PTSB is being transformed into a much larger player under a deal that will see it take on around 7.6 billion euros ($8.08 billion) of loans and assets from Ulster parent NatWest, which is exiting the Irish market.

It posted a profit before tax of 267 million euros for 2022 versus a loss of 21 million euros a year earlier.

Some 222 million euros of that arose primarily from taking on Ulster's mortgage and SME loan books, it said.

Its underlying profit before tax rose to 45 million euros from 17 million as it increased its new mortgage lending by 40% to 2.6 billion euros, boosting its market share to 18.5% from 16.9% at the end of the third quarter.

PTSB also opened over 160,000 new accounts last year in what it described as "an unprecedented era of switching activity" reflecting the exits from the Irish market of Ulster Bank and Belgium's KBC.

The majority state-owned bank has so far taken on 5.2 billion euros of mortgage loans, 25 branches and a 165 million euro SME loan portfolio from Ulster.

This year will see it take on a further 1 billion euros of mortgage loans and a 400 million euro asset finance businesses to follow in the first half of 2023.

It said it expects the purchased assets to generate some 170 million  euros in gross interest income this year, pushing its net interest margin to 2.25% from 1.92% in the fourth quarter of last year.

Analysts at Davy Stockbrokers said the guidance indicated low- to mid-teen percentage upside to its forecasts and that the pace of European Central Bank interest rate rises could result in further upside.

NatWest took a 17% share in PTSB as part of the loans deal, diluting the Irish government's holding to 62%.

($1 = 0.9406 euros)

(Reporting by Padraic Halpin; editing by Jason Neely)