REG - AIB Group PLC - AIB Group plc Q1 2026 Trading Statement

AIBAnnouncement

30/04/2026 07:02

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RNS Number : 4798C  AIB Group PLC  30 April 2026

 

 EMBARGO 07:00  30 April 2026

 

AIB Group pLC - Q1 2026 Trading update (UNAUDITED)

 

Strong Q1 performance underpinned by continued strategic delivery; guidance
reiterated

 

"Having entered 2026 with great momentum in our business, the Group delivered
a strong performance in the first quarter. Gross loans grew by 1.7% to €73.5
billion for the period and new lending increased by 11% to €3.6 billion, of
which 42% was green. Notwithstanding the geopolitical uncertainty, the Irish
economy continues to perform well and we remain confident in our outlook for
2026. AIB plays a key role by supporting our customers and communities through
our extensive branch network and digital channels. We remain on course to
deliver strong, sustainable returns to our shareholders as we progress through
the final year of our current strategic cycle."

 

 - Colin Hunt, Chief Executive Officer

 

Key highlights: (all comparisons Q1 2026 versus Q1 2025 unless otherwise
stated)

·    All 2026 guidance reiterated

·    Total income broadly in line with prior year

o  Net interest income (NII) of €0.92bn as expected; Q1 NIM 2.65%

o  Other income up 8%

·    Costs((1)) up 2% in line with guidance; cost income ratio (CIR) of
44%

·    Small net credit impairment charge in Q1

·    Gross loans increased 1.7% or €1.3bn to €73.5bn from Dec 2025

o New lending up 11% to €3.6bn

o Mortgage market share of 30% March YTD((2))

·    Strong and diversified funding

o Customer deposits of c. €117bn in line with Dec 2025

·    CET1 ratio of 16.0% (Dec 25: 16.2%) excluding Q1 profit

o c. +80bps organic capital generation

·    €1bn share buyback programme announced on 4 March 2026 underway; c.
€198m completed so far

·    AGM today seeking shareholder approval for

o  a final dividend of 46.257c per ordinary share (distribution of €985m)
and

o  an Odd-lot offer to shareholders

 

 

2026 Guidance reiterated:

·    NII is expected to be c. €3.8bn

·    Other income is expected to be > €750m

·    Costs expected to increase by c. 2%

·    Cost of risk (CoR) expected to be within the range of 20-30bps

·    Bank levies and regulatory fees are expected to be c. €140m

·    No material exceptional items expected

·    Customer loans are expected to grow by c. 5%

·    Customer deposits are expected to grow by 2-3%

·    RoTE is expected to be > 20%

 

 

Medium-term targets (2024-2026):

·    RoTE of 15%

·    CET1 ratio > 14% with a buffer over MDA of at least 250bps

·    Absolute cost < €2 billion with a CIR of < 50%

 

Medium-term targets continue to guide the business and will be refreshed for
our next strategic cycle.

 

 

                   Financial Performance

 

The Group recorded a strong financial performance in the first quarter of
2026.

 

Net interest income of €0.92bn (Q4 2025: €0.94bn) was 3% lower in Q1 2026
compared to the equivalent prior year period (Q1 2025: €0.95bn), primarily
due to lower interest rates partially offset by an increase in average
volumes. NIM for Q1 was 2.65% and the deposit beta was c. 20%. For 2026 we
expect NII of c. €3.8bn based on rate assumptions of an ECB deposit rate of
2.00% throughout 2026, a BOE rate of 3.25% at December 2026 and a deposit beta
of c. 20%. In March 2026 an additional €10bn of hedging was transacted. Our
updated interest rate sensitivity indicates that a 100bps parallel upward
shift in interest rates would increase NII by €256m((3)) on an annualised
basis (Dec 25: €387m).

 

Other income increased by 8% compared to Q1 2025, reflecting a gain on
investment securities disposals. Net fee and commission income decreased by 5%
as the prior year benefitted from one-off items.

 

Operating costs were up 2% in line with guidance. FTEs at end Q1 2026 were
10,196 (Dec 25: 10,207).

 

Overall credit quality remained robust with a small net credit impairment
charge recorded in Q1. Our approach remains conservative, comprehensive and
forward-looking.

 

Bank levies and regulatory fees of c. €100m were accrued in Q1 2026
including recognition of the Irish bank levy.

 

 

       Customer Loans

 

Gross loans of €73.5bn increased by €1.3bn or 1.7% (Dec 25: €72.3bn)
driven by new lending of €3.6bn and positive FX impact of €0.1bn partially
offset by redemptions of €2.5bn.

 

Total new lending of €3.6bn increased by 11% on the prior year period.

 

AIB's new mortgage lending in Ireland was €0.9bn (Q1 2025: €0.9bn)
resulting in a mortgage market share of 30%((2)). Personal lending in Ireland
remained relatively stable and in line with prior year period. New lending to
SMEs in Ireland improved compared to the prior year.

 

New lending in Capital Markets was €1.1bn with strong performances across
corporate and property lending.

 

Climate & Infrastructure Capital delivered strong new lending of €0.6bn,
an increase of €0.3bn following lower activity in the prior year, with 72%
of new lending in Europe and the UK. We continue to finance the transition to
renewable energy and social infrastructure.

 

UK new lending was £0.3bn reflecting lending in corporate and property
sectors.

 

Green and transition lending of €1.5bn accounted for 42% of new lending with
€24.4bn deployed since 2019 as we continue to support our customers to
transition to a more sustainable future. Green mortgages represented 61% of
new mortgage lending.

 

NPEs of €1.7bn were broadly in line with December 2025 representing 2.3% of
gross loans. Asset quality remains resilient and we continue to carefully
manage the loan book.

 

 

Funding and Capital

 

Strong funding and capital ensure AIB is well-positioned for sustainable
growth. Customer deposits were flat at c. €117bn with 93% of accounts
ROI-based. The mix between current accounts and deposits remains broadly
unchanged from December 2025. The Group continues to have strong funding and
liquidity ratios with an LDR of 62%, LCR of 194% and NSFR of 158%((4)) at Q1
2026 which compare to 61%, 204% and 163% respectively at December 2025.

 

Capital remains robust and comfortably ahead of minimum requirements. The
fully-loaded CET1 ratio was 16.0% (Dec 25: 16.2%) and reflects strong balance
sheet growth. Profit for the first quarter generated 80bps of CET1 and is not
included in the CET1 ratio pending a final decision on payout at year end.

Distributions announced at the 2025 Annual Financial Results of a €1bn share
buyback and €1.25bn cash dividend of 58.585c per share (12.328c interim
& 46.257c final) have been deducted from the CET1 ratio, consistent with
the December 2025 disclosure.

 

Distributions:

At today's AGM shareholder approval will be sought for i) a final dividend of
46.257c per share and ii) a future Odd-lot offer to any shareholders holding
50 or fewer shares in the Group. The €1bn share buyback programme announced
on 4 March 2026 is progressing as planned and as at 29 April 2026, 21.46m
shares have been repurchased for a total consideration of c. €198m at a
volume weighted average price of €9.21 per share.

 

 

Outlook

 

We are now in the final year of our three-year strategic cycle and the Group
has had a strong start to 2026. With a favourable domestic economic backdrop,
resilient and growing balance sheet and an exceptional customer franchise, we
remain confident in our outlook for 2026 and beyond.

 

We will announce our half-yearly financial results on 30 July 2026

 

***

 

Analyst conference call

Colin Hunt, CEO and Donal Galvin, CFO, will host a conference call today at
08.00 IST for 30 minutes.

 

Conference call access

 

Please register in advance at AIB Q1 2026 Trading Update - Self Registration
(https://register-conf.media-server.com/register/BIfceca28904af42e8ab7a8827daca87f4)
to receive the dial in details including the Conference Pin and your unique
User PIN. You will be unable to access this call without your unique User PIN

Call Replay will be available through the link above until Thursday 14 May
2026.

Please dial in 5-10 minutes prior to the start time.

 

***

Note: Figures presented above may be subject to rounding

 

Abbreviations:

RoTE: Return on tangible equity; RoTE = (PAT-AT1) / (CET1 @14% of RWAs)

NIM: Net interest margin

 

(1)      Costs before bank levies and regulatory fees and exceptional
items

(2)      Source: Mortgage drawdowns BPFI March 2026

(3)      NII sensitivity +25bps €64m, +50bps €128m & +100bps
€256m. See page 225 of the 2025 Annual Financial Report for assumptions
regarding interest rate sensitivity

(4)      Subject to finalisation

For further information, please contact:

 Group Investor Relations & External Communications      Investor Relations                                         External Communications

 Niamh.a.Hore@aib.ie (mailto:Niamh.a.Hore@aib.ie)        Siobhain.m.Walsh@aib.ie (mailto:Siobhain.m.Walsh@aib.ie)   Will.r.Goodbody@aib.ie (mailto:Will.r.Goodbody@aib.ie)

 Tel: + 353 86 313 5647                                  Tel: + 353 87 3956864                                      Tel: +353 86 8502204

Forward Looking Statements

This document contains certain forward looking statements with respect to the
financial condition, results of operations and business of AIB Group and
certain of the plans and objectives of the Group. These forward looking
statements can be identified by the fact that they do not relate only
to historical or current facts. Forward looking statements sometimes use
words such as 'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend',
'plan', 'goal', 'believe', 'may', 'could', 'will', 'seek', 'continue',
'should', 'assume', or other words of similar meaning. Examples of forward
looking statements include, among others, statements regarding the Group's
future financial position, capital structure, income growth, loan losses,
business strategy, projected costs, capital ratios, estimates of capital
expenditures, and plans and objectives for future operations. Because such
statements are inherently subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such forward looking
information. By their nature, forward looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward looking statements. These are set out in the
Principal risks on pages 17 to 18 in the 2025 Annual Financial Report. In
addition to matters relating to the Group's business, future performance will
be impacted by the Group's ability along with governments and other
stakeholders to measure, manage and mitigate the impacts of climate change
effectively. Future performance could also be impacted by macroeconomic
uncertainty, tariffs, geopolitical tensions and global conflict. Any forward
looking statements made by or on behalf of the Group speak only as of the date
they are made. The Group cautions that the list of important factors on pages
17 to 18 of the 2025 Annual Financial Report is not exhaustive. Investors and
others should carefully consider the foregoing factors and other uncertainties
and events when making an investment decision based on any forward looking
statement.

 

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