, and no derogations from
the Policy were availed of during the year.
2023 was another year of considerable
change and opportunity for PTSB.
During the year, the Bank completed
the acquisition of certain parts of the
Ulster Bank's Retail, SME and Asset
Finance business. The Remuneration
Committee was closely involved in the
oversight of that transaction including
the implementation of a comprehensive
suite of ‘measures’ designed to replicate
the reward and benefit entitlements of
employees of Ulster Bank. This significant
piece of work enabled PTSB to satisfy
its obligations under TUPE {Transfer of
Undertakings (Protection of Employment)}
Regulations, but also helped engage and
motivate our new colleagues as they
made the decision to join PTSB. I want
to thank colleagues for their significant
contribution to this transformational
programme of work, and also welcome our
new colleagues to PTSB.
2023 represented the second and final
year of our previous Pay Agreement
which was designed around an average
pay pot of 6.5% and individual awards
of up to 8% per annum over the term of
the agreement. Alongside the base pay
increases included in the Agreement,
the Bank also introduced significant
enhancements to our broader pay and
benefits package, via the expansion
of maternity leave arrangements, and
improvements in the supports available
to colleagues experiencing periods of
illness. As part of the 2023 review of pay
arrangements, the CEO’s salary remained
unchanged in order to comply with State
Agreements on remuneration, while the
CFO received a 12.7% base pay increase,
with the size of that increase influenced
by the results of a comprehensive market
benchmarking exercise and influenced
by the continuing impact of restrictions
on variable pay which restrict the
competitiveness of total remuneration
as a whole. Full details of Directors
remuneration arrangements are provided
over the following pages.
In any conversation on pay, it is important
to acknowledge that economic factors,
beyond the Bank’s control, contributed
to a significant inflationary environment
in 2023. In the second half of the year,
some moderation has emerged in respect
of cost of living increases. However, in
recognition of the extent of the pressures
which our colleagues faced in 2023, and in
addition to the pay agreement mentioned
above and previous special ‘cost of living’
gestures extended in 2022, the Bank took
the decision to process a special, once-off
support payment equivalent to 2% annual
salary. This payment was extended to
eligible colleagues up to and including our
less senior managers but excluded our
middle and senior management teams,
all Material Risk Takers and the Executive
Directors. The payment was accompanied
by a further gesture in the form of a €750
gift voucher issued in November 2023 and
which was extended to include our middle
management team also.
In 2023, the Remuneration Committee
oversaw the closure of the project which
delivered significant changes to the
administration arrangements in place
in respect of our Defined Contribution
Pension schemes. In 2023, two existing
schemes were merged into a new, single
consolidated Defined Contribution
scheme. The changed structure ensures
that our colleagues’ pensions remain
subject to the highest standards of
oversight and governance, but also
provides colleagues with significantly
enhanced investment proposition as they
plan and save for their retirement.
161
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Remuneration Committee (continued)
As set out in the Director’s Remuneration
Policy which was voted upon by
shareholders on an advisory basis at
the 2023 AGM, the Bank implemented
amendments to the Executive Directors’
Pension entitlements designed to align
the arrangements with those of the wider
Executive Committee, and – in the case of
the Chief Executive Officer’s entitlements
- to align same with equivalent
arrangements available across the
market. Full details of the entitlements are
provided in the Directors’ Remuneration
Policy.
Finally, the Committee also continued to
oversee options to redesign the Bank’s
remuneration framework. In that regard,
the Committee approved a number of
updates to the Bank’s Remuneration
Policy. These updates form part of the
Bank’s plans for the introduction of a
new variable remuneration scheme at an
appropriate future date. That scheme,
when launched, is intended to apply
to all colleagues, including Executive
Directors and Executive Committee
members. The scheme design will take
account of the need to comply fully with
all appropriate regulation and legislation
and State Agreements on remuneration,
and will support us in improving the
linkages between remuneration and the
sustainability of our business. .
The new scheme is intended to offer
colleagues a cash award, or where
practical, an award in the form of shares,
or a combination of both. With that in
mind, the Bank is exploring options
relating to an Approved Profit Share
Scheme (“APSS”).
Remuneration Committee Composition and Operation
The members of the Board Remuneration Committee are experienced in the
management and oversight of large organisations where the remuneration and
motivation of staff and executives is of crucial importance.
The Committee had seven meetings during 2023.
2023 Committee Meeting Attendance
Member
Appointed
Ceased
Number of
Years on the
Committee
2023 Meeting
Attendance (of
which eligible to
attend)
Celine Fitzgerald*
(Chairperson)
30 Mar 2021
-
2.8
Ken Slattery**
28 Jan 2014
12 Dec 2023
9.9
Julie O’Neill
17 Jan 2023
-
Robert Elliott
31 Mar 2017
30 Mar 2023
1
6
Andrew Power
26 Sep 2016
19 May 2023
6.6
Ruth Wandhofer
01 Feb 2019
Rick Gildea
12 Dec 2023
* Chairperson since 16 February 2024
** Chairperson until 12 December 2023
-
-
4.9
-
Remuneration Committee Role and Responsibilities
7/7
7/7
6/6
2/2
3/3
5/7
0/0
The purpose, duties and membership
of the Committee are set out in the
Committee’s Terms of Reference, which
can be found on the Bank’s website www.
permanenttsbgroup.ie. The Terms of
Reference are reviewed by the Committee
on an annual basis. No material changes
were enacted following a review of the
Committee’s Terms of Reference in 2023.
The main roles and responsibilities of the
Committee include:
• Recommending the Bank’s remuneration
At this point, I would like to thank
our former Remuneration Committee
Chairperson, Ken Slattery, for his
positive advice and guidance prior to his
departure; and also express my gratitude
to my fellow Board and Committee
members; our colleagues across the Bank;
and our shareholders for their support.
policies, including that applicable to
the Board of Directors, to the Board
for approval on an annual basis and
ensuring they comply with applicable
regulatory and legal requirements
and remain free from any form of bias
relating to gender, age or social or
ethnic background.
• Supporting the Board in overseeing
remuneration policies, practices and
processes and compliance with the
Bank’s Remuneration Policy (both as
applicable to the Directors and the
wider population);
• Ensuring the remuneration policies
and procedures do not promote
Celine Fitzgerald
Chairperson
162
excessive risk taking and are aligned
with the Company’s overall corporate
governance framework, corporate
culture, risk culture and attitude to and
appetite for risk and related governance
processes, and takes into account the
need to maintain all capital and liquidity
ratios including buffer requirements;
• Recommending the design, eligibility
and performance measures for any
incentive schemes to the Board for
approval;
• Setting and assessing performance
targets for any incentive schemes;
• Recommending remuneration proposals
(including joining and termination
arrangements) in respect of the
Chairperson, CEO, Executive Directors,
Company Secretary, Executive
Committee, Group Treasurer, Chief
Credit Officer, and Heads of Control
Functions for approval by the Board;
• Overseeing remuneration proposals
in respect of any other identified staff
(Material Risk Takers) as defined under
the fifth Capital Requirements Directive
(CRD V); and,
• Overseeing the annual review of the
implementation of the Remuneration
Policy applicable across the Bank.
PTSB Group Holdings plc - Annual Report 2023 Remuneration Committee Advisers
During 2023, the Committee used the
services of its external consultant, Deloitte
LLP, for advice on remuneration trends in
the external market and for perspective
on remuneration regulatory compliance
matters. During the year, Deloitte also
provided support to the Bank in relation to
PSD2 and other risk related matters.
The Committee also utilised the
services of Willis Towers Watson who
provided market benchmarking data
and remuneration trend analysis, and
consultancy services in relation to the
design and ongoing maintenance of the
Bank’s Employee Value Proposition.
In addition to the use of external advice,
in designing its approach to remuneration
the Committee also takes account of
appropriate input from the Bank’s HR,
Risk, Compliance, Finance and Internal
Audit functions to ensure that the decision
making process is aligned with the Bank’s
financial performance, risk appetite,
regulatory guidelines and stakeholder
interests.
Matters considered by the
Committee in 2023
The Committee performed an annual
review of its own Terms of Reference, as
well as reviewing its own effectiveness,
and recommended the output of that
review to the Board.
During 2023, and within the terms of
State agreements, the Remuneration
Committee kept the impact of the
Bank’s Remuneration Policy (including
that applicable to the Directors), and
movements in the external market,
under review. As part of this process,
the Committee reviewed the Bank’s
Remuneration Policy and strategy
to assess the appropriateness of
the approach to reward and the
competitiveness of current arrangements,
and future direction, to take account of
market developments including amongst
the Bank’s peer group.
The Committee also considered
whether the Directors’ Remuneration
Policy operated as intended in terms of
company performance and quantum.
The Committee also kept under review
all aspects of remuneration for the Board
Chairperson, CEO, Executive Directors,
members of the Executive Committee and
the wider employee population.
In determining remuneration arrangements
for Executive Directors, the Committee
takes account of the pay and employment
conditions of the wider workforce to
ensure consistency. Wider workforce
engagement on pay arrangements at the
Bank took place with the Bank’s Staff
Representative Bodies during 2023.
It remains the policy of the Bank to
reward colleagues appropriately as work
is undertaken to build a valuable and
sustainable business, operating within the
Bank’s Risk Appetite and underpinned by
a strong culture which manifests itself in
responsible and accountable behaviours
in day-to-day interactions and decision
making with customers and across the
Bank’s teams. To this end, the Policy has
been designed based upon a number
of principles including the linking of pay
levels against median base pay available
across market peer groups, and to ensure
that the Bank’s offering is sufficiently
competitive so as to attract and retain
the required talent and skills to deliver
the return of value to the Company’s
shareholders.
In 2023, the Committee reviewed the
Bank’s approach to remuneration from
the perspective of ensuring that all
employees, regardless of gender, age
or social or ethnic background are
remunerated fairly. In that regard, it is
of note that 2023 was the fourth year
in which the Bank published details of
its gender pay gap; albeit 2023 was
the second year in which the Bank
reported in line with recently published
Irish legislation. The Bank’s gender
pay gap stood at 16.3% at our chosen
snapshot date of 30th June 2023 which
represented a narrowing the gap of 17.5%
reporting in 2022. Further details of the
gap and our commitment to reducing
same are provided in the separate section
of the Bank’s Annual Report which details
the Bank’s Diversity and Inclusion strategy.
2023 represented the second and final
year of our two-year pay agreement.
That agreement provided certainty to
colleagues and incorporated a 6.5% pay
pot which was allocated at an individual
level based on individual staff members’
performance and their salary position
versus the relevant market median.
Alongside increases in base pay, the pay
agreement also provided for significant
enhancements to Maternity Leave
arrangements and to our Illness Leave
Policies which serve to emphasise our
commitment to supporting our colleagues
at all stages of their careers with PTSB.
In recognition of the extent of the
pressures which our colleagues faced
in 2023, and in addition to the pay
agreement mentioned above and previous
special ‘cost of living’ gestures extended
in 2022, the Bank took the decision to
process a special, once-off support
payment equivalent to 2% annual salary.
This payment was extended to eligible
colleagues up to and including our less
senior managers but excluding our
middle and senior management teams,
all Material Risk Takers and the Executive
Directors. The payment was accompanied
by a further gesture in the form of a €750
gift voucher issued in November 2023
and which was extended to our middle
management team also.
As set out in the Director’s Remuneration
Policy which was voted upon by
shareholders on an advisory basis at the
2023 AGM, the Bank implemented certain
amendments to this Policy whereby the
Executive Directors’ maximum employer
pension contribution rates were brought
into line with those of the wider Executive
Committee; and, the CEO’s pension
entitlements were aligned with equivalent
arrangements in place across our peers.
Details of the Executive Directors’
entitlements are provided in the Policy
which forms part of these statements.
Throughout 2023, the Committee
contributed to the oversight of the
completion of Project ‘Sun’, the
programme of work underpinning the
acquisition of elements of the Ulster
Bank’s Retail, SME and Asset Finance
business. In particular, the Committee
reviewed the implementation of certain
‘measures’ designed to satisfy TUPE
{Transfer of Undertakings (Protection
of Employment)} Regulations attaching
to the transfer. The implementation of
these measures was a key factor in
the successful engagement of our new
colleagues as they exercised their right to
join PTSB.
During the year, the Committee also
maintained significant oversight to ensure
compliance with the UK Corporate
Governance Code, CRD V related
regulations and guidelines, including
focussing on reviewing the remuneration
arrangements in place for Material Risk
Takers. The Committee re-approved
the process and approach for the
identification of Material Risk Takers in line
with these requirements.
163
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Remuneration Committee (continued)
During the year, the Committee also
reviewed the Bank’s established variable
commission scheme, as well as principles
and practices to ensure full alignment with
regulatory requirements. In particular, the
Committee considered the requirements
of CRD V, the EBA’s Guidelines on sound
remuneration policies and practices
related to the sale and provision of retail
banking products and services, the
Central Bank of Ireland’s Guidelines on
Variable Remuneration Arrangements for
Sales Staff, and relevant market practice.
The Committee also reviewed the Bank’s
established variable commission scheme:
the ‘Branch Based Commission Scheme’,
as well as principles and practices to
ensure full alignment with regulatory
requirements. In particular, the Committee
considered the requirements of CRD V, the
EBA’s Guidelines on sound remuneration
policies and practices related to the sale
and provision of retail banking products
and services, the Central Bank of Ireland’s
Guidelines on Variable Remuneration
Arrangements for Sales Staff, and
relevant market practice. On the basis
of this review, it was agreed to extend
the operation of the scheme for a further
year, subject to management maintaining
strong control over customer and conduct
management and robust governance of
scheme-related performance data.
The Remuneration Committee, supported
by management, continued to monitor
closely ongoing engagements with key
stakeholders including shareholders and
employee representative bodies and
the insights gained were used to inform
decision-making relating to remuneration
throughout 2023.
As mentioned above, the Bank’s Directors’
Remuneration Policy was voted upon
and approved by shareholders on an
advisory basis at the 2023 AGM. The
Committee is satisfied that in 2023 the
Bank has continued to operate within its
Remuneration Policy (both as applicable
to the Directors and the wider population)
and in line with the remuneration
requirements of the framework agreement
between the Minister for Finance
and the Bank, and that the Directors’
Remuneration Policy operated as intended
in terms of company performance and
quantum. Other than as set out in the
Chairpersons Introduction to Governance
on page 119 of the Annual Report, the
Committee is satisfied that the Bank
is in compliance with the provisions of
the Companies Act, the UK Corporate
Governance Code and the Shareholder
Rights Directive. With specific reference to
the UK Code, the table on page 164 sets
out how the Remuneration Committee has
addressed the principles set out in the
Code. Additional regulatory disclosures
in relation to Remuneration Policy and
strategy are set out in the Bank’s Pillar 3
Report.
The following section sets out how the Remuneration Committee addresses the principles set out in the UK Corporate Governance
Code in respect of the Directors’ Remuneration Policy.
Provision
Approach
Clarity
Remuneration arrangements should
be transparent and promote effective
engagement with shareholders and the
workforce.
Simplicity and predictability
Remuneration structures should avoid
complexity and their rationale and
operation should be easy to understand.
The range of possible values of rewards
to individual directors and any other
limits or discretions should be identified
and explained at the time of approving
the Policy.
Risk
Remuneration arrangements should
ensure reputational and other risks from
excessive rewards, and behavioural
risks that can arise from target-based
incentive plans, are identified and
mitigated.
The Committee regularly engages and consults with key stakeholders to take
feedback into account and to ensure that our approach to Executive Remuneration
is as transparent, simple and clear as is possible.
Employees are informed about the Bank’s approach to remuneration. The Bank’s
Remuneration Policy, applicable throughout the organisation and which includes
details of the approach to Director remuneration, is published internally for all staff
to view and the Directors’ Remuneration Policy is published in full on the Bank’s
website www.permanenttsbgroup.ie.
Due to certain agreements and commitments in place with the Irish State, the Bank
only operates fixed remuneration among Executive Directors, consisting of basic
salary, pension and benefits. As a result, the Committee’s ability to apply discretion
with respect to outcomes for this population was limited. However, the simplicity of
our approach enhances its predictability.
The Bank’s approach to variable remuneration will involve a review of Executive
Director remuneration arrangements from the perspective of ensuring the approach
continues to avoid complexity, and is predictable in its nature, as well as providing
the Remuneration Committee with discretion over remuneration outcomes.
Remuneration arrangements are designed to align pay with the Bank’s risk
culture, attitude to and appetite for risk and the Bank’s governance and regulatory
framework.
The design of future variable remuneration schemes will factor in robust linkages
between pay and performance with controls to be put in place to ensure variable
pay outcomes are appropriate, including the use risk adjustments as appropriate.
The Committee will be assigned the discretion to adjust formulaic outcomes for
Executive Directors and members of the Executive Committee to ensure appropriate
consideration of risk factors when determining variable pay outcomes.
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PTSB Group Holdings plc - Annual Report 2023 Provision
Approach
Proportionality and alignment to culture
The link between individual awards, the
delivery of strategy and the long-term
performance of the company should be
clear. Outcomes should not reward poor
performance.
Incentive schemes should drive
behaviours consistent with company
purpose, values and strategy.
While the Bank currently only operates fixed remuneration among the Executive
Directors, it is committed to ensuring the ongoing alignment of remuneration with
strategy and long-term sustainable performance and the recognition of positive
behaviours.
In future years, where variable remuneration forms a component of the Bank’s
reward proposition, the Committee will have the ability to adjust formulaic outcomes
to ensure they remain proportionate in the context of the Bank’s achievement of its
financial or non-financial performance objectives and to promote the achievement
of long-term strategic ambitions while driving behaviours consistent with the Bank’s
purpose, values and strategy including commitment to its Sustainability agenda.
The Policy, in alignment with the
Remuneration Policy applicable across
the Bank, is based on a set of agreed
basic principles which are applied to all
employees:
• Aligning remuneration with the
Bank’s risk appetite, approaches and
governance framework;
• Ensuring the Bank’s approach is
in compliance with all applicable
regulatory requirements;
• Aligning remuneration with the
Bank’s business strategy, objectives,
purpose and values, and promoting the
achievement of long-term Bank and
stakeholder objectives and interests;
• Focusing on the attraction, engagement
and retention of key talent of the calibre
required;
• Ensuring that the Bank’s Policy and
each element of Directors’ remuneration
is as transparent, simple and clear as is
possible.
Director’s Remuneration Policy
In this section, we set out our Directors’
Remuneration Policy (“Policy”) for
our Executive Directors and Non-
Executive Directors as reviewed by the
Remuneration Committee and approved
by the Board of Directors, subject to
advisory shareholder approval at the 2024
AGM.
The Directors’ Remuneration Policy
was most recently approved by our
shareholders at the 2023 AGM and
incorporated certain amendments to
the Policy to allow for enhanced pension
arrangements for our Executive Directors
designed to bring the Executive Directors’
maximum contribution rates in line with
the wider Executive Committee; or in the
case of the CEO’s entitlement; to align
same with equivalent arrangements in
place across our peers.
The Committee undertook a further
review of our remuneration policy for
colleagues during 2023 in the context of
certain restrictions on variable pay. As a
result, the Committee approved a number
of policy amendments designed to
support the launch of a new Variable Pay
scheme at an appropriate future date.
The Policy has been designed, to the
extent possible given the remuneration
restrictions in place as a result of the
agreements and commitments in place
with the Irish State, to ensure alignment
between the Bank’s approach to reward
and its business strategy and to promote
long-term sustainable success. The policy
criteria are intended to ensure that the
Bank rewards colleagues appropriately in
order to build a valuable and sustainable
business, underpinned by a strong culture
which manifests itself in responsible and
accountable day-to-day behaviours and
interactions.
Specifically, the Remuneration Policy has
been updated to provide for:
• The introduction of a short-term
variable remuneration scheme for
all colleagues, including Executive
Directors and members of the Bank’s
Executive Committee.
• Variable Pay scheme criteria that
support compliance with all appropriate
regulation and legislation and the terms
of State Agreements on remuneration,
including the restriction on maximum
individual payouts to €20,000 per
colleague, per year.
• The payment of awards in the form of
cash, or, where feasible, in shares or a
combination of both.
The amended Policy is presented below
and is intended to apply to the period up
to the Group’s AGM in 2027. However, the
Board may seek shareholder approval for
a new Policy during the period depending
on regulatory developments, changes to
strategy or competitive pressures.
The Policy is published in full on the Bank’s
website: www.permanenttsbgroup.ie and
is set out below/overleaf.
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Remuneration Committee (continued)
Remuneration Components
The following are the key components of the Bank’s reward proposition as it relates to the Executive Directors:
Remuneration
Component
Basic Salary
Remuneration Policy
Basic salaries are set so as to attract and retain key talent of the calibre required to develop, lead and
deliver the Bank’s long-term strategy.
Basic salaries are normally reviewed by the Remuneration Committee annually, taking into consideration:
• the individual’s skills, responsibilities and experience;
• the scope of the role;
• pay and conditions elsewhere in the Group;
• overall business performance and affordability; and
• market competitiveness by reference to relevant comparator groups.
Increases to basic salary may not necessarily be provided at each review. Whilst there is no maximum
base salary (other than that specified by the terms of State Agreements), any increases for Executive
Directors will normally be in line with the range of increases for other employees in the wider Group.
Benefits
Benefits are provided to ensure the overall package is competitive and in accordance with local market
practice.
The Committee’s policy is to provide Executive Directors with a market competitive level of benefits,
taking into consideration benefits offered to other employees in the Group, the individual’s circumstances
and market practice at similar companies.
Benefits may include, but are not limited to, the provision of a car (or cash allowance in lieu) and
subsidised house purchase loans provided on the same terms and conditions as loans to other eligible
PTSB employees.
Taxable or other expenses incurred in performing the role may also be reimbursed, as well as any related
tax cost on such reimbursement.
Pensions
Pension arrangements are intended to provide competitive post-retirement benefits aligned with market
practice.
Executive Directors are eligible to participate in the PTSB Defined Contribution Pension Scheme.
Executive Directors may receive a maximum allowance of 16% of basic salary, or 20% of basic salary in the
case of the Chief Executive Officer. Maximum contribution rates are generally consistent across the Bank.
However, in recognition of the remuneration restrictions remaining in place as a result of the agreements
and commitments in place with the Irish State, in order to ensure a competitive overall package, Executive
Directors are not subject to certain age-related eligible criteria which apply to the availability of the
maximum contribution rate for the wider workforce
Short Term
Incentive Plans
In 2023, the Remuneration Committee approved changes to the Remuneration Policy which will support
the introduction of variable remuneration at an appropriate future date.
Variable Pay subject to the criteria included in the Remuneration Policy will help support the further
development of PTSB’s high performance culture and will do so in way that promotes sustainable
outcomes for our stakeholders. The scheme criteria will support full compliance with applicable regulatory
requirements and State Agreements on remuneration.
A maximum limit of €20,000 per annum on any award or combination of awards per individual colleague
will apply.
For Executive Directors, awards will be based on a performance period of one financial year. Awards will
be assessed with reference to a suite of financial and non-financial performance metrics and will be paid
in cash, shares (where practical) or a combination of both.
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PTSB Group Holdings plc - Annual Report 2023 Remuneration
Component
Remuneration Policy
Variable pay awards will be subject to malus and clawback (i.e. repayment or recoupment of paid/vested
awards) for a period of three years from the date of award. Malus and clawback may be applied in
circumstances including:
• Evidence of misconduct or serious error by the individual (e.g. breach of conduct standards and other
internal rules, especially concerning risks);
• Whether PTSB and/or the business unit subsequently suffers a significant downturn in its financial
performance;
• Whether PTSB and/or the business unit in which the identified staff member works suffers a significant
failure of risk management;
• Significant increases in PTSB’s or the business unit’s economic or regulatory capital base; or
• Any regulatory sanctions where the conduct of the individual contributed to the sanction.
Also if the individual:
i. Participated in or was responsible for conduct which resulted in significant losses to PTSB; or
ii. Failed to meet appropriate standards of fitness and propriety;
PTSB intends to implement an APSS to facilitate payments under the scheme.
Recruitment approach for new
Executive Directors
In determining the remuneration
arrangements of a new Executive Director
recruited or appointed to the Board, the
Remuneration Committee’s approach is to
pay no more than is necessary to attract
the best candidates to the role, and the
following principles will be applied:
• The Remuneration Committee will
take into account all relevant factors
including the calibre of the individual
and local market practice;
• Remuneration packages must meet
any applicable local regulatory
requirements;
• Remuneration arrangements for
new recruits will be appropriately
competitive and aligned with the
remuneration policy table set out above;
• In the case of an internal appointment,
any existing commitments will be
honoured; and
• The Policy does not, other than
by exception, allow for buy-out of
remuneration terms forfeited by new
recruits on leaving a previous employer.
Any such award would be structured
in line with applicable regulatory
requirements, be subject to the terms
of agreements in place with the Minister
for Finance and will be structured in
order that the terms and amount of any
replacement award will not be more
generous than the award forfeited on
departure from the former employer.
Any such buy-outs will be minimised
wherever possible.
Non-Executive Director
Remuneration
Non-Executive members of the Board of
Directors receive a base fee. Additional
fees may be paid for those individuals
that perform additional duties; including,
but not limited to, the role of Senior
Independent Director and for chairing
or being a member of specific Board
Committees. The Chairperson receives an
inclusive fee for the role.
Newly appointed Non-Executive Directors
are remunerated in line with the principles
above, on a time-apportioned basis in the
first year as necessary.
For the avoidance of doubt, Non-
Executive Board members are not eligible
to participate in variable remuneration
schemes or receive any pension benefits.
Buy-out awards are not offered to Non-
Executive Board members.
Taxable or other expenses incurred
in performing the role may also be
reimbursed, as well as any related tax cost
on such reimbursement.
The Chairperson’s and Non-Executive
Directors’ fees are reviewed regularly to
ensure they are consistent with market
practice and are market competitive,
reflective of the time commitment and
responsibilities of the role (subject to any
limits set by the Bank’s shareholders).
The Remuneration Committee
recommends the Chairperson’s fee to
the Board for approval. In respect of the
review of remuneration decisions relating
to Non-Executive Directors, a forum
consisting of the Chairperson, Company
Secretary and CEO has been authorised
by the Board to review Non-Executive
Director remuneration and to approve any
changes thereto. No individual is involved
in decisions in respect of their own
remuneration. There were no proposed
changes to the Non-Executive Director
remuneration for 2023.
Relative proportion of fixed and
variable remuneration
PTSB does not currently operate any
variable remuneration arrangements for its
Executive Directors. Remuneration for this
population is therefore presently entirely
fixed in nature.
In line with the amendments to the
State Agreement, the Committee has
decided to introduce the ability to pay
bonuses to our Executive Directors to
enable us to provide an element of pay
for performance within our overall reward
framework, albeit on a very limited basis.
Any awards paid will be in line with the
framework agreement between the
Minister for Finance and the Bank, which
currently permits annual bonuses in any
12-month period not exceeding €20,000
in the aggregate per individual.
Service contracts and letters of
appointment and payments for loss
of office
Executive Directors
Executive Directors’ service contracts are
reviewed by the Remuneration Committee
and approved by the Board.
167
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Corporate Governance Statement
Remuneration Committee (continued)
Executive Directors’ contracts provide
for a rolling 6 month notice period for all
Executive Director Board appointments
since 2020. The contractual arrangements
in place with Executive Directors do not
typically contain a predetermined contract
end date, other than that date as set
with reference to the Bank’s retirement
policy age criteria (i.e. age 65). The Bank
reserves the right to require an Executive
Director to take any remaining leave
entitlement they may have during notice
period.
Executive Directors may be required
to work during the notice period, take
a period of ‘garden leave’ or may be
provided with pay in lieu of notice if not
required to work the full notice period.
Executive Director contracts will not
normally contain any provisions for
predetermined compensation on
termination which exceeds basic salary,
pension and benefits payable in respect of
the applicable notice period. Accrued but
untaken holiday entitlement may also be
paid. Any statutory requirements will be
observed.
If an Executive Director ceases
employment due to ill-health, retirement
or death, the individual or his/her estate
may be eligible for a payment under the
scheme. The HR Director may approve
any payments pro-rated for the period
worked by the individual, provided it is
aligned with performance during that
time and subject RemCo oversight. Any
payment made in these circumstances
will only be paid on the date on which a
payment becomes due under the rules of
the scheme, apart from the death of the
employee when a payment to the estate
of the deceased employee may be made
earlier, subject to the assessment of
performance.
If an Executive Director ceases
employment for any other reason, the
default position is that the individual is not
eligible for a payment under the scheme.
However, in exceptional circumstances,
the HR Director may approve a payment
pro-rated for the period worked by the
individual, provided it is aligned with
performance during that time and subject
to RemCo oversight. Any payment made
in these circumstances will only be paid
on the date on which a payment ordinarily
becomes due under the rules of the
scheme.
Any payments in relation to termination of
employment are made in accordance with
168
the provisions of all applicable regulatory
requirements and Irish legislation and will
reflect performance achieved over time
and will not reward failure or misconduct.
Non-Executive Directors
The term of appointment of Non-
Executive Directors is three years and
is subject to satisfactory performance
that is reviewed annually. Non-executive
Directors do not have service contracts,
but are bound by letters of appointment.
Decision making process for
Policy determination, review and
implementation
The Board of Directors is responsible for
(i) designing the Directors’ Remuneration
Policy and proposing the Policy for
shareholder approval at the Annual
General Meeting; and (ii) implementing
and evaluating the adopted Policy,
including determining the remuneration
and other terms and conditions of
appointment of the Executive Directors.
All Directors are required to seek
reappointment by election at the
Annual General Meeting. Non-Executive
Directors will automatically retire from
the Board after six years. It is always
at the discretion of the Board to invite
a Non-Executive Director to continue
for a further period but this discretion
will only be exercised in exceptional
circumstances.
The Chairperson is proposed for
reappointment by the Directors on an
annual basis. The term of office of the
Chairperson is normally six years.
The Non-Executive Directors letter of
appointment specify a one-month notice
period. There are no additional obligations
in the Non-Executive Directors’ letters
of appointment that could give rise to
remuneration payments or payments for
loss of office.
Statement of consideration of
employment conditions elsewhere
in the Bank
The Committee takes account of the pay
and employment conditions of the wider
PTSB employee base when it considers
the remuneration of the Executive
Directors. As stated above, the Policy
is in alignment with the Remuneration
Policy applicable across the Group, and
is made available to all staff members
on the Group’s internal communications
website and is based on a set of agreed
basic principles which are applied to all
employees.
In determining remuneration arrangements
for the Executive Directors, the Committee
is presented with information in relation to
the remuneration of the wider workforce,
including aggregate pay outcomes in
order to ensure decisions are made in the
context of a detailed understanding of
remuneration for the wider employee base
and to ensure consistency throughout the
Group.
The Remuneration Committee is
responsible for annually reviewing
the Policy and submitting a clear and
understandable proposal to the Board
concerning the Policy. In the performance
of this task the Remuneration Committee
receives input and support from the other
Board committees and control functions
as appropriate.
Non-Executive members of the Board act
independently of the Executive Directors,
and therefore no conflicts of interest
should arise. No Director is involved in
deciding their own remuneration outcome.
Derogation
Minor changes
The Board may make minor amendments
to the Directors’ Remuneration Policy
set out above for regulatory, exchange
control, tax or administrative purposes or
to take account of a change in legislation
without obtaining shareholder approval
for that amendment. In the performance
of this task the Committee may receive
input and support from the other Board
committees.
Exceptional circumstances
In exceptional circumstances, and to
facilitate recruitment and termination, the
Committee may, with approval from the
Board, award minor additional benefits
as appropriate. Any such award would
be structured in line with applicable
regulatory requirements, and be subject to
the terms of agreements in place with the
Minister for Finance. Any such awards will
be minimised wherever possible.
Grandfathering
Executive Directors may be eligible
to receive any payments from any
remuneration arrangements in effect
prior to the approval of this Remuneration
Policy. Details of any such payments
will be set out in the applicable annual
remuneration report as they arise.
PTSB Group Holdings plc - Annual Report 2023
Director’s Report on Remuneration
Executive Directors’ Remuneration and Pension Benefits
Directors’ remuneration for 2023 was implemented in accordance with the Bank’s Directors’ Remuneration Policy, as approved by
shareholders at the 2023 AGM. No derogations from the Policy were availed of during the year. The Policy was designed, to the
extent possible given the remuneration restrictions in place as a result of the agreements and commitments in place with the Irish
State, to ensure alignment between the Bank’s approach to reward and business strategy and to promote long-term sustainable
success.
In line with certain agreements and commitments in place with the Irish State, during 2023 all Bank employees were subject to a
salary cap of €500,000 per annum. In addition, the Bank did not operate any variable remuneration arrangements for its Executive
Directors. No bonus payments and long term incentive arrangements were made to Executive Directors during 2022 or 2023.
In December 2022, the aforementioned State Agreements were amended such that bonuses are now no longer prohibited, subject to
the amount of any such remuneration not exceeding €20,000 in the aggregate in a single tax year. It is the policy of the Bank that any
future bonus schemes and future long term incentives plans, for which the Executive Directors may prove eligible, will adhere to the
terms of the State Agreements, relevant regulatory requirements on variable pay and applicable Irish legislation, and will be subject to
approval by shareholders. However, there were no such payments relating to the 2023 financial year.
Executive Directors’ Remuneration and Pension Benefits – Audited
2023 remuneration for Executive Directors who held office for any part of the 2023 financial year was entirely fixed in nature,
consisting of basic salary, certain benefits and defined contribution pension entitlements as follows:
1.
Fixed Remuneration
2.
Variable Remuneration
2023
Note Base Salary Fees
Fringe
Benefits
One-year
variable
Multi-year
variable
3.
Extraordinary
items
4.
Pension
Expense
5.
Total
Remuneration
6.
Proportion
of Fixed and
Variable
Remuneration
1 €480,000
€0 €20,000
2 €400,000
€0 €20,892
€0
€0
€0
€0
€0 €96,000
€596,000
100% fixed
€0 €61,667
€482,559
100% fixed
Name of Executive
Director, Position
Eamonn Crowley,
CEO
Nicola O’Brien,
CFO
Notes:
1.
2. Fringe Benefits consist of Car Allowance Benefit and professional body subscriptions
Fringe Benefits consist of Car Allowance Benefit.
For comparison, 2022 Remuneration for Executive Directors who held office for any part of the 2022 financial year was entirely fixed
in nature, consisting of basic salary, certain benefits and defined contribution pension entitlements as follows:
1.
Fixed Remuneration
2.
Variable Remuneration
2022
Name of Executive
Director, Position
Note
Base
Salary
Fees
Fringe
Benefits
One-year
variable
Multi-year
variable
3.
Extraordinary
items
4.
Pension
Expense
5.
Total
Remuneration
6.
Proportion
of Fixed and
Variable
Remuneration
Eamonn Crowley,
CEO
Nicola O’Brien,
CFO
Michael Frawley,
CRO
1 €480,000
€0 €20,000
2 €145,054
€0
€8,172
3 €83,944
€0
€5,000
€0
€0
€0
€0
€0
€0
€0 €72,000
€572,000
100% Fixed
€0 €21,758
€174,984
100% Fixed
€0 €12,592
€101,535
100% Fixed
Fringe Benefits consist of Car Allowance Benefit.
Notes:
1.
2. Fringe Benefits consist of Car Allowance Benefit. Appointed as an Executive Director on 4 August 2022.
3. Ceased as an Executive Director on resigned 31 March 2022.
Aggregate Executive Director Compensation stood at €1,078,559 in 2023 compared to €848,519 in 2022.
No Executive Director was in receipt of any remuneration from any undertaking within the Group other than PTSB Group Holdings plc.
169
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Director’s Report on Remuneration
(continued)
Components of Executive Director Remuneration - 2023
Basic salary
As in previous years, pay increases to eligible staff were based on each individual staff member’s performance and salary position
versus the relevant market median. The increases ranged from 0% up to 8% with an average increase of 3% and all increases were
effective from 1 January 2023. As part of the 2023 review of pay arrangements, the CEO’s salary remained unchanged in order to
comply with State Agreements on remuneration, while the CFO received a 12.7% base pay increase, with the size of that increase
influenced by the results of a comprehensive market benchmarking exercise and influenced by the continuing impact of restrictions
on variable pay which restrict the competitiveness of total remuneration as a whole. The 2024 salary review for Executive Directors
has not yet concluded and further details of any increases granted will be included within next year’s report.
Pensions
The current Executive Directors are members of the PTSB Defined Contribution Pension Scheme. During 2022, the Bank contributed
up to 20% of basic salary in the case of the CEO and 16% in the case of the other Executive Director.
Other than basic salary, there are no other elements of Executive Director’s remuneration which are pensionable.
Benefits
During 2023, Executive Directors received benefits in line with Policy. This included an allowance of €20,000 in lieu of a company
car and eligibility for subsidised house purchase loans provided on the same terms and conditions as loans to other eligible PTSB
employees.
Bonus and Long-term Incentive Plans
In line with the terms of certain agreements in place with the State during 2023, the Remuneration Policy did not provide for the
payment of variable remuneration to Executive Directors. No bonus payments were made to Executive Directors during 2023 or 2022.
Neither were there any long term incentive arrangements in place for Executive Directors in 2023 or 2022.
During 2023, the Remuneration Committee approved certain amendments to the Remuneration Policy which will allow for the
introduction of a new variable pay scheme at an appropriate time. All variable remuneration arrangements will be designed in a
way that promotes the interests of stakeholders and fully complies with applicable regulatory requirements and State Agreements
on remuneration. Variable remuneration schemes will be based on company and individual performance. For Executive Directors,
future awards will be based on a performance period of one financial year. Awards will be assessed with reference to both financial
and non-financial performance metrics. Awards will be payable in cash or, where practical, in shares or a combination of shares and
cash. The Remuneration Committee will hold the discretion to review the level of awards to take account of risk adjustments where
appropriate. Variable Pay awards will be subject to the malus and clawback (where applicable).
Further information on our future approach to variable pay will be provided in the 2024 annual report and accounts.
Share option schemes - Audited
No share options were granted in 2023 or 2022. There were no share options or share option schemes in existence at the end of the
period.
PTSB is reviewing options to implement an APSS as part of its plans to implement a new Variable Pay scheme.
Loss of Office Payments
The Remuneration Policy requires that any payments on termination of employment are made in accordance with the provisions of
CRD V and applicable Irish legislation. Any payments in relation to termination reflect performance achieved over time and will not
reward failure or misconduct. Leavers will receive any payments required under the terms of their contract.
No payments for loss of office were made to Executive Directors during 2023 (2022: None).
Payments to Former Directors
No such payments were made to former Executive Directors during 2023 (2022: None).
170
PTSB Group Holdings plc - Annual Report 2023 Directors’ Fees from another Company
The Bank operates established polices, practices and procedures that are designed to identify, document and manage conflicts
of interest. It is the policy of the Bank that where an Executive Director of the Bank is remunerated for service as a Non-Executive
Director of a non-Bank company and retains such remuneration, the amount of this remuneration is disclosed. No Executive Director
was in receipt of fees from external appointments during the period.
Non-Executive Director Remuneration - Audited
The level of fees paid to the Chairperson and Non-Executive Directors in 2023 is outlined in the table below.
Aggregate fees paid to Non-Executive Directors increased from €1,046,218 (2022) to €1,061,840 (2023) as a consequence of the
changes to the fee structure.
1.
Fixed Remuneration
2023
2.
Variable Remuneration
Note
Base
Salary
Basic Fees
Fees Paid
Fringe
Benefits
One-year
variable
Multi-year
variable
3.
Extraordinary
items
4.
Pension
Expense
5.
Total
Remuneration
6.
Proportion
of Fixed and
Variable
Remuneration
1
2
3
4
5
6
7
8
9
10
11
12
13
€0 €320,000 €256,275
€0 €320,000 €80,000
€11
€0
€0 €60,000 €72,593
€375
€0 €60,000 €28,350
€0
€0 €60,000 €121,187
€375
€0 €60,000 €101,938
€90
€0 €60,000 €73,750
€445
€0 €60,000 €79,937
€0 €60,000 €82,688
€0 €60,000 €71,281
€0 €60,000 €82,688
€0 €60,000
€4,113
€0 €60,000
€3,965
€445
€445
€445
€445
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€256,286 100% Fixed
€80,000 100% Fixed
€72,968 100% Fixed
€28,350 100% Fixed
€121,562 100% Fixed
€0
€102,028 100% Fixed
€0
€74,195 100% Fixed
€0
€0
€0
€0
€0
€0
€80,382 100% Fixed
€83,133 100% Fixed
€71,726 100% Fixed
€83,133 100% Fixed
€4,113 100% Fixed
€3,965 100% Fixed
Name of
Director,
Position
Julie O’Neill
Robert Elliott
Ken Slattery
Andrew
Power
Ronan O’Neil
Donal
Courtney
Ruth
Wandhofer
Marian
Corcoran
Paul Doddrell
Celine
Fitzgerald
Anne Bradley
Catherine
Moroney
Rick Gildea
1. Ms O'Neill was appointed as a member of the Board on 17 January 2023 and on the 1 February became a member of the Remuneration Committee, Board
Nomination, Culture and Ethics Committee and Project Sun (Ulster Bank transaction) Oversight Committee. Ms O'Neill was appointed as Board Chairperson on
31st March 2023. Fringe benefits relate to the payment of expenses.
2. Mr Elliott retired from the Board on 30 March 2023
3. Additional fees paid as Chairperson of the Remuneration Committee, and member of the Nomination, Culture and Ethics Committee. Fringe benefits comprise
Benefit in Kind relating to the payment of professional body subscriptions. Mr Slattery retired from the Board on 12 December 2023.
4. Additional fees paid as member of the Board Audit Committee and member of the Remuneration Committee. Mr Power retired from the Board on 19 May 2023.
5. Additional fees paid as Chairperson of the Board Audit Committee, member of the Board Nomination, Culture and Ethics Committee, Project Sun Oversight
Committee and Senior Independent Director. Fringe benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
6. Additional fees paid as Chairperson of the Board Risk and Compliance Committee, and member of Board Audit Committee and the Project Sun Oversight
Committee. Fringe benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
7. Additional fees paid as member of the Board Risk and Compliance Committee and the Remuneration Committee. Fringe benefits comprise Benefit in Kind
relating to the payment of professional body subscriptions.
8. Additional fees paid as member of the Board Risk and Compliance Committee, the Board Nomination, Culture and Ethics Committee and Project Sun Oversight
Committee. Fringe benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
9. Additional Fees paid as member of the Board Risk and Compliance Committee, Project Sun Oversight Committee and the Board Audit Committee. Fringe
benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
10. Additional fees paid as member of the Remuneration Committee and Nomination, Culture and Ethics Committee. Fringe benefits comprise of Benefit in Kind
relating to the payment of professional body subscriptions.
11. Additional fees paid as member of the Board Audit Committee, Project Sun Oversight Committee and Board Risk and Compliance Committees. Fringe benefits
comprise Benefit in Kind relating to the payment of professional body subscriptions.
12. Additional Fees paid as member of the Board Risk and Compliance Committee and the Board Audit Committee. Ms Moroney was appointed to the Board on 12
December 2023.
13. Additional Fees paid as member of the Board Risk and Compliance Committee and the Board Remuneration Committee. Mr Gildea was appointed to the Board
on 12 December 2023.
171
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Director’s Report on Remuneration
(continued)
For comparison, the level of fees paid to the Chairperson and Non-Executive Directors in 2022 is outlined in the table below.
1.
Fixed Remuneration
2022
2.
Variable Remuneration
Note
Base
Salary
Basic Fees
Fees Paid
Fringe
Benefits
One-year
variable
Multi-year
variable
3.
Extraordinary
items
4.
Pension
Expense
5.
Total
Remuneration
6.
Proportion
of Fixed and
Variable
Remuneration
€0 €320,000 €305,000
€0
€0 €60,000 €73,088
€375
€0 €60,000 €70,463
€0
€0 €60,000 €117,713
€375
€0 €60,000 €99,337
€0
€0 €60,000 €70,463
€435
€0 €60,000 €78,338
€0 €60,000 €80,963
€435
€435
€0 €60,000 €67,837
€0 €60,000 €80,963
€0
€0
1
2
3
4
5
6
7
8
9
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€305,000 100% Fixed
€73,463 100% Fixed
€70,463 100% Fixed
€118,088 100% Fixed
€0
€99,337 100% Fixed
€0
€70,898 100% Fixed
€0
€0
€0
€0
€78,773 100% Fixed
€81,398 100% Fixed
€67,837 100% Fixed
€80,963 100% Fixed
Name of
Director,
Position
Robert Elliott
Ken Slattery
Andrew
Power
Ronan O’Neil
Donal
Courtney
Ruth
Wandhofer
Marian
Corcoran
Paul Doddrell
Celine
Fitzgerald
Anne Bradley
1. Additional fees paid as Chairperson of the Remuneration Committee, and member of the Nomination, Culture and Ethics Committee. Fringe benefits comprise
Benefit in Kind relating to the payment of professional body subscriptions.
2. Additional fees paid as member of the Board Audit Committee and member of the Remuneration Committee.
3. Additional fees paid as Chairperson of the Board Audit Committee, member of the Board Nomination, Culture and Ethics Committee, member of Project Sun
Oversight Committee, and Senior Independent Director. Fringe benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
4. Additional fees paid as Chairperson of the Board Risk and Compliance Committee and member of Project Sun Oversight Committee. Fringe benefits comprise
Benefit in Kind relating to the payment of professional body subscriptions.
5. Additional fees paid as member of the Board Risk and Compliance Committee and member of the Remuneration Committee. Fringe benefits comprise Benefit in
Kind relating to the payment of professional body subscriptions.
6. Additional fees paid as member of the Board Risk and Compliance Committee, member of the Board Nomination, Culture and Ethics Committee and member of
Project Sun Oversight Committee. Fringe benefits comprise Benefit in Kind relating to the payment of professional body subscriptions.
7. Additional Fees paid as member of the Board Risk and Compliance Committee, Board Audit Committee and Project Sun Oversight Committee.
8. Additional fees paid as member of the Remuneration Committee and Nomination, Culture and Ethics Committee.
9. Additional fees paid as member of the Board Audit Committee and Board Risk and Compliance Committees and member of Project Sun Oversight Committee.
The table below outlines the level of fees paid to the Chairman and Non-Executive Directors, including base fees and further fees for
additional Board duties such as Chairpersonship or membership of a committee. The fee structure remained unchanged in 2023 and
is considered to remain appropriate following the 10% increase which was applied from the 1st July 2022 as part of a comprehensive
fee review.
Position:
Board Chairperson
Non-Executive Director (Base Fee)
Senior Independent Director
Board Audit Committee and Board Risk & Compliance Committee
Chairperson
€27,500
Remuneration Committee
Member
€8,250
Chairperson
€11,000
Remuneration Committee and Nomination, Culture & Ethics Committee
Member
€5,500
Project Sun Oversight Committee (ceased 30/09/2023)
Member
€8,250
172
2022 Fees
2023 Fees
€320,000
€320,000
€60,000
€22,000
€60,000
€22,000
€27,500
€8,250
€11,000
€5,500
€8,250
PTSB Group Holdings plc - Annual Report 2023
Comparison of Directors’ and Employees’ pay
The following table provides information regarding the annual change in the total remuneration of members of the Bank’s Board
of Directors, as well the average change in remuneration, on a full-time equivalent basis, of our employees as compared with our
Company performance between 2019 and 2023.
Percentage
change
between 2019
and 2020
Percentage
change
between 2020
and 2021
Percentage
change
between 2021
and 2022
Percentage
change
between 2022
and 2023
Note
Changes in Remuneration
Directors’ Remuneration – Executive Directors
Eamonn Crowley, CEO
Nicola O’Brien, CFO
Michael Frawley, CRO
Directors’ Remuneration – Non-Executive Directors (NEDs)
Robert Elliott
Julie O’Neill
Ken Slattery
Andrew Power
Ronan O’Neill
Donal Courtney
Ruth Wandhofer
Marian Corcoran
Paul Doddrell
Celine Fitzgerald
Anne Bradley
Catherine Moroney
Rick Gildea
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
6.6%
N/A
0.7%
0.0%
N/A
4.6%
0.0%
6.5%
0.0%
0.0%
0.0%
N/A
N/A
N/A
N/A
N/A
Average remuneration on a full-time equivalent basis of employees
Employees of the company
Company performance
Underlying profit/ loss
Adjusted Cost to Income Ratio
17
Note
18
19
2.6%
2020
(€109m)
75%
5.1%
N/A
0.0%
0.0%
N/A
2.3%
0.0%
21.3%
1.1%
0.6%
7.0%
1.8%
N/A
N/A
N/A
N/A
1.7%
2021
€17m
82%
0.0%
N/A
0.0%
5.2%
N/A
1.7%
4.9%
7.6%
6.6%
4.2%
8.9%
14.2%
4.1%
6.5%
N/A
N/A
-0.8%
2022
€45m
83%
4.2%
12.7%
N/A
0.0%
N/A
4.1%
4.7%
2.9%
2.7%
4.7%
2.0%
2.1%
5.7%
2.7%
NA
NA
2.8%
2023
€166m
64%
Notes:
1. Mr Crowley served as CFO up to 1st July 2020 at which point he was appointed as CEO. The year on year increase in 2021 reflects this appointment to CEO. The
increase in 2023 results from certain changes to pension arrangements.
2. Ms. O’Brien was appointed to the Board on 04 August 2022 and therefore no pre-2022 data is available for comparative purposes.
3. Mr. Frawley was appointed to the Board on 29th October 2019. Remuneration for 2019 has been annualised for the purpose of the above. He resigned from the
Board on 30 March 2022.
4. Mr. Elliot’s increase in 2022 is reflective of the increase in board remuneration fees which were approved in July 2022.
5. Ms O'Neill was appointed as member of the Board on 17th January 2023, and as Chairperson to the Board on 31st March 2023 and therefore no data is available
for comparative purposes
6. Mr. Slattery was appointed as Chair of Remuneration Committee on 8th September 2020. The year on year increase in 2021 reflects this appointment and the
payment of fringe benefits during 2021. The year on year increases in 2022 and 2023 respectively are reflective of the increase in board remuneration fees
which were approved in July 2022.
7. The year on year increases in 2022 and 2023 respectively are reflective of the increase in board remuneration fees which were approved in July 2022 and which
have been annualised for the purposes of the 2023 analysis.
8. Mr O’Neill was appointed as Senior Independent Director on 6th August 2020. The year on year increase in 2021 reflects this appointment, and other committee
membership changes during 2021. The year on year increases in 2022 and 2023 respectively are reflective of the increase in board remuneration fees which
were approved in July 2022.
9. The year on year increases in 2022 and 2023 respectively are reflective of the increase in board remuneration fees which were approved in July 2022.
10. Ms Wandhöfer was appointed as a member of the Board on 1st February 2019. Remuneration for 2019 was annualised for the purposes of the above. Her year
on year increase in 2021 reflects payment of fringe benefits during 2021. The year on year increases in 2022 and 2023 respectively are reflective of the increase
in board remuneration fees which were approved in July 2022.
11. Ms Corcoran was appointed as a member of the Board on 24th September 2019. Remuneration for 2019 was annualised for the purposes of the above. Her year
on year increase in 2021 reflects committee membership changes during 2021. The year on year increases in 2022 and 2023 respectively are reflective of the
increase in board remuneration fees which were approved in July 2022.
12. Mr Doddrell was appointed as a member of the Board on 26th November 2020 and therefore no pre-2020 data is available for comparative purposes.
Remuneration for 2020 was annualised for the purposes of the above. The year on year increase in 2021 reflects committee membership changes during 2021.
The year on year increases in 2022 and 2023 respectively are reflective of the increase in board remuneration fees which were approved in July 2022.
13. Ms. Fitzgerald was appointed as a member of the Board on 30th March 2021 and therefore no pre-2021 data is available for comparative purposes.
Remuneration for 2021 was annualised for the purposes of the above. The year on year increases in 2022 and 2023 respectively are reflective of the increase in
board remuneration fees which were approved in July 2022.
14. Ms. Bradley was appointed as a member of the Board on 30th March 2021 and therefore no pre-2021 data is available for comparative purposes. Remuneration
for 2021 was annualised for the purposes of the above. The year on year increases in 2022 and 2023 respectively are reflective of the increase in board
remuneration fees which were approved in July 2022.
15. Ms Moroney was appointed as a member of the Board on 12th December 2023 and therefore no data is available for comparative purposes.
16. Mr Gildea was appointed as a member of the Board on 12th December 2023 and therefore no data is available for comparative purposes.
17. The change in average remuneration is based on the annual employee costs (excluding social welfare and directors’ remuneration) divided by the average
number of employees.
18. Operating profit/loss before exceptional items. See page 72 for a reconciliation of underlying loss to operating profit on an IFRS basis.
19. Defined as total operating expenses (excluding exceptional, other non-recurring items, bank levy and regulatory charges) divided by total operating income.
173
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Director’s Report on Remuneration
(continued)
Voting Results from the Annual General Meeting
At the 2023 AGM, shareholder approval on an advisory basis was sought for the 2023 Directors’ Report on Remuneration. At the AGM
in 2023, 99.9% of votes cast were in favour of the resolution.
Also, in accordance with the Shareholder Rights Directive, every four years, shareholder approval on an advisory basis is sought on
the Directors’ Remuneration Policy. Shareholder approval for the Directors’ Remuneration Policy was last granted at the AGM in 2023
which was approved by 99.9% of shareholders at that time.
The Bank takes the views of shareholders on our approach to remuneration into account on an ongoing basis and welcomed the
strong support received for both resolutions.
An updated version of the Directors’ Remuneration Policy has been brought through internal governance and will be presented for
shareholder approval on an advisory basis at the 2024 AGM. That updated Policy includes a number of amendments to support the
planned introduction of reward with a variable component.
174
PTSB Group Holdings plc - Annual Report 2023 • the Annual Report and the financial
statements, taken as a whole, is
fair, balanced, understandable and
provides the information necessary for
shareholders to assess the Group and
Company’s position and performance,
business model and strategy.
On behalf of the Board
Julie O’Neill
Chairperson
Eamonn Crowley
Chief Executive
Conor Ryan
Company Secretary
Nicola O’Brien
Chief Financial
Officer
6 March 2024
Statement of Directors’ Responsibilities
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with International Financial Reporting
Standards (IFRS) adopted by the
European Union (EU) and with those
parts of the Companies Act 2014
applicable to companies reporting under
IFRS and in respect of the consolidated
financial statements, Article 4 of the IAS
Regulation.
Under Irish law the Directors shall not
approve the Group’s and Company’s
financial statements unless they are
satisfied that they give a true and fair view
of the Group’s and the Company’s assets,
liabilities and financial position as at the
end of the financial year and of the profit
or loss of the Group for the financial year.
In preparing these financial statements,
the Directors are required to:
• select suitable accounting policies and
then apply them consistently;
• make judgements and estimates that
are reasonable and prudent;
• state whether the financial statements
have been prepared in accordance with
IFRS adopted by the EU and ensure that
they contain the additional information
required by the Companies Act 2014;
and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to:
• correctly record and explain the
transactions of the Company;
• enable, at any time, the assets,
liabilities, financial position of the
Company to be determined with
reasonable accuracy; and
• enable the Directors to ensure that the
financial statements comply with the
Companies Act 2014, and as regards
the Group financial statements, article 4
of the IAS Regulation and enable those
financial statements to be audited.
The Directors are also responsible for
safeguarding the assets of the Group
and the Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and the
requirements of the Listing Rules issued
by the Irish and London Stock Exchanges,
the Directors are also responsible for
preparing a Directors’ Report and reports
relating to Directors’ remuneration and
Corporate Governance. The Directors
are also required by the Transparency
(Directive 2004/109/EC) Regulations 2007
and the Transparency Rules to include
a management report containing a fair
review of the business and a description
of the Principal Risks and Uncertainties
facing the Group.
The Directors are responsible for
the maintenance and integrity of the
corporate and financial information
included on the Company’s website
www.permanenttsb.ie. Legislation in
the Republic of Ireland governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
The Directors confirm that, to the best of
each Director’s knowledge and belief:
• they have complied with the above
requirements in preparing the financial
statements;
• the financial statements, prepared in
accordance with IFRS as adopted by
the European Union, give a true and fair
view of the assets, liabilities, financial
position of the Group and the Company
and of the loss of the Group;
• the Group’s Chairperson Statement, the
Group’s Chief Executives Review and
the Operating and Financial Review set
out in the Strategic Report includes
a fair review of the development and
performance of the business and
the position of the Group and the
Company, together with a description
of the Principal Risks and Uncertainties
that they face as set out in the Risk
Management Section of the Strategic
Report; and
175
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Independent Auditor’s Report to the Members of
Permanent TSB Group Holdings plc
Report on the audit of the financial
statements
Opinion
We have audited the financial statements
of Permanent tsb Group Holdings
plc (‘the Company’ or ‘PTSB’) and its
consolidated undertakings (‘the Group’)
for the year ended 31 December
2023 set out on pages 184 to 298,
contained within the reporting package
635400DTNHVYGZODKQ93-2023-12-31-
en.zip,which comprise the consolidated
income statement, consolidated
statement of comprehensive income,
consolidated statement of financial
position, consolidated statement of
changes in equity, consolidated statement
of cash flows, company statement of
financial position, company statement of
changes in equity, company statement of
cash flows and related notes, including
the Group’s material accounting policies
set out in note 1 and the Company’s
material accounting policies set out on
page 295. Certain required disclosures
have been presented elsewhere in the
Annual Report, rather than in the notes
to the financial statements. These are
incorporated in the financial statements
by cross-reference and are identified as
audited
The financial reporting framework that
has been applied in their preparation
is Irish Law, including the Commission
Delegated Regulation 2019/815 regarding
the single electronic reporting format
(ESEF) and International Financial
Reporting Standards (IFRS) as adopted by
the European Union and, as regards the
Company financial statements, as applied
in accordance with the provisions of the
Companies Act 2014.
In our opinion:
• the financial statements give a true
and fair view of the assets, liabilities
and financial position of the Group and
Company as at 31 December 2023 and
of the Group’s profit for the year then
ended;
• the Group financial statements have
been properly prepared in accordance
with IFRS as adopted by the European
Union;
• the Company financial statements have
been properly prepared in accordance
with IFRS as adopted by the European
Union, as applied in accordance with
the provisions of the Companies Act
2014; and
176
• the Group and Company financial
statements have been properly
prepared in accordance with the
requirements of the Companies Act
2014 and, as regards the Group
financial statements, Article 4 of the IAS
Regulation.
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(Ireland) (ISAs (Ireland)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s Responsibilities section of our
report. We believe that the audit evidence
we have obtained is a sufficient and
appropriate basis for our opinion. Our
audit opinion is consistent with our report
to the Board Audit Committee (‘BAC’).
We were appointed as auditor by the
Board of Directors on 2 June 2023.
The period of total uninterrupted
engagement is therefore one year ended
31 December 2023. We have fulfilled our
ethical responsibilities under, and we
remained independent of the Group in
accordance with, ethical requirements
applicable in Ireland, including the Ethical
Standard issued by the Irish Auditing and
Accounting Supervisory Authority (IAASA)
as applied to public interest entities. No
non-audit services prohibited by that
standard were provided.
Other matter – first year audit
considerations
Prior to the commencement of the
current financial year and our formal
appointment on 2 June 2023, we were
required to become independent of
the Group. During this time, we met
with management across the Group to
understand the business and to gather
information which we needed to plan
our first audit effectively. We met with
the former Auditors and attended the
Board Audit Committee (BAC) meetings
throughout the 2022 Group Financial
Statement audit cycle to understand the
key audit matters as and when they arose.
We also assessed the audit work papers
of the former Auditors to gain sufficient
audit evidence about whether the opening
balances contained misstatements that
could materially affect the current year
financial statements
Conclusions relating to going concern
In auditing the financial statements, we
have concluded that the director’s use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate.
Our evaluation of the director’s
assessment of the Group’s and Company’s
ability to continue to adopt the going
concern basis of accounting included:
• we used our knowledge of the Group
and Company, the financial services
industry, and the general economic
environment to identify the inherent
risks to the business model and
analysed how those risks might affect
the Group and Company’s financial
resources or ability to continue
operations over the going concern
period. The risks that we considered
most likely to adversely affect the
Group and Company’s available financial
resources over this period were:
the availability of funding and liquidity
in the event of a market wide stress
scenario; and
the impact on regulatory capital
requirements in the event of an
economic slowdown or recession.
• we also considered whether these risks
could plausibly affect the availability
of financial resources in the going
concern period by comparing severe,
but plausible, downside scenarios that
could arise from these risks individually
and collectively against the level of
available financial resources indicated
by the Group’s financial forecasts..
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or collectively,
may cast significant doubt on the Group
or the Company’s ability to continue as
a going concern for a period of at least
twelve months from the date when the
financial statements are authorised for
issue.
Our responsibilities and the
responsibilities of the directors with
respect to going concern are described in
the relevant sections of this report.
In relation to the Group and the
Company’s reporting on how they have
applied the UK Corporate Governance
Code and the Irish Corporate Governance
Annex, we have nothing material to
add or draw attention to in relation to
the directors’ statement in the financial
statements about whether the directors
considered it appropriate to adopt the
going concern basis of accounting.
PTSB Group Holdings plc - Annual Report 2023 Detecting irregularities including
fraud
We identified the areas of laws and
regulations that could reasonably be
expected to have a material effect on the
financial statements and risks of material
misstatement due to fraud, using our
understanding of the entity’s industry,
regulatory environment and other external
factors and inquiry with the directors. In
addition, our risk assessment procedures
included:
• Inquiring with the management as to
the Group’s policies and procedures
regarding compliance with laws and
regulations, identifying, evaluating and
accounting for litigation and claims, as
well as whether they have knowledge
of non-compliance or instances of
litigation or claims.
• Inquiring of directors, the Board Audit
Committee, Group Internal Audit (“GIA“)
and inspection of policy documentation
as to the Group’s high-level policies
and procedures to prevent and detect
fraud , and the Group’s channel for
“whistleblowing”, as well as whether
they have knowledge of any actual,
suspected or alleged fraud.
• Inquiring of directors, the Board Audit
Committee, Group Internal Audit
regarding their assessment of the
risk that the financial statements
may be materially misstated due to
irregularities, including fraud.
• Inspecting the Group’s regulatory and
legal correspondence.
• Reading Board Audit Committee
and where relevant, sub-Committee
minutes.
• Considering remuneration incentive
schemes and performance targets for
management and executive directors.
• Performing planning analytical
procedures to identify any usual or
unexpected relationships.
We discussed identified laws and
regulations, fraud risk factors and the
need to remain alert among the audit
team.
Firstly, the Group is subject to laws
and regulations that directly affect the
financial statements including companies
and financial reporting legislation. We
assessed the extent of compliance with
these laws and regulations as part of
our procedures on the related financial
statement items, including assessing
the financial statement disclosures
and agreeing them to supporting
documentation when necessary.
Secondly, the Group is subject to many
other laws and regulations where the
consequences of non-compliance could
have a material effect on amounts or
disclosures in the financial statements, for
instance through the imposition of fines
or litigation. We identified the following
areas as those most likely to have such
an effect: regulatory capital and liquidity,
other banking laws and regulations and
certain aspects of company legislation
recognising the financial and regulated
nature of the Group’s activities.
Auditing standards limit the required
audit procedures to identify non-
compliance with these non-direct laws
and regulations to inquiry of the directors
and other management and inspection
of regulatory and legal correspondence,
if any. These limited procedures did not
identify material actual or suspected non-
compliance.
We assessed events or conditions that
could indicate an incentive or pressure to
commit fraud or provide an opportunity
to commit fraud. As required by auditing
standards, we performed procedures to
address the risk of management override
of controls and the risk of fraudulent
revenue recognition. On this audit we do
not believe there is a fraud risk related to
revenue recognition. We identified fraud
risks in respect of post model adjustments
relating to the Group’s impairment loss
allowance on loans and advances to
customers, a certain provision balance
relating to litigation and management
override of controls.
Further detail in respect of post model
adjustments related to the Group’s
impairment loss allowance is set out in the
key audit matter disclosures in this report
In response to the fraud risks, we also
performed procedures including:
• Identifying journal entries and other
adjustments to test based on risk
criteria and comparing the identified
entries to supporting documentation;
• Evaluating the business purpose of
significant unusual transactions;
• Assessing significant accounting
estimates for bias; and
• Assessing the disclosures in the
financial statements
As the Group is regulated, our
assessment of risks involved obtaining an
understanding of the legal and regulatory
framework that the Group operates in
and gaining an understanding of the
control environment including the Group’s
procedures for complying with regulatory
requirements.
Owing to the inherent limitations of an
audit, there is an unavoidable risk that
we may not have detected some material
misstatements in the financial statements,
even though we have properly planned
and performed our audit in accordance
with auditing standards. For example, the
further removed non-compliance with
laws and regulations (irregularities) is from
the events and transactions reflected in
the financial statements, the less likely the
inherently limited procedures required by
auditing standards would identify it.
In addition, as with any audit, there
remains a higher risk of non-detection
of irregularities, as these may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of
internal controls. We are not responsible
for preventing non-compliance and cannot
be expected to detect non-compliance
with all laws and regulations.
Key audit matters: our assessment
of risks of material misstatement
Key audit matters are those matters
that, in our professional judgement, were
of most significance in the audit of the
financial statements and include the most
significant assessed risks of material
misstatement (whether or not due to
fraud) identified by us, including those
which had the greatest effect on: the
overall audit strategy; the allocation of
resources in the audit; and directing the
efforts of the engagement team. These
matters were addressed in the context of
our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.
In arriving at our audit opinion above, the
key audit matters, in decreasing order of
audit significance, were as follows:
177
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Independent Auditor’s Report to the Members
of Permanent TSB Group Holdings plc
(continued)
Group key audit matters
Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements €570 million (2022: €521
million)
Refer to page 198 (accounting policy) and pages 235 to 238 (financial disclosures)
The key audit matter
How the matter was addressed in our audit
The calculation of expected credit losses (“ECLs”)
requires a high degree of judgement to reflect recent
developments in credit quality, arrears experience
and / or emerging macroeconomic risks.
Impairment loss allowance under IFRS 9 - accuracy of modelled ECL
estimate:
We performed end to end process walk-throughs to identify the key
systems, applications and key controls used in the impairment loss
allowance modelling processes.
The key areas where we identified greater levels of
management judgement and therefore increased
levels of audit focus in the Group’s estimation of
ECLs include but are not limited to:
Impairment loss allowance under IFRS 9 - accuracy
of modelled ECL estimate:
The calculation of expected credit losses uses
complex and inherently judgmental modelling
techniques. ECLs may be inappropriate if certain
models or underlying assumptions do not accurately
predict defaults or recoveries over time, become
out of line with wider industry experience, or fail to
reflect the credit risk of financial assets.
As a result of these factors, we have identified
a significant risk of error arising from complexity
or uncertainty in certain models or underlying
assumptions. Furthermore, these models are the key
drivers of the complexity and estimation uncertainty
in the ECL estimate and resulted in an enhanced
audit time.
Impairment loss allowance under IFRS 9 - post-
model adjustments:
Post-model adjustments (“PMAs”) are raised by
management to address known impairment model
limitations or emerging trends.
We identified a significant risk of error and fraud
associated with the valuation of those PMAs with the
greatest degree of management judgement. PMAs
represent approximately 24% of the ECL. These
adjustments are inherently uncertain and significant
management judgement is involved in estimating
certain PMAs and management overlays.
Impairment loss allowance under IFRS 9 - economic
scenarios:
Economic scenarios have a direct impact on the
loan staging classification and the resultant ECL.
Significant management judgement is applied to the
determination of the economic scenarios and the
weightings applied to them.
We have identified a significant risk due to error
with respect to management judgment relating
to the selection of scenarios, the associated
scenario probabilities and the material economic
variables which drive the scenarios and the related
weightings.
178
In conjunction with our credit modelling specialists, we tested the
design, implementation and operating effectiveness of key controls
including controls over:
Model validation, model monitoring and controls over significant model
inputs and outputs.
In conjunction with our credit modelling specialists, we challenged the
model development and validation teams to assess the appropriateness
of the models used by the Bank.
We tested the completeness and accuracy of identified critical data
elements used within the ECL models.
In conjunction with our credit modelling specialists, we independently
re-performed testing over key aspects of the models underlying the
calculation of ECLs, including:
Re-performance of ECL execution for a selection of ECL models using
PTSB’s statistical analysis system (SAS),
Independent rebuild and replication testing for a selection of IFRS 9 PD
and LGD models, and
Inspection of model validation and model monitoring reports to assess
whether the findings have been appropriately considered, addressed by
management and included in the PMA stack as relevant.
Impairment loss allowance under IFRS 9 - post-model adjustments:
We performed end to end process walk-throughs and tested the design,
implementation and operating effectiveness of the key controls over the
identification, calculation, review and authorisation of PMAs.
In conjunction with our credit modelling specialists, we evaluated
the conceptual soundness of certain PMAs by critically assessing
management’s methodology, including the limitation and/or risk that
those PMAs are seeking to address, and the PMAs‘ compliance with the
requirements of IFRS 9.
• Inspected the PMA calculation methodology and tested the
completeness and accuracy of relevant data inputs into the PMA
calculation.
Tested the completeness and accuracy of the PMAs having regard for
the risk profile of the loan books, as well as known model limitations,
and by challenging management on their assumptions relating to the
credit risk impact of prevailing macroeconomic uncertainty such as
interest rates and inflation.
PTSB Group Holdings plc - Annual Report 2023 The key audit matter
How the matter was addressed in our audit
Disclosure quality:
The disclosures regarding the Group’s application of
IFRS 9 are key to explaining the key judgements and
material inputs to the IFRS 9 ECL results.
The effect of these matters is that, as part of our
risk assessment, we determined that the impairment
of loans and advances to customers including
off balance sheet elements has a high degree of
estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality
for the financial statements as a whole. The credit
risk sections of the financial statements (pages 258
to 279) disclose additional information in relation to
ECL. For the reasons outlined above the engagement
team determine this matter to be a key audit matter.
Challenged the overall reasonableness of the PMAs by comparing the
PMAs recognised by management to the model limitations and/or data
limitations that we consider to exist in the portfolio.
• Performed benchmarking analysis with peer banks over ECL coverage
levels and we assessed whether any PMAs identified for testing are
indicative of fraud, management bias or other deficiencies.
Assessed the overall adequacy of disclosures relating to PMAs.
Impairment loss allowance under IFRS 9 - economic scenarios:
We performed end to end process walk-throughs and tested the design,
implementation and operating effectiveness of the key controls related
to the estimation of macroeconomic forecasts used in measuring ECL
including the economic scenarios and probability weightings applied to
them.
In conjunction with our economics specialist, we challenged
management and management‘s specialists and inspected related
documentation to assess whether the basis for significant management
assumptions and judgements are reasonable and consistent with
independent consensus forecasts.
In conjunction with our economics specialist, we challenged and
assessed the plausibility of the significant assumptions underpinning
PTSB’s economic scenarios which have been identified as GDP,
unemployment and House Price Index (‘HPI‘) by comparing to
independent and observable economic forecasts, leveraging a number
of external data points.
We involved our economic specialist to assist in assessing the
appropriateness of the Bank’s methodology for determining the
economic scenarios used and the probability weightings applied to
them.
We challenged whether management’s forward-looking information
incorporated within the Group’s upside and downside scenarios were
reasonable, having regard to all available information at year-end.
Disclosure Quality
We assessed whether the disclosures appropriately disclose and
address the uncertainty which exists when determining the ECL. In
addition, we assessed whether the disclosure of the key judgements
and assumptions was sufficiently clear.
Our results:
We found the significant judgements used by management in
determining the impairment loss allowanced and current year charge,
including the accuracy of modelled ECL estimates, application of PMAs,
and economic scenarios and associated disclosures to be reasonable.
179
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Independent Auditor’s Report to the Members
of Permanent TSB Group Holdings plc
(continued)
IT Operational Risk
The key audit matter
As with many banks, the Group is highly dependent
on IT systems for the processing and recording of
significant volumes of transactions.
Our audit approach relies extensively on automated
controls and therefore on the effectiveness of
controls over IT systems. In particular, we consider
privileged user access management controls to be
critical in ensuring that only appropriately authorised
changes are made to relevant IT systems.
How the matter was addressed in our audit
In conjunction with our IT audit team, we performed end to end
walkthroughs and tested the design, implementation and operating
effectiveness, of the key automated controls that are relevant to
financial reporting.
We performed the following procedures as part of our risk assessment:
Obtained an understanding of the Group’s IT environment having
particular regard for developments with respect to the Group’s IT
strategy.
Moreover, appropriate access controls contribute
to mitigating the risk of potential fraud or error as a
result of changes to applications and data.
Inspected internal governance reporting relating to IT (including Risk,
Cyber, Internal Control functions) to identify any IT matters that may
impact integrity of financial reporting.
We regard this area as a key audit matter owing to
the high level of IT dependency within the Group as
well as the associated complexity and the risk that
automated controls are not designed and operating
effectively.
For the reasons outlined above the engagement
team determine this matter to be a key audit matter.
Inquired of GIA and inspected the relevant GIA reports produced during
the period to understand the nature of findings, if any, and consider the
impact on our audit.
We tested relevant General IT Controls for IT applications considered
relevant to the financial reporting process, including access
management, program development, change management and
computer operations.
We also tested the design, implementation and operating effectiveness
of key IT application controls, including the configuration, security and
accuracy of end user computing controls.
We focused on testing privileged access and change processes for in-
scope systems given their pervasiveness and criticality to our ability to
rely on IT controls for audit purposes.
Our results:
We obtained sufficient appropriate audit evidence to rely on the
operation of the Group’s IT systems for the purposes of our audit. Our
testing did not identify unauthorised user activities relevant to financial
reporting which would have required us to significantly expand the
extent of our planned substantive testing.
180
PTSB Group Holdings plc - Annual Report 2023 Company key audit matter
Impairment evaluation of the investment by PTSBGH Company only in PTSB PLC €2.35bn (2022: €2.35bn)
Refer to page 217 (accounting policy) and page 296 (financial disclosures)
The key audit matter
How the matter was addressed in our audit
The PTSBGH plc Company-only balance sheet
includes a €2.35 billion investment in PTSB plc at 31
December 2023.
Our audit procedures included performing an end-to-end process
walkthrough over the impairment assessment carried out by
management over the carrying value of the investment.
PTSBGH Company carries its investment in
its subsidiary undertaking at cost and reviews
whether there is any indication of impairment at
each reporting date. Impairment testing involves
comparing the carrying value of the investment to its
recoverable amount. The recoverable amount is the
higher of the investment’s fair value or its value-in-
use (VIU).
The recoverable amount at 31 December 2023 is
based on the VIU of the subsidiary investment which
exceeds market capitalisation. Given the inputs used
in arriving at the VIU, there is a degree of judgement
involved in estimating the value of the underlying
business at 31 December 2023.As a result of the
subjectivity involved in the VIU estimation and its
significance and magnitude to the Company, we
consider this to be a key audit matter.
We evaluated management’s assessment process that the carrying value
of the investment in subsidiary was not impaired at year end based on
management‘s value in use calculation which followed guiding principles
of IAS 36 in selection of appropriate capital asset pricing models,
relevant assumptions and forecast data.
We assessed the appropriateness of the discounted cash flow valuation
method applied, reasonability of forecasted free cash flows and other
relevant data inputs used and appropriateness of the discount rate
applied in management’s calculations.
We assessed the relevant macroeconomic assumptions underlying
the relevant forecasts in the context of economic consensus and for
alignment with Group’s Medium Term Plan.
We challenged management’s use of selected discount rate, applied
method and data inputs with the assistance of our Corporate Finance
Team.
We found that the various inputs to the valuation calculation were
consistent with the Group’s Medium Term Plan and appropriately
applied. We also found that the method used and discount rate applied
for calculating the VIU were reasonable.
We assessed the adequacy of the financial statement disclosures in
respect of the investment in the company only financial statements.
Our results:
Based on evidence obtained, we found that management’s conclusion
that the investment by the Company is not impaired at 31 December
2023 to be reasonable.
181
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Independent Auditor’s Report to the Members
of Permanent TSB Group Holdings plc
(continued)
Our application of materiality and an
overview of the scope of our audit
Materiality for both the Group financial
statements and Company financial
statements as a whole was set at €12m,
determined with reference to benchmark
of net assets (of which it represents 0.5%
respectively).
We consider net assets to be the most
appropriate benchmark given the volatility
in profit or loss arising over recent years
driven by certain exceptional activities
and recent instability in the economic
environment. Moreover, we believe that
net assets, rather than profitability,
provides us with a more appropriate
and consistent year on year basis for
determining materiality. In applying our
judgement in determining materiality, we
considered a number of factors which
had the most significant impact were:
the ownership structure of the Group
and Company, Debt arrangements, our
understanding of the Group and Company
and it’s environment; and earnings
sensitivities.
Performance materiality for both the
Group financial statements and Company
financial statements as a whole was set
at €9m respectively, determined with
reference to benchmark of net assets (of
which it represents 75% respectively). We
use performance materiality to reduce to
an appropriately low level the probability
that the aggregate of uncorrected and
undetected misstatements exceeds
overall materiality. In applying our
judgement in determining performance
materiality, we considered a number of
factors including: the number and value of
misstatements detected and the number
and severity of deficiencies in control
activities identified by the prior year
auditors of the financial statements.
We reported to the Board Audit
Committee any corrected or uncorrected
identified misstatements exceeding €0.6m
(5% of materiality), in addition to other
identified misstatements that warranted
reporting on qualitative grounds.
We applied materiality to assist us
determine the overall audit strategy
including identifying the significant risks
and procedures to be performed.
Our audit was undertaken to the
materiality and performance materiality
level specified above and was all
performed by a single engagement team
in Dublin.
182
Other information
The directors are responsible for the
preparation of the other information
presented in the Annual Report together
with the financial statements. The other
information comprises the information
included in the Directors’ Report and
Strategic Report set out on pages 2 to
79, the unaudited sections of the Risk
Management Report set out on pages
80 and 110, the Governance Section on
pages 118 to 168 and the parts of ‘Other
Information’ on pages 299 and 335
labelled ‘unaudited‘.
The financial statements and our auditor’s
report thereon do not comprise part of
the other information. Our opinion on the
financial statements does not cover the
other information and, accordingly, we do
not express an audit opinion or, except
as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether, based on our financial
statements audit work, the information
therein is materially misstated or
inconsistent with the financial statements
or our audit knowledge. Based solely on
that work we have not identified material
misstatements in the other information.
Based solely on our work on the other
information undertaken during the course
of the audit we report that, in those parts
of the directors’ report specified for our
consideration:
• we have not identified material
misstatements in the directors’ report;
• in our opinion, the information given in
the directors’ report is consistent with
the financial statements; and
• in our opinion, the directors’ report has
been prepared in accordance with the
Companies Act 2014.
Corporate governance statement
We have reviewed the directors’ statement
in relation to going concern, longer-
term viability, that part of the Corporate
Governance Statement relating to the
Company’s compliance with the provisions
of the UK Corporate Governance Code
and the Irish Corporate Governance Annex
specified for our review by the Listing
Rules of Euronext Dublin and th UK Listing
Authority.
Based on the work undertaken as part of
our audit, we have concluded that each of
the following elements of the Corporate
Governance Statement is materially
consistent with the financial statements
and our knowledge obtained during the
audit:
• Directors’ statement with regards the
appropriateness of adopting the going
concern basis of accounting and any
material uncertainties identified set out
on page 111;
• Directors’ explanation as to their
assessment of the Group’s prospects,
the period this assessment covers and
why the period is appropriate set out on
page 111;
• Director’s statement on whether it has a
reasonable expectation that the Group
will be able to continue in operation and
meets its liabilities set out on page 111;
• Directors’ statement on fair, balanced
and understandable and the information
necessary for shareholders to assess
the Group’s position and performance,
business model and strategy set out on
page 175;
• Board’s confirmation that it has carried
out a robust assessment of the
emerging and principal risks and the
disclosures in the annual report that
describe the principal risks and the
procedures in place to identify emerging
risks and explain how they are being
managed or mitigated set out on page
111;
• Section of the annual report that
describes the review of effectiveness
of risk management and internal control
systems set out on page 141 and;
• Section describing the work of the
board audit committee set out on page
148.
The Listing Rules of Euronext Dublin also
requires us to review certain elements of
disclosures in the report to shareholders
by the Board of Directors’ remuneration
committee.
We have nothing to report in this regard.
In addition as required by the Companies
Act 2014, we report, in relation to
information given in the Corporate
Governance Statement on pages 118 to
168, that:
• based on the work undertaken for our
audit, in our opinion, the description of
the main features of internal control and
risk management systems in relation
to the financial reporting process , and
information relating to voting rights
and other matters required by the
European Communities (Takeover Bids
(Directive 2004/EC) Regulations 2006
PTSB Group Holdings plc - Annual Report 2023
The purpose of our audit work and to
whom we owe our responsibilities
Our report is made solely to the
Company’s members, as a body, in
accordance with Section 391 of the
Companies Act 2014. Our audit work has
been undertaken so that we might state
to the Company’s members those matters
we are required to state to them in an
auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility
to anyone other than the Company and
the Company’s members, as a body, for
our audit work, for this report, or for the
opinions we have formed.
Frank Gannon
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit
Firm
1 Harbourmaster Place
IFSC
Dublin 1
D01 F6F5
6 March 2024
Respective responsibilities and
restrictions on use
Responsibilities of directors for the
financial statements
As explained more fully in the directors’
responsibilities statement set out on page
175, the directors are responsible for: the
preparation of the financial statements
including being satisfied that they give a
true and fair view; such internal control
as they determine is necessary to enable
the preparation of financial statements
that are free from material misstatement,
whether due to fraud or error; assessing
the Group and Company’s ability to
continue as a going concern, disclosing,
as applicable, matters related to going
concern; and using the going concern
basis of accounting unless they either
intend to liquidate the Group or the
Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (Ireland) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of these financial statements.
A fuller description of our responsibilities
is provided on IAASA’s website at https://
iaasa.ie/publications/description-of-the-
auditors-responsibilities-for-the-audit-of-
the-financial-statements/.
and specified for our consideration, is
consistent with the financial statements
and has been prepared in accordance
with the Act;
• based on our knowledge and
understanding of the Company and its
environment obtained in the course
of our audit, we have not identified
any material misstatements in that
information; and
• the Corporate Governance Statement
contains the information required by the
European Union (Disclosure of Non-
Financial and Diversity Information by
certain large undertakings and groups)
Regulations 2017.
• We also report that, based on
work undertaken for our audit, the
information required by the Act is
contained in the Corporate Governance
Statement.
Our opinions on other matters
prescribed by the Companies Act 2014
are unmodified
We have obtained all the information
and explanations which we consider
necessary for the purposes of our audit.
In our opinion the accounting records of
the Company were sufficient to permit
the financial statements to be readily
and properly audited and the financial
statements are in agreement with the
accounting records.
We have nothing to report on other
matters on which we are required to
report by exception
The Companies Act 2014 requires us to
report to you if, in our opinion:
• the disclosures of directors’
remuneration and transactions required
by Sections 305 to 312 of the Act are
not made;
• the Company has not provided the
information required by Section 1110N
in relation to its remuneration report for
the financial year 31 December 2022;
• the Company has not provided the
information required by section 5(2) to
(7) of the European Union (Disclosure of
Non-Financial and Diversity Information
by certain large undertakings and
groups) Regulations 2017 for the year
ended 31 December 2022 as required
by the European Union (Disclosure of
Non-Financial and Diversity Information
by certain large undertakings and
groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
183
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Consolidated Income Statement
For the year ended 31 December 2023
Interest income calculated using the effective interest rate method
Other interest income
Interest income
Interest expense
Net interest income
Fees and commission income
Fees and commission expense
Net trading income
Net other operating income
Exceptional items
Gain on bargain purchase
Total operating income
Administrative, staff and other expenses (excluding exceptional items)
Bank levy and other regulatory charges
Depreciation of property and equipment
Amortisation of intangible assets
Reversal of impairment of property and equipment
Exceptional items
Restructuring and other costs
Costs incurred in relation to the Ulster Bank transaction
Total operating expenses
Operating profit before credit impairment and taxation
Credit Impairment
Loans and advances to customers
Exceptional impairment arising from deleveraging of loans
Total credit impairment (charge)/write-back
Operating profit before taxation
Taxation
Profit for the year
Attributable to:
Equity holders of the parent*
Other equity holders
Earnings per ordinary share
Basic earnings per share of €0.5 ordinary share
Diluted earnings per share of €0.5 ordinary share
Year ended
Year ended
Note
31 December
2023
31 December
2022
€m
766
12
778
(158)
620
86
(44)
3
3
-
668
(378)
(60)
(27)
(40)
-
(2)
(31)
(538)
130
(56)
5
(51)
79
(11)
68
25
43
€m
417
-
417
(55)
362
75
(33)
3
6
362
775
(302)
(51)
(21)
(31)
1
(13)
(92)
(509)
266
(7)
8
1
267
(44)
223
213
10
€ Cent
€ Cent
4.5
4.5
45.4
45.4
5
5
5
6
6
7
8
11
9
10
25
26
25
11
11
23
11
12
13
13
*2022 Profit attributable to equity holders has been re-presented to reflect the allocation of profits to other equity holders
184
PTSB Group Holdings plc Annual Report 2023
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Profit for the year
Items that will not be reclassified to the income statement in subsequent periods
Fair value reserve (equity instruments)
Change in fair value of equity instruments
Tax relating to fair value of equity instruments
Revaluation of property
Tax relating to revaluation of property
Other comprehensive (expense), net of tax
Total comprehensive income for the year, net of tax
Attributable to:
Equity holders of the parent*
Other equity holders
Year ended
Year ended
Note
31 December
2023
31 December
2022
36
12
25
12
€m
68
5
(2)
(12)
5
(4)
64
21
43
€m
223
3
(1)
(8)
2
(4)
219
209
10
*2022 Total comprehensive income attributable to equity holders has been re-presented to reflect the allocation of profits to other equity
holders
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G
PTSB Group Holdings plc Annual Report 2023
185
Consolidated Statement of Financial Position
As at 31 December 2023
Assets
Cash at bank
Items in the course of collection
Loans and advances to banks
Derivative financial instruments
Other assets
Assets classified as held for sale
Debt securities
Equity securities
Prepayments and contract assets
Loans and advances to customers
Interest in associated undertakings
Property and equipment
Intangible assets
Deferred taxation
Total assets
Liabilities
Deposits by banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Other liabilities
Accruals
Current tax liability
Provisions
Subordinated liabilities
Total liabilities
Equity
Share capital
Share premium
Other reserves
Retained earnings
Shareholders’ equity
Other equity instruments
Total equity
Total liabilities and equity
On behalf of the Board:
Note
31 December
2023
31 December
2022
€m
€m
14
14
15
16
17
18
19
20
21
22
24
25
26
27
28
29
16
30
31
32
33
35
35
35
35
35
71
40
2,051
36
60
12
3,256
5
80
58
40
2,123
-
1
18
3,177
30
207
21,427
19,593
16
205
187
309
13
204
160
309
27,755
25,933
398
22,966
1
1,512
148
13
1
40
257
614
21,730
13
658
181
6
1
80
252
25,336
23,535
273
804
(810)
1,784
2,051
368
2,419
273
804
(791)
1,744
2,030
368
2,398
27,755
25,933
Julie O’Neill
Chairperson
Eamonn Crowley
Chief Executive
Nicola O’Brien
Chief Financial Officer
Conor Ryan
Company Secretary
186
PTSB Group Holdings plc Annual Report 2023
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
m
€
l
a
t
o
T
3
2
2
)
4
(
9
1
2
9
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PTSB Group Holdings plc Annual Report 2023
187
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Cash flows from operating activities
Operating profit before taxation
Adjusted for non-cash items and other adjustments:
Depreciation, amortisation and impairment of property, equipment and intangibles
(Gain)/loss on revaluation of property
Impairment (release)/charge on:
- Loans and advances to customers
Unrealised (gains)/losses on financial assets
Other income
Other mortgage related adjustments
Other provisions
Gain on bargain purchase
Other non-cash items
(Increase)/decrease in operating assets:
Derivative Assets
Other assets
Debt securities
Prepayments and accrued income
Loans and advances to customers
Increase/(decrease) in operating liabilities:
Deposits by banks (including central banks)
Customer accounts
Debt securities in issue
Derivative liabilities
Other liabilities and accruals
Provisions
Net cash (outflow)/inflow from operating activities before tax
Tax paid
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Maturities of debt securities - HTC
Purchase of debt securities - HTC
Purchase of property and equipment
Purchase of intangible assets
Cash transferred for business combinations
Forward contract derivatives
Investment in subsidiary undertakings
Investment in associated undertakings
Sale of Visa shares
Net cash flows from investing activities
188
PTSB Group Holdings plc Annual Report 2023
31 December
31 December
2023
€m
79
67
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45
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67
6
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81
343
(15)
10
57
131
(371)
(251)
1,135
769
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13
(41)
1,437
1,780
(7)
1,773
728
(827)
(24)
(37)
(41)
(1,595)
-
(7)
30
2022
€m
267
52
(1)
(1)
-
(6)
26
43
(362)
14
32
1
273
49
(5)
7
257
2,634
118
1
7
(15)
3,327
3,359
(1)
3,358
251
(972)
(31)
(30)
(4,816)
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-
(11)
-
(1,773)
(5,609)
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Consolidated Statement of Cash Flows (continued)
For the year ended 31 December 2023
Cash flows from financing activities
Issuance of AT1 Securities
Payment of lease liabilities
AT1 coupon payment
Interest paid on T2 capital notes
Interest paid on T2 hedging derivative
Net cash flows from financing activities
(Decrease)/increase in cash and cash equivalents
Analysis of changes in cash and cash equivalents
Cash and cash equivalents as at 1 January
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the end of the period*
31 December
31 December
2023
€m
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(59)
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2,162
2022
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(10)
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4,251
(2,030)
2,221
Net cash flows from operating activities includes interest received of €857 million (2022: €484 million) and interest/dividends paid of €160
million (2022: €58 million).
* Due to an IFRIC decision, restricted cash held by the Groups securitisation entities, which was excluded from cash and cash equivalents in prior years is now
included in cash and cash equivalents for 2023 and 2022. See note 14.
Reconciliation of liabilities arising from financing activities
1 January 2023
Financing Cashflows:
Lease Liability
Interest paid on Tier 2 capital notes
Interest paid on Tier 2 hedging derivatives
Non-cash movements:
Additions to lease liabilities
Interest accrued on Tier 2 capital notes
Hedge adjustment on Tier 2 capital notes
31 December 2023
1 January 2022
Financing Cashflows:
Lease Liability
Interest paid on Tier 2 capital notes
Interest paid on Tier 2 hedging derivatives
Non-cash movements:
Additions to lease liabilities
Interest accrued on Tier 2 capital notes
Hedge adjustment on Tier 2 capital notes
31 December 2022
Subordinated
Liabilities
Lease Liabilities
Tier 2 hedging
derivatives
€m
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8
5
257
252
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(8)
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8
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252
€m
38
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4
-
-
35
31
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-
13
-
-
38
€m
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-
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-
-
(5)
(6)
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-
-
-
-
-
-
-
Total
€m
290
(7)
(8)
(1)
4
8
-
286
283
(6)
(8)
-
13
8
-
290
PTSB Group Holdings plc Annual Report 2023
189
Notes to the Consolidated Financial Statements
Notes
1. Corporate information, basis of preparation and material accounting policies
2. Critical accounting estimates and judgements
3. Business combination
4. Operating Segment
5. Net interest income
6. Fees and commission income
7. Net Trading income
8. Net other operating income
9. Administrative, staff and other expenses (excluding exceptional items)
10. Bank levy and other regulatory charges
11. Exceptional items
12. Taxation
13. Earnings per ordinary share
14. Cash and cash equivalents
15. Loans and advances to banks
16. Derivative financial instrument
17. Other assets
18. Assets classified as held for sale
19. Debt securities
20. Equity securities
21. Prepayments and contract assets
22. Loans and advances to customers
23. Impairment provisions
24. Interest in associated undertakings
25. Property and Equipment
26. Intangible assets
27. Deferred taxation
28. Deposits by banks (including central banks)
29. Customer accounts
30. Debt securities in issue
31. Other liabilities
32. Provisions
33. Subordinated liabilities
34. Leases
35. Share capital, reserves and other equity instruments
36. Analysis of other comprehensive income
37. Measurement basis and fair values of financial instruments
38. Financial risk management
39. Capital management
40. Current/non-current assets and liabilities
41. Transfer of financial assets
42. Offsetting financial assets and financial liabilities
43. Commitments and contingencies
44. Related parties
45. Sale of loans and advances to customers
46. Principal subsidiary undertakings and interest in subsidiaries and structured entities
47. Reporting currency and exchange rates
48. Events after the reporting period
190
PTSB Group Holdings plc Annual Report 2023
Page
191
210
218
218
220
220
221
221
221
222
223
224
225
226
226
227
229
229
230
231
231
232
235
239
240
242
243
244
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245
246
246
247
248
250
252
252
258
280
281
282
283
284
285
288
289
290
290
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G
1. Corporate information, basis of preparation and material accounting policies
1.1 Corporate information
Permanent TSB Group Holdings plc (the Company) is a holding company domiciled in Ireland (registration number 474438). Its registered
office is situated at 56 - 59, St. Stephen’s Green, Dublin 2, Ireland. The Company’s shares are listed on the main market of the Irish and London
Stock Exchanges.
The consolidated financial statements include the financial statements of the Company and its subsidiaries (together referred to as the Group)
and are prepared up to the end of the financial year, 31 December 2023.
Permanent TSB plc (PTSB), a 100% owned subsidiary of the Company, is the main trading entity of the Group which is involved in retail
banking.
These consolidated financial statements for the year ended 31 December 2023 were approved by the Board and authorised for issue by the
Directors on 6 March 2024.
The accounting policies applied in the preparation of the financial statements for the year ended 31 December 2023 are set out below.
1.2 Basis of preparation
Statement of compliance
These consolidated financial statements comprise of the consolidated income statement, the consolidated statement of comprehensive
income (SOCI), the consolidated statement of financial position (SOFP), the consolidated statement of changes in equity (SOCE), the
consolidated statement of cash flows (SOCF), the Company SOFP, the Company SOCE, the Company SOCF and the notes to the
consolidated and the Company financial statements, which have been prepared in accordance with IFRS and interpretations issued by the IFR
Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under
IFRS and EU (Credit Institutions: Financial Statements) Regulations 2015.
The accounting policies have been consistently applied by the Group entities and are consistent with the previous year.
The financial statements include the information that is described as being an integral part of the audited financial statements contained in the
Directors’ Report on Remuneration and in Risk Management. Certain tables and related information in the notes to the financial statements,
included in boxes and clearly identified as unaudited do not form part of the audited financial statements.
The individual financial statements of the holding company have also been prepared in accordance with IFRS and interpretations issued by
IFRIC as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. In accordance with
section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement and
related notes to the AGM and from filing it with the Registrar of Companies. See note 46 for further information.
The Company’s profit after tax for the year ended 31 December 2023 was €46m (31 December 2022: €708m). For further information, see the
Company financial statements on pages 291 to 298.
Basis of measurement
The consolidated and Company financial statements have been prepared on the historical cost basis as modified to include the fair valuation
of certain financial instruments such as equity securities classified as FVOCI, derivative financial instruments, assets classified as held for sale,
financial assets and liabilities designated as hedged items in qualifying fair value hedge relationships, and land and buildings accounted for
using the revaluation model.
Functional and presentation currency
These financial statements are presented in Euro, which is the Company’s functional currency. Except where otherwise indicated, financial
information presented in Euro has been rounded to the nearest million (m).
Use of estimates and judgements
The preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and
related disclosures.
While the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based
on the best available information at the date of the approval of these consolidated financial statements.
PTSB Group Holdings plc Annual Report 2023
191
Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
Additional information about key assumptions and judgements are disclosed in the relevant notes for the following areas including significant
estimation uncertainty:
• Allowance for credit impairment losses (note 23);
• Deferred taxation (notes 12 and 27);
• Fair value of financial instruments (note 37);
• Impairment review of subsidiary undertaking (note 46).
• Fair value assumptions in relation to business combination accounting (note 2).
The estimates and assumptions are reviewed on an on-going basis and where necessary are revised to reflect current conditions. The
principal estimates and assumptions made by Management relate to impairment of loans and advances to customers, deferred taxation,
impairment of investment in subsidiary undertakings and financial instruments.
Judgements made by Management that have a significant effect on the financial statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 2.
1.3 Going Concern
In considering Management’s assessment of the Group’s and Company’s ability to continue as a going concern, Management considered the
principal risks and uncertainties as they might pertain to the going concern assumption, particularly the liquidity, profitability, and capital
position. Management considered these items in their current status and over future projections. In doing so, Management considered each
risk in turn, and the likelihood of the risk precipitating in the going concern assumptions becoming invalid over the period of assessment, being
twelve months from the date of the approval of the financial statements for the year ended 31 December 2023. Management considered
realistic alternatives, including downside scenarios applied by the Group and Company to test assumptions and potential outcomes.
Assessment Basis
The time that the Directors and Management have considered in evaluating the appropriateness of the going concern basis in preparing the
Company consolidated financial statements for the twelve months ended 31 December 2023 is a period of twelve months from the date of
approval of these financial statements (6 March 2025).
In making this assessment, the Directors and Management have considered the Group’s and Company’s 2024-2028 MTP, profitability
forecasts, funding and capital resource projections. These projections include both base and stress scenarios applied by the Group and
Company. Together with a number of factors such as the Irish Economy, Government fiscal policies, the availability of collateral to access
funding through third parties and the euro-system, and on-going changes in the regulatory environment.
Economic and political environment
Although economic conditions in Ireland have not been as strong in 2023 compared to prior years, growth is continued to be forecast albeit at
a more nominalised and moderate rate. Consumer price inflation has eased in the second half of 2023 as a result of the ECB’s monetary
tightening. The ECB has kept interest rates steady as inflation started to ease and expected to begin easing if this trend continues in the
medium term.
Further to this, the Group and Company continues to be materially reliant on Government and EU policy, and impacted by geopolitical events;
such as ongoing global conflicts, the continuing uncertainty around the Northern Ireland Protocol and the introduction of the global minimum
corporation tax rate to a sector of the Irish market.
The Group and Company reassessed the financial impacts of the economic and political environment through the Group’s and Company’s
integrated planning process and believes it is reasonably well positioned to withstand any volatility from economic events, particularly given
the Group’s and Company’s acquisition of certain parts of the Ulster Bank business in 2022 and the settlement of derivatives in 2023 and
continued management of its financial position through NPL reduction and capital management.
Funding & Liquidity
The Group and Company continued to have sufficient liquidity throughout 2023, and continues to undertake initiatives to improve its liquidity
position in the areas of deposits, collateral optimisation, and wholesale markets activity. The Directors and Management have also considered
forecasts of the liquidity position over the going concern period, under a range of stress scenarios.
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1. Corporate information, basis of preparation and material accounting policies (continued)
The Group and Company continues to hold a significant liquidity buffer at 31 December 2023 that can be easily and readily monetised in a
period of stress. The Directors and Management are aware that the Group’s and Company’s ability to effectively utilise its contingent
counterbalancing capacity is dependent on the underlying collateral remaining eligible. However, the Directors and Management are satisfied,
based on a review of funding plans, interaction with wholesale markets and deposit trends that the required liquidity and funding will be
available to the Group and Company during the period of assessment.
There are no material uncertainties, which would cast significant doubt on the ability of the Group to continue on a going concern basis over
the period of assessment.
Profitability and Capital Adequacy
The Group and Company made a profit for the year ended 31 December 2023. Directors and Management have reviewed the Medium Term
Plan and based on this, the near-term macro-economic conditions of the country and the resolution of legacy issues, the Directors and
Management are satisfied that the Group and Company are well positioned to continue to deliver profits in future years.
The Directors and Management have also considered the Group’s and Company’s forecast capital position, including a deterioration in
economic conditions due to high inflation and disruptions to the global supply chain. Based on the above considerations, the Directors and
Management have assessed and concluded that this does not give rise to a material uncertainty, which would cast significant doubt on the
ability of the Group and Company to continue on a going concern basis for the period of assessment.
Conclusion
As required by IFRS as adopted by the EU, the Directors and Management have considered the principal risks and uncertainties facing the
Group and Company as outlined above. Based on the latest and projected financial performance and position, and the options available to the
Group and Company, the Directors have concluded that the Group and Company have no material uncertainties, which would cast significant
doubt on the going concern assumption and have considered it appropriate to prepare the financial statements on a going concern basis.
1.4 Comparative information
The comparative information for 2022 has been prepared on a consistent basis with 2023.
1.5 Summary of material accounting policies
(i) Basis of consolidation
Subsidiaries
Subsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:
• the power, directly or indirectly, over the relevant activities of the investee, for example through voting or other rights;
• exposure to, or rights to, variable returns through involvement with the investee; and
• the ability to use its power over the investee to affect the Group’s return from the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the
date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction
balances and unrealised gains/losses on transactions between the Group’s companies are eliminated on consolidation.
The Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is
any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its
recoverable amount. The recoverable amount is the higher of the investment’s fair value or its VIU. If impairment occurs, this loss is recognised
in the income statement.
Details of principal subsidiaries are included in note 46.
Interest in associated undertakings
Interest in associated undertakings encompass investments in entities whereby the Group has significant influence over the financial and
operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than
20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting
rights but could be demonstrated to have significant influence.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
Interest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the
investment is increased or decreased each year by the Group’s share of the post-acquisition profit or loss of the associate. The Group’s share
of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.
The Group continues to decrease the carrying amount of the investment for its share of post-acquisition losses until the carrying amount is
zero unless the Group has incurred a legal or constructive obligation or made payments on behalf of the associate. These additional losses are
provided for and a liability is recognised in this instance.
(ii) Business combinations and goodwill
(a) Business combinations
The Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set
of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).
In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities
acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
The consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the
former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if
related to the issue of debt or equity securities (see (vii) and (a)). The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is
measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial
instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent
consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are
recognised in the income statement.
(b) Goodwill
The Group measures goodwill as the excess of (i) the consideration transferred; (ii) the amount of any non-controlling interest in the acquired
entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets
acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised
directly in profit or loss as a bargain purchase.
Goodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may
not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.
(iii) Foreign currencies
Foreign currency transactions are translated into the functional currency of each entity, being the currency of the primary environment in
which the entity operates at the exchange rate prevailing at the date of the transaction or valuation where items are remeasured. Monetary
assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange
movements are recognised in the income statement. However, exchange movements arising from the translation of equity investments in
respect of which an election has been made to present subsequent changes in fair value in OCI are recognised in OCI.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the spot
exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign
currency are translated using the spot exchange rate at the date of the transaction.
The results and financial position of the Group’s subsidiaries which have a functional currency different from Euro are translated into Euro as
follows:
• Assets and liabilities, including goodwill and fair value adjustments, are translated at the rates of exchange ruling at the reporting date;
• Income and expenses are translated at the average exchange rates for the year; and
• All resulting exchange differences are recognised in Other Comprehensive Income (OCI) and as a separate component of equity
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1. Corporate information, basis of preparation and material accounting policies (continued)
(iv) Recognition of income and expenses
(a) Interest and similar income and expenses
For all interest bearing financial instruments, interest income or expense is recorded using the EIR method.
The EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
• the gross carrying amount of the financial asset; or
• the amortised cost of the financial liability.
The effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In
calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not
credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date
on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees
paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition
or issue of a financial asset or financial liability.
Interest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:
1. POCI financial assets, for which the original credit-adjusted EIR is applied to the amortised cost of the financial asset (the calculation of
interest income does not revert to a gross basis, even if the credit risk of the asset improves); and,
2. Financial assets that are not ‘POCI’ but have subsequently become credit-impaired (or ‘Stage 3’), for which interest revenue is calculated by
applying the EIR to their amortised cost (i.e. net of ECL provision). If the asset is no longer credit-impaired, then the calculation of interest
income reverts to the gross basis.
Interest income and expense calculated using the effective interest method presented in the consolidated income statement includes:
• interest on financial assets and financial liabilities measured at amortised cost;
• the effective portion of fair value changes in qualifying hedging derivatives designated in fair value hedges of interest rate risk;
• negative interest on financial liabilities measured at amortised cost;
• negative interest on financial assets measured at amortised cost; and
• interest expense on lease liabilities.
Other interest income presented in the consolidated income statement includes interest income on lease receivables.
(b) Fees and commission income and expense
As outlined above, fees and commission income and expense that are integral to the EIR on a financial asset or liability are included in the
measurement of the EIR.
Other fees and commission income are recognised as the related services are performed. Fees and commission expenses relate mainly to
transaction and service fees, which are expensed as the services are received.
(c) Net trading income/(expense)
Net trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and
unrealised fair value changes on derivatives that do not qualify for hedge accounting, dividends and FX differences.
Dividend income is recognised when the right to receive income is established.
(d) Exceptional items
Certain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the
financial information. These items would not ordinarily occur while carrying out normal business activities.
Exceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations,
material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential
acquisitions).
The definition of exceptional items was refined to exclude gains and losses on material loan deleveraging post 31 December 2021. However,
releases on those transactions which occurred prior to this refinement continue to be included in exceptional items is consistent with the
treatment of the losses on deleveraging of loans in prior years.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
(e) Bank Levy and other regulatory charges
Bank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a
bank levy.
A bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation
to pay the levy.
(v) Employee Benefits
(a) Defined contribution pension plan
The Group operates a number of defined contribution pension schemes, under which the Group pays fixed contributions to a separate entity.
The contribution payable to a defined contribution plan is recorded as an expense under administration, staff and other expenses. Unpaid
contributions are recorded as a liability.
(b) Short term employee benefits
Short term employee benefits, such as salaries and other benefits, are accounted for on an accruals basis over the period in which the
employee’s service is rendered. Bonuses are recognised where the Group has a legal or constructive obligation to employees that can be
reliably measured.
(c) Termination payments
Termination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the
following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a
restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits
falling due more than 12 months after the end of the reporting period are discounted to their present value.
(vi) Current and deferred taxation
Taxation comprises both current and deferred tax. Taxation is recognised as income or expenses and included in the income statement
except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised
in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as
identifiable assets or liabilities at the acquisition date.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5% from 1 April 2015).
Deferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax
purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the
transaction affects neither accounting, nor taxable, profit or loss.
Deferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the
temporary differences when they reverse.
Deferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
DTAs and liabilities shall be offset if, and only if:
• there is a legally enforceable right to set off current tax assets and liabilities; and
• the DTAs and liabilities relate to income taxes levied by the same taxation authority on either:
- the same taxable entity; or
- different taxable entities which intend to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.
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1. Corporate information, basis of preparation and material accounting policies (continued)
A DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future
taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the
extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with
IAS 12.
Unrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable
profits will be available against which they can be used.
(vii) Financial instruments
(a) Classification of financial assets
Financial assets of the Group currently are recorded at fair value and are classified, on initial recognition, as amortised cost, or elected at
FVOCI. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or
sell the asset.
With the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The
fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction
between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various
valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow
projections, option pricing models and other valuation techniques used by market participants.
The classification requirements for debt and equity instruments are described below.
Debt instruments
Debt instruments, including loans and debt securities, are currently classified as amortised cost
Classification and subsequent measurement of debt instruments depend on:
(i)The Group’s business model for managing the asset; and
(ii) The cash flow characteristics of the asset.
(i) Business model assessment
The business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group’s objective is
solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from
the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of ‘other’ business model and
measured at FVTPL.
The Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business
objectives. The observable factors considered include:
• How the performance of the business model and the financial assets held within that business model are evaluated and reported to Group
ExCo;
• How risks that affect the performance of the business model are managed;
• How business managers are compensated; and
• The timing, frequency and volume of sales.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
(ii) Cash flow characteristics assessment
The Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise
to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if
they represent cash flows that are solely payments of principal and interest (the ‘SPPI’ test). Principal, for the purpose of this test, is defined as
the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or
amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most
significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the
cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the
related financial asset is classified and measured at FVTPL.
The Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at
every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except
when equities have been elected to be accounted for at FVOCI).
Based on the above assessments, the Group currently classifies its debt instruments into one category as per below:
Debt instruments measured at amortised cost
Debt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect
contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt
instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the
EIR method.
The EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross
carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction
costs and fees that are an integral part of the EIR.
Impairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at
amortised cost are presented net of allowance for ECL in the SOFP within Loans and advances to customers and Debt securities and interest
income recognised in net interest income.
Equity instruments
Equity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments
measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to
classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis
and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not
subsequently reclassified to the income statement. The Group has classified certain equity instruments as FVOCI on initial recognition as per
above. Dividends received are recorded in the income statement.
Reclassifications
Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for
managing financial assets.
(b) Impairment of financial assets
The Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:
• Financial assets at amortised cost;
• Lease receivables
• Loan commitments;
• Financial assets at FVOCI (excluding equity instruments); and
• Guarantees.
Measurement
ECL is measured by the Group in a way that reflects:
• an unbiased probability weighted amount that is determined by evaluating a range of possible outcomes;
• the time value of money; and
• reasonable and supportable information that is available without undue cost or effort at the reporting date and past events, current
conditions and forecast of future economic conditions.
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1. Corporate information, basis of preparation and material accounting policies (continued)
The amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and
whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate
ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:
• Stage 1 – includes financial instruments that have not had a Significant increase in Credit Risk (SICR) since initial recognition. For these
assets, 12-month ECL is recognised. 12-month ECL is the ECL that results from default events that are possible within 12 months of the
reporting date. It is not the expected cash shortfalls over the 12-month period but the entire credit loss on an asset weighted by the
probability that the loss will occur in the next 12 months. Therefore, all financial assets in scope will have an impairment provision equal to at
least 12-month ECL;
• Stage 2 – includes financial instruments that have had a SICR since initial recognition but that does not have objective evidence of
impairment. For these assets, lifetime ECL is recognised, being the ECL that results from all possible default events over the expected life of
the financial instrument;
• Stage 3 – includes financial assets that have objective evidence of impairment at the reporting date, i.e. are credit-impaired. For these
assets, lifetime ECL is recognised.
The Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9
purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL
calculation.
The expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans
arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:
• Selling the loans becomes a recovery method that the Group expects to pursue in a default scenario;
• The Group is neither legally nor practically prevented from realising the loans using the recovery method; and
• The Group has reasonable and supportable information upon which to base its expectations and assumptions.
Credit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows
that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.
Purchased or originated credit-impaired assets POCI
POCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial
recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted
EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.
Expected life
When measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual
terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most
instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.
For certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on
the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.
For instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.
Expert Credit Judgement
The Group’s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced
credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.
Effective Interest Rate
The discount rate used by the Group in measuring ECL is the EIR (or ‘credit-adjusted effective interest rate’ for POCI financial assets) or an
approximation thereof.
For undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan
commitment.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
Low credit risk exemption
The Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks
and certain intercompany positions in scope for impairment under IFRS 9.
The Group considers credit risk on a financial instrument low if it meets the following conditions:
• Strong capacity by borrower to meet its contractual cash flow obligations in the near term.
• Adverse changes in economic business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil
its contractual cash flow obligations.
• External rating of investment grade or an internal credit rating equivalent.
These exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.
Modification Policy for Financial Assets
The Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group
assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the
following factors:
• If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is
expected to be able to pay;
• Whether any substantial new items are introduced such as a profit share/equity-based return that substantially affects the risk profile of the
loan;
• Significant extension of the loan term when the borrower is not in financial difficulty;
• Significant change in the interest rate;
• Change in the currency the loan is denominated in; and
• Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.
If the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and
recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial
recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group
also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances
where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount
are also recognised in profit or loss as a gain or loss on derecognition.
If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the
gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The
new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial
assets).
Write-off policy
The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic
prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being
deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the
write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of
further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take
place on conclusion of the enforcement process.
In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.
Presentation of ECL allowance in the statement of financial position
The ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.
The ECL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the SOFP, which remains at fair value.
Instead an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a
corresponding charge to provision for credit losses in the income statement.
Credit losses on items not recognised in the statement of financial position such as undrawn lending commitments, letters of credit and
guarantees (other than financial guarantee contracts) are reported under loans and advances to customers..
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1. Corporate information, basis of preparation and material accounting policies (continued)
(c) Financial liabilities and equity
Financial liabilities are currently classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives.
Derivative liabilities are dealt with under separate accounting policies. All of the Group’s financial liabilities, other than derivative liabilities, are
classified at amortised cost.
The classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual
arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as
financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the EIR method.
Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as
equity and any coupon payments are classified as distributions in the period in which they are made. If the Group purchases its own debt, it is
removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other
operating income, net of any costs or fees incurred.
Financial liabilities measured at amortised cost
Financial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities and subordinated debt. The related
interest expense is recognised in net interest income.
Debt securities issued and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities
are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the
contractual provisions of the instrument.
All financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at
amortised cost and the related interest expense is recognised in the income statement using the EIR method.
Equity
Financial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity.
Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity
instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when
declared as a distribution out of retained earnings. Equity instruments are issued at arm’s length.
(d) Derecognition of Financial instruments
Financial assets
The Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights
to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain
control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion
of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed)
and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss
on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the
Group is recognised as a separate asset or liability.
The Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and
rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such
transactions are securities lending and sale-and-repurchase transactions.
In certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is
derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than
adequate (asset) or is less than adequate (liability) for performing the servicing.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
The Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets.
For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of
financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of
the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally
retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also
occur with entities external to the Group. Retained interests are recognised as debt securities in issue. The Group sells loans and advances to
customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expired. This may happen when
payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of
debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition
conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished,
any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.
(e) Determination of fair value of financial instruments and other assets
Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the
liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous
market for the asset or liability which is accessible to the Group.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy
based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:
• Level 1: Quoted market prices in active markets for identical assets or liabilities (unadjusted);
• Level 2: Valuation techniques such as discounted cash flow method, comparison with similar instruments for which market observable
prices exist, options pricing models, credit models and other relevant valuation models for which the lowest level input that is significant to
the fair value measurement is directly or indirectly observable; or
• Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of
the end of the reporting period during which the change has occurred.
An analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 37.
(viii) Derivative instruments and hedging
The Group follows the IFRS 9 model for hedge accounting.
Derivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at
fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, the Group engages in fair value hedges which is hedging the exposure to changes in the fair value of a
recognised asset or liability in relation to interest rate risk.
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1. Corporate information, basis of preparation and material accounting policies (continued)
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply
hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of
the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship
meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is
determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
• There is ‘an economic relationship’ between the hedged item and the hedging instrument;
• The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship; and
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually
hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
Certain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The
fair value movement and any interest income/(expense) are included in Net trading income/(expense).
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
(a) Fair value hedges
The Group uses interest rate swaps to hedge its exposure to changes in the fair value of fixed-rate euro notes issued in respect of the
EURIBOR benchmark interest rate. The Group hedges interest rate risk only to the extent of the benchmark interest rate because the changes
in the fair value of a fixed-rate note issued are significantly influenced by changes in the benchmark interest rate.
Before fair value hedge accounting is applied the Group determines whether an economic relationship between the hedged item and the
hedging instrument exists. This is performed by comparing the critical terms of each of the instruments and also regression analysis to assess
whether the hedging instrument is expected to be highly effective in offsetting changes in the fair value of the hedged item i.e. that the fair
value of the hedged item and the fair value of the hedging instrument move in opposite directions and therefore offset. The Group establishes
a hedge ratio by aligning the par amount of the fixed-rate note and the notional amount of the interest rate swap designated as a hedging
instrument. The Group then performs regression analysis to ensure that the hedge relationship is highly effective as per above. This analysis is
also performed at reporting periods to ensure that the hedge relationship remains highly effective.
The main sources of ineffectiveness will include differences in maturities of the instruments and different interest basis calculations.
The effective portion of fair value gains on hedging derivatives and the gain or loss on the hedged item are recognised in net interest income.
For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the
remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when
the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognised,
the unamortised fair value is recognised immediately in profit or loss.
(b) Credit valuation adjustment
The Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is
required. CVA is considered to reflect the counterparty’s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no
specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.
As a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement.
The Group mitigates its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not
operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to
net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The
collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers
and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative
positions.
The Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.
(ix) Cash and cash equivalents
Cash comprises cash on hand and demand deposits and cash equivalents include liquid investments that are readily convertible to known
amounts of cash which are subject to an insignificant risk of change in value and with an original maturity of less than three months.
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
(x) Leases
(a) Classification of Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether:
• the contract involves the use of an identified asset; this may be specified explicitly or implicitly, and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is
not identified;
• the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
• the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant
to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is
used is predetermined, the Group has the right to direct the use of the asset if either:
- the Group has the right to operate the asset; or
- the Group designed the asset in a way that predetermines how and for what purpose it will be used.
Unless the lease is of short-term and of low-value assets, where the Group has the right to obtain substantially all of the economic benefits
from use of identified assets and has the right to direct the use of the identified asset, a right-of-use asset is recognised in property and
equipment and a lease liability is recognised in other liabilities.
If a lease is assumed as part of a business combination the Group, subject to not meeting the recognition exemptions as detailed below, will
recognise a right-of-use asset and a lease liability as if the lease were a new lease at the acquisition date. The right-of-use assets and lease
liability are then measured consistently with the Group’s accounting policy as detailed above with the lease commencement date being the
acquisition date.
As a lessee
The Group recognises a right-of-use asset (Property Plant and Equipment) and a lease liability (Other liabilities) at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the
same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
incremental borrowing rate. Incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. For
its incremental borrowing rate, the Group uses its FTP, which comprises its base cost of funds with add-ons related to regulatory
requirements, and term liquidity premium based on the slope of swap curve as a proxy of time value of money. The Group FTP is fully
reflective of its funding profile and therefore considers it an appropriate reflection of the Group’s borrowing cost. For retail properties, property
yield is added as a lease specific adjustment.
Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments.
The lease liability is remeasured, if there is a change in future lease payments arising from a change in index-linked considerations, if there is a
change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of vehicles that have a lease term of
twelve months or less and leases of low-value assets, including office equipment. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
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1. Corporate information, basis of preparation and material accounting policies (continued)
As a lessor
When the Group acts as a lessor, it determines at lease inception, whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards
incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part
of this assessment, the Group considers certain indicators such as, whether the lease is for the major part of the economic life of the asset.
When assets are held under a finance lease, the present value of the lease payments is recognised as a receivable at an amount equal to the
net investment in the lease. The difference between the gross receivable and the present value of the receivable is recognised as unearned
finance income. Lease income is included within net interest income and is recognised over the term of the lease reflecting a constant
periodic rate of return on the net investment in the lease. Finance lease receivables are recognised within Loans and Advances to Customers
and the related interest income within net interest income.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investments in the lease.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease
classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If
a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating
lease.
If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.
The Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of
other income.
If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract. The
Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of other
income.
The accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS 16. However, when the
Group was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
(xi) Property and equipment
Leasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and
impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their
estimated useful lives, which are assessed annually.
Freehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold
premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is
restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in
shareholders’ equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the
revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the
land element, are depreciated to their residual values over their estimated useful lives, which are assessed annually.
Subsequent costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is
an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the
impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income
statement. The depreciation charge for the asset is then adjusted to reflect the asset’s revised carrying amount.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
If an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being
disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal
rather than the income statement.
The estimated useful lives are as follows:
Freehold Buildings
Leasehold Buildings
Office Equipment
Computer Hardware
Fixtures and fittings
50 years
50 years or term of lease if less than 50 years
5 – 7 years
3 – 7 years
7 – 10 years
(xii) Intangible assets (other than goodwill)
Acquired computer software is stated at cost, less amortisation and provision for impairment, if any. The external costs and directly
attributable internal costs of bringing to use the computer software are capitalised where it is probable that future economic benefits that
exceed its cost will flow from its use over more than one year.
Capitalised computer software has a finite life and is amortised on a straight-line basis over a period of between three to seven years.
Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate: that the product is technically
and commercially feasible, its intention and ability to complete the development and use the software in a manner that will generate future
economic benefits, and that it can reliably measure the costs to complete the development. The capitalised costs of internally developed
software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful
life. Internally developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses.
Software is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount. The estimated recoverable amount is the higher of the asset’s fair value less costs to sell or VIU.
Costs associated with research activities or maintaining computer software programmes are recognised as an expense as incurred.
(xiii) Collateral in possession
In certain circumstances, property is repossessed following foreclosure on loans that are in default. When a property is repossessed, the
associated loan relating to that property is derecognised and any provision on that loan is reversed. On initial recognition the collateral in
possession is valued at its fair value.
Subsequent to initial recognition, the property is carried at the lower of its cost and net realisable value.
(xiv) Assets and liabilities classified as held for sale
An asset or a disposal group is classified as held for sale if the following criteria are met:
• Its carrying value will be recovered principally through sale rather than continuing use;
• It is available for immediate sale; and
• The sale is highly probable within the next 12 months.
When assets (or disposal groups), other than financial assets as classified under IFRS 9, or rights under an insurance contract, are initially
classified as held for sale, they are measured at the lower of the carrying amount or fair value less costs to sell at the date of reclassification.
Impairment losses subsequent to classification of such assets (or disposal groups) are recognised in the income statement. Increases in fair
value less costs to sell of such assets (or disposal groups) that have been classified as held for sale are recognised in the income statement to
the extent that the increase is not in excess of any cumulative loss previously recognised in respect of the asset (or disposal group).
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1. Corporate information, basis of preparation and material accounting policies (continued)
Where the above conditions cease to be met, the assets (or disposal group) are reclassified out of held for sale and included under the
appropriate SOFP classifications.
Financial assets within the scope of IFRS 9, DTAs and income taxes within the scope of IAS 12 continue to be measured in accordance with
these standards.
(xv) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably,
and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the
risks specific to the liability.
A restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has
commenced or has been publicly announced. Future operating losses are not permitted to be recognised.
Present obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in
which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.
Contingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain
future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not
recognised because:
• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
• The amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because
a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.
Loan commitments are firm commitments to provide credit under pre-specified terms and conditions.
The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the
other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be
reasonably measured to be recognised on the SOFP.
ECL held against commitments are reported under loans and advances to customers.
Financial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently,
they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when
appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
Other loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of
any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised.
Derecognition policies in (d) are applied to loan commitments issued and held.
The Group has issued no loan commitments that are measured at FVTPL
(xvi) Dividends
Final dividends on ordinary shares are recognised in equity in the period in which they are approved by the Company’s shareholders. Interim
dividends are recognised in equity in the period in which they are paid.
(xvii) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of the Group’s other components, whose operating results are reviewed
regularly by the Group Executive Committee (being the chief operating decision maker (CODM)) to make decisions about resources allocated
to each segment and assess its performance, and for which discrete financial information is available. Transactions between the operating
segments are on normal commercial terms and conditions unless stated otherwise. Internal charges and transfer pricing adjustments have
been reflected in the performance of each segment. Revenue from external parties is measured in a manner consistent with the income
recognition policy of the Group.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
(xviii) Sales and repurchase agreements
Financial assets may be lent for a fee or sold subject to a commitment to repurchase them (“repos”). Such assets are retained on the SOFP
when substantially all the risks and rewards of ownership remain with the Group. The assets are reclassified as pledged assets when the
transferee has the right by contract to sell or repledge the collateral. The liability to the counterparty is included separately on the SOFP as
appropriate in either Deposits by banks or Customer accounts depending on whether the counter-party is a bank or not.
Similarly, where financial assets are purchased with a commitment to resell (“reverse repos”), or where the Group borrows financial assets but
does not acquire the risks and rewards of ownership, the transactions are treated as collateralised loans, and the financial assets are not
included in the SOFP. The collateralised loan asset is included separately on the SOFP as appropriate in either Loans and advances to banks
or Loans and advances to customers.
The difference between the sale and repurchase price is recognised in net interest income over the life of the agreements using the EIR.
In certain circumstances, the Group pledges collateral in respect of liabilities or borrowings. Collateral pledged in the form of securities or loans
and advances continues to be recorded on the SOFP. Collateral placed in the form of cash is recorded in loans and advances to banks or
customers. Any interest receivable arising is recorded as interest income.
(xix) Collateral
The Group enters into master agreements with counterparties to ensure that in the event of a default, all amounts outstanding with those
counterparties will be settled on a net basis. The Group obtains collateral in respect of customer liabilities where this is considered
appropriate. The collateral normally takes the form of a lien over the customers’ assets and gives the Group a claim on these assets for both
existing and future liabilities. The collateral is not recorded on the Group’s SOFP.
The Group also receives collateral in the form of cash or securities in respect of other credit instruments, such as sale-and-repurchase
contracts and derivative contracts, in order to reduce credit risk. Collateral received in the form of securities is not recorded on the SOFP.
Collateral received in the form of cash is recorded on the SOFP, with a corresponding liability recognised within deposits from banks or
deposits from customers. Any interest payable arising is recorded as interest expense.
(xx) Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is currently a legally enforceable right of
set off and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. No impairment loss
allowance for ECL is recognised on a financial asset, or portion thereof, which has been offset.
1.6 Application of new and revised IFRS
In 2023, the Group assessed the impact of new and revised pronouncement of IFRSs which took effect during the year. The changes to IFRSs
during 2023 did not have material impact on the Group’s financial statements. The Group has not early adopted any of the changes described
below.
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1. Corporate information, basis of preparation and material accounting policies (continued)
1.7 Impact of other accounting standards with effective periods beginning on or after 1 January 2023.
The following table outlines the new pronouncements coming into effect for accounting periods on or after 1 January 2023 and are not
deemed to have a significant impact on the financial statements.
Accounting Standard
Update
IFRS 17 ‘Insurance Contracts’
Amendments to IFRS 17
(Insurance contracts)
Extension of the Temporary
Exemption from Applying IFRS
9 (Amendments to IFRS 4)
Disclosure of Accounting
Policies (Amendments to IAS 1
and IFRS Practice Statement 2)
Amendments to IAS 8 –
Definition of Accounting
Estimates
Amendments to IAS 12 –
Deferred Tax related to Assets
and Liabilities arising from a
Single Transaction
Description of Change
Key impacts for PTSB
Effective
Date
Clarifies how to measure
insurance liabilities in order to
achieve a consistent basis of
accounting for insurance
contracts.
This new standard has no
material impact on current or
future reporting. PTSB has no
insurance contracts.
Amendments are intended to
clarify some of the
implementation challenges faced
in the implementation of IFRS 17
Insurance contracts.
This amendment has no material
impact on current or future
reporting. PTSB has no
insurance contracts.
Annual periods beginning on or
after 1 January 2023.
Annual periods beginning on or
after 1 January 2023.
This amendment has no material
impact on current or future
reporting. PTSB has no
insurance contracts.
Annual periods beginning on or
after 1 January 2023.
This amendment has no material
accounting policy impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2023.
This amendment has no material
impact on current or future
reporting.
Annual periods beginning on or
after 1 January 2023.
See note 27 for details on the
impact of this amendment.
Annual periods beginning on or
after 1 January 2023.
Amendment changes the fixed
expiry date for the temporary
exemption in IFRS 4 Insurance
Contracts from applying IFRS 9
Financial Instruments.
Amendments are intended to
help preparers in deciding which
accounting policies to disclose in
their financial statements.
The amendment updates the
definition of accounting
estimates “accounting estimates
are monetary amounts in the
financial statements that are
subject to measurement
uncertainty”.
The amendments clarify that the
initial recognition exemption
does not apply to transactions in
which equal amounts of
deductible and taxable
temporary differences arise on
initial recognition.
Amendments to IAS 12 –
International Tax Reform —
Pillar Two Model Rules
Provide a temporary exception to
the requirements regarding
deferred tax assets and liabilities
related to pillar two income
taxes.
This amendment has no material
impact on current reporting
period but this decision will be
kept under review for future
reporting periods.
Annual periods beginning on or
after 1 January 2023.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
1. Corporate information, basis of preparation and material accounting policies (continued)
1.8 Impact of other accounting standards with effective periods beginning on or after 1 January 2024.
The following table outlines the new pronouncements coming into effect for accounting periods on or after 1 January 2024 and are not
deemed to have a significant impact on the financial statements.
Accounting Standard
Update
Amendment to IAS 1 –
Classification of Liabilities as
Current or Non-current
Lease Liability in a Sale and
Leaseback (Amendments to
IFRS 16)
Non-current Liabilities with
Covenants (Amendments to
IAS 1)
Supplier Finance
Arrangements (Amendments
to IAS 7 and IFRS 7)
Lack of Exchangeability
(Amendments to IAS 21)
Description of Change
Key impacts for PTSB
Effective
Date
Clarifies that the classification of
liabilities as current or non-
current should be based on
rights that exist at the end of the
reporting period.
Clarifies how to measure sales in
a sales and lease back
agreement. The aim is to ensure
it meets the requirements of
IFRS15 revenue recognition.
Clarifies how conditions with
which an entity must comply
within twelve months after the
reporting period affect the
classification of a liability.
Provides disclosure
requirements, and ‘signposts’
within existing disclosure
requirements, that ask entities to
provide qualitative and
quantitative information about
supplier finance arrangements.
Provides guidance to specify
when a currency is
exchangeable and how to
determine the exchange rate
when it is not.
This amendment is expected to
have no material impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2024.
This amendment is expected to
have no material impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2024.
This amendment is expected to
have no material impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2024.
This amendment is expected to
have no material impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2024. Not yet
endorsed by the EU.
This amendment is expected to
have no material impact on
current or future reporting.
Annual periods beginning on or
after 1 January 2025. Not yet
endorsed by the EU.
2. Critical accounting estimates and judgements
The preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates
and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty
about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets
or liabilities affected in future periods.
The current economic climate, with interest rate increases and high inflation, elevates the uncertainty associated with judgements, estimates
and assumptions made by Management. The Irish economy demonstrated recovery post Covid and resilience in the current economic climate
in 2023. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory of recovery. The Directors and
Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face
challenges, particularly due to higher capital requirements and new and emerging risks.
While the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based
on the best available information at the date of the approval of these consolidated financial statements.
Assumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and
updated information.
Critical accounting estimates and judgements made by Management in applying accounting policies are set out below.
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2. Critical accounting estimates and judgements (continued)
(a) Allowance for credit losses under IFRS 9
IFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event.
There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit
risk on those financial instruments has increased significantly since initial recognition.
Government-led customer support initiatives in response to the pandemic have weakened established relationships between model inputs
and outputs, reducing the ability to forecast using models alone. In addition, models are constructed based on a single economic cycle. As a
result, a greater level of management judgement is required to reflect the current nature and uncertainty of the economic outlook.
The following concepts introduce significant judgement within impairment and have a tangible impact on the level of ECL allowances.
Determination of significant increase in credit risk SICR
The determination of whether a loan has experienced a significant increase in credit risk may have a material impact on the level of ECL
impairment allowance as a 12-month ECL is recognised for Stage 1 loans whereas a lifetime ECL is recognised for Stage 2 loans.
Migration of loans between Stage 1 and Stage 2 can cause some volatility in the amount of the recognised ECL allowances and the provision
for expected credit losses in any accounting period.
The Group has relied on a number of measures including delinquency, forborne status, risk grade, change in remaining lifetime Probability of
Default (PD) and PD at maturity to determine SICR.
At December 2023, management judgement has been applied to specified non-standard mortgages classified as Stage 1 by Impairment
models and these loans were transferred to Stage 2 with a lifetime impairment loss allowance applied. The impact of this staging adjustment is
a c.€94m increase in Stage 2 volumes.
Forward Looking Information FLI
The Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9
purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL
calculation.
Judgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group’s loan portfolios
and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.
Changes in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL
impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a
decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be
significant in the accounting period of update.
The estimation and application of FLI requires significant judgement. In its calculation of ECL, the Group considers multiple scenarios and
possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of possible outcomes. Each
macroeconomic scenario in the Group’s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for
a five year period (where the relevant period extends to five years), subsequently reverting to long-run averages.
The Group’s approach applies extreme-but-plausible economic scenarios (i.e. underpinned by historical evidence) to estimate the distribution
of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an
unbiased probability weighted estimate of ECL at the reporting date.
Three scenarios are currently considered in the Group’s calculation of ECL at the reporting date. The base scenario is used for financial
planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central
scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
2. Critical accounting estimates and judgements (continued)
The following table details the key macroeconomic variables applied to model credit losses together with the associated percentiles and
probability weightings for Stages 1 and 2 at 31 December 2023. Macroeconomic scenarios were most recently updated in December 2023.
The update in the Base Case Scenario reflects lower CPI growth as inflationary forces dissipate in the first forecast year and also a return to
forecasted house price growth due to current property prices supports. IFRS 9 Upside and Downside scenarios have been updated to present
extreme ‘1-in-20’ scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95%
Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.
31 December 2023
31 December 2022
Base Case
Upside
Scenario
Downside
Scenario
Base Case
Upside
Scenario
Downside
Scenario
Average value
over the
forecast
period
Average value
for the
forecast
period
Average value
over the
forecast
period
Average value
over Year 1
Average value
over the
forecast
period
Average value
over the
forecast
period
Average value
over the
forecast
period
Average value
over Year 1
Percentile
Scenario Probability
Weighting
Irish Residential House
Prices
Irish Unemployment
Irish GDP
Consumer Price Index
ECB Base Rate
50th
54%
2%
5%
3%
2%
3%
5th
23%
12%
4%
6%
2%
1%
95th
23%
-10%
11%
-2%
4%
4%
2%
6%
3%
3%
4%
50th
54%
2%
5%
3%
3%
3%
5th
23%
12%
4%
6%
2%
1%
95th
23%
-10%
11%
-2%
4%
3%
0%
7%
4%
6%
3%
The Base, Upside and Downside scenarios are described as follows:
Base scenario
In the base scenario, the outlook for the global economy enters a new critical phase in 2024, with growing expectations for faster rate cuts
and lower interest rates in the next year. However, the multiyear volatility in the international economy continues, from the sharp rebound in
global economic activity from the impact of COVID, driving the biggest inflationary shock since the 1970s in 2022, and the most aggressive
monetary response from global central banks in recent history. The expectation is that 2024 will bring both the top of the interest cycle but
also a series of rate cuts, as inflationary forces dissipate.
Property prices have now reached the peak last seen in April 2007, although wages are significantly ahead of that period in 2023, and the
number of households in the economy has grown by c.400,000 with new housing supply meeting a fraction of demand. Underlying driving
forces, such as a) decade of under supply of housing (with 2023 falling short of output forecasts), b) strong population growth through inward
migration, c) record rental values, d) an influx of Ukrainian war refugees and e) exceptionally strong construction price increases, are expected
to support property prices in the medium term.
On unemployment, the Baseline model reflects no major change in the outlook on unemployment numbers.
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2. Critical accounting estimates and judgements (continued)
Upside scenario
This is an extreme positive scenario developed to reflect a much stronger outcome for the Irish economy than in the base scenario. There is
both historical context and statistical backing to the key forecasts, but at a positive extremity.
Average GDP growth over the forecast period is 6%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook
reflects an extreme positive of effective full employment.
Consistent with the longer term nominal house price average gain of 9.3% since 1970 (Irish property prices are 50X higher than in 1970 in
nominal terms) and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases during the
scenario under review, at 12% per annum.
Substantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive
of economic growth.
Downside scenario
The Downside scenario is an extreme scenario backed by Irish historical context and international comparatives. The scenario captures a
statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. A prolonged period of mid teen
unemployment, extends quickly, reaching a peak of 15% in the second year.
Five years of sub normal growth across the forecast horizon in 2024 to 2028, shows a sharp reversal from current expected growth levels and
is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. GDP falls a low point of minus 5% over the forecast
period.
The threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging
the weakness in the global supply chain, and the impact of the Ukraine /Russian conflict which has pushed inflationary forces to 40 year highs
in 2022.
The Group applies statistical techniques combined with expert credit judgement to formulate an unbiased probability weighted estimate of
ECL at the reporting date. A review of the methodology to calculate the final weighted estimate of ECL based on three scenario inputs (Base,
Upside and Downside scenarios) by reference to challenger methods and supplementary benchmarks was conducted in H2 2023. The review
concluded that the methodology remains in compliance with IFRS 9.
Given the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential
mortgage portfolio.
Determining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of
Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.
If the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding Management’s
adjustment to modelled outcomes, the ECL impairment allowance would be €113m less than reported at 31 December 2023.
Similarly, excluding Management’s adjustment to modelled outcomes, if the Group were to only apply its Upside Scenario for the measurement
of ECL for the secured mortgage portfolio, the ECL impairment allowance would be €150m less than reported at 31 December 2023. Whereas,
if the Group were to only use its Downside Scenario, the ECL impairment allowance would be €391m greater than reported at December
2023.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
2. Critical accounting estimates and judgements (continued)
The adequacy of ECL allowance is reviewed by the BAC on a half-yearly basis.
The Bank has determined that a pre-model adjustment be required to adjust the relationship between the historical reference point and the
forecast in the determination of Forward-looking Probability of Default, due to the level of growth experienced at the reference point
(December 2021).
At 31 December 2023, the total impairment provision included €135m of management’s adjustments to modelled outcomes (31 December
2022: €137m) which primarily comprises the following:
• €50m of Management’s adjustment in respect of Stage 3 residential mortgage loans that are in default for a prolonged period and for which
Management consider the modelled impairment to be insufficient to cover resolution.
• Management are of the view that the modelled impairment allowance may not fully reflect expected credit losses for certain cohorts of
borrowers. The Groups IFRS9 models are constructed based on a single economic cycle covering a period of low and stable inflation rates.
In addition, post pandemic demand as a result of government-led supports and economic stimulus has weakened the relationships
between model inputs and outputs. At the reporting date, a €29m management overlay is held for risk.
• €13m overlay to reflect limitations associated with using internal models in the calculation of impairment allowance on recently acquired
portfolios (31 December 2022: nil)
• A €44m overlay to reflect the uncertainty associated with the current economic headwinds as a result of the increasing interest rate
environment. ECB rates rose by 2% in the year. The overlay comprises of €10m in respect of the consumer portfolio, €17m in respect of the
commercial portfolio and €17m in respect of the residential mortgage portfolio. At December 2023, model results capture a greater degree
of uncertainty risk.
(b) Deferred taxation
At 31 December 2023, the Group had a net deferred tax asset of €309m (31 December 2022: €309m), see Note 27 for further details.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised. The recognition of a deferred tax asset relies on Management’s judgements surrounding the probability and adequacy of future
taxable profits and the reversals of existing taxable temporary differences.
The most important judgement relates to Management’s assessment of the recoverability of the deferred tax asset relating to carried forward
tax losses, being €323m at 31 December 2023. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated
in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).
The assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability
because of the period over which recovery extends. In addition, given PTSB’s history of recent losses, in accordance with IAS 12, there must
be convincing other evidence to underpin this assessment.
In making the assessment, the Board considered the following factors:
• The current macroeconomic environment and external forecasts for the Irish economy particularly in light of the geopolitical environment,
the forecast interest rate rises and inflationary risks;
• The current expected trajectory of the Group’s financial performance;
• The impairment performance;
• The Group’s projected liquidity and capital position;
• The absolute level of deferred tax assets on tax losses compared to the Group’s equity;
• The quantum of profits required to be generated to utilise the tax losses and the extended period of time over which these profits are
projected to be generated;
• The challenge of forecasting over an extended period and in particular taking account of external factors such as global political
uncertainty, the level of competition and disruptors to the market and market size;
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2. Critical accounting estimates and judgements (continued)
• Consideration of the assumptions underpinning the Group’s financial projections (on which analysis of the recoverability of the deferred tax
asset on tax losses are based). The key relevant assumptions considered being:
- No material change to the Group’s business activities in the medium term;
- Further progress in addressing the Group’s non-performing assets;
- Net Interest Margin, which has benefitted from increasing interest rates, is also expected to be positively impacted by the evolution of the
Group’s lending book as new lending volumes are added and lower yielding tracker mortgages pay down; however, further material
reductions in cost of funds are considered unlikely;
- An expectation that mortgage market size will continue to return to normalised levels of activities
- Continued focus on cost management; and
- The cost of risk will continue its return to normalised levels reflecting the Group’s assessment of the medium to long term average; and
• Consideration of forecasting risks, including sensitivity analysis on the financial projections, such sensitivity analysis including the effect of
higher than expected impairments, cost of funds or operating expenditure, and lower than expected asset yields, new lending or ECB rates.
Taking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the
Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on
the basis of the assessment above, continue to recognise €323m of a deferred tax asset on tax losses on the statement of financial position
as at 31 December 2023.
In this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on
tax losses carried forward. Based on the Group’s latest forecast plans to 2027 and assuming a level of profitability growth consistent with GDP
growth of approximately 2.5%, it will take c. 11 years for the deferred tax asset on tax losses of €323m to be utilised. A level of profitability
consistent with GDP growth continues to be considered by Management to be appropriate given the Group’s primarily domestic retail focus
and the expectation arising therefrom that, over the long-term, the Group’s performance would be expected to broadly track the performance
of the Irish economy, with modest GDP growth expected over the medium term. Management are of the view that a long-term assumed
growth rate of 2.5% is not unreasonable in this context.
IFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to
be recovered.
The expected period of time to full utilisation of the deferred tax asset has increased since 31 December 2022 from 10 to 11 years. This is
mainly due to forecast interest rate rises and the impact of the Ulster Bank transaction. These revised profitability figures also impact the
assumed long-term projections for the Group with the result that the expected utilisation period has decreased. Assumptions underpinning
the deferred tax asset recoverability analysis are broadly in line with prior periods.
It should be noted that Management make certain judgements in the process of applying the Group’s accounting policies which may impact
on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 27,
analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it
continues to be Management’s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried
forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.
It should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is
based on the current business model of the Group.
The recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these
profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term.
Consequently the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more
or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the
regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any
change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which
this asset is recovered.
PTSB Group Holdings plc Annual Report 2023
215
Notes to the Consolidated Financial Statements (continued)
2. Critical accounting estimates and judgements (continued)
As set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has
considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially
significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased
impairment charges and (iii) increases in operating costs. These stress case scenarios are intended to simulate a situation where there is an
economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the
time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of
recoverability would be extended by 3 years (i.e. full utilisation by 2037). However, Management consider this scenario unlikely. Changes in
these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress
loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may
not be resolved for a number of years. However, as noted, based on the Group’s latest forecast plan, it is Management’s estimate that the
expected time period for recovery of the deferred tax asset on tax losses to be 11 years, i.e. full utilisation is expected by 2034.
(c) Fair Value of Financial instruments
The Group’s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair
value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of
judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for
the instruments, as well as identifying and applying an appropriate discount rate and credit spread.
Valuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared
to those based on observable data.
The quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.
The Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use
quoted market prices (level 1). Where quoted market prices are not available, the Group uses internally developed valuation models and
valuations from external experts. Inputs to these models are taken from observable market data where possible (level 2) but where this is not
possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves,
equity prices, option volatilities and currency rates.
Further details of the fair value of financial assets and liabilities are set out in note 37.
(d) Business Combination Accounting
Business combination accounting was achieved and accounted for in the 2022 financial statements in relation to the acquisitions from Ulster
Bank and is therefore not considered to be a critical accounting judgement in the 2023 financial statements. However, business combination
accounting required Management to make certain critical accounting estimates being the fair value of the assets acquired including
derivatives. This was relevant for the 2023 financial statements as the transfer of the remaining Retail lending, SME, Asset Finance and Branch
Property assets occurred during the year. Management engaged the services of independent third-party valuers to provide valuations of the
assets being transferred in the transaction. The fair value of the branch properties was determined using the open market prices. As there was
no observable market price for the loans (Level 3), their fair value was calculated using discounted cashflow model and included calculating
the expected contractual cash flows of the assets and applying the following to the portfolio of assets; prepayment rate, redemption rate,
transition rate (from fixed to variable rates and vice versa), probability of default (PD) and loss given default assumptions, servicing cost, risk
weights based on the asset characteristics and a discount rate based on cost of funding, capital and targeted capital ratio.
See notes 3 and 37 for sensitivities relating to the fair values.
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2. Critical accounting estimates and judgements (continued)
(e) Impairment review of its subsidiary undertaking
The Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each
reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount
is the higher of the investment’s fair value or its value-in-use (VIU).
An impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the
estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than
its net assets. It is noted that the market capitalization does not include a control premium. The recoverable amount of the investment is the
higher of its fair value less costs to sell or it’s VIU. The carrying value of the investment in PTSB was €2,346m as at 31 December 2023. The
recoverable amount based on the VIU s in excess of the carrying amount. On the basis that the VIU in excess of the carrying value no
impairment charge is required (31 December 2022: no impairment charge). In 2022 management considered whether a reversal of impairment
charge from previous years is appropriate. Having reviewed external and internal information management noted that there had been a
significant change in the value of the asset, primarily due to the increased profitability as a result of the Ulster Bank transaction and increased
interest rates. On this basis, management were satisfied there was sufficient headroom to take a full write back of the previous impairment
charges of €697m in 2022.
The VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation
discounted at an appropriate rate for the investment.
The recoverable amount reflecting Management’s best estimate is sensitive to changes in the following key assumptions:
Cash flow forecasts
Cash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a
long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:
• Forecasted net lending growth, which is based on historical experience of the Group, strategic priorities and direction;
• Forecasted SME business and increase in fee based income portfolio based on the targets for the coming years;
• Increase in the loan book as a result of the Ulster Bank business combination;
• Increase in revenue due to interest rate increases;
• Operating profits based on historical experience and average margins
• Impairment charge based on historical experience and forecasted general macro-economic outlook;
• Deposits projections based on the liquidity funding needs of the Groups; and
• Issuance / redemptions of the debt issued and other capital raising activities.
The projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions
and Management’s best estimates of future projections.
Growth rate
Growth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the
industry in which it operates. A growth rate of 2.5% was used.
Discount rate
The discount rate used is a post-tax weighted average cost of capitalof the Group of 11.5% (2022: 10%) as the cash flows used in impairment
assessment are pre-tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific
risks are not reflected in the cash flows projected for impairment analysis.
The discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in
risk profile of the Group.
The Group uses pre-tax discount rate as the cash flows generated by the subsidiary are pre tax cash flows.
PTSB Group Holdings plc Annual Report 2023
217
Notes to the Consolidated Financial Statements (continued)
2. Critical accounting estimates and judgements (continued)
Sensitivity analysis
The impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:
• A decrease in ECB interest rate of 100bps would result in a VIU in excess of the carrying value after impairment write-back, resulting in no
impairment charge;
• An increase in operating expenses of €20m per annum, would result in a VIU in excess of the carrying value after impairment write-back,
resulting in no impairment charge;
• An increase of 1% in long-term growth rate would result in a VIU in excess of the carrying value after impairment write-back, resulting in no
impairment charge;
• A decrease of 1% in long-term growth rate would result in a VIU in excess of the carrying value after impairment write-back, resulting in no
impairment charge;
• An increase of 1% in the discount rate would result in a VIU in excess of the carrying value after impairment write-back, resulting in no
impairment charge; and
• A decrease of 1% in the discount rate would result in a VIU in excess of the carrying value after impairment write-back, resulting in no
impairment charge.
3. Business combination
On 7 November 2022 the Group achieved business combination accounting when €5.2bn of the Retail business assets and significant
processes were acquired by the Bank from Ulster Bank Ireland DAC (‘Ulster’) thereby legally binding the Bank to acquire the remaining Retail,
Asset Financing and SME assets. The remaining assets to be transferred were recognised initially as Forward Contract Derivatives as the
Group had committed to purchase these as part of the business combination.
The Group also recognised a contingent liability to pay an equity cash consideration amount based on 4.04% of the Banks ordinary shares
(after the issuance of shares on the acquisition date of 7 November 2022) using a volume weighted average price (VWAP) of the Banks
ordinary shares for a period of 60 days post the acquisition date. This liability was settled in January 2023 when cash of €41m was paid to
NatWest. This resulted in a loss recognised in Net other operating income in 2023 of €2m.
The following transfers of assets from Ulster occurred during the year ended 31 December 2023. This resulted in the settlement of the
associated Forward Contract Derivatives and a gain of €5m was recognised in Net other operating income due to changes in the amount of
assets acquired and fair value of the assets acquired on the acquisition dates.
• The Branch Properties (including associated employees) transferred in January 2023 and €9m cash was paid to Natwest. This resulted in
an increase in Property, Plant and Equipment of €9m (Forward Contract Derivative liability 31 December 2022: €nil).
• The SME business assets (including associated employees) transferred in February and June 2023 and €164m cash was paid to Natwest.
This resulted in an increase in Loans and Advances to Customers of €154m (Forward Contract Derivative liability 31 December 2022:
€10m).
• The remaining Retail business assets transferred in May 2023 and €923m cash was paid to Natwest. This resulted in an increase in Loans
and Advances to Customers of €922m (Forward Contract Derivative liability 31 December 2022: €nil).
• The Asset finance business assets (including associated employees) transferred in July 2023 and €500m cash was paid to Natwest. This
resulted in an increase in Loans and Advances to Customers of €504m. (Forward Contract Derivative liability 31 December 2022: €2m)
No further transfer of assets is set to occur in relation to the transaction and no further amounts are owed to Natwest as part of the
acquisition as at 31 December 2023.
4. Operating segments
The Group reports one operating segment which is in accordance with IFRS 8 ‘Operating segments’.
In line with IFRS 8, the Group also reports revenue from external customers for each major group of products and services. The amount of
revenue reported is based on the financial information used to produce the Group’s financial statements. The Group also reports revenue and
non-current assets on a geographical basis; Ireland and Isle of Man (IOM).
The ExCo as the Chief Operating Decision Maker (CODM) is responsible for implementing the strategic management of the Group as guided
by the Board. The ExCo reviews key performance indicators and internal management reports on a monthly basis.
The Group has assessed its operating segments and continues to be satisfied that there is only one operating segment based on reporting to
the CODM, in accordance with IFRS 8.5. The requirements of IFRS 8 will continue to be assessed on an ongoing basis as the Group’s business
develops.
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4. Operating segment (continued)
4.1 Revenue from external customers split by products and services
The sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other
operating income. Total revenue from external customers was €870m (2022: €501m). The main products from which the Group earns external
revenue include: mortgages; consumer finance; and treasury assets. The interest income from these products is set out in the table below.
Net interest income from external customers split by product:
Mortgages
Consumer finance*
Treasury assets
Wholesale funding
Total
31 December
2023
31 December
2022
€m
611
50
36
81
778
€m
354
33
11
19
417
*Consumer Finance comprises income from term loans, credit cards, overdrafts and asset financing.
4.2 Profit for the year based on geographical location
During the years ended 31 December 2023 and 31 December 2022, the majority of the Group’s profit was incurred in Ireland. Immaterial losses
(less than €1m) were incurred outside of Ireland in the Group’s IOM subsidiary PBI Ltd during the years ended 31 December 2023 and 31
December 2022. PBI Ltd entered liquidation on 20 December 2023.
4.3 Assets and liabilities based on geographical location
31 December 2023
Assets
Held for sale
Other assets
Total segment assets
Total segment liabilities
Capital expenditure
Ireland
€m
12
27,743
27,755
25,336
100
IOM*
€m
Of which inter-
group balances
€m
-
-
-
-
-
-
-
-
-
-
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd, which entered liquidation on 20 December 2023.
31 December 2022
Assets
Held for sale
Other assets
Total segment assets
Total segment liabilities
Capital expenditure
Ireland
€m
18
25,914
25,932
23,534
112
IOM*
€m
-
1
1
1
-
Of which inter-
group balances
€m
-
(56)
(56)
(56)
-
*This is based on geographical locations and reflects Group intercompany activity with PBI Ltd.
Total
€m
12
27,743
27,755
25,336
100
Total
€m
18
25,915
25,933
23,535
112
PTSB Group Holdings plc Annual Report 2023
219
Notes to the Consolidated Financial Statements (continued)
5. Net interest income
(i) Interest income
Interest income
Loans and advances to customers
Loans and advances to banks
Debt securities and other fixed-income securities
Deposits from banks
Interest income calculated using the effective interest rate method
Other interest income*
Interest income
Interest expense
Deposits from banks
Due to customers
Debt securities in issue
Loans and advances to banks
Subordinated liabilities
Lease liabilities
Interest expense
Net interest income
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
649
81
36
-
766
12
778
(35)
(43)
(71)
-
(8)
(1)
(158)
620
387
15
11
4
417
-
417
(10)
(10)
(16)
(10)
(9)
-
(55)
362
*Other interest income consists of Interest income on lease receivables
Net interest income includes a charge of €29m (31 December 2022: €22m) in respect of deferred acquisition costs and €25m (31 December
2022: €4m) amortisation on the business combination related fair value adjustments.
Debt securities in issue contains €2m net interest expense on derivatives that are in hedge relationships (31 December 2022: €nil).
6. Fees and commission income
Fees and commission income
Retail banking and credit card fees
Brokerage and insurance commission
Other fees and commission income
Fees and commission income
Fees and commission expense *
Net fees and commission income
* Fees and commission expenses primarily comprises retail banking and credit cards fees.
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
76
9
1
86
(44)
42
65
9
1
75
(33)
42
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PTSB Group Holdings plc Annual Report 2023
7. Net trading Income
Held-for-trading
Foreign exchange gains
Net trading income
8. Net other operating income
Other income
Net other operating income
9. Administrative, staff and other expenses (excluding exceptional items)
Staff costs (as detailed below)
Other general and administrative expenses
Administrative, staff and other expenses (excluding exceptional items)
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Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
3
3
3
3
Year ended
Year ended
31 December
2023
31 December
2022
€m
3
3
€m
6
6
Year ended
Year ended
31 December
2023
31 December
2022
€m
201
177
378
€m
152
150
302
Administrative, staff and other expenses (excluding exceptional items) includes costs of €2m in relation to legacy cases (2022: €4m).
Fees paid to the Group’s auditors for services outlined below
Statutory auditor’s remuneration (including expenses and excluding VAT)
- Audit of the individual and the Group financial statements
- Other assurance services*
- Other non-audit services**
Year ended
Year ended
31 December
2023
31 December
2022
€m
1.8
0.2
1.4
€m
1.4
0.1
0.8
*In 2023, other assurance services includes ESG related costs and interim financial statement review related costs. In 2022, other assurance services includes
costs in relation to Section 27b and GHG Disclosures, and professional services performed.
**In 2023 other non-audit services costs includes fees and interim fees for professional services in relation to Project Sun, DTR Claim, and costs in relation to the
Lombard KYC processes. In 2022 other non-audit services costs primarily relate to the Project Sun Class 1 Circular to shareholders and comfort letters and other
services in relation to the Group’s Euro Notes Programme and subsequent debt issuance, the AT1 issuance and the Fastnet securitisations.
PTSB Group Holdings plc Annual Report 2023
221
Notes to the Consolidated Financial Statements (continued)
9. Administrative, staff and other expenses (excluding exceptional items) (continued)
Staff costs
Wages and salaries (including commission payable to sales staff)
Social insurance
Pension costs (payments to defined contribution pension schemes)
Total staff costs
Staff costs capitalised
Staff costs charged to exceptional items
Total staff costs included in the Income Statement
Year ended
Year ended
31 December
2023
31 December
2022
€m
183
20
17
220
(16)
(3)
201
€m
140
15
15
171
(13)
(6)
152
Staff redundancy costs associated with exceptional items for the year ended 31 December 2023 and 31 December 2022 are included as part
of note 11 Exceptional Items.
Staff costs of €16m (31 December 2022: €13m), have been capitalised to Intangible assets (see note 26), as the cost incurred was directly
related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one
year. Therefore these costs are not included in this note.
Staff numbers
Closing and average number of staff (including Executive Directors) employed during the year are as follows:
Customer facing
Non-customer facing
Total number of staff
*Closing staff numbers are calculated on a full time equivalent FTE basis.
10. Bank levy and other regulatory charges
Bank levy
Other regulatory charges
Bank levy and other regulatory charges
Closing staff numbers*
Average staff numbers
2023
1,116
2,214
3,330
2022
724
1,890
2,614
2023
2022
1,024
2,031
3,055
671
1,751
2,422
Year ended
Year ended
31 December
2023
31 December
2022
€m
22
38
60
€m
22
29
51
Other regulatory charges include €28m for the Deposit Guarantee Scheme (DGS) (31 December 2022: €19m), €4m for the Single Resolution
Fund (SRF) (31 December 2022: €5m), €4m for the Central Bank Industry Funding Levy (31 December 2022: €4m) and €2m related to other
regulatory charges (31 December 2022: €1m).
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11. Exceptional items
Gain on bargain purchase (a)
Costs incurred in relation to the Ulster Bank transaction (b)
Other (c)
Impairment write-back from deleveraging of loans (d)
Exceptional items
Year ended
Year ended
31 December
2023
31 December
2022
€m
-
(31)
(2)
5
(28)
€m
362
(92)
(13)
8
265
(a) During 2022, the Group recognised a gain on bargain purchase of €362m in respect of the Ulster Bank business combination. This was
treated as an exceptional gain in the Income Statement. See note 3 for further details.
(b) During 2023, the Group incurred costs of €31m in relation to the Ulster Bank business combination.
The Group incurred costs of €92m on the Transaction in 2022, these costs were also recognised as exceptional costs in the income
statement.
The Group has incurred total costs of €154m on the Transaction.
(c) Other costs of €2m (2022: €13m) relate to additional costs arising in respect of a previous disposal of a business. In the prior period other
costs also contained additional costs incurred as a result of phase 2 of the Group’s Enterprise Transformation Programme.
(d) The definition of exceptional items was refined to exclude profit or loss on material loan deleveraging post 31 December 2021 (including
any increase in impairment arising solely as a result of the sale of loans) due to the sale of loans becoming part of the Group’s normal recovery
strategy.
During 2023, warranty provisions and accruals of €5m (31 December 2022: €8m) were released in relation to loan deleveraging transactions
that the Group executed pre 31 December 2021.
The Group considers these releases as exceptional as the warranty and indemnity provisions were previously recorded through exceptional
impairment. This treatment is consistent with the treatment of losses on deleveraging of loans in prior years.
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223
Notes to the Consolidated Financial Statements (continued)
12. Taxation
(a) Analysis of taxation charge
Current taxation
Charge for current year
Deferred taxation
Origination and reversal of temporary differences
Deferred taxation recognised in the income statement (note 27)
Taxation charged to income statement
Effective tax rate
Year ended
Year ended
31 December
2023
31 December
2022
€m
€m
1
1
10
10
11
2
2
42
42
44
14%
16%
The Group taxation charge for the year ended 31 December 2023 was €11m (31 December 2022: €44m). The main drivers of this charge
include (i) a current tax charge of €1m arising on trading income, (ii) a current year deferred tax charge of €10m arising from the utilisation of
tax losses carried forward to shelter tax adjusted profits arising in the year.
(b) Reconciliation of standard to effective tax rate
Profit on the Group activities before tax
Tax calculated at standard ROI corporation tax rate of 12.5% (2022: 12.5%)
Tax effect of non-deductible expenses and non-trading income
Other
Taxation charged to income statement
(c) Tax effects of each component of other comprehensive income
Revaluation of property
Fair value reserve:
- Change in fair value of equity instruments
- Current tax on equity instrument disposal
- Deferred tax on equity instrument disposal
31 December 2023
Year ended
Year ended
31 December
2023
31 December
2022
€m
79
10
1
-
11
Year ended 31 December 2023
Gross
€m
(12)
5
21
(21)
(7)
Tax
€m
5
(2)
(6)
6
3
€m
267
33
9
2
44
Net
€m
(7)
3
15
(15)
(4)
The tax effect of the equity instrument disposal includes utilisation of €1m of previously unrecognised tax losses brought forward.
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12. Taxation (continued)
Revaluation of property
Fair value reserve:
-Change in fair value of equity instruments
31 December 2022
13. Earnings per ordinary share
(a) Basic earnings per ordinary share
Year ended 31 December 2022
Gross
€m
(8)
3
(5)
Tax
€m
3
(1)
2
Net
€m
(5)
2
(3)
Year ended
Year ended
31 December
2023
31 December
2022
Weighted average number of ordinary shares in issue and ranking for dividend excluding treasury shares
545,584,539
468,387,212
Profit for the year attributable to equity holders
Less AT1 coupon paid (see note 35)
Profit for the year attributable to equity holders less AT1 coupon paid
Basic earnings per ordinary share (€ cent)
(b) Diluted earnings per ordinary share
Weighted average number of ordinary shares excluding treasury shares held under employee benefit trust
used in the calculation of diluted earnings per share
Diluted earnings per ordinary share (€ cent)
€68m
(€43m)
€25m
€223m
(€10m)
€213m
4.5
45.4
Year ended
Year ended
31 December
2023
31 December
2022
545,584,539
468,387,212
4.5
45.4
Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
No adjustment to the weighted average number of ordinary shares for the effects of dilutive potential ordinary shares was required for the
year ended 31 December 2023 or 31 December 2022, as the AT1 securities issued in 2022 and 2020 have no conversion features within the
securities.
PTSB Group Holdings plc Annual Report 2023
225
Notes to the Consolidated Financial Statements (continued)
13. Earnings per ordinary share (continued)
Weighted average number of ordinary shares*
Number of ordinary shares in issue at 1 January (note 35)
545,589,119
454,695,492
2023
2022
Treasury shares held (note 35)
Net movements during the year
Weighted average shares issued
Weighted average number of ordinary shares
(4,580)
(4,580)
-
13,696,300
545,584,539
468,387,212
* When calculating the earnings per share the weighted average number of ordinary shares outstanding during the year and all years presented shall be adjusted
for events other than the conversion of potential ordinary shares that have changed the number of ordinary shares without a corresponding change in reserves.
There are no instruments with a potential to be converted to ordinary shares at 31 December 2023. The AT1 securities issued in 2022 and
2020 have no conversion features within the securities.
14. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise of following:
Cash at bank
Items in the course of collection
Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 15)
Cash and cash equivalents as per statement of cash flows
31 December
2023
31 December
2022
€m
71
40
2,051
2,162
€m
58
40
2,123
2,221
At 31 December 2023 restricted cash of €217m (31 December 2022: €408m) consists of cash of €217m (31 December 2022: €405m) held by
the Group’s securitisation entities and €nil (31 December 2022: €3m) which relates to cash collateral placed with counterparties in relation to
derivative positions and repurchase agreements. Restricted cash is included in cash and cash equivalents.
The following contractual restrictions apply to our securitisation vehicles cash balances. Each vehicle must hold an amount equal to a
percentage of the outstanding notes in an account on demand as part of the credit enhancement and liquidity support rules. These funds can
only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available. When
the notes are fully repaid these funds can be used to pay outstanding principal on the subordinated loan.
15. Loans and advances to banks
Held at amortised cost
Placed with central banks
Placed with other banks
Loans and advances to banks
31 December
2023
31 December
2022
€m
€m
1,688
363
2,051
1,619
504
2,123
Placements with other banks includes restricted cash of €217m (31 December 2022: €408m) of which €217m (31 December 2022: €405m) is
held by the Group’s securitisation entities and €nil (31 December 2022: €3m) which relates to cash collateral placed with counterparties in
relation to derivative positions and repurchase agreements. The fair value of collateral pledged by counterparties in relation to reverse
repurchase agreements at 31 December 2023 is €nil (31 December 2022:€8m)
Loans and advances to banks amounting to €2,051m (31 December 2022: €2,123m) have a maturity of less than three months and therefore
have been treated as cash and cash equivalents, with the exception of restricted cash as noted above.
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16. Derivative financial instruments
Derivative instruments are used by the Group, for risk management purposes, to hedge against interest rate risk and foreign currency risk.
Certain derivative instruments, while being economic hedges, do not fulfil the hedge accounting criteria under IFRS 9 and are consequently
classified as held for trading (HFT). All derivatives are carried at fair value.
The derivative instruments used by the Group include:
• Currency forward rate contracts, which are commitments to purchase and sell currencies, including undelivered spot transactions; and
• Interest rate swaps which involve the exchange of fixed and variable rate interest payments between two parties at specified times based
on a common nominal amount and maturity date.
The forward contract derivatives relating to the business combination were settled in 2023 as the remaining Retail lending assets and the
entirety of the Asset Financing and SME assets and branch properties were transferred during the year. See Note 3 for further detail.
Further details on the Group’s risk management policies in connection with Derivatives and the policy surrounding Hedge Accounting are set
out in section 3.2 of the Risk Management Report.
The notional amounts and fair values of derivative instruments held by the Group are set out in the table below:
31 December 2023
31 December 2022
Contract/
notional amount
€m
Fair
value
asset
€m
Fair
value
liability
€m
Derivatives held for hedging
Interest rate swaps
Derivatives held for trading
Currency Forwards
Business combination forwards
Derivative financial instruments
as per the statement of financial
position
1,200
1,200
57
-
57
1,257
36
36
-
-
-
36
-
-
1
-
1
1
Contract/
notional amount
€m
-
82
1,520
1,602
1,602
Fair
value
asset
€m
Fair
value
liability
€m
-
-
-
-
-
-
1
12
13
13
PTSB Group Holdings plc Annual Report 2023
227
Notes to the Consolidated Financial Statements (continued)
16. Derivative financial instruments (continued)
Fair value hedges of interest rate risk
The Group uses fair value hedge accounting for hedge relationships to protect against changes in the fair value of financial assets and
financial liabilities due to movements in interest rates. The Group uses interest rate swaps to hedge interest rate risk. The financial instruments
that are currently hedged for interest rate risk are fixed rate debt securities in issue. All hedging instruments are included within derivative
financial instruments on the balance sheet and hedge ineffectiveness is included within net trading income on the income statement (31
December 2023 €nil, 31 December 2022 €nil).
At 31 December 2023 the Group held the following interest rate swaps as hedging instruments in fair value hedges of interest rate risk. The
Group did not hold derivatives for hedging purposes at 31 December 2022.
Fair value hedges Interest rate swaps
Less than 1
month
1 to 3 months
3 months to 1
year
1 to 5 years
5 years +
Liabilities:
Hedges of debt securities in issue
Nominal principal amount (€m)
Average interest rate (%)*
Hedges of subordinated debt
Nominal principal amount (€m)
Average interest rate (%)*
-
-
-
-
-
-
-
-
300
3.89%
-
-
650
3.17%
250
3.48%
-
-
-
-
*The fixed rate on the interest rate swaps detailed above are swapped out for variable 3 month Euribor. The swaps pay 3 month EURIBOR on
a quarterly basis and receive fixed in an annual basis.
The tables below set out the amounts relating to items designated as (a) hedging instruments and (b) hedged items in fair value hedges of
interest rate risk together with the related hedge ineffectiveness at 31 December 2023 (31 December 2022 €nil):
(a) Hedging Instruments
Interest rate
swaps hedging:
Debt Securities
in issue
Subordinated
debt
Nominal
€m
Assets
€m
Liabilities
€m
Line item in SOFP
where the
hedging
instrument is
included
Change in fair
value used for
calculating hedge
ineffectiveness
for the year
Hedge
ineffectiveness
recognised in the
income
statement
Line item in the
income
statement that
included hedge
ineffectiveness
€m
€m
950
250
30
6
-
-
Derivative
Assets
Derivative
Assets
14
5
Net trading
income
Net trading
income
-
-
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16. Derivative financial instruments (continued)
(b) Hedged items
Carrying amount of hedged items
recognized in the SOFP
Accumulated amount of fair value
hedge adjustments on the hedged
items included in the carrying
amount of the hedged item
Line item in the
SOFP where
hedged item is
included
Assets
€m
Liabilities
€m
Assets
€m
Liabilities
€m
-
-
(997)
(257)
-
-
Debt securities
in issue
Subordinated
liabilities
(14)
(5)
Debt securities
in issue
Subordinated
debt
17. Other assets
Receivables
Other
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Accumulated
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value hedge
adjustments
remaining in the
SOFP for any
hedged items
that have ceased
to be adjusted for
hedging
Change in fair
value of hedged
items used for
calculating hedge
ineffectiveness
for the year
€m
(14)
(5)
€m
-
-
31 December
2023
31 December
2022
€m
57
3
60
€m
-
1
1
Receivables of €57m for 2023 relates to amounts due to the Group on completion of the liquidation of PBI Ltd which entered liquidation on 15
December 2023.
Other assets includes accruals for miscellaneous debtors of €3m at 31 December 2023 (31 December 2022: €1m).
18. Assets classified as held for sale
At 31 December 2023, assets classified as held for sale amounted to €12m (31 December 2022: €18m). This consists of the following:
• €11m (31 December 2022: €18m) relates to collateral in possession, these properties are expected to be sold within the next 12 months.
• €1m (31 December 2022: €nil) relates to two branch properties (31 December 2022: one branch property) which is no longer occupied by
the Group, the sale of these properties are expected to complete within the next 12 months.
PTSB Group Holdings plc Annual Report 2023
229
Notes to the Consolidated Financial Statements (continued)
19. Debt securities
Government bonds
Corporate bonds
Gross debt securities
31-Dec-23
Total HTC
€m
3,256
-
3,256
31-Dec-22
Total HTC
€m
3,128
49
3,177
As at 31 December 2023, all unpledged debt securities are available to be used and are eligible as collateral (though eligibility will depend on
the criteria of the counterparty) in sale and repurchase agreements.
Debt securities that are managed on a Hold to Collect (HTC) business model basis are accounted for at amortised cost.
Government bonds of €3.3bn (31 December 2022: €3.1bn) comprise Irish, Spanish, Portuguese, French, Italian, Belgian, Austrian and EU
government bonds which are designated as HTC. Corporate bonds which comprised Residential Mortgage Backed Securities (RMBS) and
were designated as HTC matured during 2023 (31 December 2022: €49m). The HTC securities represent a portfolio of securities purchased
for the purpose of collecting contractual cashflows to maturity. The Group has no HTC&S securities as at 31 December 2023 (31 December
2022: €nil).
At 31 December 2023, debt securities at amortised cost with a fair value of €529m (31 December 2022: €654m) had been pledged to third
parties in sale and repurchase agreements. The Group has not derecognised any securities delivered in such sale and repurchase agreements
on the statement of financial position.
All debt securities at 31 December 2023 are stage 1 for ECL purposes.
(a) HTC
The movement in HTC securities is classified as follows:
As at 1 January
Additions
Maturities
Interest net of cash receipts
Amortisation of premium / (discount)
Total
31 December
2023
31 December
2022
HTC
€m
3,177
828
(728)
(14)
(7)
3,256
HTC
€m
2,494
972
(251)
3
(41)
3,177
(b) Amounts arising from impairment provisioning on debt securities:
Held at amortised cost
As at 31 December 2023, the amount arising from ECL on debt securities measured at amortised cost is €0.6m (31 December 2022: €0.6m).
The ECL on debt instruments measured at amortised cost is offset against the carrying amount of the assets in the statement of financial
position.
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20. Equity securities
As at 1 January
Revaluation
Disposal
Total equity securities
The carrying value of equity securities can be analysed as follows:
Unlisted
Gross equity securities
31 December
2023
31 December
2022
€m
30
5
(30)
5
€m
26
4
-
30
31 December
2023
31 December
2022
€m
5
5
€m
30
30
During 2023 PTSB disposed of its holding of Visa A shares for €30m. Since initial recognition, a cumulative gain on sale of €15m was
recognised and subsequently reclassified from fair value reserve to retained earnings in the consolidated statement of changes in equity.
PTSB Group holds B preferred stock in Visa Inc. at 31 December 2023 with a value of €5m (2022: A&B shares valued at €30m). The Series A
preferred stock was initially acquired during 2020 upon the conversion of Series B preferred stock by Visa Inc (the latest conversion occurred
in July 2022). These were fair valued at €nil and €5m respectively at 31 December 2023 (31 December 2022: €26m and €4m) and are
recognised in the statement of financial position at FVOCI.
The fair value of the preferred stock Series A is classified as Level 1 and the fair value of the preferred stock Series B is classified as Level 3, as
the valuation of these preferred stock includes inputs that are based on unobservable data (refer to note 37 for details).
21. Prepayments and contract assets
Visa prepayments
Other prepayments
31 December
2023
31 December
2022
€m
43
37
80
€m
175
32
207
PTSB Group Holdings plc Annual Report 2023
231
Notes to the Consolidated Financial Statements (continued)
22. Loans and advances to customers
Loans and advances by category are set out below:
Residential mortgages
- Held through special purpose entities
- Held directly
Commercial mortgage loans
Consumer finance (term loans/other)
Finance leases and hire purchase receivables
Gross loans and advances to customers
Less: provision for impairment (note 23)
Deferred fees, discounts and business combination related fair value adjustments
Net loans and advances to customers
Loans and advances can be analysed into tracker, fixed and variable rate loans as follows:
31 December
2023
31 December
2022
€m
€m
5,664
14,642
20,306
437
499
446
21,688
(570)
309
21,427
7,915
11,249
19,164
239
401
-
19,804
(521)
310
19,593
Tracker rate
Variable rate
Fixed rate
Deferred fees, discounts and business combination related fair value
adjustments
Total
Gross loans and advances to
customers
Net loans and advances to
customers
31 December
2023
31 December
2022
31 December
2023
31 December
2022
€m
€m
€m
€m
3,453
3,788
14,447
21,688
309
21,997
4,378
2,788
12,638
19,804
310
20,114
3,186
3,632
14,300
21,118
309
21,427
4,099
2,665
12,519
19,283
310
19,593
The Group has established a number of securitisation entities. This involved transferring the Group’s interest in pools of residential mortgages
to a number of special purpose entities which issued mortgage-backed floating-rate notes to fund the purchase of the interest in the
mortgage pools. The notes are secured by a first fixed charge over the residential mortgages in each pool and may be sold to investors or held
by the Group and used as collateral for borrowings.
Details of the residential mortgage pools sold to special purpose entities and the notes issued by the special purpose entities are included
below:
Residential mortgages held through special purpose entities
Notes issued by special purpose entities
- rated
- unrated
31 December
2023
31 December
2022*
€m
5,664
4,911
806
€m
7,915
6,793
1,242
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22. Loans and advances to customers (continued)
The notes issued by these special purpose entities comprise the following:
Held by other banks and institutions as part of collateralised lending or sale and
repurchase agreements (note 28)
Available collateral**
Rated notes, unavailable for collateral
Unrated notes
31 December
2023
31 December
2022*
€m
€m
287
3,725
899
806
5,717
290
5,604
899
1,242
8,035
*31 December 2022 figures have been re-presented in millions, having been presented in billions in the 2022 Annual Report
** The eligibility of available collateral will depend on the criteria of the counterparty.
Loans and advances balance movement for the year ended 31 December 2023 and the year ended 31 December 2022 is set out in the
following tables:
Non-credit impaired
Credit impaired
Stage 1
€m
Stage 2
€m
Stage 3
€m
POCI
€m
Balance as at 1 January 2023
17,455
1,699
New assets originated*
Loans acquired**
Stage Transfers:
Transfers from Stage 1 to Stage 2
Transfers to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 3
Net movement arising from transfer of Stage
Redemptions and repayments
Decrease due to write offs
Disposals
Other movements
2,205
1,308
(432)
(43)
195
-
(280)
(1,631)
-
-
122
127
432
(136)
(195)
95
196
(230)
(1)
-
Balance as at 31 December 2023
19,057
1,913
*Loan originations are net of repayments in the year
**Net of repayments
649
10
55
-
179
-
(95)
84
(62)
(18)
-
718
1
-
-
-
-
-
-
-
-
-
-
(1)
-
Total
€m
19,804
2,337
1,490
-
-
-
-
-
(1,923)
(19)
-
(1)
21,688
PTSB Group Holdings plc Annual Report 2023
233
Notes to the Consolidated Financial Statements (continued)
22. Loans and advances to customers (continued)
Non-credit impaired
Credit impaired
Balance as at 1 January 2022
11,689
2,239
Stage 1
€m
Stage 2
€m
New assets originated*
Loans acquired**
Stage Transfers:
Transfers from Stage 1 to Stage 2
Transfers to Stage 3
Transfers from Stage 2 to Stage 1
Transfers from Stage 3
Net movement arising from transfer of Stage
Redemptions and repayments
Decrease due to write offs
Disposals
Other movements
Balance as at 31 December 2022
*Loan originations are net of repayments in the year
**Net of repayments
2,586
5,063
(296)
(16)
344
2
34
(1,575)
(1)
(341)
-
17,455
111
-
296
(119)
(344)
155
(12)
(242)
(2)
(395)
-
1,699
Stage 3
€m
815
-
-
-
135
-
(157)
(22)
(62)
(40)
(42)
-
649
POCI
€m
2
-
-
-
-
-
-
-
-
-
-
-
(1)
1
Total
€m
14,745
2,697
5,063
-
-
-
-
-
-
(1,879)
(43)
(778)
(1)
19,804
Amounts receivable under finance leases and hire purchase receivables
The following balances principally comprise of leasing arrangements and hire purchase agreements of vehicles, plant, machinery and
equipment:
Gross receivables
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 3 years
Later than 3 years and not later than 4 years
Later than 4 years and not later than 5 years
Later than 5 years
Total
Unearned future finance income
Deferred costs incurred on origination
Present value of minimum payments
ECL allowance for uncollectible minimum payments receivable
31 December
2023
31 December
2022
€m
€m
172
138
97
59
26
8
500
(54)
5
451
(20)
-
-
-
-
-
-
-
-
-
-
-
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23. Impairment provisions
Loans and advances to customers
The following table reflects non-performing loans for which ECL provisions are held and an analysis of Stage 1, Stage 2 and Stage 3 ECL
provisions across the loans and advances to customers portfolio.
The non-performing loan balance as at 31 December 2023 was €718m (31 December 2022: €650m). Refer to note 38 for further details.
31 December 2023
Residential:
-Home loans
-Buy-to-let
Commercial
Consumer Finance:
-Term loans/other
Finance leases and hire purchase
receivables
Total gross loans
Impairment provision
Deferred fees, discounts and business
combination related fair value
adjustments
Balance as at 31 December 2023
31 December 2022
Residential:
-Home loans
-Buy-to-let
Commercial
Consumer Finance:
-Term loans/other
Finance leases and hire purchase
receivables
Total gross loans
Impairment provision
Deferred fees, discounts and business
combination related fair value
adjustments
Balance as at 31 December 2022
ECL provisions
Loans and
advances to
customers
of which
NPLs
NPL % of
total loans
Stage 1
Stage 2
Stage 3
€m
€m
%
€m
€m
€m
403
267
20
2.1%
35.6%
4.6%
16
3.2%
12
718
2.7%
3.3%
131
2
8
12
12
165
51
58
47
8
-
164
110
99
11
13
8
241
19,557
749
437
499
446
21,688
(570)
309
21,427
ECL provisions
Loans and
advances to
customers
of which
NPLs
NPL % of
total loans
Stage 1
Stage 2
Stage 3
€m
€m
%
€m
€m
€m
342
270
23
15
-
650
1.9%
32.8%
9.6%
3.7%
-
3.3%
127
3
1
5
-
136
50
68
30
15
-
163
103
96
9
14
-
222
18,340
824
239
401
-
19,804
(521)
310
19,593
Total ECL
provisions
as % of total
loans
%
1.5%
21.2%
15.1%
Total
€m
292
159
66
33
6.6%
20
570
4.5%
2.6%
Total ECL
provisions
as % of total
loans
%
Total
€m
280
167
40
34
-
521
1.5%
20.3%
16.7%
8.5%
-
2.6%
PTSB Group Holdings plc Annual Report 2023
235
Notes to the Consolidated Financial Statements (continued)
23. Impairment provisions (continued)
A reconciliation of the provision for impairment losses for loans and advances is as follows:
Residential
mortgages
Commercial
Consumer
finance
Finance leases
and hire purchase
receivables
€m
447
(22)
(8)
29
12
11
-
-
(7)
(7)
451
€m
40
(1)
2
16
10
27
-
-
(1)
(1)
66
€m
34
0
(5)
3
4
2
-
-
(3)
(3)
33
€m
-
-
-
-
20
20
-
-
-
-
20
2023
Total by portfolio
ECL as at 1 January 2023
Redemptions and repayments
Net remeasurement of loss allowance
Loan originations
Loans acquired
Net movement excluding derecognition
Derecognition-disposals
Derecognition-repossessions
Derecognition-write offs*
Derecognition
ECL as at 31 December 2023**
Net movement excluding derecognition (from
above)
Interest income booked but not recognised
Other Movements***
Write offs net of recoveries
Impairment charge on customer loans and
advances for the year ended 31 December 2023
Total
€m
521
(23)
(11)
48
46
60
-
-
(11)
(11)
570
60
(12)
6
2
56
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery.
In circumstances -where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may
be earlier than collateral realisation.
** Closing ECL incorporates ECL of €8m on loan commitments
*** Includes costs in respect of deleveraging and impairment of interest in associated undertakings.
Residential
mortgages
€m
Commercial
€m
Consumer
finance
€m
Finance leases
and hire purchase
receivables
€m
525
(18)
(41)
34
37
12
(64)
(3)
(23)
(90)
447
53
(9)
(16)
13
-
(12)
-
-
(1)
(1)
40
26
(1)
5
7
-
11
-
-
(3)
(3)
34
-
-
-
-
-
-
-
-
-
-
-
2022
Total by portfolio
ECL as at 1 January 2022
Redemptions and repayments
Net remeasurement of loss allowance
Loan originations
Loans acquired
Net movement excluding derecognition
Derecognition-disposals
Derecognition-repossessions
Derecognition-write offs*
Derecognition
ECL as at 31 December 2022
Net movement excluding derecognition (from
above)
Interest income booked but not recognised
Write offs net of recoveries
Impairment charge on customer loans and advances
for the year ended 2022
Total
€m
604
(28)
(52)
54
37
11
(64)
(3)
(27)
(94)
521
11
(8)
4
7
* The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery.
In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may
be earlier than collateral realisation.
236
PTSB Group Holdings plc Annual Report 2023
23. Impairment provisions (continued)
2023
Stage 1
€m
Stage 2
€m
Stage 3
€m
Total by Stage
ECL as at 1 January 2023
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Stage transfers
Redemptions and repayments
Net remeasurement of loss allowance
Loan originations
Loans Acquired
Net movement excluding derecognition
Derecognition-disposals
Derecognition-repossessions
Derecognition-write offs*
Derecognition
136
31
(6)
-
25
(5)
(38)
18
29
4
-
-
-
-
163
(30)
21
(21)
(30)
(11)
12
27
3
31
-
-
-
-
ECL as at 31 December 2023**
165
164
Net movement excluding derecognition (from above)
Interest income booked but not recognised
Other Movements***
Write offs net of recoveries
Impairment charge on loans and advances to customers for the year
ended 31 December 2023
222
(1)
(15)
21
5
(7)
15
3
14
25
-
-
(11)
(11)
241
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a
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t
a
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a
n
F
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i
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n
I
l
a
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Total
€m
521
-
-
-
-
(23)
(11)
48
46
60
-
-
(11)
(11)
570
60
(12)
6
2
56
*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery.
In circumstanceswhere the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be
earlier than collateral realisation.
** Closing ECL incorporates ECL of €8m on loan commitments
*** Includes costs in respect of deleveraging and impairment of interest in associated undertakings.
PTSB Group Holdings plc Annual Report 2023
237
Notes to the Consolidated Financial Statements (continued)
23. Impairment provisions (continued)
2022
Total by Stage
ECL as at 1 January 2022
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Stage transfers
Redemptions and repayments
Net remeasurement of loss allowance
Loan originations
Loans Acquired
Net movement excluding derecognition
Derecognition-disposals
Derecognition-repossessions
Derecognition-write offs*
Derecognition
ECL as at 31 December 2022
Net movement excluding derecognition (from above)
Interest income booked but not recognised
Write offs net of recoveries
Impairment charge on loans and advances to customers for the year
ended 31 December 2022
Stage 1
€m
Stage 2
€m
Stage 3
€m
61
13
(3)
-
10
(5)
-
34
37
66
(1)
-
-
(1)
136
238
(13)
39
(19)
7
(11)
(34)
20
-
(25)
(56)
-
(1)
(57)
163
305
-
(36)
19
(17)
(12)
(18)
-
-
(30)
(7)
(3)
(26)
(36)
222
Total
€m
604
-
-
-
-
(28)
(52)
54
37
11
(64)
(3)
(27)
(94)
521
11
(8)
4
7
*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery
or on foot of anegotiated settlement. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable
expectation of further recovery, write off may be earlier than collateral realisation.
Modified Financial Assets
There have been no significant modified financial assets for which the loss allowance has changed from lifetime to 12-month ECL at 31
December 2023 and 31 December 2022.
238
PTSB Group Holdings plc Annual Report 2023
24. Interest in associated undertakings
Synch Payments and Clearpay
First Home Scheme Ireland
31 December
31 December
2023
€m
1
15
16
2022
€m
3
10
13
The Group owns a non-controlling interest in Synch Payments DAC (25%) and Clearpay DAC (33%). These investments are accounted for
under the equity method in the consolidated financial statements and have a carrying value of €1m at 31 December 2023 (31 December 2022:
€3m).
These investments will be increased or decreased by the Group’s share of the profit or loss which will be assessed annually.
On 15 November 2023 Synch Payments DAC announced that it will cease operations. As a result of this, the investment in Synch DAC has
been impaired by €3.5m.
On 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC. This investment is accounted for under the
equity method in the consolidated financial statements and was initially recognised at €11m. An additional investment was made on 1
December 2023 for €5m. Post-acquisition losses of €1m have been recognised to date.
In presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of
and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.
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PTSB Group Holdings plc Annual Report 2023
239
Notes to the Consolidated Financial Statements (continued)
25. Property and equipment
2023
Held at fair value
land and
buildings
Fixtures and
fittings
Right-of-use assets*
Held at cost
office and
computer
equipment Leased buildings
Leased motor
vehicles
€m
€m
€m
€m
€m
Cost or valuation
At 1 January
Additions
Additions from Business
Combinations
Revaluations
Depreciation write-back on
revaluation
Disposals or cancellations
At 31 December
Accumulated depreciation
At 1 January
Provided in the year
Eliminate on revaluation
At 31 December
Net book value at 31 December
91
-
9
(12)
(1)
(1)
86
-
(1)
1
-
86
128
19
-
-
-
-
109
9
-
-
-
-
147
118
(84)
(9)
-
(93)
54
(77)
(10)
-
(87)
31
61
1
3
-
-
-
65
(25)
(6)
-
(31)
34
3
-
-
-
-
-
3
(2)
(1)
-
(3)
-
Total
€m
392
29
12
(12)
(1)
(1)
419
(188)
(27)
1
(214)
205
*For further details on right-of-use assets refer to note 34.
Of the €12m net revaluation loss, €12m is included in the revaluation reserve in the statement of comprehensive income and no impairment
write-back is recognised on land and buildings in the income statement.
2022
Cost or valuation
At 1 January
Additions
Revaluations
Depreciation write-back on
revaluation
Disposals/Lease exits or
cancellations
At 31 December
Accumulated depreciation
At 1 January
Provided in the year
Eliminate on revaluation
At 31 December
Net book value at 31 December
Held at fair value
land and
buildings
Fixtures and
fittings
Right-of-use assets*
Held at cost
office and
computer
equipment Leased buildings
Leased motor
vehicles
€m
€m
€m
€m
99
-
(7)
(1)
-
91
-
(1)
1
-
91
€m
117
11
-
-
-
91
18
-
-
-
128
109
(77)
(7)
-
(84)
44
(69)
(8)
-
(77)
32
49
13
-
-
(1)
61
(20)
(5)
-
(25)
36
2
1
-
-
-
3
(2)
-
-
(2)
1
Total
€m
358
43
(7)
(1)
(1)
392
(168)
(21)
1
(188)
204
*For further details on right-of-use assets refer to note 34.
Of the €7m revaluation loss, €8m is included in the revaluation reserve in the statement of comprehensive income and €1m impairment write-
back is recognised on land and buildings in the income statement.
240
PTSB Group Holdings plc Annual Report 2023
25. Property and equipment (continued)
The net book value of land and buildings includes the following:
Land
Buildings - freehold fair value
Buildings - Fixtures and fittings
Buildings - leasehold
31 December
31 December
2023
€m
26
60
42
46
174
2022
€m
30
61
33
47
171
Buildings – Leasehold includes €12m (31 December 2022: €11m) of fixtures and fittings within Leased buildings.
Land and buildings at 31 December 2023 held at fair value was €86m (31 December 2022: €91m). The historic cost of land and buildings
under the cost model is €94m (31 December 2022: €92m).
Fair value measurement of Group’s land and buildings
The Group’s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation less any
accumulated depreciation recognised from the date of the latest revaluation. On the date of revaluation any accumulated depreciation is
eliminated. The fair value measurements of the Group’s freehold land and buildings as at 31 December 2023 and 31 December 2022 were
performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of
properties in the locations and categories being valued. The effective date of revaluation is 30 November 2023 and 31 October 2022.
The fair value of the freehold land and buildings was determined based on a market comparable approach that reflects recent transaction
prices for similar properties using capitalisation yields ranging from 5.35% to 10.75%. There has been no change to the valuation techniques
during the year.
Details of the freehold land and buildings and information about the fair value hierarchy as defined in the Group’s accounting policy as at 31
December 2023 and 31 December 2022 are as follows:
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a
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t
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e
t
a
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S
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31 December 2023
Land
Buildings - freehold
31 December 2022
Land
Buildings - freehold
Level 1
€m
Level 2
€m
Level 3
Total fair value
€m
26
60
86
€m
26
60
86
-
-
-
Level 2
Level 3
Total fair value
€m
30
61
91
€m
-
-
-
€m
30
61
91
-
-
-
Level 1
€m
-
-
-
There was a change in 2023, in the fair value hierarchy, from Level 2 to Level 3, due to valuation inputs.
PTSB Group Holdings plc Annual Report 2023
241
Notes to the Consolidated Financial Statements (continued)
25. Property and equipment (continued)
Key unobservable inputs
The following table summarises the valuation techniques and inputs used in determination of Freehold land and building values:
31 December 2023
Freehold Land and Buildings
Urban Centres
Urban Other
Rural
Cap Yield
%
Low
High weighted average
5.35%
7.50%
8.00%
9.65%
9.50%
10.75%
9.03%
8.23%
9.07%
Rent per sqm
€
Low
237
194
108
High weighted average
4,252
770
266
657
348
196
Interrelationship between key unobservable inputs and FV measurement
The estimated fair value would increase (decrease) if:
• capital yield were higher (lower)
• the rent per square metre were higher (lower)
26. Intangible assets
Software
Cost
At 1 January
Additions
At 31 December
Accumulated amortisation
At 1 January
Provided in the year
At 31 December
Net book value at 31 December
31 December
2023
31 December
2022
€m
€m
293
67
360
(133)
(40)
(173)
187
224
69
293
(102)
(31)
(133)
160
242
PTSB Group Holdings plc Annual Report 2023
27. Deferred taxation
Deferred tax liabilities
Deferred tax assets
Net deferred tax assets
Net deferred tax assets are attributable to the following:
2023
Property and equipment (including right of use assets)
Unrealised gains/(losses) on assets/liabilities
Losses carried forward
Other temporary differences
Other Liabilities (including lease liabilities)
2022
Property and equipment (including right of use assets)
Unrealised gains/(losses) on assets/liabilities
Losses carried forward
Other temporary differences
Other liabilities (including lease liabilities)
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S
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a
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F
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n
I
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G
31 December
2023
31 December
2022
€m
(18)
327
309
€m
(30)
339
309
At 1 January
Recognised in
income
statement
Recognised in
other
comprehensive
income At 31 December
€m
(18)
(7)
334
-
-
309
€m
(4)
-
(11)
1
4
(10)
€m
5
6
-
(1)
-
10
€m
(17)
(1)
323
-
4
309
At 1 January
Recognised in
income
statement
Recognised in
other
comprehensive
income At 31 December
€m
(20)
(6)
373
3
-
350
€m
(5)
-
(39)
(3)
5
(42)
€m
2
(1)
-
-
-
1
€m
(23)
(7)
334
-
5
309
The Group applied Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) from 1 January
2023. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax
liability in relation to its right-of-use assets.
PTSB Group Holdings plc Annual Report 2023
243
Notes to the Consolidated Financial Statements (continued)
27. Deferred taxation (continued)
In line with the requirements of IAS 12 “Deferred Tax Assets”, Management and Directors formed the view that there should be sufficient future
taxable profits within the PTSB legal entity against which PTSB tax losses carried forward can be used. Management and Directors have
reviewed this position as at 31 December 2023 and remain of the view that it is appropriate to continue to recognise a deferred tax asset on
the full quantum of tax losses carried forward in PTSB. This information is based on the following supporting evidence: (i) A review of the
quantum of tax losses carried forward in PTSB in conjunction with forecasted profitability (the projections used having been approved by the
Board of Directors). This review demonstrated that it is probable that there will be sufficient future taxable profits within PTSB against which
the full quantum of tax losses carried forward can be utilised; (ii) The consideration of forecasting risks, including sensitivity analysis on the
financial projections used (including an analysis of the effects of higher than expected impairment levels and lower than expected net interest
margin). This analysis demonstrated, were certain adverse events to occur, it would remain probable that there would be sufficient future
taxable profits within PTSB against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over
which such utilisation would occur would be extended; and (iii) The consideration of a number of other factors which may impact the
utilisation of the tax losses including the macroeconomic environment, progress made on the Group’s NPL strategy and the Group’s financial
position. These factors are set out in further details in note 2, Critical accounting estimates and judgements.
In 2021 the Economic Co-operation and Development (OECD) released the 15% minimum effective tax rate (“Pillar Two”) Model Rules. In
December 2023, Pillar Two legislation has been enacted in Ireland, effective for the Group’s financial year beginning 1 January 2024. The
Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. Based on the assessment performed, the
Group is not currently in scope of the Pillar Two legislation. The Group will continue to assess the application of Pillar Two legislation for future
reporting periods.
It should also be noted that under current Irish tax legislation there is no time restriction on the utilisation of trading losses. Therefore, the tax
losses carried forward in PTSB are available for utilisation against profits of the same trade in any future period. Also, the Directors are satisfied
that taxable future profits should be available to recover the remaining deferred tax assets.
The total unrecognised deferred tax assets on carried forward tax losses at 31 December 2023 amounted to €36m (31 December 2022:
€20m).
Included in the overall deferred tax asset is a deferred tax asset of €nil in relation to Permanent TSB Group Holdings plc (31 December 2022:
€nil)
In accordance with IFRS these balances are recognised on an undiscounted basis.
Pillar Two – minimum effective tax rate
In 2021 the Economic Co-operation and Development (OECD) released the 15% minimum effective tax rate (“Pillar Two”) Model Rules. In
December 2023, Pillar Two legislation has been enacted in Ireland, effective for the Group’s financial year beginning 1 January 2024. The
Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. Based on the assessment performed, the
Group is not currently in scope of the Pillar Two legislation. The Group will continue to assess the application of Pilllar Two legislation for future
reporting periods. The Group has applied the IAS 12 temporary exception to the accounting for deferred taxes arising from the implementation
of the Pillar Two rules.
28. Deposits by banks
Placed by other banks and institutions on repurchase agreements
Other deposits
Deposits by banks
31 December
2023
31 December
2022
€m
380
18
398
€m
611
3
614
Securities which are sold under agreements to repurchase are secured by Irish and other eligible bonds. These agreements are completed
under market standard Global Master Repurchase Agreements. The fair value of the financial assets pledged under existing agreement to
repurchase is €529m at 31 December 2023 (31 December 2022: €654m). Other deposits include €18m (31 December 2022: €3m) of cash
collateral placed with PTSB in relation to derivative positions and repurchase agreements.
244
PTSB Group Holdings plc Annual Report 2023
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S
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29. Customer accounts
Term deposits
Demand deposits
Current accounts
Notice and other accounts
Customer accounts
31 December
2023
31 December
2022
€m
€m
3,028
8,451
9,329
2,158
22,966
1,509
8,871
8,983
2,367
21,730
All customer accounts above are held at amortised cost.
At 31 December 2023, the Group held corporate deposits of €1,316m (31 December 2022: €1,214m).
An analysis of the contractual maturity profile of customer accounts is set out in the liquidity risk section of note 38 of the consolidated
financial statements.
30. Debt securities in issue
At amortised cost
Bonds and medium-term notes
Maturity analysis
Repayable in less than 1 year
Repayable in greater than 1 year but less than 5 years
Repayable in greater than 5 years
31 December
2023
31 December
2022
€m
€m
1,512
1,512
54
960
498
1,512
658
658
10
648
-
658
Bonds and medium-term notes
In the first half of 2023, PTSBGH issued €650m of Senior Unsecured Medium Term Notes at a fixed rate of 6.625% per annum maturing on 25
April 2028 and €500m of Senior Unsecured Medium Term Notes at a fixed rate of 6.625% per annum maturing on 30 June 2029. Interest is
payable on the nominal amount annually in arrears on the coupon date. Senior Unsecured Medium Term Notes of €350m with a fixed rate of
2.125% were redeemed on the optional redemption date of 26 September 2023.
€950m of Senior Unsecured Medium Term Notes are currently hedged for interest rate risk. At 31 December 2023, debt securities in issue
contains €14m hedge adjustment (31 December 2022: €nil). Further details are included in note 16 of the financial statements.
PTSB Group Holdings plc Annual Report 2023
245
Notes to the Consolidated Financial Statements (continued)
31. Other liabilities
Amounts falling due within one year
PAYE and social insurance
Other taxation including deposit interest retention tax (DIRT)
Creditor accruals
Other*
Lease liability (see note 34 for further information on lease liabilities)
Total amounts falling due within one year
Amounts falling due greater than one year
Lease liability (see note 34 for further information on lease liabilities)
Total amounts falling due greater than one year
Total other liabilities
31
December
2023
31
December
2022
€m
€m
6
4
95
8
6
119
29
29
148
5
-
84
54
6
149
32
32
181
*Other includes liability of €8m for Visa balances. In 2022, other includes €38m relating to additional equity cash consideration payable for
Project Sun acquired by the Group in 2022 and other miscellaneous items.
32. Provisions
2023
Provision for
legacy, legal
and
compliance
liabilities
Restructuring
costs
€m
4
-
-
(2)
2
€m
23
2
(1)
(11)
13
2022
Provision for
legacy, legal
and
compliance
liabilities
Restructuring
costs
€m
6
2
-
(4)
4
€m
28
8
(3)
(10)
23
Other
€m
53
6
(6)
(28)
25
Total
€m
80
8
(7)
(41)
40
Other
€m
21
39
(6)
(1)
53
Total
€m
55
49
(9)
(15)
80
As at 1 January
Provisions made during the year
Write-back of provisions during the
year
Provisions used during the year
As at 31 December
The provision at 31 December 2023 is €40m (31 December 2022: €80m) which is comprised of the following:
Restructuring costs
During 2020, the Group announced an Enterprise Transformation programme. At 31 December 2020, a provision for restructuring of €27m was
recognised based on the estimate of the costs of this programme. During 2021 an additional provision of €7m was made and an amount of
€29m was utilised as part of this programme. During 2022 a further provision of €2m was made and an amount of €4m utilised. A further €2m
was utilised in 2023. The remaining provision of €1m is based on an estimate of the remaining costs to bring the programme to a conclusion.
This programme is expected to conclude in 2024.
The Group remains a lessee on a number of non-cancellable leases over properties that it no longer occupies following a restructure in 2013.
The remaining provision of €2m relates to dilapidation costs associated with the remaining properties.
246
PTSB Group Holdings plc Annual Report 2023
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32. Provisions (continued)
Provision for legacy, legal and compliance liabilities
As at 31 December 2023, the Group has provisions of €13m relating to legal, compliance and other costs of on-going disputes in relation to
legacy business issues (31 December 2022: €23m).
A provision of €2m and a write-back of €1m were made during 2023 relating to legal, compliance and other costs of on-going disputes in
relation to legacy business issues.
Management has exercised judgment in arriving at the estimated provision in respect of the potential liabilities.
Other
As at 31 December 2023, the provision of €25m (31 December 2022: €53m) primarily relates to indemnities and guarantees provided by the
Group, together with further costs, relating to the purchasing and deleveraging of various asset portfolios.
At 31 December 2022, a provision relating to Stamp Duty arising as a result of the Ulster Bank asset acquisition was recognised for €25m. This
was increased further by €3m in H1 2023 and fully utilised in H2 2023.
33. Subordinated liabilities
At amortised cost:
€250m Tier 2 capital notes due August 2031, Callable 2026
Maturity date
Repayable in less than 1 year
Repayable in greater than 1 year but less than 5 years
Repayable in greater than 5 years
31 December
2023
31 December
2022
€m
€m
257
257
252
252
31 December
2023
31 December
2022
€m
€m
3
-
254
257
3
-
249
252
Tier 2 capital notes PTSBGH
In May 2021, PTSBGH issued €250m of Tier 2 capital notes at a fixed rate of 3% per annum. The notes mature on 19 August 2031 with a call
date of any date from and including 19 May 2026 to and including 19 August 2026. The call is subject to approval of the regulatory authorities,
with approval conditional on meeting the requirements of the Capital Requirement Regulations.
The interest rate will be reset, in the event that the securities are not called, on 19 August 2026 to Euro 5 year Mid Swap rate plus a margin of
3.221% per annum. The loan is subordinated and ranks as Tier 2 capital with interest paid annually in arrears on 19 August. The loan may be
subject to the exercise of Irish Statutory loss absorption powers by the relevant resolution authority.
The Tier 2 capital notes are currently hedged for interest rate risk. At 31 December 2023, subordinated liabilities contain €5m hedge
adjustment (31 December 2022: €nil). Further details on hedging are included in note 16 of the financial statements.
In the event of winding up of PTSBGH, the Tier 2 capital notes will be:
• junior in right of payment to all Senior Claims;
• pari passu with all other subordinated claims against PTSBGH which constitute, or would but for any applicable limitation on the amount of
such capital constitute, Tier 2 capital notes or that rank or are expressed to rank pari passu with the obligations of PTSBGH under Tier 2
capital notes; and
• in priority to PTSBGH ordinary shares, preference shares, additional Tier 1 capital notes and junior subordinated obligations or other
securities of PTSBGH which by law rank, or by their terms are expressed to rank, junior to the Tier 2 capital notes.
The Group did not have any defaults of principal or interest or other breaches with respect to its subordinated liabilities during the years ended
31 December 2023 and 31 December 2022.
PTSB Group Holdings plc Annual Report 2023
247
Notes to the Consolidated Financial Statements (continued)
Land and
buildings Motor vehicles
€m
36
4
-
(6)
34
€m
1
-
-
(1)
-
Land and
buildings Motor vehicles
€m
29
13
(1)
(5)
36
€m
-
1
-
-
1
Land and
buildings Motor vehicles
€m
37
4
-
(6)
35
€m
1
-
-
(1)
-
Land and
buildings Motor vehicles
€m
31
13
(1)
(6)
37
€m
-
1
-
-
1
Total
€m
37
4
-
(7)
34
Total
€m
29
14
(1)
(5)
37
Total
€m
38
4
-
(7)
35
Total
€m
31
14
(1)
(6)
38
34. Leases
Right-of-use assets*
As at 1 January 2023
Additions
Lease exits and cancellations
Depreciation of right-of-use assets
Balance as at 31 December 2023
Right-of-use assets*
As at 1 January 2022
Additions
Lease exits and cancellations
Depreciation of right-of-use assets
Balance as at 31 December 2022
Lease liabilities*
As at 1 January 2023
Additions
Lease exits or cancellations
Repayment of lease liabilities
Balance as at 31 December 2023
Lease liabilities*
As at 1 January 2022
Additions
Lease exits or cancellations
Repayment of lease liabilities
Balance as at 31 December 2022
*Right-of-use assets are included in PPE and lease liabilities are included in Other liabilities.
248
PTSB Group Holdings plc Annual Report 2023
34. Leases (continued)
Lease liabilities
Maturity analysis - contractual undiscounted cash flows*
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities
Lease liabilities included in the statement of financial position
Current lease liability
Non-current lease liability
*The maturity analysis of undiscounted lease liabilities are disclosed in note 38.
Amounts recognised in income statement*
Interest on lease liabilities
Expenses relating to short-term leases
Depreciation of right-of-use assets
Total charge in income statement
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31 December
2023
31 December
2022
€m
€m
7
18
12
37
35
6
29
7
18
15
40
38
6
32
31 December
2023
31 December
2022
€m
(1)
-
(7)
(8)
€m
-
(1)
(5)
(6)
*Interest expense on the lease liabilities amounted to €0.9m 31 December 2022 €0.4m) whereas expenses relating to short-term leases amounted to €0.5m 31
December 2022 €0.6m) and is included in Administrative, staff and other expenses (excluding exceptional items).
Amounts recognised in statement of cash flow
Cash outflow for leases
Total
As a lessee
(i) Real estate
31 December
2023
31 December
2022
€m
(7)
(7)
€m
(6)
(6)
The Group leases retail properties for its branch operations. The lease term of retail properties typically run for a period of 10-35 years. The
Group does not have variable lease payments and its leases do not contain extension options.
(ii) Vehicles
The Group leases vehicles with lease terms of three to five years. The Group has no option to purchase the assets at the end of the contract
term and it does not guarantee the residual value of the leased assets at the end of the contract term.
(iii) Sub-leases
The Group has no sub leases as at 31 December 2023 (31 December 2022: no sub leases). Further details on ‘leases as a lessor’ are included
in note 22 of the financial statements.
PTSB Group Holdings plc Annual Report 2023
249
Notes to the Consolidated Financial Statements (continued)
35. Share capital, reserves and other equity instruments
Share capital
Share capital is the funds raised as a result of a share issue and comprises the ordinary shares of the holding company Permanent TSB Group
Holdings plc.
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at
meetings of the Bank. All ordinary rank equally with regard to the Bank’s residual assets.
Authorised share capital
31 December 2023
Ordinary shares of €0.50 each
31 December 2022
Ordinary shares of €0.50 each
Issued share capital
The movement in the number of paid up ordinary shares is as follows:
Balances as at 31 December 2023
As at 1 January 2023
Movement
As at 31 December 2023
Issued share capital (€m)
Shares held under employee benefit trust
% of authorised capital issued
Balances as at 31 December 2022
As at 1 January 2022
Movement
As at 31 December 2022
Issued share capital (€m)
Shares held under employee benefit trust
% of authorised capital issued
Number of shares
1,550,000,000
Number of shares
1,550,000,000
31 December
2023
€m
775
31 December
2022
€m
775
€ 0.50 Ordinary
shares
Total
545,589,119
-
545,589,119
273
4,580
€ 0.50 Ordinary
shares
454,695,492
90,893,627
545,589,119
273
4,580
273
35%
Total
273
35%
Share Premium
The share premium reserve represents the excess of amounts received for share issues less associated issue costs over the par value of
those shares of the Company.
Other Reserves
Revaluation reserve Non-distributable)
The revaluation reserve is a non-distributable reserve comprising unrealised gains or losses, net of tax, on the revaluation of owner occupied
properties.
Fair value reserve Non-distributable)
The fair value reserve comprises:
• the cumulative net change in the fair value of equity securities measured at FVOCI; and
• the cumulative net change in the fair value of debt securities measured at FVOCI until the assets are derecognised or reclassified. This
amount is increased by the amount of loss allowance and is disposed of by the end of the year.
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35. Share capital, reserves and other equity instruments (continued)
Other capital reserves Non-distributable)
Other capital reserves includes €1,087m capital issued by the Company net of €7m capital redemption reserve from the repurchase and
cancellation of shares and €224m incurred in the cancellation of the share capital and share premium of PTSB on the incorporation of the
Company.
Retained earnings
Retained earnings include distributable and non-distributable earnings. This reserve represents the retained earnings of the holding Company
and subsidiaries after consolidation adjustments.
Other equity instruments Non-distributable
Additional Tier 1 Securities
As at 1 January
Issued during the year
Additional Tier 1 Securities - net of the transaction costs
Profit
AT1 coupon paid
Additional Tier 1 securities
31 December
2023
31 December
2022
€m
368
-
43
(43)
368
€m
123
245
10
(10)
368
On 26 October 2022, PTSBGH issued additional €250m AT1 Fixed Rate Reset Perpetual Temporary Write Down Securities. The transaction
costs incurred were €5m. The first reset date for the fixed rate is 26 April 2028.
The AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 13.25% paid in arrears on 26 April and 26
October of each year, commencing on 26 April 2023. On the first reset date on 26 April 2028, in the event the securities are not redeemed,
interest will be reset to Euro 5 year Mid Swap rate plus a margin of 10.546% (converted from an annual to a semi-annual rate). The Company
may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an
interest payment date.
On 25 November 2020, PTSBGH issued €125m nominal value of AT1 Perpetual Temporary Write Down Securities as part of capital raise. The
transaction costs incurred were €2m. The first reset date for the fixed rate is 25 May 2026.
The AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 7.875% paid in arrears on 25 May and 25
November. On the first reset date on 25 May 2026, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap
rate plus a margin of 8.468% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to
cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.
The Company may use such cancelled payments without restriction, including to make distributions or any other payments to the holders of
its shares or any other securities issued by the Company. Any cancellation of interest payments will be permanent and on a non-cumulative
basis and such cancellation will not give rise to or impose any restriction on the Company.
Although the AT1 securities are perpetual, the Company may, in its sole discretion, redeem the AT1 securities in full on any day falling in the
period commencing 25 November 2025 and the first reset date above and on every interest payment date thereafter (subject to the approval
of the Supervisory Authority) at the prevailing principal amount together with accrued but unpaid interest. In addition, the securities are
redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval.
Under the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.
On the occurrence of a trigger event, at any time, any accrued and unpaid interest up to (but excluding) the write down date shall be
automatically and irrevocably cancelled, and the then Prevailing Principal Amount of each Security shall be automatically and irrevocably
reduced by the write down amount. This will occur if the CET1 Capital Ratio of PTSB or the Group at any time falls below 7%. Subsequent to
any write-down event the Company may, at its sole discretion, write-up some or all of the written-down principal amount of the AT1
instrument provided regulatory capital requirements and the securities rank behind the claims against the Group of all other subordinated and
unsubordinated creditors.
PTSB Group Holdings plc Annual Report 2023
251
Notes to the Consolidated Financial Statements (continued)
36. Analysis of other comprehensive income/(expense)
The analysis of other comprehensive income below provides additional analysis to the information provided in the primary statements and
should be read in conjunction with the consolidated statement of changes in equity.
31 December 2023
Other comprehensive income/(expense) (net of tax)
Revaluation of property
Fair value reserve (equity instruments):
Change in fair value of equity instruments
Total other comprehensive income/(expense), net of tax
31 December 2022
Other comprehensive income (net of tax)
Revaluation of property
Fair value reserve (equity instruments):
Change in fair value of equity instruments
Total other comprehensive income/(expense), net of tax
Revaluation
reserve
Fair value
reserve
€m
€m
(7)
-
(7)
-
3
3
Revaluation
reserve
Fair value
reserve
€m
€m
(6)
-
(6)
-
2
2
Total
€m
(7)
3
(4)
Total
€m
(6)
2
(4)
37. Measurement basis and fair values of financial instruments
The Group’s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial
instruments held by the Group and their fair values.
(a) Measurement basis and fair value of financial instruments
31 December 2023
Financial assets
Cash at bank
Items in course of collection
Loans and advances to banks
Derivative financial instruments
Debt securities
Equity securities
Loans and advances to customers
Financial liabilities
Deposits by banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Subordinated liabilities
Other financial liabilities
Held at
amortised
cost
At fair value
through OCI
At fair value
through
profit or loss
Designated
as fair value
hedges
Total
carrying
value
Fair value
€m
€m
€m
€m
€m
€m
14
14
15
16
19
20
22
28
29
16
30
33
31
71
40
2,051
-
3,256
-
21,427
398
22,966
-
1,498
252
148
-
-
-
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
36
-
-
-
-
-
-
14
5
-
71
40
2,051
36
3,256
5
71
40
2,051
36
3,137
5
21,427
21,343
398
398
22,966
22,907
1
1,512
257
148
1
1,593
240
148
252
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37. Measurement basis and fair values of financial instruments (continued)
31 December 2022
Financial assets*
Cash at bank
Items in course of collection
Loans and advances to banks
Derivative financial instruments
Debt securities
Equity securities
Loans and advances to customers
Financial liabilities*
Deposits by banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Subordinated liabilities
Other financial liabilities
Held at
amortised
cost
At fair value
through OCI
At fair value
through
profit or loss
Designated
as fair value
hedges
Note
€m
€m
€m
€m
Total
carrying
value
€m
Fair value
€m
14
14
15
16
19
20
22
28
29
16
30
33
31
58
40
2,123
-
3,177
-
19,593
614
21,730
-
658
252
143
-
-
-
-
-
30
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
-
-
38
-
-
-
-
-
-
-
-
-
-
-
-
-
58
40
58
40
2,123
2,123
-
3,177
30
-
2,929
30
19,593
20,059
614
614
21,730
21,726
13
658
252
181
13
634
204
181
The following table sets out the fair value of financial instruments that the Group holds at 31 December 2023. It categorises these financial
instruments into the relevant level on the fair value hierarchy.
The fair values of financial instruments are measured according to the following fair value hierarchy:
Level 1 – financial assets and liabilities measured using quoted market prices (unadjusted).
Level 2 – financial assets and liabilities measured using valuation techniques which use observable inputs including quoted prices of financial
instruments themselves or quoted prices of similar instruments – in either active or inactive markets.
Level 3 – financial assets and liabilities measured using valuation techniques which use unobservable market data inputs.
Basis and fair values of financial instruments
31 December 2023
Financial assets
Cash at bank
Items in course of collection
Loans and advances to banks
Derivative financial instruments
Debt securities
Equity securities
Loans and advances to customers
Financial liabilities
Deposits by banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Subordinated liabilities
Other financial liabilities
Total
carrying
value
Note
Level 1
Level 2
Level 3
Total fair
value
€m
€m
€m
€m
€m
14
14
15
16
19
20
22
28
29
16
30
33
31
71
40
2,051
36
3,256
5
21,427
398
22,966
1
1,512
257
148
71
-
-
-
3,137
-
-
-
-
-
-
-
-
-
40
2,051
36
-
-
-
398
22,907
1
1,593
240
148
-
-
-
-
-
5
71
40
2,051
36
3,137
5
21,343
21,343
-
-
-
-
-
-
398
22,907
1
1,593
240
148
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253
Notes to the Consolidated Financial Statements (continued)
37. Measurement basis and fair values of financial instruments (continued)
31 December 2022
Financial assets
Cash at bank
Items in course of collection
Loans and advances to banks
Derivative financial instruments
Debt securities
Equity securities
Loans and advances to customers
Financial liabilities
Deposits by banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Subordinated liabilities
Other financial liabilities
Note
Total carrying
value
€m
58
40
2,123
-
3,177
30
19,593
614
21,730
13
658
252
181
14
14
15
16
19
20
22
28
29
16
30
33
31
Level 1
€m
58
-
-
-
2,929
26
-
-
-
-
634
204
-
Level 2
-
40
2,123
-
-
-
-
614
21,726
1
-
-
181
Level 3
€m
-
-
-
-
-
4
20,059
-
-
12
-
-
-
Total fair
value
€m
58
40
2,123
-
2,929
30
20,059
614
21,726
13
634
204
181
(b) Fair value measurement principles
The Group’s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical
accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value
of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Where possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair
values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based
upon management’s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor
changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for
the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial
institutions or to evaluate the Group’s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also the
fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at
the reporting date.
Financial assets and financial liabilities not subsequently measured at fair value
Other than the HTC&S debt securities, derivative financial instruments and equity securities, all other financial assets and liabilities are not
measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and
liabilities is set out below.
Cash at bank
The fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-
term in nature in an active market.
Items in course of collection
The fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-
term in nature.
Loans and advances to banks
For the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and
advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.
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37. Measurement basis and fair values of financial instruments (continued)
Loans and advances to customers
Loans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair
value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on
the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying
value of the consumer finance portfolio is considered equal to its fair value due to its short duration.
Debt securities HTC securities)
Debt securities at 31 December 2023 are €3,256m (31 December 2022 €3,177m) and consist of HTC securities. HTC securities are derived
from observable inputs through independent pricing sources such as Bloomberg. A weighted average method is used to apply the prices to
the Group’s retained holding in the securitisation.
Deposits by banks/customer accounts
The estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-
interest bearing deposits), approximates to their book value. The estimated fair value of fixed-interest bearing deposits and other borrowings
is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.
Debt securities in issue/subordinated liabilities
The fair values of debt securities in issue/subordinated liabilities are estimated using market prices of instruments that are substantially the
same as those issued by the Group. Where a readily available market price is unavailable in relation to the instrument, an estimated price is
calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked
to similar instruments, is used within the valuation technique. The fair values of debt securities in issue and subordinated liabilities include the
fair value hedge adjustment in relation to interest rate swaps. Further details on hedging are included in note 16 of the financial statements.
During 2023, due to changes in market conditions, quoted prices in active markets were no longer available for these instruments. However,
there was sufficient information available to measure the fair value of these instruments based on observable market inputs. Therefore, debt
securities in issue with a carrying amount of €1,512m and subordinated liabilities with a carrying amount of €257m, were transferred from
Level 1 to Level 2 of the fair value hierarchy.
Financial assets and financial liabilities subsequently measured at fair value
On initial recognition, all financial instruments are measured at fair value. Following this, the Group measures HTC&S financial assets at fair
value through other comprehensive income. Derivative financial instruments are held for trading and fair valued through profit or loss.
Derivative financial instruments
The fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are
commonly used by market participants. These valuations are provided by third party brokers and the models used incorporate observable
market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.
Equity securities
PTSB Group holds Series B preferred stock in Visa Inc. at 31 December 2023. During 2023 PTSB disposed of its holding of Visa A shares for
€30m. A gain on sale of €14m was recognised in other comprehensive income. PTSB Group holds B preferred stock in Visa Inc. at 31
December 2023 with a value of €5m (2022: A&B shares valued at €30m) and are recognised in the statement of financial position at FVOCI.
The fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified
as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.
PTSB Group Holdings plc Annual Report 2023
255
Notes to the Consolidated Financial Statements (continued)
37. Measurement basis and fair values of financial instruments (continued)
Fair value measurements recognised in the Statement of financial position
31 December 2023
Level 1
Notes
Financial assets measured at fair value
Derivative financial instrument
Equity instruments
Financial liabilities measured at fair value
Derivative financial instrument
31 December 2022
Financial assets measured at fair value
Derivative financial instrument
Equity instruments
Financial liabilities measured at fair value
Derivative financial instrument
16
20
16
Notes
16
20
16
Reconciliation of level 3 fair value measurements of financial assets
Equity Instruments
As at 1 January
Revaluation movement in OCI – Fair value reserve (equity instruments)
Conversion of Series B preferred stock to Series A preferred stock
As at 31 December
€m
-
-
-
Level 2
€m
Level 3
€m
36
-
1
-
5
-
Level 1
€m
Level 2
€m
Level 3
€m
-
26
-
-
-
1
-
4
12
2023
€m
4
1
-
5
Total
€m
36
5
1
Total
€m
-
30
13
2022
€m
9
-
(5)
4
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2023 or 2022 for financial assets.
Level 3 fair value measurements of financial liabilities
There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2023 or 2022 for financial liabilities. The level 3 of
€12m relates to business combination forwards as at 31 December 2022. The fair value of the forward derivative at the acquisition date was a
liability of €16m.
This is calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
See notes 2 and 3 for further detail.
256
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37. Measurement basis and fair values of financial instruments (continued)
Level 3 sensitivity analysis
The table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in
the fair value hierarchy.
Financial instruments
31 December 2023
Valuation
technique
Significant
unobservable
inputs
Range of
estimates for
unobservable
inputs
Fair value
€m
Ranges of
estimates
changes in the
fair value
Visa Inc. Series B Preferred Stock
Quoted market
price
(Discounted)*
Final share
conversion rate 0 - 90%
5
0 - 90%
* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
31 December 2022
Valuation
technique
Significant
unobservable
inputs
Range of
estimates for
unobservable
inputs
Fair value
€m
Ranges of
estimates
changes in the
fair value
Visa Inc. Series B Preferred Stock
Quoted market
price
(Discounted)*
Final share
conversion rate 0 - 90%
4
0 - 90%
*Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.
Significant unobservable inputs
Visa Inc. Series A and Series B preferred stock
The Visa Inc. Series A preferred stock held by PTSB was acquired during 2020 upon the partial conversion of Series B preferred stock by Visa
Inc. These Series A and B preferred stock were fair valued at €nil and €5m respectively at 31 December 2023 (31 December 2022: €26m and
€4m) and are recognised in the statement of financial position at FVOCI. During 2023 PTSB disposed of its holding of Visa A shares for €30m.
Valuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc.
Series A and Series B preferred shares at 31 December 2023 and 31 December 2022. Future conversions are calculated using discounted
cash follows. The stock was revalued at the year-end exchange rate.
Unobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.
The Visa Inc. Series A and Series B preferred stock is denominated in US dollars and is exposed to FX risk.
Business Combination Forwards
The level 3 of €12m as at 31 December 2022 related to business combination forwards. The business combination derivatives were
derecognised in 2023 as the remaining Retail lending assets and the entirety of the Asset Financing and SME assets and branch properties
were transferred during the year. See Note 3 for further detail. The fair value of the forward derivative is calculated as the difference between
the fair value of the consideration to be paid and the fair value of the assets to be acquired. See notes 2 and 3 for further detail.
Valuation methodology: The fair value of the forward derivative at 31 December 2023 was €nil (31 December 2022: liability of €12m). This is
calculated as the difference between the fair value of the consideration to be paid and the fair value of the assets to be acquired.
Unobservable input: The unobservable inputs are the prepayment rate, redemption rate, transition rate (from fixed to variable rates and vice
versa), probability of default (PD) and loss given default assumptions, servicing cost, risk weights based on the asset characteristics and a
discount rate based on cost of funding, capital and targeted capital ratio. Taking account of the various uncertainties, Management estimate
the range of changes in fair value on the receive leg (loans acquired) to be 95% to 105%, with no material change expected on the pay leg (the
consideration).
PTSB Group Holdings plc Annual Report 2023
257
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management
Maximum exposure to credit risk before collateral held or other credit enhancements
The following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group’s
financial assets as at the statement of financial position date.
Cash at bank
Items in course of collection
Loans and advances to banks (iii)
Derivative financial instruments (ii)
Other assets
Debt securities (i)
Loans and advances to customers (iv)
Commitments
Notes
31 December
2023
31 December
2022
14
14
15
16
17
19
22
43
€m
71
40
2,051
36
60
3,256
21,427
26,941
1,380
28,321
€m
58
40
2,123
-
1
3,177
19,593
24,992
1,342
26,334
The following tables outline the Group’s exposure to credit risk by asset class
(i) Debt securities
The Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are
subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External
Credit Assessment Institution (ECAI) rating of investment grade.
The following table gives an indication of the level of the credit worthiness of the Group’s debt securities and is based on the Group’s internal
rating policy which was approved by the CBI. The inputs to the ratings used in the table below are those prescribed by Moody’s Investor
Services Limited.
Rating
Aaa
Aa1
Aa2
Aa3
A1
A3
Baa1
Baa2
Baa3
Total
31 December
2023
31 December
2022
€m
€m
309
30
356
1,578
-
448
432
-
103
3,256
49
110
250
-
1,734
-
497
456
81
3,177
258
PTSB Group Holdings plc Annual Report 2023
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38. Financial risk management (continued)
The following table discloses, by country, the Group’s exposure to sovereign debt and corporate debt as at:
Country
Ireland
Portugal
Spain
France
EU
Italy
Austria
Belgium
Total
31 December
2023
31 December
2022
€m
€m
1,559
1,783
448
432
356
309
103
30
19
456
497
250
81
110
-
-
3,256
3,177
(ii) Derivative financial instruments
The Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its
counterparties in respect of all derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in
line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The Group manages its
collateral derivative positions with counterparties on a net basis. The uncollaterised derivative positions are held with investment grade
counterparties. The cumulative positive market value of derivative assets at 31 December 2023 was €36m (31 December 2022: €nil) which
relates to fair value hedge interest rate swaps used to hedge interest rate risk on fixed rate debt securities in issue. See note 16 for further
detail.
(iii) Loans and advances to banks
The Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any
exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group’s loans
and advances to banks and is based on the ratings prescribed by Moody’s Investor Services Limited and Standard and Poor’s for the CBI.
Rating
AAA
Aa2
Aa3
A1
A2
Ba1
Total
31 December
2023
31 December
2022
€m
€m
1,687
75
231
2
56
-
1,620
199
286
10
-
8
2,051
2,123
PTSB Group Holdings plc Annual Report 2023
259
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
The following sections detail additional disclosures on asset quality
(iv) Loans and advances to customers
Gross customer loans and advances
The tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial, consumer
finance and finance leases and hire purchase receivables.
Measured at amortised cost
Residential mortgages:
Home loan
Buy-to-let
Total residential mortgages
Commercial
Consumer finance
Finance leases and hire purchase receivables
Total measured at amortised cost
Analysed by ECL staging:
Stage 1
Stage 2
Stage 3
POCI
Total measured at amortised cost
Of which at the reporting date
Neither past due nor Stage 3
Past due but not Stage 3
Stage 3
Total measured at amortised cost
Of which are reported as non-performing loans
Deferred fees, discounts & business combination related fair value adjustments
31 December
2023
31 December
2022
€m
€m
19,557
749
20,306
437
499
446
18,340
824
19,164
239
401
-
21,688
19,804
19,057
1,913
718
-
21,688
20,909
61
718
21,688
718
309
17,455
1,699
649
1
19,804
19,118
36
650
19,804
650
310
260
PTSB Group Holdings plc Annual Report 2023
38. Financial risk management (continued)
The following table provides an aged analysis of home loan, buy-to-let and commercial mortgages which are past due but not Stage 3.
31 December 2023
0-30 days
31-60 days
61-90 days
Total past due not Stage 3
Fair value of collateral held
Fair value of collateral held
0-30 days
31-60 days
61-90 days
Total past due not Stage 3
31 December 2022
0-30 days
31-60 days
61-90 days
Total past due not Stage 3
Fair value of collateral held
Fair value of collateral held
0-30 days
31-60 days
61-90 days
Total past due not Stage 3
Home loans
Buy-to-let
Commercial
€m
29
7
6
42
42
€m
€m
3
3
-
6
6
1
1
-
2
2
Home loans
Buy-to-let
Commercial
€m
29
7
6
42
€m
€m
3
3
-
6
1
1
-
2
Home loans
Buy-to-let
Commercial
€m
16
4
5
25
25
€m
€m
2
1
-
3
3
-
-
-
-
-
Home loans
Buy-to-let
Commercial
€m
16
4
5
25
€m
€m
2
1
-
3
-
-
-
-
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a
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e
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a
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S
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a
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a
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F
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o
i
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Total
€m
33
11
6
50
50
Total
€m
33
11
6
50
Total
€m
18
5
5
28
28
Total
€m
18
5
5
28
Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon
the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance
or the valuation amount.
Non-performing loans
Non-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group’s
definition of default. The Group’s definition of default considers objective indicators of default including the 90 days past due criterion,
evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority
(EBA) guidance on the definition of forbearance.
Foreclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit
enhancements.
Non-performing assets are defined as NPLs plus foreclosed assets.
PTSB Group Holdings plc Annual Report 2023
261
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
31 December 2023
Home loans
Buy-to-let
Commercial
€m
167
77
44
60
55
-
403
2
405
2.1%
€m
86
51
16
86
28
-
267
9
276
35.6%
€m
11
2
1
1
5
-
20
20
4.6%
Home loans
Buy-to-let
Commercial
Stage 3
Consumer
finance
€m
4
4
2
2
4
-
16
16
Finance leases
and hire purchase
receivables
€m
6
4
1
1
-
-
12
12
Total
€m
274
138
64
150
92
-
718
11
729
3.2%
2.7%
3.3%
Stage 3
Consumer
finance
Finance leases
and hire purchase
receivables
€m
€m
€m
175
31
31
51
54
-
342
3
345
1.9%
€m
118
15
80
28
29
-
270
15
285
€m
17
-
-
-
6
-
23
-
23
2
3
2
2
5
1
15
-
15
32.8%
9.6%
3.7%
Total
€m
312
49
113
81
94
1
650
18
668
3.3%
-
-
-
-
-
-
-
-
-
-
NPL is < 90 days
NPL is > 90 days and < 1 year past
due
NPL is 1-2 years past due
NPL is 2-5 years past due
NPL is > 5 years past due
POCI
Non-performing loans
Foreclosed assets
Non-performing assets
NPLs as % of gross loans
31 December 2022
NPL is < 90 days
NPL is > 90 days and < 1 year past
due
NPL is 1-2 years past due
NPL is 2-5 years past due
NPL is > 5 years past due
POCI
Non-performing loans
Foreclosed assets
Non-performing assets
NPLs as % of gross loans
Non-performing loans as a percentage of total loans and advances was 3.3% at 31 December 2023, no change from 3.3% at 31 December
2022.
262
PTSB Group Holdings plc Annual Report 2023
38. Financial risk management (continued)
Total portfolio loss allowance: statement of financial position
The tables below outline the ECL loss allowance total at 31 December 2023 in respect of total customer loans and advances.
The impairment charge in respect of the total loans and advances for year ended 31 December 2023 was €56m, compared to €7m charge for
the year ended 31 December 2022.
Loss allowance - statement of financial position
Stage 1
Stage 2
Stage 3
Total loss allowance
Provision coverage ratio*
Stage 1
Stage 2
Stage 3
Total provisions/total loans
*Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.
31 December
2023
31 December
2022
€m
€m
165
164
241
570
136
163
222
521
31 December
2023
31 December
2022
%
%
0.9%
8.6%
33.5%
2.6%
0.8%
9.6%
34.1%
2.6%
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PTSB Group Holdings plc Annual Report 2023
263
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
Origination profile
Loan origination profile of the residential mortgage loan portfolio before provision for impairment:
The table below illustrates that €2bn or 9% (31 December 2022: 11%) of the residential mortgage portfolio originated before 2006. Between
2006 and 2008 origination was €4bn or 21% (31 December 2022: 24%) of the residential mortgages. The remaining 70% (31 December 2022:
65%) of residential mortgages were originated between 2009 and 2023.
31 December 2023
2000 and before
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Residential mortgages portfolio
Stage 3 residential mortgages
portfolio
Number
Balance
€m
Number
Balance
€m
3,055
2,004
2,811
4,443
7,579
11,015
13,837
11,944
7,407
2,311
914
789
1,225
1,638
2,877
3,949
4,665
5,642
7,352
9,408
7,820
9,065
9,618
8,394
64
60
116
232
471
943
1,624
1,591
925
212
66
65
108
158
294
442
617
843
1,239
1,735
1,624
2,135
2,539
2,203
253
114
139
219
278
454
753
773
452
73
22
9
18
17
26
52
46
49
71
64
39
20
8
4
8
4
8
16
25
61
174
209
97
8
2
1
1
2
4
4
7
6
11
12
5
3
1
1
139,762
20,306
3,953
670
264
PTSB Group Holdings plc Annual Report 2023
38. Financial risk management (continued)
31 December 2022
1999 and before
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Residential mortgages portfolio
Stage 3 residential mortgages
portfolio
Number
Balance
Number
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S
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s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
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F
i
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o
i
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n
I
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G
Balance
€m
4
3
4
6
14
23
57
169
203
90
7
1
1
-
-
3
1
4
4
8
7
1
1
1
113
57
79
99
166
220
397
723
740
408
65
14
5
3
4
13
29
23
24
52
37
14
8
4
1,786
1,483
1,938
2,801
5,360
7,729
11,134
14,396
12,439
7,912
2,301
936
819
1,190
1,673
2,960
4,058
4,664
5,804
7,607
9,633
7,940
8,871
9,409
134,843
€m
30
40
66
127
255
514
1,006
1,796
1,730
1,006
213
70
69
110
163
316
471
639
899
1,345
1,863
1,735
2,164
2,537
19,164
3,297
612
Loan-to-value profile
Loan-to-value LTV of mortgage lending (index linked):
The LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV
is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.
PTSB Group Holdings plc Annual Report 2023
265
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
Actual and average LTVs across principal mortgage portfolios:
The tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let
facilities by value. The weighted average LTV on the residential mortgage portfolios is 52% at 31 December 2023 compared to 54% at 31
December 2022.
31 December 2023
Home loans
Buy-to-let
%
45%
38%
16%
-
99%
1%
-
-
-
-
-
-
-
-
%
33%
23%
18%
8%
82%
6%
2%
3%
2%
1%
1%
1%
-
2%
Total
%
45%
37%
16%
1%
99%
1%
-
-
-
-
-
-
-
-
1%
18%
1%
100%
100%
100%
52%
69%
47%
68%
70%
55%
41%
100%
52%
69%
47%
81%
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Weighted average LTV:
Stock of existing residential mortgages
Residential mortgages originated in the year
Acquired residential mortgages
Stage 3 mortgages
266
PTSB Group Holdings plc Annual Report 2023
38. Financial risk management (continued)
31 December 2022
Home loans
Buy-to-let
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Weighted average LTV:
Stock of existing residential mortgages
Residential mortgages originated in the year
Acquired residential mortgages
Stage 3 mortgages
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i
n
o
i
t
a
m
r
o
f
n
I
l
a
r
e
n
e
G
Total
%
44%
39%
14%
1%
98%
1%
-
-
-
-
-
-
-
1%
2%
%
44%
40%
14%
1%
99%
1%
-
-
-
-
-
-
-
-
1%
%
32%
18%
24%
8%
82%
5%
4%
3%
1%
2%
1%
-
-
2%
18%
100%
100%
100%
53%
68%
47%
74%
76%
58%
39%
100%
54%
68%
47%
85%
PTSB Group Holdings plc Annual Report 2023
267
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
Loan-to-value profile (continued)
Analysis by LTV of the Group’s residential mortgage lending which is neither past due nor Stage 3
The tables below illustrates that 100% of residential home loan mortgages (31 December 2022: 100%) and 95% of residential buy-to-let
mortgages (31 December 2022: 94%) that are neither past due nor stage 3 are in positive equity as at 31 December 2023.
31 December 2023
Home loans
Buy-to-let
%
46%
38%
16%
-
100%
-
-
-
-
-
-
-
-
-
-
%
48%
29%
14%
4%
95%
2%
1%
-
1%
-
-
-
-
1%
5%
100%
100%
Home loans
Buy-to-let
%
45%
41%
14%
-
100%
-
-
-
-
-
-
-
-
-
-
%
44%
23%
23%
4%
94%
2%
1%
1%
-
1%
-
-
-
1%
6%
Total
%
46%
38%
16%
-
100%
-
-
-
-
-
-
-
-
-
-
100%
Total
%
45%
40%
14%
1%
100%
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
31 December 2022
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
268
PTSB Group Holdings plc Annual Report 2023
38. Financial risk management (continued)
Loan-to-value profile (continued)
Analysis by LTV of the Group’s residential mortgage lending which are classified as Stage 3:
The tables below illustrate that 83% of residential home loan mortgages (31 December 2022: 79%) and 60% of residential buy-to-let
mortgages (31 December 2022: 55%) that are classified as Stage 3 are in positive equity as at 31 December 2023.
31 December 2023
Home loans
Buy-to-let
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Stage 3
%
38%
24%
15%
6%
83%
3%
3%
2%
1%
2%
2%
1%
-
3%
17%
100%
€m
403
%
7%
11%
26%
16%
60%
13%
6%
8%
2%
2%
2%
2%
1%
4%
40%
100%
€m
267
31 December 2022
Home loans
Buy-to-let
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Stage 3
%
33%
22%
19%
5%
79%
3%
5%
4%
2%
1%
1%
1%
-
4%
21%
100%
€m
342
%
7%
8%
27%
13%
55%
12%
10%
9%
3%
3%
2%
1%
1%
4%
45%
100%
€m
270
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e
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a
r
t
S
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c
n
a
n
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e
v
o
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s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
l
a
r
e
n
e
G
Total
%
26%
19%
19%
10%
74%
7%
4%
4%
2%
2%
2%
1%
1%
3%
26%
100%
€m
670
Total
%
22%
16%
22%
8%
68%
7%
7%
6%
2%
2%
2%
1%
1%
4%
32%
100%
€m
612
PTSB Group Holdings plc Annual Report 2023
269
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
(v) Group portfolios: Collateral in possession
Collateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the
non-repayment of the loan facility. The following tables outline the main movements in this category during the year.
Stock of collateral in possession
Residential collateral in possession
Home loans
Buy-to-let
Total
31 December 2023
31 December 2022
Balance
outstanding at
transfer of
ownership
Number
Balance
outstanding at
transfer of
ownership
Number
€m
6
13
19
14
105
119
€m
7
27
34
10
52
62
Collateral in possession assets are sold as soon as practicable. These assets which total €11m as at 31 December 2023 (31 December 2022:
€18m) are included in assets held for sale (see note 18 for further details).
During the year the ownership of 4 properties was transferred to the Group.
The details of the transfers are provided in the table below:
Home loans
Buy-to-let
Total
31 December 2023
Collateral in possession
Home loans
Buy-to-let
Year ended 31 December 2023
Number
-
4
4
Balance
outstanding at
transfer of
ownership
Number of
disposals
Gross sales
proceeds
Costs to sell
Pre
provisioning
loss on sale*
€m
€m
€m
€m
4
57
61
1
16
17
2
10
12
1
-
1
-
6
6
*Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment
provisioning process.
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a
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a
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38. Financial risk management (continued)
31 December 2022
Collateral in possession
Home loans
Buy-to-let
Year ended 31 December 2022
Balance
outstanding at
transfer of
ownership
Number of
disposals
Gross sales
proceeds
Costs to sell
Pre
provisioning
loss on sale*
€m
€m
€m
€m
13
76
89
3
18
21
2
13
15
-
1
1
1
6
7
*Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment
provisioning process.
(vi) Additional disclosures on forborne loans
The Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties,
which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).
The tables below of analyse loans for which the Group has entered formal temporary and permanent forbearance arrangements with
customers for the years ended 31 December 2023 and 2022.
(a) Weighted Average LTV
LTV on total residential mortgages in forbearance
The tables below illustrate that 89% of residential home loan mortgages (31 December 2022: 85%) and 73% of residential buy-to-let
mortgages (31 December 2022: 69%) that are in forbearance are in positive equity as at 31 December 2023.
31 December 2023
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Weighted average LTV:
Stock of residential mortgages
Residential mortgages originated in the year
Stage 3 mortgages
Home loans
Buy-to-let
%
42%
29%
13%
5%
89%
2%
2%
1%
1%
1%
1%
1%
-
2%
11%
100%
61%
66%
71%
%
10%
13%
36%
14%
73%
10%
3%
3%
2%
2%
1%
1%
1%
4%
27%
100%
91%
-
99%
Total
%
37%
26%
17%
6%
86%
3%
2%
2%
2%
1%
1%
1%
-
2%
14%
100%
66%
66%
76%
PTSB Group Holdings plc Annual Report 2023
271
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
31 December 2022
Home loans
Buy-to-let
Less than 50%
50% to 70%
71% to 90%
91% to 100%
Subtotal
101% to 110%
111% to 120%
121% to 130%
131% to 140%
141% to 150%
151% to 160%
161% to 170%
171% to 180%
Greater than 180%
Subtotal
Total
Weighted average LTV:
Stock of residential mortgages
Residential mortgages originated in the year
Stage 3 mortgages
%
37%
27%
17%
4%
85%
3%
3%
3%
1%
1%
1%
1%
-
2%
15%
%
7%
11%
42%
9%
69%
11%
4%
4%
2%
2%
2%
1%
1%
4%
31%
Total
%
31%
24%
23%
5%
83%
4%
3%
3%
1%
1%
1%
1%
-
3%
17%
100%
100%
100%
66%
73%
75%
92%
-
97%
72%
73%
80%
(b) Forbearance arrangements - mortgages
The tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements
with customers as at 31 December 2023 and 31 December 2022.
(i) Residential home loan mortgages:
The incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:
31 December 2023
All loans
Stage 3
Number
Balances
Number
Balances
Interest only
Reduced payment (less than interest only)
Reduced payment (greater than interest only)
Payment moratorium
Arrears capitalisation
Term extension
Hybrid*
Split mortgages**
Total
€m
4
8
193
7
88
34
33
26
393
17
32
672
33
419
232
178
158
1,741
€m
3
6
105
4
49
19
24
26
236
19
47
1,362
48
821
481
238
158
3,174
* Hybrid is a combination of two or more forbearance arrangements.
** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.
272
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a
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a
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38. Financial risk management (continued)
31 December 2022
Interest only
Reduced payment (less than interest only)
Reduced payment (greater than interest only)
Payment moratorium
Arrears capitalisation
Term extension
Hybrid*
Split mortgages**
Total
All loans
Stage 3
Number
Balances
Number
Balances
21
34
1,369
32
433
428
277
153
2,747
€m
6
3
192
5
53
32
41
26
358
19
22
782
19
252
209
178
153
1,634
€m
3
2
120
3
31
17
26
26
228
* Hybrid is a combination of two or more forbearance arrangements.
** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.
The tables above reflect an increase of 427 cases in the year to 31 December 2023 for the Group in the number of residential home loan
mortgages in forbearance arrangements, an increase of €35m. The average balance of forborne loans is €0.124m at 31 December 2023 (31
December 2022: €0.130m).
(ii) Residential buy-to-let mortgages:
The incidence of the main type of forbearance arrangements for residential buy-to-let mortgages only is analysed below:
31 December 2023
All loans
Stage 3
Number
Balances
Number
Balances
Interest only
Reduced payment (less than interest only)
Reduced payment (greater than interest only)
Payment moratorium
Arrears capitalisation
Term extension
Hybrid*
Split mortgages**
Total
€m
6
2
25
1
6
4
28
7
79
14
2
61
1
10
12
46
22
168
€m
6
2
21
-
3
3
19
7
61
16
2
82
3
24
16
61
22
226
* Hybrid is a combination of two or more forbearance arrangements.
** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.
31 December 2022
All loans
Stage 3
Number
Balances
Number
Balances
Interest only
Reduced payment (less than interest only)
Reduced payment (greater than interest only)
Payment moratorium
Arrears capitalisation
Term extension
Hybrid*
Split mortgages**
Total
€m
8
-
29
-
8
6
41
7
99
17
-
76
-
10
12
51
22
188
19
-
99
1
18
27
70
22
256
* Hybrid is a combination of two or more forbearance arrangements.
** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.
PTSB Group Holdings plc Annual Report 2023
€m
7
-
24
-
4
3
23
7
68
273
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
The tables above reflect a decrease of 30 cases in the year to 31 December 2023 for the Group in the number of residential buy-to-let in
forbearance arrangements, a decrease of €20m in balances. The average balance of forborne loans is €0.35m at 31 December 2023 (31
December 2022: €0.39m).
(iii) Commercial mortgages
The incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:
Commercial mortgages
Interest only
Reduced payment (greater than interest only)
Payment moratorium
Arrears capitalisation
Term extension
Hybrid*
Split mortgages
Total
31 December 2023
31 December 2022
Number
Balances
Number
Balances
€m
€m
-
7
-
24
7
4
-
42
-
3
-
2
1
1
-
7
-
11
-
1
7
6
-
25
-
5
-
1
1
1
-
8
*Hybrid is a combination of two or more forbearance arrangements.
The table above reflects an increase of 17 cases in the year to 31 December 2023 for the Group in the number of commercial mortgages in
forbearance arrangements, a decrease of €1m in balances.
(c) Reconciliation of movement in forborne loans for all classes
The tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the
number and balances of forbearance treatments offered, expired and loans paid down during the year.
(i) Reconciliation of movement of total forborne loans
Residential mortgages
Home loans
cases
Home loans
balances
Buy -to-let
cases
Buy-to-let
balances
Commercial
cases
Commercial
balances Total cases
Total
balances
31 December 2023
€m
Opening balance 1 January 2023
2,747
358
256
New forbearance extended during the
year*
Deleveraged loans
Exited forbearance
- re-classified to Stage 3 non-forborne
- expired forbearance treatment
- expired loan paid down
Balance shift**
Closing balance of loans in
forbearance as at 31 December 2023
1,133
-
(24)
(450)
(232)
-
3,174
118
-
(3)
(52)
(18)
(10)
393
35
-
(4)
(30)
(31)
-
226
€m
99
7
-
(3)
(15)
(6)
(3)
79
* Balance movements are stated net of portfolio re-classification.
** Balance movements in respect of loans which are in forbearance at the start and end of the year.
€m
8
1
-
-
(1)
-
(1)
7
3,028
1,191
-
(29)
(482)
(266)
-
3,442
€m
465
126
-
(6)
(68)
(24)
(14)
479
25
23
-
(1)
(2)
(3)
-
42
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a
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a
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38. Financial risk management (continued)
Residential mortgages
Home loans
cases
Home loans
balances
Buy -to-let
cases
Buy-to-let
balances
Commercial
cases
Commercial
balances Total cases
Total
balances
31 December 2022
Opening balance 1 January 2022
3,524
New forbearance extended during the
year*
Deleveraged loans
Exited forbearance
- re-classified to Stage 3 non-forborne
- expired forbearance treatment
- expired loan paid down
Balance shift**
307
(3)
(18)
(816)
(247)
-
€m
467
39
(1)
(3)
(106)
(25)
(13)
Closing balance of loans in
forbearance as at 31 December 2022
2,747
358
€m
166
17
(51)
(4)
(13)
(12)
(4)
99
449
30
(138)
(7)
(34)
(44)
-
256
€m
37
-
-
-
(21)
(8)
-
8
€m
670
56
(52)
(7)
(140)
(45)
(17)
4,010
337
(141)
(25)
(854)
(299)
-
3,028
465
37
-
-
-
(4)
(8)
-
25
* Balance movements are stated net of portfolio re-classification.
** Balance movements in respect of loans which are in forbearance at the start and end of the year.
(ii) Reconciliation of movement in forborne loans Stage 3
Home loan
cases
Home loan
balances
Buy-to-let
cases
Buy-to-let
balances
Commercial
cases
Commercial
balances Total cases
Total
balances
31 December 2023
Opening balance 1 January 2023
1,634
New Stage 3 forborne extended during
the year*
Deleveraged loans
Exited forborne Stage 3, now
performing forborne
Exited forbearance
€m
228
69
-
188
30
-
€m
68
11
-
615
-
(352)
(43)
(21)
(11)
- exited forborne Stage 3, now Stage 3
non-forborne
- expired forbearance treatment
- expired loan paid down
Balance shift**
(12)
(13)
(131)
-
(1)
(3)
(12)
(2)
Closing balance loans in forbearance
as at 31 December 2023
1,741
236
-
(4)
(25)
-
168
-
(2)
(5)
-
61
* Balance movements are stated net of portfolio re-classification.
** Balance movements in respect of loans which are in forbearance at the start and end of the year.
19
12
-
-
(1)
(1)
(2)
-
27
€m
6
1,841
657
-
€m
302
80
-
(373)
(54)
(13)
(18)
(158)
-
(1)
(5)
(17)
(2)
6
1,936
303
-
-
-
-
-
-
-
PTSB Group Holdings plc Annual Report 2023
275
Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
Home loan
cases
Home loan
balances
Buy-to-let
cases
Buy-to-let
balances
Commercial
cases
Commercial
balances Total cases
Total
balances
31 December 2022
Opening balance 1 January 2022
New Stage 3 forborne extended during
the year*
Deleveraged loans
Exited forborne Stage 3, now
performing forborne
Exited forbearance
- exited forborne Stage 3, now Stage 3
non-forborne
- expired forbearance treatment
- expired loan paid down
Balance shift**
Closing balance of loans in
forbearance as at 31 December 2022
€m
289
43
(1)
2,010
354
(3)
(550)
(70)
(10)
(19)
(148)
-
1,634
(2)
(9)
(18)
(4)
228
267
29
(32)
(29)
(4)
(4)
(39)
-
188
€m
94
15
(10)
(11)
(4)
(3)
(11)
(2)
68
* Balance movements are stated net of portfolio re-classification.
** Balance movements in respect of loans which are in forbearance at the start and end of the year.
€m
33
-
-
2,309
383
(35)
€m
416
58
(11)
(1)
(583)
(82)
-
(17)
(8)
(1)
(14)
(24)
(195)
-
6
1,841
(6)
(29)
(37)
(7)
302
32
-
-
(4)
-
(1)
(8)
-
19
(vii) Funding profile
The below amounts for non-derivative financial liabilities is calculated using undiscounted cash flows which include an estimate of future
interest payments. Derivative liabilities include contractual undiscounted cash flows on a gross basis if the instrument is settled gross and on a
net basis if settled net.
The ALCo monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile.
Excluding equity, the Group’s funding profile as at the 31 December 2023 can be broken down into the below component parts:
Customer accounts
Long-term debt
Short-term debt
31
December
2023
31
December
2022
%
91
7
2
%
93
4
3
100
100
Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less
than 12 months from year-end.
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38. Financial risk management (continued)
In accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an
undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the
balances on the consolidated statement of financial position due to the inclusion of future interest payments.
31 December 2023
Liabilities
Deposits by banks
Customer accounts
Debt securities in issue
Derivative financial instruments
Subordinated liabilities
Other financial liabilities
Total liabilities
31 December 2022
Liabilities
Deposits by banks
Customer accounts
Debt securities in issue
Derivative financial instruments
Subordinated liabilities
Other financial liabilities
Total liabilities
Up to
1-3
3-6
6-12
1 month
months
months
months
€m
€m
€m
€m
1-2
years
€m
Over 2
years
€m
398
19,640
8
1
1
115
20,163
Up to
-
664
15
-
1
0
680
1-3
-
415
23
-
2
2
442
3-6
-
864
46
-
4
3
-
671
384
-
7
5
-
764
1,366
-
292
25
917
1,067
2,447
25,716
1 month
months
months
months
€m
€m
€m
€m
6-12
1-2
years
€m
Over 2
years
€m
614
19,906
2
10
1
145
-
689
4
169
1
-
-
261
6
1,343
2
2
-
385
11
-
4
3
-
157
371
-
7
6
20,678
863
1,614
403
541
-
342
308
-
300
27
977
Total
€m
398
23,018
1,842
1
307
150
Total
€m
614
21,740
702
1,522
315
183
25,076
The maturity analysis for credit commitments and guarantees are presented in Note 43.
When managing the Group’s liquidity and funding profile, for products where the contractual maturity date may be different from actual
behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.
PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
38. Financial risk management (continued)
The following table details the Group’s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has
been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and
the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not
fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting
year.
31 December 2023
Gross settled:
FX forwards
- inflow
- outflow
Balance at 31 December 2023
31 December 2022
Gross settled:
FX forwards
- inflow
- outflow
Business combination forwards
- inflow
- outflow
Balance at 31 December 2022
Up to
1-3
3-6
6-12
1 month
months
months
months
€m
€m
€m
€m
1-2
years
€m
Over 2
years
€m
58
(59)
(1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Up to
1-3
3-6
6-12
1 month
months
months
months
€m
€m
€m
€m
1-2
years
€m
Over 2
years
€m
Total
€m
58
(59)
(1)
Total
€m
82
(83)
-
(9)
(10)
-
-
-
-
-
-
(169)
(169)
(1,343)
(1,343)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82
(83)
-
(1,521)
(1,522)
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38. Financial risk management (continued)
(viii) Interest rate gap position
Gap analysis is a technique for measuring the Group’s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes
interest sensitive assets, liabilities, and derivative positions into “time bands” according to their maturity (if fixed rate), time remaining to their
next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December
2023 IRRBB profile also includes interest cash flows based on the next re-price date i.e. one month’s interest included for variable rate
products and lifetime interest for fixed rate products.
A summary of the Group’s interest rate gap position is as follows:
Interest rate re-pricing
31 December 2023
Assets
Liabilities
Derivatives
Interest rate re-pricing gap
Cumulative interest rate re-
pricing gap
31 December 2022
Assets
Liabilities
Derivatives
Interest rate re-pricing gap
Cumulative interest rate re-pricing
gap
Not more than 3
months
Over 3 months
but not more than
6 months
Over 6 months
but not more than
1 year
Over 1 year but
not more than 5
years
€m
9,806
(6,438)
(1,155)
2,213
€m
999
(1,152)
343
190
€m
2,224
(2,434)
-
(210)
€m
13,574
(13,420)
978
1,132
Over 5 years
€m
2,018
(4,570)
-
(2,552)
2,213
2,403
2,193
3,325
773
Not more than 3
months
Over 3 months
but not more than
6 months
Over 6 months
but not more than
1 year
Over 1 year but
not more than 5
years
Over 5 years
€m
9,884
(6,048)
81
3,917
€m
697
(996)
-
(299)
€m
€m
€m
1757
(2,425)
-
(668)
11516
(12,932)
-
(1,416)
2148
(2,836)
-
(688)
3,917
3,618
2,950
1,534
846
Total
€m
28,621
(28,014)
166
773
Total
€m
26002
(25,237)
81
846
Sensitivity analysis
The following table outlines the sensitivity of the Bank’s NII to a change in interest rates. The NII sensitivity is calculated on a constant balance
sheet basis in line with the EBA Guidelines on Interest Rate Risk in the Banking Book (EBA 2022/03).
31 December 2023
Upwards
Downwards
31 December 2022
Upwards
Downwards
100bps
m
32
(31)
100bps
m
58
(57)
200bps
m
65
(62)
200bps
m
116
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PTSB Group Holdings plc Annual Report 2023
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Notes to the Consolidated Financial Statements (continued)
39. Capital management
The core objective of the Group’s capital management policy is to ensure that the Group complies with its regulatory capital requirements and
maintains sufficient capital to cover its business risks and support its strategy. The Group has established an Internal Capital Adequacy
Assessment Process (ICAAP) to ensure that it is adequately capitalised against the inherent risks to which its business operations are exposed
and to maintain an appropriate level of capital to meet the minimum capital requirements. The Board has overall responsibility for the
completeness and implementation of the ICAAP. The ICAAP is subject to review and evaluation by the Regulator.
The management of capital within the Group is monitored on an ongoing basis by the Board and various Executive Committees in accordance
with Board approved policy.
The Group’s regulatory capital comprises of three tiers:
CET1 capital, consisting of ordinary share capital, share premium, retained earnings and other regulatory adjustments relating to items that
are included in equity but are treated differently for capital adequacy purposes;
Additional Tier 1 Capital, consisting of CET1 capital and qualifying convertible perpetual financial instruments with discretionary coupons;
and
Tier 2 Capital, consisting of Additional Tier 1 capital and qualifying subordinated liabilities, revaluation reserves and other regulatory capital
adjustments.
The Group’s 31 December 2023 regulatory Pillar 2 Requirement (P2R) has reduced by 0.20% to 3.25% (31 December 2022: 3.45%) following
the 2023 SREP Assessment.
The Group’s 31 December 2023 regulatory CET1 (transitional) capital requirement is 9.83% (31 December 2022: 8.94%). The CET1 ratio
requirement of 9.83% consists of Pillar 1 minimum requirement of 4.50% (31 December 2022: 4.50%), P2R of 1.83% (31 December 2022:
1.94%), Capital Conservation Buffer (CCB) of 2.50% (31 December 2022: 2.50%) and Countercyclical Buffer (CCyB) of 1.0% (31 December
2022: 0%).
The Group’s Total Capital requirement of 14.75% at 31 December 2023 (31 December 2022: 13.95%) consists of Pillar 1 minimum requirement
of 8% (31 December 2022: 8%), P2R of 3.25% (31 December 2022: 3.45%), CCB of 2.5% (31 December 2022: 2.50%) and CCyB of 1.0% (31
December 2022: 0%).
These requirements exclude Pillar 2 Guidance (P2G) which is not publicly disclosed.
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40. Current/non-current assets and liabilities
The following table provides an analysis of certain asset and liability line items as at 31 December 2023 and 31 December 2022. The analysis
includes amounts expected to be recovered or settled no more than 12 months after the statement of financial position date (current) and
more than 12 months after the statement of financial position date (non-current).
31 December 2023
31 December 2022
Note
Current Non-current
€m
€m
Total
€m
Current Non-current
€m
€m
Total
€m
Assets
Cash and balances at central banks
Items in the course of collection
Loans and advances to banks
Derivative financial instruments
Other Assets
Assets classified as held for sale
Debt securities
Equity Securities
Prepayments and contract assets
Loans and advance to customers
Liabilities
Deposits by banks including central banks
Customer accounts
Derivative financial instruments
Debt securities in issue
Other Liabilities
Accruals
Provisions
Subordinated liabilities
14
14
15
16
17
18
19
20
21
22
28
29
16
30
31
32
33
71
40
2,051
6
60
12
190
-
80
-
-
-
30
-
-
71
40
58
40
2,051
2,123
36
60
12
-
1
18
735
-
207
2,521
3,066
3,256
5
-
5
80
2,775
18,652
21,427
398
-
398
614
21,558
1,408
22,966
21,240
1
54
119
13
13
3
-
1,458
29
-
27
254
1
1,512
148
13
40
257
13
10
149
6
52
3
-
-
-
-
-
-
2,442
30
-
58
40
2,123
-
1
18
3,177
30
207
17,072
19,593
-
490
-
648
32
-
28
249
614
21,730
13
658
181
6
80
252
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Notes to the Consolidated Financial Statements (continued)
41. Transfer of financial assets
In the ordinary course of business, the Group enters into transactions that result in the transfer of financial assets of loans and advances to
customers and debt securities. In accordance with note 1.5 (vii), the transferred financial assets continue to be either recognised in their
entirety or to the extent of the Group’s continuing involvement, or are derecognised in their entirety.
The Group transfers financial assets primarily through the following transactions:
sale and repurchase of securities; and
securitisation activities in which loans and advances to customers are sold to Structured Entities (SEs) that in turn issue notes to investors
which are collateralised by purchased assets.
(a) Transferred financial assets that are not derecognised in their entirety
Sale and repurchase agreements
Sale and repurchase agreements are transactions in which the Group sells a security and simultaneously agrees to repurchase it (or an asset
that is substantially the same) at a fixed price on a future date. The Group continues to recognise the securities in their entirety in the
statement of financial position as loans and advances to customers (note 22) and debt securities (note 19) because it retains substantially all
the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and a financial liability is recognised for
the obligation to pay the repurchase price. As the Group sells the contractual rights to the cash flows of the securities it does not have the
ability to use or pledge as collateral the transferred assets during the term of the arrangement. The carrying value of repurchase agreements
at 31 December 2023 is €380m (31 December 2022: €611m).
Securitisations
The Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets.
For the purpose of disclosure in this note, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the
transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in
the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes.
Although the Group does not own more than half of the voting power of the Fastnet entities, it has the power to control the relevant activities
of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration
received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is
recognised. Therefore, the Group is exposed to substantially all the risks and rewards of ownership including credit and market risk of the
transferred assets.
When the Group transfers assets as part of the securitisation transactions it does not have the ability to use or pledge as collateral the
transferred assets during the term of the arrangement.
The table below sets out an overview of carrying amounts and fair values related to transferred financial assets that are not derecognised in
their entirety and associated liabilities.
Carrying amount of assets
Carrying amount of associated liabilities
Liabilities that have recourse only to the transferred financial assets
Fair value of assets
Fair value of associated liabilities
Net position
31 December 2023
31 December 2022
Sale and
repurchase
agreements
€m
530
382
529
382
147
Securitisations
€m
-
-
-
-
-
Sale and
repurchase
agreements
€m
678
612
654
612
42
Securitisations
€m
-
-
-
-
-
(b) Transferred financial assets that are derecognised in their entirety
The Group has not transferred any financial assets that were derecognised in their entirety where the Group has continuing involvement in a
transferred asset.
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42. Offsetting financial assets and financial liabilities
In accordance with IAS 32, Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on the
statement of financial position only if there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on
a net basis, or to realise the asset and settle the liability simultaneously. This is disclosed in the table below in the “Effect of offsetting on the
statement of financial position” section.
The gross amounts of derivative assets and liabilities and their net amounts disclosed in the below tables have been measured in the
statement of financial position at fair value.
The tables below also disclose (in the “Related amounts not offset in the statement of financial position” section) the impact of master netting
agreements and other similar agreements on all derivative financial instruments and similar financial instruments that are subject to master
netting agreements or similar agreements, but do not qualify for netting on the balance sheet. The similar financial agreements include
securitisations and sale and repurchase agreements. The similar agreements include global master repurchase agreements. It highlights the
amounts that could be potentially offset on the statement of financial position and those amounts covered by collateral placed with or by
counterparties to these trades.
The tables highlight the amounts that have been offset on the statement of financial position and those amounts covered by collateral placed
with or by counterparties to these trades. It does not highlight where right of offset is available in the event of a default, as allowed under ISDA
master agreements.
The tables below also provide analysis of derivative financial assets and liabilities subject to offsetting, enforceable master netting agreements
and similar agreements:
Assets
Derivative financial instruments
Total
Liabilities
Derivative financial instruments
Total
Effect of offsetting on the statement of financial
position
Related amounts not offset in the statement of
financial position
31-Dec-23
Gross financial
assets/
(liabilities)
recognised
€m
36
36
1
1
Gross financial
(liabilities)/
assets offset
€m
-
-
-
-
Net amounts
reported on the
statement of
financial position
Financial
instruments
Cash collateral
Net amount
€m
36
36
1
1
€m
€m
-
-
-
-
(16)
(16)
-
-
€m
20
20
1
1
31 December 2022
Effect of offsetting on the statement of financial
position
Related amounts not offset in the statement of
financial position
Gross financial
assets/
(liabilities)
recognised
Gross financial
(liabilities)/
assets offset
Net amounts
reported on the
statement of
financial position
Financial
instruments
Cash collateral
Net amount
€m
€m
€m
€m
€m
€m
Assets
Derivative financial instruments
Total
Liabilities
Derivative financial instruments
Total
-
-
1
1
-
-
-
-
-
-
1
1
-
-
-
-
-
-
-
-
-
-
1
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Notes to the Consolidated Financial Statements (continued)
43. Commitments and Contingencies
The table below gives the contractual amounts of irrevocable capital commitments. Even though these obligations are not recognised in
statement of financial position they do involve credit risk. The maximum exposure to credit loss under commitments is the contractual amount
of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The
transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.
Credit commitments
Guarantees and irrevocable letters of credit
Commitments to extend credit
- less than 1 year
- 1 year and over
Total commitments to extend credit
Total credit commitments
31 December
2023
31 December
2022
€m
2
1,333
45
1,378
1,380
€m
2
1,284
56
1,340
1,342
Other contingencies
The Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to
in note 32, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.
A number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving
deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26
September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were
put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank
understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank’s
perspective, have been dormant for some time will now be re-commenced.
As part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to
the purchaser under a number of identified scenarios. If the Bank is required to make any reimbursements under these identified scenarios,
the impact on the financial statements could be material. Based on the facts currently known, it is not practicable at this time to predict the
final outcome this could have, nor the timing and possible impact on the Bank.
Like other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in
relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances.
The Bank provides for these cases, where based on legal advice, the directors believe that it is more likely than not that an outflow of
resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank is involved in
appeals against two FSPO decisions in tracker mortgage related complaints to the High Court and, while the timing and outcome of these
appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in
these appeals processes, the impact on the financial statements could be material. Based on the facts currently known and the current stages
that the legal process is at, it is not practicable at this time to predict the final outcome of this litigation/FSPO complaints, nor the timing and
impact on the Bank. The Bank is aware that there are other legal proceedings on-going in which decisions of the FSPO, upholding customers’
claims to a tracker interest rate on their mortgage, are being challenged. While the facts of each case differ, the Bank is keeping other cases
under review to see whether any issues raised in these other proceedings could have implications for the Bank’s on-going appeals and its
position in respect of whether there could be a liability to customers who are in similar circumstances to the customers who are the subject of
the Bank’s appeals.
ECL held against commitments are reported under loans and advances to customers.
On 1 July 2022, The Group entered into a joint venture with First Home Scheme Ireland DAC, along with the State, AIB and Bank of Ireland. The
Group committed €54m in funding to the Joint venture. €15m was recognised in the Statement of Financial Position in respect of the scheme
as at 31 December 2023.
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44. Related parties
Related parties include individuals and entities that can exercise significant influence on operational and financial policies of the Group.
The Group has a related party relationship with its Directors, Senior Executives, the Group’s pension schemes, the Minister for Finance and
with the Irish Government and Irish Government related entities on the basis that the Irish Government is deemed to have control over the
Group.
(a) Directors’ and Secretary’s interest
The interests of the Directors and the Company Secretary, including interests of their close family members in the share capital of the
Company are as follows:
Number of beneficial ordinary shares held
Julie O’Neill (appointed to Board 17 January 2023
and appointed Chairperson 31 March 2023)
Robert Elliott (retired 31 March 2023)
Eamonn Crowley
Nicola O'Brien
Conor Ryan
Position
Chairperson
Chairperson
Chief Executive Officer
Chief Financial Officer
Company Secretary
31 December
2023
31 December
2022
Ordinary
shares
Ordinary
shares
10,000
16,500
50,000
-
10
-
16,500
50,000
-
10
Ken Slattery (retired 12 December 2023)
Non-Executive Director
10,000
10,000
Andrew Power (retired 19 May 2023)
Ronan O'Neill
Donal Courtney
Ruth Wandhofer
Marian Corcoran
Paul Doddrell
Celine Fitzgerald
Anne Bradley
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Catherine Moroney (Appointed 12 December 2023) Non-Executive Director
Rick Gildea (Appointed 12 December 2023)
Non-Executive Director
-
4
-
-
-
-
-
-
-
-
-
4
-
-
-
-
-
-
-
-
Conor Ryan, as trustee of the employee benefit trust set up under the terms of the long-term incentive plan, has non-beneficial interest in
4,580 shares held in the plan (31 December 2022: 4,580).
There were no transactions in the above Directors’ and Secretary’s interests between 31 December 2023 and 6 March 2024.
Details of the Directors’ remuneration is included in the Directors’ Remuneration Report on pages 169 to 174.
(b) Transactions with key management personnel
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group. Key management personnel include Non-Executive Directors, Executive Directors and members of the Executive Committee (ExCo).
The Executive Directors and members of the ExCo are listed below:
Members of the ExCo at 31 December 2023
Eamonn Crowley
Nicola O’Brien
Patrick Farrell
Tom Hayes
Ger Mitchell
Andrew Walsh
Peter Vance
Barry D’Arcy
Chief Executive
Chief Financial Officer
Retail Sales Director
Chief Technology Officer
CHRO and Corporate Development Director
Chief Legal Officer
Chief Operations Officer
Chief Risk Officer
PTSB Group Holdings plc Annual Report 2023
285
Notes to the Consolidated Financial Statements (continued)
44. Related parties (continued)
During the year ended 31 December 2023, the following key management personnel changes occurred;
Julie O'Neill was appointed as a member of the Board on 17 January 2023 and on the 31st March 2023 Ms O'Neill was appointed as Board
Chairperson following the retirement of Robert Elliott as Chairperson of the Board.
Catherine Moroney and Rick Gildea were appointed as members of the Board on 12 December 2023, following the retirement of Ken Slattery
and Andrew Power as members of the Board during 2023.
Barry D’Arcy was appointed Chief Risk Officer, following the retirement of David Curtis as Interim Chief Risk Officer.
David Curtis retired as member of the ExCo during 2023. Their details are included in the comparative figures for 2022.
Non-Executive Directors are compensated by way of fees. In certain circumstances, expenses incurred by Non-Executive Directors during the
normal course of business are paid by the Group and are included in taxable benefits. The compensation of Executive Directors and members
of the ExCo comprises salary and other benefits together with pension benefits. Previously they also participated in the Group’s profit sharing,
share option schemes and long-term incentive plans. No awards have been issued under these schemes and plans since 2008.
Number of key management personnel as at year end is as follows:
Non-Executive Directors
Executive Directors and Senior Management
(b) (i) Total compensation to Executive and Non-Executive Directors is as follows:
Fees
Taxable benefits
Salary and other benefits
Pension benefits
- defined contribution
Total
Total compensation to other key management personnel is as follows:
Taxable benefits
Salary and other benefits
Pension benefits
- defined contribution
Total
There were no connected persons to key management personnel employed by the group during 2023 or 2022.
31 December
2023
31 December
2022
10
8
18
10
8
18
Year ended
Year ended
31 December
2023
31 December
2022
€’000
1,063
4
920
158
2,145
€’000
1,044
2
742
106
1,894
Year ended
Year ended
31 December
2023
31 December
2022
€’000
€’000
9
2,852
365
3,226
5
2,395
332
2,732
286
PTSB Group Holdings plc Annual Report 2023
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44. Related parties (continued)
(b) (ii) Balances and transactions with key management personnel:
In the normal course of its business, the Group had loan balances and transactions with key management personnel and their connected
persons. The loans are granted on normal commercial terms and conditions with the exception of certain home loans where Executive
Directors and Senior Managers may avail of subsidised loans on the same terms as other eligible management of the Group. All of the loans in
the scope of the related party guidelines as outlined under the Companies Act 2014, the Central Bank Related Party lending code 2013 and
IAS 24 Related party disclosures are secured, and all interest and principal due at the statement of financial position date has been repaid on
schedule and therefore, no provision for loan impairment is required. Total outstanding balances of loans, credit cards, overdrafts and deposits
are as follows:
Balances
Loans
Unsecured credit card balances and overdrafts
Deposits
31 December
2023
31 December
€’000
€’000
1,147
8
4,139
1,059
1
3,354
Year ended
Year ended
31 December
2023
31 December
€’000
€’000
Transactions during the year
Loan advances
Loan repayments
Interest received on loans
Interest paid on deposits
Loans to Directors
31 December 2023
Ronan O’Neill*
31 December 2022
Ronan O’Neill*
Balance as at 1
Jan
Advances during
year
Principal repaid
€’000
€’000
€’000
640
640
-
-
11
11
Balance
as at
31 Dec
€’000
629
629
-
56
45
(2)
Interest
paid
€’000
20
20
Balance as at 1
Jan
Advances during
the year
during
year
Balance as at 31
Dec
as at
31 Dec
Interest paid
paid
Principal repaid
€’000
€’000
€’000
€’000
€’000
652
652
-
-
12
12
640
640
16
16
-
892
41
(1)
Maximum
balance
€’000
640
640
Maximum
balance
€’000
652
652
*Represents a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.
PTSB Group Holdings plc Annual Report 2023
287
Notes to the Consolidated Financial Statements (continued)
44. Related parties (continued)
(c) Irish Government and Irish Government related entities
The Minister for Finance continues to be the majority shareholder of the Group (and the ultimate controlling party per IAS 24). The Irish
Government is recognised as a related party as the Government is deemed to have control over the Group as defined by IAS 24. The Group
has applied the amended IAS 24 which exempts an entity from the related party disclosure requirements in respect of the Government and
Government related entities unless transactions are individually or collectively significant. In the normal course of business, the Group has
entered into transactions with the Government and Government related entities involving deposits and senior debt.
The following are transactions and balances between the Group and the Government and Government related entities that are collectively
significant:
• The Group holds securities issued by the Government of €1,559m (31 December 2022: €1,734m).
• The Group had an investment in associated undertakings of €16m for the year ended 31 December 2023 involving participants that are
deemed related parties due to the common ownership by the Government. The amount and nature is referenced in note 24.
• The Group entered into banking transactions in the normal course of business with local Government and Semi-State Institutions such as
local authorities and county councils. These transactions principally include the granting of loans, the acceptance of deposits and clearing
transactions.
• A bank levy imposed by the Government through the Finance Bill 2014 is payable in the second half of each calendar year. A bank levy
payable to government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the
levy. In 2023, the amount recognised in the income statement was €22m (31 December 2022: €22m). As announced by the Minister for
Finance on 10 October 2023, a revised bank levy was announced for 2024.
• During 2023, the Group also paid €28m DGS fees to the CBI (2022: €19m) as part of the Deposit Guarantee Scheme.
• During 2013, following the Transfer Order requested by the Central Bank and issued by the High Court dated 10 November 2013, the Group
acquired certain assets, liabilities, books and records of NCU and all its employees transferred to the Group. As part of this transaction,
along with the assets and liabilities of NCU, a cash financial incentive of €23m was paid from the Credit Institutions Resolution Fund, which
forms part of the Financial Incentives Agreement (FIA) signed between the Central Bank and the Group dated 10 November 2013. It was
also agreed in the FIA that the Central Bank will use the Credit Institution Resolution Fund to compensate the Group for 50% of any future
impairment losses incurred on NCU loans and advances to customers. Similarly, it was also agreed that if any provision write-backs or
future recoveries of previously written off NCU loans and advances to customers occurs, the Group will pay a cash amount equivalent to
50% of the provision write-back or the recoveries to the Credit Institutions Resolution Fund. As per the FIA, this arrangement will continue
for ten years from the transfer date. At 31 December 2023, the Group had recorded a payable of €2.4m due under the FIA (31 December
2022: €2.3m).
(d) Other related party transactions
• At 31 December 2023 the Company had an intercompany balance of €1,512m (31 December 2022: €658m) with its principal subsidiary
PTSB plc relating to the MREL issuance.
• In November 2020, PTSB Group made an investment of €123m in PTSB plc. This investment was through the issuance of AT1 securities by
the Company. In October 2022, PTSB Group made an additional investment of €245m in PTSB plc through the issuance of AT1 securities
by the Company.
• In May 2021, PTSB plc borrowed €250m from the Group at a fixed rate of 3% per annum plus a margin of 0.181% per annum which mature
on 19 August 2031. The loan is subordinated and ranks as Tier 2 capital notes with interest paid annually in arrears on 19 August.
45. Sale of loans and advances to customers
Project Glenbeigh IV
On 21 September 2022, the Group agreed the sale of a predominately performing buy-to-let loan portfolio (‘Glenbeigh IV’). The portfolio gross
balance on the Statement of Financial Position was €767m with a net book value of €703m.
In line with IFRS 9, the assets have been derecognised from the Statement of Financial Position.
As a result of the transaction, an impairment write-back on the sale of the portfolio of €8m was recorded through the impairment line of the
income statement. On 17 November 2022, the deal completed with the receipt of the sales proceeds.
288
PTSB Group Holdings plc Annual Report 2023
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46. Principal subsidiary undertakings and interest in subsidiaries and structured entities
Under IFRS 10 ‘Consolidated financial statements’, the Group has control over an entity when it has the power to direct relevant activities that
significantly affect the investee return, it is exposed or has rights to variable returns from its involvement in the investee and has the ability to
affect those returns through its powers over the entity.
A subsidiary is considered material if the value of the consolidated total assets at the end of the financial year of the subsidiary and the
entities it controls (if any) is more than 1% of the total assets of the Group.
The key subsidiary of the parent meeting the criteria outlined above is:
Name and registered office
Held directly by the company:
Permanent TSB plc
Nature of
Incorporated
% of ordinary
business
in
shares held
56-59 St. Stephen’s Green, Dublin 2
Retail banking
Ireland
100
In presenting details of the principal subsidiary undertakings, the exemption permitted by section 315 (a) (i) of the Companies Act 2014 in
relation to disclosing related undertaking net assets or profit or loss, has been availed of, and the Company will annex a full listing of Group
undertakings to its annual return to the Companies Registration Office.
The reporting date for each of the Group’s principal subsidiary entities is 31 December.
The principal country of operation of each company is the country in which it is incorporated.
The registered office of Permanent TSB Group Holdings plc is 56-59 St. Stephen’s Green, Dublin 2.
(a) Company’s interest in subsidiary undertakings
The Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB is
carried at the recoverable amount in the holding company’s statement of financial position.
At 31 December 2023 the investment amounted to €2,346m (31 December 2022: €2,346m). The Group carried out an impairment
assessment using a combination of internal group models and externally available data to inform their view of the recoverable amount of
investment. As the value in use was higher than the carrying value, in line with IAS 36, no impairment charge was taken (31 December 2022:
impairment write back €697m). See Company SOFP on page 292 for further details.
(b) Structured entities (SEs)
A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. SEs are generally created to
achieve a narrow and well defined objective with restrictions around their on-going activities. Depending on the Group’s power to direct the
relevant activities of the investee and its exposure or rights to variable returns from its involvement in the investee and the ability to use its
power over the investee to affect the amount of the investor’s return, it may consolidate the entity.
Control and voting rights
The Directors of the individual SEs are independent of the Group and neither the Group nor any of its subsidiaries have voting rights in the
share capital of these entities. The Group initiated the setup of these SEs and, as architect dictated the terms relating to the operation of
these SEs. The Group, as administrator, provides services to the individual SEs. The Group, as administrator, has power to:
• Exercise rights, powers and discretions of the Issuers in relation to the mortgage loans and their related security and to perform its duties in
relation to the mortgage loans and their related securities: and
• To do or cause to be done any and all other things which it reasonably considers necessary, convenient or incidental to the administrator of
the mortgage loans and their related security or the exercise of such rights, powers and discretions.
PTSB Group Holdings plc Annual Report 2023
289
Notes to the Consolidated Financial Statements (continued)
46. Principal subsidiary undertakings and interest in subsidiaries and structured entities (continued)
The key activities performed by the Group’s subsidiaries as administrator is:
To manage the credit risk associated with the mortgages contained in the individual SEs; and
To determine and set rates of interest applicable to loans on each rate setting date in accordance with the terms of the loans and negotiate
the cost of funds associated with these mortgages which may result in a variable return in the entity.
These two items highlight the power the Group has to direct the relevant activities of these entities that significantly affect the investee
returns and the ability to use its power to affect variable returns of investors.
The Group provides funding to each of these vehicles by way of a subordinated loan and has an entitlement to deferred consideration.
Through the subordinated loan and the deferred consideration the Group is exposed to the variable returns of the SEs.
The Group currently has five SEs in issue in the ROI the details of which are outlined below. During 2023, Fastnet Securities 11 DAC collapsed
and subsequently went into liquidation:
SEs setup with ROI Residential Mortgages
- Fastnet Securities 14 DAC
- Fastnet Securities 15 DAC
- Fastnet Securities 16 DAC
- Fastnet Securities 17 DAC
- Fastnet Securities 18 DAC
Sub loan
provided
√
√
√
√
√
Although the Group does not own more than half of the voting power, it has the power to control the relevant activities of the SE and the ability
to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the
investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.
At 31 December 2023, restricted cash of €217m (31 December 2022: €405m) relates to cash held by the Group’s securitisation.
47. Reporting currency and exchange rates
The consolidated financial statements are presented in millions of Euro.
The following table shows the closing and average rates used by the Group for the current year-end and prior year-end
€ / £ exchange rate
Closing
Average
€ / US$ exchange rate
Closing
Average
31 December
2023
31 December
2022
0.8691
0.8688
1.1050
1.0830
0.8869
0.8549
1.0666
1.0500
48. Events after the reporting period
No items, transactions or events that would materially impact the consolidated financial statements and require adjustment or disclosure to
these consolidated financial statements have occurred between the reporting date of 31 December 2023 and the date of the approval of
these financial statements by the Board of Directors of 6 March 2024.
Fastnet 14 Securities DAC and Fastnet 15 Securities DAC collapsed on 19th February 2024. The Fastnets redeemed all outstanding notes at
their aggregate principal amounts outstanding, together with any accrued but unpaid interest. PTSB repurchased the mortgage portfolio at
par.
290
PTSB Group Holdings plc Annual Report 2023
Company Financial Statements and Notes to the Company
Financial Statements
Index:
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash flows
A Accounting policies
B Loans and advances to banks
C Investment in subsidiary
D Debt securities in issue
E Subordinated liabilities
F Share capital and reserves
G Related parties
H Audit fees
Page
292
293
294
295
295
296
296
297
297
297
298
291
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Company Statement of Financial Position
As at 31 December 2023
Assets
Loans and advances to banks
Investment in subsidiary undertakings
Total assets
Liabilities
Debt securities in issue
Other liabilities
Subordinated liabilities
Total liabilities
Equity
Share capital
Share premium
Retained earnings
Shareholders’ equity
Other equity instruments
Total equity
Notes
31 December
2023
31 December
2022
€m
€m
B
C
D
E
F
F
F
F
1,753
2,346
4,099
1,497
2
252
1,751
273
804
903
1,980
368
2,348
911
2,346
3,257
658
1
252
911
273
804
901
1,978
368
2,346
Total liabilities and equity
4,099
3,257
The accompanying notes form an integral part of these financial statements.
The Company’s profit for the financial year determined in accordance with IFRS was €46m (2022: €707m profit).
On behalf of the Board:
Julie O’Neill
Chairperson
Eamonn Crowley
Chief Executive
Nicola O’Brien
Chief Financial Officer
Conor Ryan
Company Secretary
292
PTSB Group Holdings plc - Annual Report 2023 Company Statement of Changes in Equity
For the year ended 31 December 2023
Company
Balance as at 1 January 2022
Profit for the year ended 2022*
Other comprehensive income, net of tax
Total comprehensive income for the year
Transactions with equity holders of the Bank,
recorded directly in equity:
Issue of share capital
Issue of other equity instruments
Issuance cost of share capital and other equity
AT1 coupon paid
Total contributions by and distributions to
owners
Balance as at 31 December 2022
Balance as at 1 January 2023
Profit for the year ended 2023
Other comprehensive income, net of tax
Total comprehensive income for the year
Transactions with equity holders of the Bank,
recorded directly in equity:
Issue of share capital
Issue of other equity instruments
AT1 coupon paid
Total contributions by and distributions to
owners
Share capital
Share
premium
Retained
earnings
€m
€m
€m
Attributable
to equity
holders of the
parent
Other equity
instrument
227
333
-
-
-
46
-
-
-
46
273
273
-
-
-
-
-
-
-
-
-
-
472
-
(1)
-
471
804
804
-
-
-
-
-
-
-
204
697
-
697
-
-
-
-
-
901
901
2
-
2
-
-
-
-
764
697
-
697
518
-
(1)
-
507
1,978
1,978
2
-
2
-
-
-
-
Balance as at 31 December 2023
273
804
903
1,980
*2022 Profit for the year has been re-presented to reflect the allocation of profits to other equity holders
€m
123
10
-
10
-
250
(5)
(10)
245
368
368
43
-
43
-
-
Total
€m
887
707
-
707
518
250
(6)
(10)
752
2,346
2,346
45
-
45
-
-
(43)
(43)
(43)
368
(43)
2,348
293
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Company Statement of Cash Flows
For the year ended 31 December 2023
Cash flows from operating activities:
Operating profit/(loss) before taxation
Adjusted for non-cash items and other adjustments:
Increase in operating assets:
Loans and advances to banks
Increase/(decrease) in operating liabilities:
Debt securities in issue
Other liabilities
Net cash inflow/(outflow) from operating activities before tax
Tax paid
Net cash inflow/(outflow) from operating activities
Cash flow from investing activities
Investments in subsidiary undertakings
Net cash flow from investing activities
Cash Flow from Financing Activities
Issuance of AT1 securities (net of issuance costs)
Interest paid on Tier 2 capital notes
AT1 Coupon payment
Net cash flow from financing activities
Increase/(decrease) in cash and cash equivalents
Analysis of changes in cash and cash equivalents
Cash and cash equivalents as at 1 January
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents as at 31 December
31 December
31 December
2023
€m
2022
€m
46
707
(46)
-
(688)
19
(761)
(307)
770
(2)
7
-
7
44
44
-
(8)
(43)
(51)
-
-
-
-
306
-
18
-
18
(245)
(245)
245
(8)
(10)
(227)
-
-
-
Net cash flows from operating activities includes interest/dividends received of €57m (2022: €26m) and interest/dividends paid of
€74 m (2022: €25m).
Reconciliation of liabilities arising from financing activities
1 January
Financing cash flows:
Issuance of Tier 2 capital notes
Interest paid on Tier 2 capital notes
Interest accrued on Tier 2 capital notes
31 December
294
31 December
31 December
2023
€m
252
(8)
8
252
2022
€m
252
-
(8)
8
252
PTSB Group Holdings plc - Annual Report 2023 Notes to the Company Financial Statements
A. Accounting policies
The accounting policies adopted by Permanent TSB Group Holdings plc (‘Company’) are the same as those of the Group as set out
in note 1 to the consolidated financial statements where applicable. These financial statements reflect the financial position of the
Company only and do not consolidate the results of any subsidiaries.
The individual financial statements of the ultimate holding company, Permanent TSB Group Holdings plc have also been prepared
in accordance with IFRS as adopted by the EU and comply with those parts of the Companies Act 2014. In accordance with section
304 (2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement to the
Annual General Meeting and from filing it with the Registrar of Companies.
B. Loans and advances to banks
Held at amortised cost
Funds placed with subsidiary, Permanent TSB plc (‘PTSB’)
ECL allowance
Loans and advances to banks
31 December
2023
31 December
2022
€m
€m
1,754
(1)
1,753
912
(1)
911
Funds placed with the principal subsidiary, PTSB are stage 1 under IFRS 9. The ratings for PTSB are as follows:
• Standard & Poor’s (S&P): Long-Term Rating “BBB+” with Outlook “Stable”;
• Moody’s: Long-Term Rating “A2” with Outlook “Positive”;
• Fitch: Long-Term Rating “BBB-” with Outlook “Positive”; and
• DBRS: Long-Term Rating “BBBL” with Outlook “Positive”.
In June 2022, the Company subscribed to the €300m of Senior Unsecured Medium Term Note issued by PTSB to meet the
subsidiary’s internal MREL requirements, which represents down streaming of the proceeds raised by the Company via the external
Senior Unsecured issuance. The terms of the Non-Preferred Senior loan were a placement at a base rate of 5.25% plus a margin of
0.14% per annum maturing on 30 June 2025. The interest is received annually in arrears on 30 June.
During 2021, the Company subscribed to the €250m of subordinated loan issued by PTSB to meet the subsidiary’s internal MREL
requirements, which represents down streaming of the proceeds raised by the Company via the external subordinated Tier 2 capital
note issuance. The terms of the subordinated loan were a placement at a base rate of 3% plus a margin of 0.181% per annum maturing
on 19 August 2026. The interest is received annually in arrears on 19 August.
During 2020, the Company subscribed to the €51m Non-Preferred Senior loan issued by PTSB to meet the subsidiary’s internal MREL
requirements, which represents down streaming of the proceeds raised by the Company via the external Senior Unsecured issuance.
The terms of the Non-Preferred Senior loan were a placement at a base rate of 1.659% plus a margin of 0.211% per annum maturing
on 26 September 2024. The interest is received annually in arrears on 26 September.
During 2019, the Company subscribed to the €300m Non-Preferred Senior loan issued by PTSB to meet the subsidiary’s internal
MREL requirements, which represents down streaming of the proceeds raised by the Company via the external Senior Unsecured
issuance. The terms of the Non-Preferred Senior loan were a placement at a base rate of 2.149% plus a margin of 0.211% per annum
maturing on 26 September 2024. The interest is received annually in arrears on 26 September
The expected credit losses on these placements were €1m at 31 December 2023 (31 December 2022: €1m).
The maximum exposure to credit risk for financial assets carried at amortised costs at 31 December 2023 is €1,753m (31 December
2022: €911m).
295
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Notes to the Company Financial Statements (continued)
C. Investment in subsidiary
At 1 January
Additional Investment
Additional Tier 1 securities - net of the transaction costs
Write-back/(Impairment) of investment
At 31 December
31 December
2023
31 December
2022
€m
€m
2,346
-
-
-
888
516
245
697
2,346
2,346
The Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB
is carried at the recoverable amount in the holding company’s statement of financial position. At 31 December 2023 the investment
amounted to €2,346m (31 December 2022: €2,346m).
The Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment
at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The
recoverable amount is the higher of the investment’s fair value or its value-in-use (VIU).
An impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by
the estimated discounted future cash flows of the underlying business. The recoverable amount of the investment is the higher of its
fair value less costs to sell or it’s VIU. The recoverable amount based on the VIU was €2,838m, resulting in no impairment write back
or charge for the year (31 December 2022: impairment write back €697m). The VIU calculation considers the future free cash flows
following the repayment of any amounts due on the Loans and advances to banks.
While the recoverable amount based on the VIU exceeds market capitalisation at the 31 December 2023, the depressed share price is
the result of the overall subdued banking environment currently in which the entity operates along with various entity specific factors
that affect the liquidity of the shares.
The VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation
that discounts expected pre-tax free cash flows at a discount rate appropriate to the investment. The discount rate used for the 2023
VIU calculation was 11.5% (2022: 10%)
On 19 October 2022, PTSBGH plc (‘Company’) issued additional €245m AT1 Fixed Rate Reset Perpetual Contingent Temporary Write
Down Securities. The first reset date for the fixed rate is 26 April 2028.
See note 2 to the consolidated financial statements for a sensitivity analysis on the key assumptions used in the calculation.
D. Debt securities in issue
At amortised cost
Bonds and medium-term notes
Maturity analysis
Repayable in less than 1 year
Repayable in greater than 1 year but less than 5 years
Repayable in greater than 5 years
296
31 December
2023
31 December
2022
€m
1,497
1,497
54
945
498
1,497
€m
658
658
10
648
-
658
PTSB Group Holdings plc - Annual Report 2023 E. Subordinated liabilities
At amortised cost
€250m Tier 2 capital notes due August 2031, Callable 2026
Maturity analysis
Repayable in less than 1 year
Repayable in greater than 5 years
31 December
2023
31 December
2022
€m
€m
252
252
3
249
252
252
252
3
249
252
Tier 2 capital notes – PTSBGH
In May 2021, PTSBGH issued €250m of Tier 2 capital notes at a fixed rate of 3% per annum. The notes mature on 19 August 2031
with a call date of any date from and including 19 May 2026 to and including 19 August 2026 with the call subject to approval of the
regulatory authorities, with approval conditional on meeting the requirements of the EU CRR.
The interest rate will be reset, in the event that the securities are not called, on 19 August 2026 to Euro 5 year Mid Swap rate plus
a margin of 3.221% per annum. The loan is subordinated and ranks as Tier 2 capital with interest paid annually in arrears on 19
August (short first coupon period). The loan may be subject to the exercise of Irish Statutory loss absorption powers by the relevant
resolution authority.
In the event of winding up of PTSBGH, the Tier 2 capital notes will be:
• junior in right of payment to all Senior Claims;
• pari passu with all other subordinated claims against PTSBGH which constitute, or would but for any applicable limitation on the
amount of such capital constitute, Tier 2 capital notes or that rank or are expressed to rank pari passu with the obligations of
PTSBGH under Tier 2 capital notes; and
• in priority to PTSBGH ordinary shares, preference shares and junior subordinated obligations or other securities of PTSBGH which
by law rank, or by their terms are expressed to rank, junior to the Tier 2 capital notes.
F. Share capital and reserves
The share capital of Permanent TSB Group Holdings plc is detailed in note 35 to the consolidated financial statements, all of which
relates to Permanent TSB Group Holdings plc.
G. Related parties
Related parties include individuals and entities that can exercise significant influence on operational and financial policies of the
Group.
The Group has a related party relationship with its Directors, Senior Executives, the Group’s pension schemes, the Minister for Finance
and with the Irish Government and Irish Government related entities on the basis that the Irish Government is deemed to have control
over the Group.
Related parties of Permanent TSB plc include subsidiary undertakings, associated undertakings, joint undertakings, post-employment
benefit schemes, Key Management Personnel and connected parties. The Irish Government is also considered a related party by
virtue of its effective control of Permanent TSB. See note 44 of the consolidated financial statements for further details.
At 31 December 2023, the Company had an intercompany balance of €1,497m (31 December 2022: €658m) with its principal
subsidiary PTSB relating to the MREL issuance and €252m (31 December 2022: €252m) relating to Tier 2 capital issuances.
297
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Notes to the Company Financial Statements (continued)
H. Audit Fees
€0.05m audit fees were paid to the auditors, KPMG, for services relates to the audit of the separate financial statements of PTSBGH
during the year to 31 December 2023 (31 December 2022: €0.04m).
This document contains certain forward-looking statements with respect to Permanent TSB Group Holdings plc’s (the ‘Group’)
intentions, beliefs, current goals and expectations concerning, among other things, the Group’s results of operations, financial
condition, performance, liquidity, prospects, growth, strategies, the banking industry and future capital requirements. These forward
looking statement often can be identified by the fact that they do not relate only to historical or current facts.
Generally but not always words such as “expect”, “anticipate”, “intend”, “plan”, “estimate”, “aim”, “forecast”, “project”, “target”, “goal”,
“believe”, “may”, “could”, “will”, “seek”, “would”, “should”, “continue”, “assume” and similar expressions (or their negative) identify
certain forward-looking statements but their absence does not mean that a statement is not forward looking. The forward-looking
statements in this document are based on numerous assumptions regarding the Group’s present and future business strategies and
the environment in which the Group will operate in the future. Forward-looking statements involve inherent known and unknown
risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur
in the future and may cause the actual results, performance or achievements of the Group to be materially different from those
expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond
the Group’s ability to control or estimate precisely, such as future global, national and regional economic conditions, levels of market
interest rates, credit or other risks of lending and investment activities, competition and the behaviour of other market participants,
the actions of regulators and other factors such as changes in the political, social and regulatory framework in which the Group
operates or in economic or technological trends or conditions. Material economic assumptions underlying the forward looking
statements are discussed further in Market and Regulatory context.
Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express
or implied, is made regarding future performance. Nothing in this document should be considered to be a forecast of future
profitability or financial position and none of the information in this document is intended to be a profit forecast or profit estimate.
The Group expressly disclaims any obligation or undertaking to release any updates or revisions to these forward-looking
statements to reflect any change in the Group’s expectations with regard thereto or any change in events, assumptions, conditions
or circumstances on which any statement is based after the date of this document or to update or to keep current any other
information contained in this document. Accordingly, undue reliance should not be placed on the forward looking statements, which
speak only as of the date of this document.
Investor and shareholder information and services including these Annual Reports, are available on-line at
www.permanenttsbgroup.ie.
298
PTSB Group Holdings plc - Annual Report 2023 Appendix
299
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Alternative Performance Measures
The financial performance of the Group is assessed by Management using various financial measures, some of which are not
defined by IFRS and do not have a standard guidance for calculation. Therefore, these measures may not be directly comparable to
other peers. Management believes that these measures provide useful information in assessing the Group’s financial performance.
Preference should be given to IFRS measures over non-IFRS measures when assessing financial performance of the Group.
The definitions and calculation methodology for the Alternative Performance Measures noted below are consistent with the prior year.
1. Underlying profit
The underlying profit is the measure of adjusted profits realised by the Group. This measure is used by the Group for its strategic
planning process and reflects the true economic substance of the Group’s financial performance. The table below details the
calculation of underlying profit. Exceptional items and non-recurring items are excluded from the operating expenses as Management
considers these items as non-reflective of core operating costs.
Operating profit per IFRS income statement
Other exceptional items in IFRS total operating expenses
Non-IFRS adjustments
Other non-recurring items*
Underlying profit per management income statement
Year ended
Year ended
31 December
2023
31 December
2022
€m
79
28
59
166
€m
267
(265)
43
45
Management’s definition of underlying profit excludes exceptional items and other items that Management view as non-recurring.
In the current year, Non-recurring items include the Day 1 ECL booked as part of the purchase of the Ulster Bank transaction and
additional impairment charges that are as a result of deleveraging.
*Full breakdown of Other non-recurring items in Financial Review Table 7
2. Exceptional and Other Non-Recurring Items
A reconciliation of exceptional costs as set out in the financial statements and exceptional and other non-recurring costs as set out in
the Financial Review is detailed below.
Gain on bargain purchase
Restructuring and other costs
Costs incurred in relation to Ulster Bank business combination
Exceptional impairment write-back arising from deleveraging of loans
Exceptional items
Other non-recurring items
Exceptional and other non-recurring items
31 December
2023
31 December
2022
Source/Cross
Reference
€m
€m
Income Statement
Income Statement
Income Statement
Income Statement
Financial Review
Financial Review
-
2
31
(5)
28
59
87
(362)
13
92
(8)
(265)
43
(222)
300
PTSB Group Holdings plc - Annual Report 2023
3. Adjusted cost income ratio
Operating expenses (excluding exceptional, other non-recurring items and regulatory charges) divided by total operating income.
Management considers adjusted cost income ratio to be an important metric to assess the profitability of the Group after adjusting for
non-controllable costs.
31 December
2023
31 December
2022
Source/Cross
Reference
€m
€m
Total operating expenses (after exceptional, other non-recurring items and regulatory
charges)
Income statement
Exceptional and other non-recurring items (excluding gain on bargain purchase)
Financial Review
Non-recurring items (included within total operating expenses)
Bank levy
Regulatory charges
Total operating expenses (excluding exceptional, other non-recurring items and
regulatory charges)
Total operating income (excluding gain on bargain purchase)
Adjusted cost income ratio
Note 9
Note 10
Note 10
Financial Review
Income statement
538
(33)
(1)
(22)
(38)
444
668
66%
509
(105)
(9)
(22)
(29)
344
409
84%
4. Headline cost income ratio
Total operating expenses (excluding exceptional items) divided by total operating income. The difference between adjusted cost to
income ratio and headline cost income ratio is due to regulatory charges and bank levy.
Total operating expenses
Exceptional and other non-recurring items
Non-recurring items (included in total operating expenses)
Total operating expenses (excluding exceptional and other non-recurring items)
Total operating income
Headline cost income ratio
31 December
2023
31 December
2022
Source/Cross
Reference
€m
€m
Income statement
Financial review
Note 9
Income statement
Financial review
538
(33)
(1)
504
668
75%
509
(105)
(9)
395
409
97%
5. CET 1 fully loaded basis*
Total common equity tier 1 capital on a fully loaded basis divided by total risk weighted assets on a fully loaded basis. CET1 ratio
provides an insight into how well the Bank can withstand financial stress and remain solvent.
Common equity tier 1
Risk weighted assets
CET 1 fully loaded
* The full year profits recognised in the year end capital ratios remain subject to approval by the Regulator.
31 December
2023
31 December
2022
Fully Loaded
Fully Loaded
Source/Cross
Reference
€m
€m
Capital
Management
Capital
Management
Capital
Management
1,616
1,616
11,546
10,627
14.0%
15.2%
301
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Alternative Performance Measures (continued)
6. CET 1 transitional basis*
Total CET 1 capital on a transitional basis divided by total RWAs on a transitional basis. CET1 ratio provides an insight into how well the
Bank can withstand financial stress and remain solvent.
Common equity tier 1
Risk weighted assets
CET 1 transitional basis
31 December
2023
31 December
2022
Transitional
Transitional
Source/Cross
Reference
€m
€m
Capital
Management
Capital
Management
Capital
Management
1,647
1,718
11,546
10,627
14.3%
16.2%
* The full year profits recognised in the year end capital ratios remain subject to approval by the Regulator.
7. Leverage ratio*
The leverage ratio is calculated by dividing Tier 1 capital by gross balance sheet exposures (total assets and off balance sheet
exposures). Leverage ratios give an insight to the Group’s financial health and its capability to meet its financial liabilities and
obligations.
Tier 1 Capital
Gross balance sheet exposures
Leverage ratio exposure measure
Leverage ratio
31 December 2023
31 December 2022
Transitional
Fully Loaded
Transitional
Fully Loaded
€m
€m
€m
€m
2,015
1,984
2,087
1,985
27,699
27,669
25,979
25,876
7.3%
7.2%
8.0%
7.7%
Source/Cross
Reference
Capital
Management
Capital
Management
* The full year profits recognised in the year end capital ratios remain subject to approval by the Regulator.
8. Liquidity coverage ratio (LCR)
Calculated based on the Commission Delegated Regulation (EU) 2015/61. The Group uses this measure to assess the resistance of
the liquidity profile of the Group over a 30 day stressed horizon.
31 December
2023
31 December
2022
Source / Cross
Reference
€m
€m
Liquidity coverage ratio
Financial Review
220%
178%
9. Net stable funding ratio (NSFR)
Defined as the ratio of available stable funding to required stable funding. The NSFR is a liquidity standard requiring banks to hold
sufficient stable funding over a 1 year time horizon. A minimum 100% requirement becomes binding in June 2022.
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Net stable funding ratio (minimum 100%)
Financial Review
155%
154%
302
PTSB Group Holdings plc - Annual Report 2023
10. Loan to deposit ratio (LDR)
Ratio of loans and advances to customers compared to customer accounts as presented in the statement of financial position. LDR
reflects the Group’s ability to cover loan losses and withdrawals by its customers. Management considers LDR to be an important
metric for assessing liquidity.
Loans and advances to customers
Customer accounts
Loan to deposit ratio
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Note 22
Note 29
21,427
22,966
93%
19,593
21,730
90%
11. Net interest margin (NIM)
NIM is derived by dividing the net interest income by the average interest earning assets. Management considers NIM to be an
important operating metric and reflects the differential yield over the average interest earning assets and cost of funding those
assets.
Net interest income
Total average interest earning assets
Net interest margin (NIM)
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Income Statement
Financial Review
(Table 2)
620
362
26,584
2.32%
23,469
1.54%
12. Non-performing loans (NPLs)
NPLs are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group’s definition of
default. Management considers NPLs to be an important metric as it reflects the risk profile of the Group.
Residential:
-Home loans
-Buy to let
Commercial
Consumer finance
Finance leases and hire purchase receivables
Non-performing loans
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Note 23
Note 23
Note 23
Note 23
Note 23
403
267
20
16
12
718
342
270
23
15
-
650
13. Foreclosed Assets
Foreclosed assets are defined as assets held on the balance sheet, which are obtained by taking possession of collateral or by calling
on similar credit enhancements.
Source / Cross
Reference
31 December
2023
31 December
2022
Foreclosed assets
Note 38
€m
11
€m
18
303
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Alternative Performance Measures (continued)
14. Non-performing assets (NPAs)
NPAs are NPLs plus foreclosed assets.
Foreclosed assets are defined as assets held on the balance sheet, which are obtained by taking possession of collateral or by calling
on similar credit enhancements.
Non-performing loans
Foreclosed assets
Non-performing assets
Source / Cross
Reference
31 December
2023
31 December
2022
Note 23
Note 38
€m
€m
718
11
729
650
18
668
15. Return on equity
Profit for the year after tax (before exceptional items) expressed as a percentage of total average equity. Management considers
return on equity to be an important metric for assessing profitability.
Profit for the year after tax
Exceptional items and other non-recurring items
Profit for the period after tax (before exceptional items)
Total average equity
Return on equity
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Income Statement
Table 7 - Financial
Review
Table 2 -Financial
Review
68
87
155
2,424
6.36%
223
(222)
1
1,885
0.05%
16. Risk weighted assets (RWAs)
RWAs are the Group’s assets or off balance sheet exposures, weighted according to risk.
Risk weighted assets
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Capital
Management
11,546
10,627
17. Total capital ratio (fully loaded basis)*
The total capital ratio is the ratio of a bank’s total capital (Tier 1 and Tier 2 capital) to its RWAs.
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Capital
Management
Capital
Management
Capital
Management
Capital
Management
Capital
Management
1,984
1,985
290
282
2,274
2,267
11,546
10,627
19.7%
21.3%
Tier 1 Capital
Tier 2 Capital
Total Capital
Risk weighted assets
Total capital ratio (fully loaded basis)
*The full year profits recognised in the year end capital ratios remain subject to approval by the Regulator.
304
PTSB Group Holdings plc - Annual Report 2023
18. Total capital ratio (transitional basis)*
The total capital ratio is the ratio of a bank’s total capital (Tier 1 and Tier 2 capital) to its RWAs.
Tier 1 Capital
Tier 2 Capital
Total Capital
Risk weighted assets
Total capital ratio (transitional basis)
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Capital
Management
Capital
Management
Capital
Management
Capital
Management
Capital
Management
2,015
2,087
290
282
2,305
2,369
11,546
10,627
20.0%
22.3%
*The full year loss recognised in the year end capital ratios remain subject to approval by the Regulator.
19. Average interest earning assets
Interest earning assets include loans and advances to banks, loans and advances to customers, debt securities and derivative assets.
Average balances on interest earning assets are calculated as the average of the monthly interest earning asset balances from
December 2022 to December 2023, thirteen months in total.
Average interest earning assets
Loans and advances to banks
Loans and advances to customers
Debt securities and derivative assets
Total average interest earning assets
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Financial Review
Financial Review
Financial Review
2,795
20,547
3,242
26,584
5,521
15,099
2,849
23,469
20. Average interest bearing liabilities
Interest bearing liabilities include customer accounts, deposits by banks, debt securities in issue, and lease liabilities.
Average balances on interest bearing liabilities are calculated as the average of the monthly interest bearing liabilities balances from
December 2022 to December 2023, thirteen months in total.
Average interest bearing liabilities
Customer accounts
Debt securities in issue and derivative liabilities
Lease liabilities
Subordinated liabilities
Deposits by banks
Total average interest bearing liabilities
Source / Cross
Reference
31 December
2023
31 December
2022
€m
€m
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
22,340
20,171
1,222
29
254
628
29
252
1,051
24,896
1,377
22,457
305
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
Alternative Performance Measures (continued)
21. Average yield on average interest earning assets
Average yield on average interest earnings assets is defined as the average interest income on interest earning assets, divided by the
total average interest earning assets balances.
Average interest income on interest earning assets is calculated as the average of the interest income arising on each of the interest
earning assets from December 2022 to December 2023, thirteen months in total.
Average interest income on interest earning assets
Loans and advances to customers
Debt securities and derivative assets
Loans and advances to banks
Total average interest income from interest-earning assets
Negative interest earning assets – loans and advances to banks
Total average interest from assets
Total average earning assets
Average yield on average interest earning assets
31 December
2023
31 December
2022
Source / Cross
Reference
€m
€m
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
661
36
81
778
778
26,584
2.94%
387
15
15
417
-
417
23,469
1.78%
22. Average rate on average interest bearing liabilities
Average rate on average interest bearing liabilities is defined as average interest expense on interest bearing liabilities divided by the
total average interest bearing liabilities balances.
Average interest expense on interest bearing liabilities is calculated as the average of the interest expense arising on each of the
interest bearing liabilities from December 2022 to December 2023, thirteen months in total.
31 December
2023
31 December
2022
Source / Cross
Reference
€m
€m
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
Table 2 - Financial
Review
43
71
1
8
35
158
158
11
16
-
8
20
55
-
55
24,896
0.64%
22,457
0.24%
Average interest expense on interest bearing liabilities
Customer accounts
Debt securities in issue
Lease liabilities
Subordinated liabilities
Deposits by banks
Total average interest income on interest bearing liabilities
Negative interest earning liabilities – deposits by banks
Total average interest from liabilities
Total average bearing liabilities
Average rate on average interest bearing liabilities
306
PTSB Group Holdings plc - Annual Report 2023
23. NPLs as % of gross loans
NPLs as % of gross loans are defined as NPLs divided by gross loans and advances to customers. Management considers NPLs as %
of gross loans to be an important metric as it reflects the risk profile of the Group.
Non-performing loans
Gross loans and advances to customers
NPLs as % of gross loans
31 December
2023
31 December
2022
Source / Cross
Reference
€m
€m
Note 23
Note 23
718
650
21,688
19,804
3.3%
3.3%
24. Average equity attributable to owners
This is an average of the equity position of each individual month from December 2022 to December 2023, thirteen months in total.
Management considers average equity attributable to owners to be an important metric for assessing profitability and generation of
returns from its investments.
Average equity attributable to owners
31 December
2023
31 December
2022
Source / Cross
Reference
€m
€m
Table 2 - Financial
Review
2,424
1,885
307
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
RAS Risk Appetite Statement
RCA Root Cause Analysis
RCSA Risk and Control Self Assessment
RMBS Residential Mortgage Backed
Securities
RNPS Relationship Net Promoter Score
ROI Republic of Ireland
RP Restructuring Plan
RPA Robotic Process Automation
RPPI Residential Property Price Index
RWA Risk Weighted Assets
SBCI Strategic Banking Corporation of
Ireland
SE Structured Entities
SEAI Sustainable Energy Authority of
Ireland
SEI Social Entrepreneurs Ireland
SFS Standard Financial Statement
SFT Securities Financing Transaction
SICR Significant increase in Credit Risk
SID Senior Independent Director
SME Small and medium sized enterprises
SOFP Statement of Financial Position
SPP Strategic Performance Priorities
SPPI Solely Payments of Principle and
Interest
SPV Special Purpose Vehicle
SREP Supervisory Review & Evaluation
Process
SSM Single Supervisory Mechanism
TCPID Trinity Centre for People with
Intellectual Disabilities
TLTRO Targeted Long-Term Refinancing
Operations
TME Tracker Mortgage Examination
TRIM Targeted Review of Internal Models
UK United Kingdom
VIP Values in Practice
VIU Value in Use
WTO World Trade Organisation
Abbreviations
The following information has not
been subject to audit by the Group’s
Independent Auditor.
BRCC Board Risk and Compliance
Committee
CDF Career Development Framework
CEO Chief Executive
CFO Chief Financial Officer
CET 1 Common Equity Tier 1
CFP Contingency Funding Plan
CODM Chief Operating Decision Maker
CPI Consumer Price Index
CRD IV Capital Requirements Directive IV
CRE Commercial Real Estate
CRO Chief Risk Officer
CRR Capital Requirements Regulation
CSAs Credit Support Annex
CSO Central Statistics Office
CSR Corporate Social Responsibility
CVA Credit Valuation Adjustment
DDI Debt to Disposable Income
DGS Deposit Guarantee Scheme
DIRT Deposit Interest Retention Tax
DoF Department of Finance
DTA Deferred Tax Asset
DVA Debit Valuation Adjustment
EAR Earnings at Risk
EBA European Banking Authority
EC European Commission
ECAI External Credit Assessment
Institution
ECB European Central Bank
ECL Expected Credit Loss
EIR Effective Interest Rate
ELG Eligible Liabilities Guarantee
ESG Environmental Social Governance
ESMA European Securities and Markets
Authority
ESRI Economic & Social Research Institute
EU European Union
EV Economic Valuation
EWI Early Warning Indicator
ExCo Executive Committee
FIA Financial Incentives Agreement
FLI Forward looking information
FSPO Financial Services and Pensions
Ombudsman Bureau of Ireland
FTE Full Time Equivalent
FVOCI Fair value through other
comprehensive income
FVTPL Fair value through profit or loss
FX Foreign Exchange
GCC Group Credit Committee
GDP Gross Domestic Product
GIA Group Internal Audit
GPPC Global Public Policy Committee
GRC Group Risk Committee
GRMA Group Risk Management
Architecture
GRMF Group Risk Management
Framework
HFT Held for Trading
HICP Harmonised Index of Consumer
Prices
308
HPI House Price Index
HTC Hold to Collect
HTC&S Hold to Collect and Sell
HTM Held to Maturity
HQLA High Quality Liquid Assets
IAS International Accounting Standards
IASB International Accounting Standards
Board
IBCB Irish Banking Culture Board
IBNR Incurred But Not Reported
ICAAP Internal Capital Adequacy
Assessment Process
IFRIC International Financial Reporting
Standards Interpretations Committee
IFRS International Financial Reporting
Standards
IIA Institute of Internal Auditors
ILAAP Internal Liquidity Adequacy
Assessment Process
IMF International Monetary Fund
IOB Institute of Banking
IOM Isle of Man
IPP Integrated Planning Process
IRB Internal rating based approach
IRRBB Interest Rate Risk in the Banking
Book
ISA International Standards on Auditing
ISDA International Swaps and Derivatives
Association
LCR Liquidity Coverage Ratio
LDR Loan to Deposit Ratio
LGD Loss Given Default
L&R Loans and Receivables
LSI Less Significant Institution
LTIP Long Term Incentive Plan
LTV Loan to value
MCO Maximum Cumulative Outflow
MGC Model Governance Committee
MREL Minimum Requirement for own
funds and Eligible Liabilities
MRP Mortgage Redress Programme
MTN Medium Term Note
MTP Medium Term Plan
NCU Newbridge Credit Union
NII Net Interest Income
NIM Net Interest Margin
NPL Non Performing Loan
NPS Net Promoter Score
NSFR Net Stable Funding Ratio
OCI Other Comprehensive Income
OTC Over the counter
P2G Pillar 2 Guidance
P2R Pillar 2 Requirement
PBI PBI Limited (formerly Permanent Bank
International Limited)
PD Probability of Default
PDH Principal Dwelling House
POCI Purchased or Originated Credit
Impaired
PSD2 Payment Services Directive 2
PTSB Permanent TSB plc.
PTSBGH Permanent TSB Group Holding
plc.
PwC PricewaterhouseCoopers
RAF Risk Appetite Framework
PTSB Group Holdings plc - Annual Report 2023 Definitions
The following information has not
been subject to audit by the Group’s
Independent Auditor.
ALCo Asset and Liability Committee
AFS Available for sale (AFS) are non
derivative financial investments that are
designated as available for sale and are
not classified as a (i) loan receivable
(ii) held to maturity investments or (iii)
financial assets at fair value through profit
or loss.
Arrears Arrears relates to any interest
or principal payment on a loan which
has not been received on its due date.
When customers are behind in fulfilling
their obligations with the result that an
outstanding loan is unpaid or overdue,
they are said to be in arrears.
Basel III Basel III is a global, voluntary
regulatory framework on bank capital
adequacy, stress testing and market
liquidity risk.
Basis point One hundredth of a per cent
(0.01%), so 100 basis points is 1%. It is the
common unit of measure for interest rates
and bond yields.
Brexit is an abbreviation of the term
“British Exit”. It refers to the United
Kingdom’s withdrawal from the European
Union.
Buy-to-let Residential mortgage
loan provided to purchase residential
investment property to rent it out.
CET 1 ratio Ratio of a bank’s core equity
capital compared to its total risk-weighted
assets.
Company Permanent TSB Group Holdings
plc or PTSBGH
Commercial property Commercial
property lending focuses primarily on the
following property segments:
a) Apartment complexes;
b) Develop to sell;
c) Office projects;
d) Retail projects;
e) Hotels; and
f) Selective mixed-use projects and
special purpose properties.
Common Equity Tier 1 Common Equity
Tier 1 (CET1) capital is recognised as the
highest quality component of capital. It
is subordinated to all other elements of
funding, absorbs losses as and when
they occur, has full flexibility of dividend
payments and has no maturity date. It
is predominately comprised of common
shares; retained earnings; undistributed
current year earnings; but may also
include non-redeemable, non-cumulative
preferred stock.
Concentration risk The risk that any
single (direct or indirect) exposure or
group of exposures has the potential to
produce losses large enough to threaten
the institution’s health or its ability to
maintain its core business.
Contractual Maturity Date on which a
scheduled payment is due for settlement
and payable in accordance with the terms
of a financial instrument.
Cost to income ratio Total operating
expense divided by total operating
income.
Credit Default Risk The event in which
companies or individuals will be unable to
make the required payments on their debt
obligations.
CRD Capital Requirements Directives
(CRD) is statutory law implemented by the
European Union for capital adequacy. CRD
have introduced a supervisory framework
in the European Union which reflects
the Basel II and Basel III rules on capital
measurement and capital standards.
Credit-related commitments
Commitments to extend credit, standby
letters of credit, guarantees and
acceptances which are designed to meet
the requirements of the customers.
Credit risk The risk of loss resulting from
a counterparty being unable to meet
its contractual obligations to the Group
in respect of loans or other financial
transactions.
Credit Risk Mitigation Methods to
reduce the credit risk associated with an
exposure by the application of credit risk
mitigants. Examples include: collateral;
guarantee; and credit protection.
CVA Credit Valuation Adjustment (CVA)
is the difference between the risk-free
portfolio value and the true portfolio value
that takes into account the possibility of a
counterparty’s default.
Customer accounts Money deposited
with the Group by counterparties other
than banks and classified as liabilities.
This includes various types of unsecured
deposits, credit current and notice
accounts.
Debt securities Instruments representing
certificates of indebtedness of credit
institutions, public bodies and other
undertakings. Debt securities can be
secured or unsecured.
Debt securities in issue Transferable
certificates of indebtedness of the Group
to the bearer of the certificates. They
include commercial paper, certificates of
deposit, bonds and medium-term notes.
Default When a customer fails to make
timely payment of interest or principal on
a debt security or to otherwise comply
with the provisions of a bond indenture.
Depending on the materiality of the
default, if left unmanaged it can lead to
loan impairment.
DVA Debt Valuation Adjustments (DVA)
an adjustment made by an entity to the
valuation of over-the-counter derivative
liabilities to reflect, within fair value, the
entity’s own credit risk.
Eurozone The Eurozone, is a monetary
union of 19 of the 28 European Union
(EU) member states which have adopted
the euro (€) as their common currency
and sole legal tender. The other nine
members of the European Union continue
to use their own national currencies. The
Eurozone consists of Austria, Belgium,
Cyprus, Estonia, Finland, France,
Germany, Greece, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the
Netherlands, Portugal, Slovakia, Slovenia
and Spain.
Exposure at Default Exposure at default
(EAD) is the gross exposure under a
facility upon default of an obligor.
Fair value The price that would be
received to sell an asset, or paid to
transfer a liability, in an orderly transaction
between market participants at the
measurement date.
309
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Definitions (continued)
Forbearance Forbearance occurs when
a borrower is granted a temporary or
permanent concession, or agreed change
to a loan, for reasons relating to the actual
or apparent financial stress or distress
of that borrower. Forbearance strategies
are employed in order to improve the
management of customer relationships,
maximise collection opportunities
and, if possible, avoid foreclosure or
repossession. Such arrangements can
include extended payment terms, a
temporary reduction in interest or principal
repayments, payment moratorium and
other modifications.
Foreclosed assets Foreclosed assets are
defined as assets held on the balance
sheet and obtained by taking possession
of collateral or by calling on similar credit
enhancements.
Foreign currency exchange risk The risk
of volatility in earnings resulting from the
retranslation of foreign currency (e.g.
Sterling and US dollar) denominated
assets and liabilities from mismatched
positions.
GDP Gross Domestic Product (GDP) is
a monetary measure of the value of all
final goods and services produced in
a period of time (quarterly or yearly).
GDP estimates are commonly used to
determine the economic performance
and standard of living of a whole country
or region, and to make international
comparisons.
Group Permanent TSB plc Group Holdings
plc and its subsidiary undertakings.
Guarantee A formal pledge by the Group
to pay debtor’s obligation in case of
default.
HTM Held to maturity (HTM) non
derivative financial assets with fixed or
determinable payments and fixed maturity
that an entity has the positive intention
and ability to hold to maturity.
Home loan A loan provided by a bank,
secured by a borrower’s primary residence
or second home.
Hybrid A combination of two or more
forbearance arrangements.
ICAAP Internal Capital Adequacy
Assessment Process (ICAAP) is a
supervisory review and an evaluation
process to assess the Group’s own
calculations and the adequate capital
which Group considers necessary to cover
the risks they take and which they are
exposed to.
ILAAP Internal Liquidity Adequacy
Assessment Process (ILAAP) is a
supervisory review and an evaluation
process to assess the Group’s own
calculations and the adequate liquidity
which the Group consider necessary to
cover the risks they take and which they
are exposed to.
IRBA The Internal Ratings Based Approach
(IRBA) allows banks to use their own
estimated risk parameters for the purpose
of calculating regulatory capital for credit
risk to estimate probability of default
(PD), loss given default (LGD), exposure
at default (EAD), maturity (M) and other
parameters required to arrive at the total
risk weighted assets (RWA).
ISDA Master Agreements A standard
agreement used in over-the-counter
derivatives transactions. The ISDA Master
Agreement, published by the International
Swaps and Derivatives Association
(ISDA), is a document that outlines the
terms applied to a derivatives transaction
between two parties. Once the two
parties agree to the standard terms, they
do not have to renegotiate each time a
new transaction is entered into.
Loan to deposit ratio The ratio of loans
and receivables compared to customer
accounts, as presented in the statement
of financial position.
LCR Liquidity Coverage Ratio(LCR) is the
ratio to ensure that bank has an adequate
amount of high quality liquid assets in
order to meet short-term obligations
under a stress scenario lasting for 30
days.
LGD Loss Given Default (LGD) is the share
of an asset that is lost when a borrower
defaults on a loan.
Liquidity risk The risk that the Group may
experience difficulty in financing its assets
and/or meeting its contractual obligations
as and when they fall due, without
incurring excessive cost.
LTV Loan to Value (LTV) is a lending risk
assessment ratio of mortgage amount to
value of property.
Market risk The risk of change in fair
value of a financial instrument due to
adverse movements in equity prices,
property prices, interest rates or foreign
currency exchange rates.
Medium term notes Medium term notes
(MTNs) are debt notes issued by the
Group which usually mature in five to ten
years. They can be issued on a fixed or
floating coupon basis.
NAMA National Asset Management
Agency (NAMA) was established in 2009
as one of a number of initiatives taken by
the Irish Government to address the Irish
financial crisis and the deflation of the
Irish bubble.
NII Net Interest Income (NII) is the
difference between interest earned on
assets and interest paid on liabilities.
NIM Net Interest Margin (NIM) is a
performance metric that measures the
difference between interest income
generated on lending and the amount of
interest paid on borrowings relative to the
amount of interest-earning assets.
Non-performing assets Non-performing
assets are defined as NPLs plus
foreclosed assets.
NPLs Non-performing loans are loans
which are credit impaired or loans
which are classified as defaulted, in
accordance with the Group’s definition of
default. The Group’s definition of default
considers objective indicators of default
including the 90 days past due criterion,
evidence of exercise of concessions or
modifications to terms and conditions;
and are designed to be consistent
with European Banking Authority (EBA)
guidance on the definition of forbearance.
NSFR Net Stable Funding Ratio (NSFR)
is designed to act as a minimum
enforcement mechanism to complement
the shorter term focused liquidity
coverage ratio.
310
PTSB Group Holdings plc - Annual Report 2023 Operational Risk The risks inherently
present in the Group’s business, including
the risk of direct or indirect loss resulting
from inadequate or failed internal and
external processes or systems and human
error, fraud, or from external events.
PD Probability of Default (PD) is a financial
term describing the likelihood that a
borrower will be unable to meet its debt
obligations.
Repurchase agreement A short term
funding agreement that allows a borrower
to create a collateralised loan by selling
a financial asset to a lender. As part of
the agreement, the borrower commits to
repurchase the security at a date in the
future repaying the proceeds of the loan.
For the counterparty to the transaction, it
is termed a reverse repurchase agreement
or a reverse repo.
RMBS Residential Mortgage Backed
Securities (RMBS) are debt obligations
that represent claims to the cash flows
from pools of mortgage loans, most
commonly on residential property.
RWAs Risk weighted assets (RWAs) is a
measure of amount of bank’s assets or
off-balance sheet exposures which are
weighted according to risk on prescribed
rules and formulas as defined in the under
Basel Banking Accord.
Regulator Central Bank of Ireland
Securitisation Securitisation is the
process of taking an illiquid asset, or
group of assets, and through financial
engineering, transforming them into a
security.
Settlement Risk The risk that the
Group delivers a sold asset or cash to a
counterparty and then does not receive
the corresponding cash or purchased
asset as expected.
SSM The Single Supervisory Mechanism
(SSM) is a mechanism which has granted
the European Central Bank (ECB) a
supervisory role to monitor the financial
stability of banks based in participating
states. The main aims of the SSM are
to ensure the safety and soundness of
the European banking system and to
increase financial integration and stability
in Europe.
SPE/SPV Special purpose entity (SPE)
is a legal entity which can be a limited
company or a limited partnership created
to fulfil specific or temporary objectives.
SPEs are typically used by companies to
isolate the firm from financial risk. This
term is used interchangeably with SPV
(Special Purpose Vehicle).
Stress testing A technique used to
evaluate the potential effects on an
institution’s financial condition of an
exceptional but plausible event and/or
movement in a set of financial variables.
Structured securities Structured
securities are complex lending
arrangements created to meet needs that
cannot be met from traditional financial
instruments available in the markets,
through the structuring of assets or debt
issues in accordance with customer and/
or market requirements. Structured debt
securities have the potential to decrease
risk, create liquidity, and increase yield.
Tier 1 capital A term used to describe the
capital adequacy of a bank. Tier 1 capital
is core capital; this includes equity capital
and disclosed reserves.
Tier 2 capital Tier 2 capital is
supplementary bank capital that includes
items such as revaluation reserves,
undisclosed reserves, hybrid instruments
and subordinated term debt.
Tracker mortgage A mortgage which
follows the base rate of interest set by the
European Central Bank and will be fixed at
a certain percentage above this rate.
311
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 Annex VI - Template for the KPIs of credit institutions
Index:
0. Summary of KPIs
1. Assets for the calculation of GAR
2. GAR sector information
3. GAR KPI stock
4. GAR KPI flow
5. KPI off-balance sheet exposures
6. KPI on fees and commissions income from services other than lending and asset management
7. KPI Trading book portfolio
Page
313
314-321
322-323
324-327
328-329
330
330-331
332-334
312
PTSB Group Holdings plc - Annual Report 2023 0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
This template requires credit institutions to disclose relevant KPIs on the basis of the scope of their prudential consolidation
determined in accordance with regulation (EU) No 575/2013, Title II, Chapter 2, Section 2.
In accordance with the Disclosure Delegated Act, PTSB is required to calculate the green asset ratio (GAR) for on-balance sheet
exposures covering the following accounting categories of financial assets, including loans and advances, debt securities, equity
holdings and repossessed collaterals:
(a) financial assets at amortised cost;
(b) financial assets at fair value through other comprehensive income;
(c) investments in subsidiaries;
(d) joint ventures and associates;
(e) financial assets designated at fair value through profit or loss and non-trading financial assets mandatorily at fair value through
profit or loss; and
(f) real estate collaterals obtained by credit institutions by taking possession in exchange for the cancellation of debts.
The following assets shall be excluded from the numerator of the GAR:
(a) financial assets held for trading;
(b) on-demand interbank loans; and
(c) exposures to undertakings that are not obliged to publish non-financial information pursuant to Article 19a or 29a of Directive
2013/34/EU.
PTSB is required to calculate the KPIs for off-balance sheet exposures considering financial guarantees granted by the credit
institution and assets under management for guarantee and investee non-financial undertakings. Other off-balance sheet exposures
such as commitments are be excluded from that calculation.
For details on the Bank’s approach to determining taxonomy alignment, and calculation of these summary KPIs, please see notes in
Template 1.
Main KPI
Green asset ratio (GAR) stock
474.75
Total environmentally
sustainable assets
Additional KPIs
GAR (flow)
Trading book*
Financial guarantees
Assets under management
Fees and commissions income**
Total environmentally
sustainable activities
109.90
-
-
-
-
KPI****
2.03%
KPI
2.82%
-
-
-
-
% of assets excluded from
% of assets excluded
the numerator of the GAR
from the denominator of
% coverage (over total
(Article 7(2) and (3) and
the GAR (Article 7(1) and
KPI*****
assets)***
Section 1.1.2. of Annex V)
Section 1.2.4 of Annex V)
-
1.68%
6.51%
17.45%
% of assets excluded from
% of assets excluded
the numerator of the GAR
from the denominator of
% coverage (over total
(Article 7(2) and (3) and
the GAR (Article 7(1) and
KPI
assets)
Section 1.1.2. of Annex V)
Section 1.2.4 of Annex V)
2.32%
8.44%
17.49%
-
-
-
-
-
* For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR
** Fees and commissions income from services other than lending and AuM
Institutions shall disclose forward looking information for this KPIs, including information in terms of targets, together with relevant explanations on the methodology applied.
*** % of assets covered by the KPI over banks´ total assets
****based on the Turnover KPI of the counterparty
*****based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
313
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
1. Assets for the calculation of GAR
Template 1 discloses the Bank’s assets used in the calculation of the Green Asset Ratio (GAR). Exposures are reported for 31st
December 2023. EU Taxonomy balances are presented gross of ECL and deferred fess, discounts and business combination related
fair value adjustments,
For this first disclosure, given the residential mortgage book represents the bank's most significant portion of on-balance sheet
exposures in terms of value [94], we have prioritised analysis of alignment with the EU Taxonomy within households, secured against
residential immovable property.
The criteria to determine alignment for residential mortgage loans to households vary based on the year of construction. The Group
took a phased approach to alignment, initially assessing properties built before 31st December 2020. For this cohort, alignment is
determined based on EPC rating criteria, and exposure to physical risk.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total [gross]
carrying amount
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Proceeds
enabling
aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Disclosure reference date T
Million EUR
GAR - Covered assets in both
numerator and denominator
1
Loans and advances, debt
securities and equity instruments
not HfT eligible for GAR
calculation
21,537.72 19,322.96 474.75 474.75
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management
companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by
219.25
217.20
217.20
-
-
2.06
-
-
-
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21,307.44 19,322.96 474.75 474.75
residential immovable property
20,608.21 19,322.96 474.75 474.75
26
of which building renovation
loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
-
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-
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-
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27
28
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30
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- 19,322.96 474.75 474.75
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- 19,322.96 474.75 474.75
- 19,322.96 474.75 474.75
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
PTSB Group Holdings plc - Annual Report 2023
Taxonomy aligned properties built before 31st December 2020, must have an EPC rating in the top 15% of the national or regional
building stock as per Regulation (EC) No 1893/2006. To identify the top 15% of most energy efficient buildings of the national or
regional building stock, as per the EU Taxonomy and associated technical screening criteria, we referred to research conducted by an
Irish Pillar Bank analysing energy ratings data from the Central Statistics Office (CSO) representing approximately 63.5% of Ireland's
housing stock. Based on this weighted national dataset, the Bank estimated the top 15% threshold corresponded to a BER rating of
B2 or higher. The Group has adopted this B2 threshold to identify the properties with a valid EPC certificate within the residential
mortgage portfolio that meet this technical screening criteria.
In addition to energy efficient criteria, exposure to physical risk must also be considered. For this first disclosure, only those properties
assessed as not vulnerable to physical risk, based on the approach outlined in template 5 of this disclosure are reported.
Data availability and quality constraints mean the assessment of alignment with EU Taxonomy has not been possible at this time
for all required exposure classes specified by Article 8 Disclosures Delegated Act within Template 1 of Annex VI of same. Initiatives’
are underway to enhance the Group’s data collection capabilities going forward, with a view to enhancing the ability to determine
taxonomy alignment.
calculation
21,537.72 19,322.96 474.75 474.75
Other financial corporations
2.06
Million EUR
GAR - Covered assets in both
numerator and denominator
1
Loans and advances, debt
securities and equity instruments
not HfT eligible for GAR
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management
companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by
26
of which building renovation
loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
27
28
29
30
219.25
217.20
217.20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
21,307.44 19,322.96 474.75 474.75
residential immovable property
20,608.21 19,322.96 474.75 474.75
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total [gross]
carrying amount
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Proceeds
enabling
aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Disclosure reference date T
-
-
-
-
-
-
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-
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-
-
-
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-
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-
-
-
-
-
-
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-
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-
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-
-
-
-
-
-
-
-
-
-
-
- 19,322.96 474.75 474.75
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
- 19,322.96 474.75 474.75
- 19,322.96 474.75 474.75
-
-
-
-
-
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
315
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
‘Annex VI - Template for the KPIs of credit institutions
(continued)
1.Assets for the calculation of GAR (continued)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total [gross]
carrying amount
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Proceeds
enabling
aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Disclosure reference date T
Million EUR
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
11.03
32
Assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1844.44
33
Financial and Non-financial
undertakings
692.06
34
SMEs and NFCs (other than
SMEs) not subject to NFRD
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.00
0.00
0.00
0.00
0.00
0.00
disclosure obligations
Loans and advances
687.02
687.02
of which loans collateralised by
commercial immovable property
37
of which building renovation
loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other categories of assets (e.g.
-
-
-
-
5.04
-
5.04
35.65
146.12
71.14
35
36
38
39
40
41
42
43
44
45
46
47
48
49
Goodwill, commodities etc.)
899.48
Total GAR assets
23382.17
19322.96 474.75 474.75
-
-
Assets not covered for GAR
calculation
4943.54
50
Central governments and
Supranational issuers
Central banks’ exposure
Trading book
Total assets
51
52
53
Off-balance sheet exposures -
Undertakings subject to NFRD
disclosure obligations
54
55
56
57
Financial guarantees
Assets under management
Of which debt securities
Of which equity instruments
3256.30
1687.24
-
28325.71
1.53
0.00
-
-
-
-
-
-
-
-
0.00
0.00
0.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
316
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
PTSB Group Holdings plc - Annual Report 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Million EUR
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
11.03
32
Assets excluded from the
numerator for GAR calculation
(covered in the denominator)
1844.44
33
Financial and Non-financial
undertakings
692.06
34
SMEs and NFCs (other than
SMEs) not subject to NFRD
disclosure obligations
Loans and advances
687.02
687.02
of which loans collateralised by
commercial immovable property
37
of which building renovation
loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other categories of assets (e.g.
Goodwill, commodities etc.)
899.48
Assets not covered for GAR
calculation
50
Central governments and
Supranational issuers
Central banks’ exposure
Trading book
Total assets
Off-balance sheet exposures -
Undertakings subject to NFRD
disclosure obligations
Financial guarantees
Assets under management
Of which debt securities
Of which equity instruments
5.04
5.04
35.65
146.12
71.14
4943.54
3256.30
1687.24
28325.71
-
-
-
-
-
-
-
-
35
36
38
39
40
41
42
43
44
45
46
47
48
49
51
52
53
54
55
56
57
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total GAR assets
23382.17
19322.96 474.75 474.75
-
-
1.53
0.00
0.00
0.00
0.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total [gross]
carrying amount
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Proceeds
enabling
aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Disclosure reference date T
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.00
0.00
0.00
0.00
0.00
0.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
317
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023
‘Annex VI - Template for the KPIs of credit institutions
(continued)
1.Assets for the calculation of GAR (continued)
Million EUR
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Disclosure reference date T-1
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total
[gross]
carrying
amount
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by
residential immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking
possession: residential and
commercial immovable properties
-
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-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
318
PTSB Group Holdings plc - Annual Report 2023 Million EUR
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Disclosure reference date T-1
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total
[gross]
carrying
amount
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
GAR - Covered assets in both
numerator and denominator
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by
residential immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking
possession: residential and
commercial immovable properties
-
-
-
-
-
-
-
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319
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
1.Assets for the calculation of GAR (continued)
Million EUR
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Disclosure reference date T-1
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total
[gross]
carrying
amount
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
32
Assets excluded from the numerator
for GAR calculation (covered in the
denominator)
33
Financial and Non-financial
undertakings
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
obligations
Loans and advances
of which loans collateralised by
commercial immovable property
of which building renovation loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other categories of assets (e.g.
Goodwill, commodities etc.)
Total GAR assets
Assets not covered for GAR
calculation
50
Central governments and
Supranational issuers
Central banks’ exposure
Trading book
Total assets
51
52
53
Off-balance sheet exposures - Undertakings
subject to NFRD disclosure obligations
54
55
56
57
Financial guarantees
Assets under management
Of which debt securities
Of which equity instruments
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. This template shall include information for loans and advances, debt securities and equity instruments in the banking book, towards financial corporates, non-financial
corporates (NFC), including SMEs, households (including residential real estate, house renovation loans and motor vehicle loans only) and local governments/municipalities
(house financing).
2. The following accounting categories of financial assets should be considered: Financial assets at amortised cost, financial assets at fair value through other comprehensive
income, investments in subsidiaries, joint ventures and associates, financial assets designated at fair value through profit or loss and non-trading financial assets mandatorily at
fair value through profit or loss, and real estate collaterals obtained by credit institutions by taking possession in exchange in of cancellation of debts.
3. Banks with non-EU subsidiary should provide this information separately for exposures towards non-EU counterparties. For non-EU exposures, while there are additional
challenges in terms of absence of common disclosure requirements and methodology, as the EU taxonomy and the NFRD apply only at EU level, given the relevance of these
exposures for those credit institutions with non-EU subsidiaries, these institutions should disclose a separate GAR for non-EU exposures, on a best effort basis, in the form of
estimates and ranges, using proxies, and explaining the assumptions, caveats and limitations.
4. For motor vehicle loans, institutions shall only include those exposures generated after the date of application of the disclosure.
320
PTSB Group Holdings plc - Annual Report 2023 32
Assets excluded from the numerator
for GAR calculation (covered in the
33
Financial and Non-financial
denominator)
undertakings
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
Loans and advances
of which loans collateralised by
commercial immovable property
of which building renovation loans
Debt securities
Equity instruments
Non-EU country counterparties
not subject to NFRD disclosure
obligations
Loans and advances
Debt securities
Equity instruments
Derivatives
On demand interbank loans
Cash and cash-related assets
Other categories of assets (e.g.
Goodwill, commodities etc.)
Total GAR assets
Assets not covered for GAR
calculation
50
Central governments and
Supranational issuers
Central banks’ exposure
Trading book
Total assets
Off-balance sheet exposures - Undertakings
subject to NFRD disclosure obligations
Financial guarantees
Assets under management
Of which debt securities
Of which equity instruments
(house financing).
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
51
52
53
54
55
56
57
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Million EUR
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Disclosure reference date T-1
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
(Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which towards taxonomy relevant sectors
Of which environmentally sustainable (Taxonomy-
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable
Of which environmentally sustainable (Taxonomy-
Total
[gross]
carrying
amount
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
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-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
1. This template shall include information for loans and advances, debt securities and equity instruments in the banking book, towards financial corporates, non-financial
corporates (NFC), including SMEs, households (including residential real estate, house renovation loans and motor vehicle loans only) and local governments/municipalities
2. The following accounting categories of financial assets should be considered: Financial assets at amortised cost, financial assets at fair value through other comprehensive
income, investments in subsidiaries, joint ventures and associates, financial assets designated at fair value through profit or loss and non-trading financial assets mandatorily at
fair value through profit or loss, and real estate collaterals obtained by credit institutions by taking possession in exchange in of cancellation of debts.
3. Banks with non-EU subsidiary should provide this information separately for exposures towards non-EU counterparties. For non-EU exposures, while there are additional
challenges in terms of absence of common disclosure requirements and methodology, as the EU taxonomy and the NFRD apply only at EU level, given the relevance of these
exposures for those credit institutions with non-EU subsidiaries, these institutions should disclose a separate GAR for non-EU exposures, on a best effort basis, in the form of
estimates and ranges, using proxies, and explaining the assumptions, caveats and limitations.
4. For motor vehicle loans, institutions shall only include those exposures generated after the date of application of the disclosure.
321
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
2. GAR sector information
The purpose of this template is to provide information on exposures in the banking book toward those sectors (NFCs subject to
NFRD) covered by the Taxonomy (NACE sector 4 levels of detail), using the relevant NACE Codes on the basis of the principle activity
of the counterparty.
For the 31st December 2023 disclosure, bank reviewed the book for exposure to NFC’s subject to NFRD.
This assessment resulted in a nil return.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
(Subject to NFRD)
to NFRD
(Subject to NFRD)
to NFRD
(Subject to NFRD)
to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Breakdown by sector - NACE 4 digits level (code and
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
Of which
environmentally
environmentally
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
label)
Mn EUR
(CCM)
Mn EUR
(CCM)
Mn EUR
(CCA)
Mn EUR
(CCA)
Mn EUR
(WTR)
Mn EUR
(WTR)
Mn EUR
sustainable (CE)
Mn EUR
sustainable (CE)
Mn EUR
(PPC)
Mn EUR
(PPC)
Mn EUR
(BIO)
Mn EUR
(BIO)
Mn EUR
+ BIO)
Mn EUR
+ BIO)
1
2
3
4
…
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Of which
environmentally
sustainable
(CCM + CCA +
WTR + CE + PPC
Of which
environmentally
sustainable
(CCM + CCA +
WTR + CE + PPC
1. Credit institutions shall disclose in this template information on exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail),
using the relevant NACE Codes on the basis of the principal activity of the counterparty
2. The counterparty NACE sector allocation shall be based exclusively on the nature of the immediate counterparty. The classification of the exposures incurred jointly by more
than one obligor shall be done on the basis of the characteristics of the obligor that was the more relevant, or determinant, for the institution to grant the exposure. The
distribution of jointly incurred exposures by NACE codes shall be driven by the characteristics of the more relevant or determinant obligor. Institutions shall disclose information
by NACE codes with the level of disaggregation required in the template.
322
PTSB Group Holdings plc - Annual Report 2023 The purpose of this template is to provide information on exposures in the banking book toward those sectors (NFCs subject to
NFRD) covered by the Taxonomy (NACE sector 4 levels of detail), using the relevant NACE Codes on the basis of the principle activity
For the 31st December 2023 disclosure, bank reviewed the book for exposure to NFC’s subject to NFRD.
2. GAR sector information
of the counterparty.
This assessment resulted in a nil return.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not subject
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
Non-Financial corporates
SMEs and other NFC not
(Subject to NFRD)
to NFRD
(Subject to NFRD)
to NFRD
(Subject to NFRD)
to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
(Subject to NFRD)
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Breakdown by sector - NACE 4 digits level (code and
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
Of which
environmentally
environmentally
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
Of which
environmentally
sustainable
(CCM + CCA +
WTR + CE + PPC
Of which
environmentally
sustainable
(CCM + CCA +
WTR + CE + PPC
label)
Mn EUR
(CCM)
Mn EUR
(CCM)
Mn EUR
(CCA)
Mn EUR
(CCA)
Mn EUR
(WTR)
Mn EUR
(WTR)
Mn EUR
sustainable (CE)
Mn EUR
sustainable (CE)
Mn EUR
(PPC)
Mn EUR
(PPC)
Mn EUR
(BIO)
Mn EUR
(BIO)
Mn EUR
+ BIO)
Mn EUR
+ BIO)
1
2
3
4
…
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Credit institutions shall disclose in this template information on exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail),
using the relevant NACE Codes on the basis of the principal activity of the counterparty
2. The counterparty NACE sector allocation shall be based exclusively on the nature of the immediate counterparty. The classification of the exposures incurred jointly by more
than one obligor shall be done on the basis of the characteristics of the obligor that was the more relevant, or determinant, for the institution to grant the exposure. The
distribution of jointly incurred exposures by NACE codes shall be driven by the characteristics of the more relevant or determinant obligor. Institutions shall disclose information
by NACE codes with the level of disaggregation required in the template.
323
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
3. GAR KPI stock
The purpose of this template is to disclose GAR KPIs on stock of loans calculated based on data disclosed in template 1, by applying
the formulas proposed in this template.
For the 31st December 2023 disclosure, bank reviewed the book and expressed as a percentage the proportion of the stock of assets
funding activities referred to in Regulation (EU) 2020/852 (i.e. eligible assets) in total stock of covered assets.
This assessment resulted in 2.03%.
The bank’s green assets relate to residential mortgage lending which predominately involves financing existing home purchases rather
than new capital expenditures. Therefore CapEx lending has been deemed not material for this disclosure.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
covered
Proportion
of total
assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
denominator
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
89.72%
2.20%
2.20%
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90.69%
2.23%
2.23%
of which loans collateralised by residential
immovable property
93.76%
2.30%
2.30%
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
Total GAR assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82.64%
2.03%
2.03%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
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-
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-
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-
-
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-
-
-
-
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-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 89.72%
2.20%
2.20%
- 89.72%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90.69%
2.23%
2.23%
- 90.69%
93.76%
2.30%
2.30%
- 93.76%
- 82.64%
2.03%
2.03%
- 82.64%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
324
PTSB Group Holdings plc - Annual Report 2023 3. GAR KPI stock
the formulas proposed in this template.
This assessment resulted in 2.03%.
The purpose of this template is to disclose GAR KPIs on stock of loans calculated based on data disclosed in template 1, by applying
For the 31st December 2023 disclosure, bank reviewed the book and expressed as a percentage the proportion of the stock of assets
funding activities referred to in Regulation (EU) 2020/852 (i.e. eligible assets) in total stock of covered assets.
The bank’s green assets relate to residential mortgage lending which predominately involves financing existing home purchases rather
than new capital expenditures. Therefore CapEx lending has been deemed not material for this disclosure.
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
denominator
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
89.72%
2.20%
2.20%
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
of which loans collateralised by residential
immovable property
93.76%
2.30%
2.30%
90.69%
2.23%
2.23%
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
Total GAR assets
82.64%
2.03%
2.03%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
covered
Proportion
of total
assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 89.72%
2.20%
2.20%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90.69%
2.23%
2.23%
93.76%
2.30%
2.30%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 82.64%
2.03%
2.03%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 89.72%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 90.69%
- 93.76%
-
-
-
-
-
-
-
-
-
-
- 82.64%
325
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
3. GAR KPI stock (continued)
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
denominator
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
32
Total GAR assets
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
specialised
Of which
lending
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
covered
Proportion
of total
assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T-1
-
-
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-
1. Institution shall disclose in this template the GAR KPIs on stock of loans calculated based on the data disclosed in template 1, on covered assets, and by applying the formulas
proposed in this template
2. Information on the GAR (green asset ratio of ‘eligible’ activities) shall be accompanied with information on the proportion of total assets covered by the GAR
3. Credit institutions can, in addition to the information included in this template, show the proportion of assets funding taxonomy relevant sectors that are environmentally
sustainable (Taxonomy-aligned). This information would enrich the information on the KPI on environmentally sustainable assets compared to total covered assets
4. Credit institutions shall duplicate this template for revenue based and CapEx based disclosures
326
PTSB Group Holdings plc - Annual Report 2023 Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T-1
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
(Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Of which
specialised
Of which
lending
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Proceeds
enabling
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
denominator
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
of which loans collateralised by residential
Other local government financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
32
Total GAR assets
proposed in this template
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Institution shall disclose in this template the GAR KPIs on stock of loans calculated based on the data disclosed in template 1, on covered assets, and by applying the formulas
2. Information on the GAR (green asset ratio of ‘eligible’ activities) shall be accompanied with information on the proportion of total assets covered by the GAR
3. Credit institutions can, in addition to the information included in this template, show the proportion of assets funding taxonomy relevant sectors that are environmentally
sustainable (Taxonomy-aligned). This information would enrich the information on the KPI on environmentally sustainable assets compared to total covered assets
4. Credit institutions shall duplicate this template for revenue based and CapEx based disclosures
Of which
Use of
Of which
Of which
Proportion
of total
assets
Proceeds
transitional
enabling
covered
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
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-
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-
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-
-
-
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-
-
-
-
-
-
-
-
327
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
4. GAR KPI flow
The purpose of this template is to disclose GAR KPIs on flow of loans calculated (new loans on a net basis) based on data disclosed
in template 1, by applying the formulas proposed in this template.
For the 31st December 2023 disclosure, bank reviewed the book and expressed as a percentage the proportion of new assets (i.e.
assets originated and acquired within the current disclosure period ) funding taxonomy-relevant activities (i.e. eligible assets) for
the objective of climate change mitigation in total new eligible assets (i.e. eligible assets originated and acquired within the current
disclosure period).
This assessment resulted in 2.82%.
The bank’s green assets relate to residential mortgage lending which predominately involves financing existing home purchases
rather than new capital expenditures. Therefore CapEx lending has been deemed not material for this disclosure.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
new assets
Proceeds
transitional
enabling
covered
Proportion
of total
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
denominator
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
76.14%
3.14%
3.14%
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
of which loans collateralised by residential
immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
Collateral obtained by taking possession:
residential and commercial immovable
properties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76.15%
3.14%
3.14%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32
Total GAR assets
68.35%
2.82%
2.82%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Institution shall disclose in this template the GAR KPIs on flow of loans calculated (new loans on a net basis) based on the data disclosed in template 1, on covered assets, and
by applying the formulas proposed in this template
2. Credit institutions shall duplicate this template for revenue based and CapEx based disclosures
328
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
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-
-
-
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-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
3.14%
3.14%
- 76.15%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
3.14%
3.14%
- 76.15%
76.15%
3.14%
3.14%
- 76.15%
PTSB Group Holdings plc - Annual Report 2023 4. GAR KPI flow
The purpose of this template is to disclose GAR KPIs on flow of loans calculated (new loans on a net basis) based on data disclosed
in template 1, by applying the formulas proposed in this template.
For the 31st December 2023 disclosure, bank reviewed the book and expressed as a percentage the proportion of new assets (i.e.
assets originated and acquired within the current disclosure period ) funding taxonomy-relevant activities (i.e. eligible assets) for
the objective of climate change mitigation in total new eligible assets (i.e. eligible assets originated and acquired within the current
disclosure period).
This assessment resulted in 2.82%.
The bank’s green assets relate to residential mortgage lending which predominately involves financing existing home purchases
rather than new capital expenditures. Therefore CapEx lending has been deemed not material for this disclosure.
% (compared to total covered assets in the denominator)
GAR - Covered assets in both numerator and
denominator
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
76.14%
3.14%
3.14%
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Disclosure reference date T
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
new assets
Proceeds
transitional
enabling
covered
Proportion
of total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Financial undertakings
Credit institutions
Loans and advances
Debt securities, including UoP
Equity instruments
Other financial corporations
of which investment firms
Loans and advances
Debt securities, including UoP
Equity instruments
of which management companies
Loans and advances
Debt securities, including UoP
Equity instruments
of which insurance undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Non-financial undertakings
Loans and advances
Debt securities, including UoP
Equity instruments
Households
immovable property
of which building renovation loans
of which motor vehicle loans
Local governments financing
Housing financing
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
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-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
3.14%
3.14%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76.15%
3.14%
3.14%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
3.14%
3.14%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
of which loans collateralised by residential
76.15%
3.14%
3.14%
Collateral obtained by taking possession:
residential and commercial immovable
properties
32
Total GAR assets
68.35%
2.82%
2.82%
1. Institution shall disclose in this template the GAR KPIs on flow of loans calculated (new loans on a net basis) based on the data disclosed in template 1, on covered assets, and
by applying the formulas proposed in this template
2. Credit institutions shall duplicate this template for revenue based and CapEx based disclosures
- 76.15%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 76.15%
329
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
5. KPI off-balance sheet exposures
The purpose of this template is to disclose information for off-balance sheet exposures calculated based on the data disclosed in
template 1, on covered assets, and by applying the formulas proposed in this template.
For the 31st December 2023 disclosure, owing to bank’s prioritised analysis of alignment with the EU Taxonomy within households,
secured against residential immovable property this template hasn’t been populated.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Disclosure reference date T
% (compared to total eligible off-balance sheet assets)
1
2
Financial guarantees (FinGuar KPI)
Assets under management (AuM KPI)
1. Institution shall disclose in this template the KPIs for off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on
covered assets, and by applying the formulas proposed in this template
2. Institutions shall duplicate this template to disclose stock and flow KPIs for off-balance sheet exposures
6. KPI on fees and commissions income from services other than lending and asset management
Fees and Commissions (Template 6) KPIs shall only apply starting 2026.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (%)
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant sectors (%)
(Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
(Taxonomy-eligible)
F&C KPI - Disclosure reference date T
Fees and commission income from NFRD corporates - Services other than lending
Services towards financial undertakings
Credit institutions
Other financial undertakings
of which investment firms
of which management companies
of which insurance insurance undertakings
Non-financial undertakings
Counterparties not subject to NFRD disclosure obligations, including third-country counterparties
Total
(Million
EUR)
Of which environmentally sustainable
(%)(Taxonomy-aligned)
Of which
Of which
transitional
enabling
Of which environmentally
sustainable (%)
(Taxonomy-aligned)
Of which
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (%)
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant sectors (%)
(Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
(Taxonomy-eligible)
F&C KPI - Disclosure reference date T-1
Fees and commission income from NFRD corporates - Services other than lending
Services towards financial undertakings
Credit institutions
Other financial undertakings
of which investment firms
of which management companies
of which insurance undertakings
Non-financial undertakings
Counterparties not subject to NFRD disclosure obligations, including third-country counterparties
Total
(Million
EUR)
Of which environmentally sustainable
(%)(Taxonomy-aligned)
Of which
Of which
transitional
enabling
Of which environmentally
sustainable (%)
(Taxonomy-aligned)
Of which
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Of which environmentally
Of which environmentally
Of which environmentally
Of which environmentally
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
Of which environmentally sustainable (%)
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
(Taxonomy-aligned)
Of which
Of which
transitional
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Of which environmentally
Of which environmentally
Of which environmentally
Of which environmentally
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
Of which environmentally sustainable (%)
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
(Taxonomy-aligned)
Of which
Of which
transitional
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
3
4
5
6
7
8
9
1
2
3
4
5
6
7
8
9
1. Institutions shall disclose in this template information on the percentage (%) of fees and commission income related to taxonomy relevant sectors and environmentally
sustainable activities (with breakdown for transitional and enabling activities) compared to total fees and commission income from NFRD corporates for services other than
lending and asset management
330
PTSB Group Holdings plc - Annual Report 2023 5. KPI off-balance sheet exposures
The purpose of this template is to disclose information for off-balance sheet exposures calculated based on the data disclosed in
template 1, on covered assets, and by applying the formulas proposed in this template.
For the 31st December 2023 disclosure, owing to bank’s prioritised analysis of alignment with the EU Taxonomy within households,
secured against residential immovable property this template hasn’t been populated.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total covered assets funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy
Proportion of total covered assets funding taxonomy relevant sectors
(Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
relevant sectors (Taxonomy-eligible)
(Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
funding taxonomy relevant sectors
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
(Taxonomy-aligned)
relevant sectors (Taxonomy-aligned)
Of which
Use of
Of which
Proceeds
enabling
Of which
Use of
Of which
Of which
Proceeds
transitional
enabling
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
Proportion of total covered assets
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Disclosure reference date T
% (compared to total eligible off-balance sheet assets)
1
2
Financial guarantees (FinGuar KPI)
Assets under management (AuM KPI)
1. Institution shall disclose in this template the KPIs for off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on
covered assets, and by applying the formulas proposed in this template
2. Institutions shall duplicate this template to disclose stock and flow KPIs for off-balance sheet exposures
6. KPI on fees and commissions income from services other than lending and asset management
Fees and Commissions (Template 6) KPIs shall only apply starting 2026.
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (%)
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant sectors (%)
(Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
(Taxonomy-eligible)
F&C KPI - Disclosure reference date T
Of which environmentally
Of which environmentally
Of which environmentally
Of which environmentally
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
Of which environmentally sustainable (%)
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
(Taxonomy-aligned)
Of which
Of which
transitional
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Of which towards taxonomy relevant sectors (%)
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant
Of which towards taxonomy relevant sectors (%)
(Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
sectors (%) (Taxonomy-eligible)
(Taxonomy-eligible)
F&C KPI - Disclosure reference date T-1
Of which environmentally
Of which environmentally
Of which environmentally
Of which environmentally
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
sustainable (%)(Taxonomy-
Of which environmentally sustainable (%)
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
aligned)
Of which
enabling
(Taxonomy-aligned)
Of which
Of which
transitional
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
(Million
EUR)
Of which environmentally sustainable
(%)(Taxonomy-aligned)
Of which
Of which
transitional
enabling
Of which environmentally
sustainable (%)
(Taxonomy-aligned)
Of which
enabling
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
(Million
EUR)
Of which environmentally sustainable
(%)(Taxonomy-aligned)
Of which
Of which
transitional
enabling
Of which environmentally
sustainable (%)
(Taxonomy-aligned)
Of which
enabling
Fees and commission income from NFRD corporates - Services other than lending
Services towards financial undertakings
Credit institutions
Other financial undertakings
of which investment firms
of which management companies
of which insurance insurance undertakings
Non-financial undertakings
Counterparties not subject to NFRD disclosure obligations, including third-country counterparties
1
2
3
4
5
6
7
8
9
1
2
3
4
5
6
7
8
9
Fees and commission income from NFRD corporates - Services other than lending
Services towards financial undertakings
Credit institutions
Other financial undertakings
of which investment firms
of which management companies
of which insurance undertakings
Non-financial undertakings
Counterparties not subject to NFRD disclosure obligations, including third-country counterparties
1. Institutions shall disclose in this template information on the percentage (%) of fees and commission income related to taxonomy relevant sectors and environmentally
sustainable activities (with breakdown for transitional and enabling activities) compared to total fees and commission income from NFRD corporates for services other than
lending and asset management
331
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
7. KPI Trading book portfolio
Trading Book (Template 7) KPIs shall only apply starting 2026.
1
Financial assets held for trading (debt securities and equity instruments) - NFRD
Fair value
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases plus
Absolute purchases plus
Absolute purchases plus
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
19 Counterparties not subject to NFRD disclosure obligations, including third-country
counterparties
20 Debt securities
21 Equity instruments
1
Financial assets held for trading (debt securities and equity instruments) - NFRD
corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
19 Counterparties not subject to NFRD disclosure obligations, including third-country
counterparties
20 Debt securities
21 Equity instruments
332
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Circular economy (CE)
Absolute purchases plus
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
Absolute purchases plus
Absolute purchases plus
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
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-
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-
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-
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-
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-
-
-
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-
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-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
-
-
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-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
PTSB Group Holdings plc - Annual Report 2023 7. KPI Trading book portfolio
Trading Book (Template 7) KPIs shall only apply starting 2026.
1
Financial assets held for trading (debt securities and equity instruments) - NFRD
Fair value
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases plus
Absolute purchases plus
Absolute purchases plus
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
-
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-
-
-
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-
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-
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-
-
-
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-
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-
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-
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-
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-
-
-
-
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-
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-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
Financial assets held for trading (debt securities and equity instruments) - NFRD
Fair value
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases
Absolute sales
absolute sales
Absolute purchases plus
Absolute purchases plus
Absolute purchases plus
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
Of which
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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333
corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
counterparties
20 Debt securities
21 Equity instruments
corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
counterparties
20 Debt securities
21 Equity instruments
19 Counterparties not subject to NFRD disclosure obligations, including third-country
19 Counterparties not subject to NFRD disclosure obligations, including third-country
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Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 ‘Annex VI - Template for the KPIs of credit institutions
(continued)
7. KPI Trading book portfolio (continued)
1
Financial assets held for trading (debt securities and equity instruments)
- NFRD corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
19 Counterparties not subject to NFRD disclosure obligations, including third-
country counterparties
20 Debt securities
21 Equity instruments
Fair value
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Absolute purchases
Absolute sales
absolute sales
Absolute purchases plus
Of which
Of which
Of which
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
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334
PTSB Group Holdings plc - Annual Report 2023 7. KPI Trading book portfolio (continued)
1
Financial assets held for trading (debt securities and equity instruments)
- NFRD corporates
2 Financial undertakings
3 Credit institutions
4 Debt securities
5 Equity instruments
6 Other financial undertakings
7
of which investment firms
8 Debt securities
9 Equity instruments
10 of which asset managers
11 Debt securities
12 Equity instruments
13 of which insurance companies
14 Debt securities
15 Equity instruments
16 Non-financial undertakings
17 Debt securities
18 Equity instruments
country counterparties
20 Debt securities
21 Equity instruments
Fair value
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Absolute purchases
Absolute sales
absolute sales
Absolute purchases plus
Of which
Of which
Of which
environmentally
environmentally
environmentally
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
sustainable
(Taxonomy-
aligned)
Trading KPI
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19 Counterparties not subject to NFRD disclosure obligations, including third-
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335
Strategic ReportGovernance Financial StatementsGeneral InformationPTSB Group Holdings plc - Annual Report 2023 This page has intentionally been left blank
336
PTSB Group Holdings plc - Annual Report 2023 e
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