REG - AIB Group PLC - Annual Financial Results 2025

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RNS Number : 2191V  AIB Group PLC  04 March 2026

 EMBARGO 07:00   4 March 2026

 

AIB GROUP PLC 2025 ANNUAL RESULTS

AIB announces profit after tax of €2.1 billion and total distributions of
€2.25 billion

"I am pleased to announce another strong financial performance for 2025 in
what was a landmark year for AIB.  We are successfully executing our strategy
supported by a resilient Irish economy, a growing customer base and
accelerating technological change. The Group reported profit after tax of
€2.1 billion, a 25% return on tangible equity and a CET1 ratio of
16.2%. Customer deposits increased 7% to €117.2 billion, gross loans
reached €72.3 billion and new lending amounted to €14.7 billion, of which
43% was green. This strong financial position enables both continued
investment in our business and the delivery of attractive shareholder returns
with total distributions of €2.25 billion for the year, including a near 60%
increase in the full year cash dividend and a regulatory approved share
buyback of €1 billion launching today.

 

Notwithstanding geopolitical uncertainty, our focus remains on completing the
final year of our current strategic cycle and planning for the future with
confidence, underpinned by the trust placed in us by our 3.4 million customers
and their communities whilst delivering sustainable returns to our
shareholders."

 

- Colin Hunt, Chief Executive Officer

 

 

KEY HIGHLIGHTS

 

Financial highlights: (all comparisons FY 2024 unless otherwise stated)

·    Strong financial performance ahead of expectations

o  Profit after tax €2,139m; EPS 93.3c; RoTE((1)) 25.0%

o  RoTE in FY 2026 is expected to be > 20%

·    Total income decreased 8% primarily driven by lower interest rates,
as expected

o  Net interest income (NII) of €3,748m down 9% as expected

o  Total other income was €756m; Net fee and commission income up 4% to
€692m

·    Total distributions of €2.25bn; payout ratio 105%

o  Total ordinary cash dividend of €1.25bn or 58.585c per share (2024:
36.984c)

§ €988m((2)) proposed final ordinary cash dividend of 46.257c per share

§ €263m interim cash dividend of 12.328c per share paid in Nov 25

o  €1.0bn regulatory approved share buyback programme launching today

·    CET1 ratio of 16.2% (Dec 24: 15.1%) ahead of regulatory requirements

o  Strong organic capital generation of c. 370bps supporting distributions

o  Mortgage SRT completed in Dec 2025; c. 25bps benefit

·    Costs((3)) increased 1% to €1,992m, lower than expected; cost
income ratio (CIR) of 44%

·    ECL charge of €172m representing 24bps cost of risk; 1.6% ECL cover

·    Gross loans increased 2%, or 3% on an underlying basis, to €72.3bn
(Dec 24: €71.2bn)

o  New lending up 2% to €14.7bn, of which 43% was green and transition
lending at €6.3bn

o  Mortgage market share 30%((4))

·    Strong and diversified funding with 7% increase in customer deposits
to €117.2bn (Dec 24: €109.8bn)

·    The Group returned to full private ownership in June 2025 and in
October 2025 cancelled the IPO warrants bringing total returns to the State to
c. €21bn((5))

 

Strategic highlights: Continued progress across our three strategic priorities

·    Customer first: developing more enduring relationships with our 3.4
million customers

o  Improving NPS scores: of our six key customer journeys five saw further
improvement in 2025 (SME Aggregated (69), Channel (62), NI Transactional (55),
Personal (41), Retail SME (29)) and the sixth, Homes (66), held steady on an
already record-breaking score

o  Abi, our AI-powered digital assistant, on average dealt with 5,208 calls
per day and is now active on 66 customer journeys

·    Greening our business: mobilising capital to support climate action

o  €22.9bn or 76% of our €30bn Climate Action target has been deployed
since 2019

o  In 2025 we supported c. 9,000 customers to buy their first home

·    Operational efficiency and resilience: investing in capabilities,
capacity & resilient platforms

o  Invested in our cloud architecture to enable scalable, secure banking;
>99.99% IT service availability across critical customer services was
achieved in 2025

o  Progress made on removing organisational complexity: 40% reduction in
legal entities, 12 legacy applications decommissioned reducing IT storage and
c. 25% reduction in postal correspondence; all completed on time

·    Completed the sale of our minority shareholding in AIB Merchant
Services

 

2026 Guidance:

·    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) continue to guide the business and will be
refreshed for our next strategic cycle

·    RoTE of 15%

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

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

 

 

 

 

FINANCIAL PERFORMANCE

 

Underpinned by resilient income, the Group delivered a strong performance with
profit after tax of €2,139m and a RoTE of 25.0%.

 

Net interest income of €3,748m (2024: €4,129m) decreased by 9% as expected
primarily due to lower interest rates partially offset by an increase in
average volumes. Net interest margin (NIM) was 2.73% (2024: 3.16%) and the
deposit beta was c. 20%. Q4 2025 exit NIM was 2.69%. NII remained resilient
throughout the interest rate cycle, supported by growth in both loans and
deposits and proactive balance sheet management. Having passed a low point in
Q2 2025, NII has now returned to growth. 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%.

 

Other income of €756m (2024: €779m) decreased by 3% as higher fee and
commission income was mainly offset by lower equity investment gains and
non-recurrence of income relating to a forward contract for the loan
acquisition of Ulster Bank tracker mortgages in 2024. Net fee and commission
income increased by 4% to €692m (2024: €666m) primarily reflecting higher
card, wealth and insurance income partially offset by lower foreign exchange
income. For 2026 we expect other income of > €750m.

 

Operating costs were lower than expected at €1,992m (2024: €1,971m), up 1%
reflecting the impact of inflation and higher opex-related investment spend
partially offset by lower variable pay allowance and lower average staff
numbers. FTE numbers reduced by 3% to 10,207 (2024: 10,469) driven by natural
attrition. The cost income ratio was 44% (2024: 40%). For 2026 we expect costs
to increase by c. 2%. As we accelerate our digitalisation, enabling faster
innovation, scalability and enhanced security, we are increasing our
investment spend to c. €400m on average per annum.

Credit quality remains robust. There was a net credit impairment charge of
€172m representing 24bps cost of risk (2024: €55m charge; 8bps CoR). This
was driven by a €224m net charge predominantly in wholesale lending
partially offset by a €52m writeback due to improved macro-economic
assumptions. Our approach remains conservative, comprehensive and
forward-looking and is reflected in an ECL coverage rate of 1.6%. For 2026 we
expect CoR within the range of 20-30bps.

 

Bank levies and regulatory fees of €114m decreased by €24m (2024: €138m)
due to confirmation that no payment was required for the Deposit Guarantee
Scheme as the scheme has currently reached its target funding level. For 2026
we expect bank levies and regulatory fees to be c. €140m.

 

Exceptional items were €156m of a gain (2024: €66m cost) primarily due to
a gain from the sale of our minority stake in AIB Merchant Services to joint
venture partner Fiserv, Inc.

 

CUSTOMER LOANS

 

Gross loans increased €1.1bn (+2%) to €72.3bn (Dec 2024: €71.2bn) driven
by underlying growth of €2.4bn (+3%) as new lending of €14.7bn exceeded
redemptions of €12.3bn. Growth was negatively impacted by adverse FX
movements of €0.9bn and deleveraging of €0.4bn. We expect customer loans
to grow by c. 5% in 2026, our pipeline is strong and our expectation of a c.
5% CAGR to 2027 remains intact.

 

Total new lending increased by 2% to €14.7bn (2024: €14.5bn).

 

AIB's new mortgage lending in Ireland was €4.3bn (2024: €4.5bn) resulting
in a mortgage market share of 30%((4)). AIB is the leading direct-to-customer
mortgage provider with 46% market share. Personal lending in Ireland was up 4%
to €1.4bn as consumer credit demand continued to increase and 88% of
personal loan applications were applied for digitally. New lending to SMEs in
Ireland remained relatively stable at €1.6bn with two thirds of small
business loans originated on our digital business loan platform whilst
automation has reduced 'time to cash' by 44%.

In Capital Markets, new lending was up 5% to €4.6bn. The growth in new
lending was driven by corporate lending and some recovery in real estate new
lending from a low prior year period.

Climate & Infrastructure Capital delivered new lending of €1.6bn of
which 65% was in Europe and the UK.  We continue to finance the transition to
renewable energy and social infrastructure.

UK new lending of £1.7bn (2024: £1.2bn) was driven by strong corporate and
property lending as we continue to focus on our chosen market sectors such as
residential investment.

Green and transition lending of €6.3bn accounted for 43% of new lending with
€22.9bn deployed since 2019 as we continue to support our customers to
transition to a more sustainable future. Green mortgages represented 60% of
new mortgage lending (2024: 52%).

NPEs reduced by 20% to €1.6bn or 2.2% of gross loans (Dec 24: €2.0bn or
2.8% of gross loans) as redemptions and disposals of €1.0bn were partially
offset by net inflows of €0.6bn. Asset quality remains resilient and we
continue to carefully manage the loan book.

 

FUNDING & CAPITAL

 

Strong funding and capital ensure AIB is well-positioned for sustainable
growth. Customer deposits increased significantly by €7.4bn or 7% to
€117.2bn with 93% of accounts ROI-based (Dec 24: 92%). Customer deposits are
expected to grow by 2-3% in 2026. The Group has strong funding and liquidity
ratios with LDR of 61%, LCR of 204% and NSFR of 163% at Dec 2025 (Dec 24: LDR
64%, LCR 201% and NSFR 162%).

 

The Group completed five MREL issuances in 2025 consisting of €700m AT1,
$750m and €800m green senior non-preferred bonds and €1bn green Tier 2.
Our MREL ratio at Dec 2025 increased to 35.2% of RWAs, well in excess of our
requirement of 28.5% for 2026. Total proceeds raised from ESG bonds to date
stand at €8.2bn.

 

Capital remains robust and well ahead of minimum regulatory requirements. The
CET1 ratio at December 2025 was 16.2% (Dec 24: 15.1%). The main drivers of the
CET1 movements were:

·    Strong organic capital generation (c. +370bps) supporting
distributions of:

o  Interim ordinary cash dividend of €263m paid in Nov 25 (c. -50bps)

o  Proposed €988m((2)) final ordinary cash dividend (c. -170bps)

o  Regulatory approved on-market share buyback €1.0bn (c. -170bps)

·    Basel IV reduction in RWAs (c. +120bps)

·    DTA utilisation (c. +40bps)

·    Cancellation of IPO warrants €390m (c. -70bps)

·    Other equity and RWA movements (c. +40bps) including the RWA benefit
from a mortgage SRT and the sale of AIB Merchant Services offset by AT1 coupon
and other equity items

 

Other factors expected to impact capital over the medium-term include IRB
model adoption and the continuation of our SRT programme.

 

Shareholder distributions of €2.25bn equate to a total payout ratio of 105%

·    A final ordinary cash dividend of 46.257c per share, equating to
€988m((2)), has been proposed and is subject to shareholder approval at our
AGM on 30 April 2026. This is in addition to the €263m dividend paid in
November 2025. Total ordinary cash dividend of €1.25bn or 58.585c per share

·    Launching a €1bn regulatory approved on-market share buyback
programme

 

Separately it is our intention to seek shareholder approval at the 2026 AGM to
launch a follow-on Odd-lot offer to smaller shareholders in response to
requests from shareholders at the 2025 AGM.

 

 

SUSTAINABILITY

In AIB we are empowering people to build a sustainable future. Greening our
business is a strategic priority for AIB. Some of the highlights of 2025
across each of the ESG categories were:

 

Environmental

•    €22.9bn in green and transition lending since the Climate Action
target launched in 2019 including €6.3bn in 2025 (43% of new lending)

•    We continue to make significant progress on reducing our operational
emissions; 92% of our own electrical energy needs are now sourced through our
VPPA from two solar farms in Co. Wexford

 

Social

•    We have supported c. 19,000 customers to buy their first home with
€5.4bn of new lending going to first-time buyers since 2024, progressing
well towards our > €6bn target by 2026

•    AIB's financial advisers undertook over 34,000 financial planning
consultations, underpinning our focus on financial wellbeing and literacy for
all customers.

 

Governance

•     42% of our management roles((6)) are held by women, maintaining
our gender balance

•     The Group returned to full private ownership in June 2025

 

 

OUTLOOK

 

Notwithstanding geopolitical uncertainty, we remain focused on delivering our
strategy while preparing for the structural forces shaping our operating
environment, including demographic change, electrification and digitalisation.
In 2026 we will launch our next‑generation mobile app and introduce
industry‑wide peer‑to‑peer payments through Zippay. With a strong
capital base, a clear strategic ambition and a deep sense of purpose, AIB is
well positioned to support our customers, the communities we serve and the
Irish economy, while delivering sustainable long‑term value for
shareholders.

 

Following a strong start to the year and with continued momentum in our
business, we remain focused on completing the final year of our current
strategic cycle and planning for the future with confidence.

 

Further detail is provided in the 2025 Annual Financial Report which can be
found on our website at AIB Results Centre 2025
(https://aib.ie/investorrelations/financial-information/results-centre/2025-financial-results)
  or click here to view:
http://www.rns-pdf.londonstockexchange.com/rns/2191V_1-2026-3-3.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2191V_1-2026-3-3.pdf)

 

Analyst presentation

Colin Hunt, CEO and Donal Galvin, CFO will host a presentation via webcast and
conference today at 09.00GMT, details available at
(https://channel.royalcast.com/aib/#!/aib/20250801_1)  AIB Group plc Annual
Financial Results 2025 (https://edge.media-server.com/mmc/p/fik3yzpq/)

 

 

Glossary:

EPS: Earnings per share; RoTE: Return on tangible equity; FTE: Full-time
equivalent

SRT: Significant risk transfer; MDA: Maximum distributable amount

LDR: Loan to deposit ratio; LCR: Liquidity coverage ratio; NSFR: Net stable
funding ratio

NPS: Net Promoter Score, a measure of customer experience

Notes:

1)        RoTE= (PAT-AT1)/(CET1 @ 14% of RWAs)

2)        Final proposed dividend amount is based on the aggregate
number of shares currently outstanding; Dec 25 shares in issue:
2,136,766,718

3)        Costs before bank levies and regulatory fees and exceptional
items

4)        Source: Mortgage drawdowns BPFI for Dec YTD 2025

5)        Total proceeds returned to the State of c. €21 billion
includes levies of c. €650 million and other fees

6)        The Equileap annual Gender Equality Global Report &
Ranking equates 'gender balanced' with between 40% and 60% women

 

 

Figures presented above may be subject to rounding and thereby may differ to
the 2025 Annual Financial Report

 

 

 

 

 

- ENDS -

 

 

For further information, please contact:

 

 Group Investor Relations & External Communications

 Niamh.a.Hore@aib.ie (mailto:Niamh.a.Hore@aib.ie)

 Tel: + 353 86 313 5647

 Investor Relations

 Siobhain.m.Walsh@aib.ie (mailto:Siobhain.m.Walsh@aib.ie)

 Tel: + 353 87 3956864

 External Communications

 Will.r.Goodbody@aib.ie (mailto:Will.r.Goodbody@aib.ie)

 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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