REG - Permanent TSB Group - Commentary on 2025 Annual Financial Report

Permanent TSB groupAnnouncement

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RNS Number : 3971V  Permanent TSB Group Holdings PLC  05 March 2026

5 March
2026
 

Permanent TSB Group Holdings plc ('PTSB' or 'the Bank')

ANNUAL RESULTS FOR YEAR ENDED 31 DECEMBER 2025

Comment by Eamonn Crowley, Chief Executive:

"2025 was a transformational year for PTSB. The Bank's balance sheet continued
to grow as customers responded to the strength of our brand and product
offering. Deposits increased by 6%, our mortgage book grew by over 3%, and our
Business Banking (SME and Asset Finance) portfolio rose by 9%. Our new
mortgage lending market share also increased, reaching c. 20%. Revenues
returned to growth in the second half of the year as interest rates
stabilised.

The recent approval of our IRB mortgage models marked a major strategic
milestone, significantly enhancing our competitiveness and enabling
sustainable business growth now and into the future.  I am also delighted to
announce a proposed final dividend, the Bank's first since 2008, which
reflects the scale of our transformation and the renewed strength of PTSB."

KEY FINANCIAL HIGHLIGHTS (all comparisons vs. 2024 unless otherwise stated):

·   Underlying Profit Before Tax(( 1  (#_ftn1) )) of €175 million (€180
million)

·   Profit Before Tax of €128 million (€159 million)

·   EPS of 20.6 cents per share; RoTE 2  (#_ftn2) 7.3%

·   Total Income of €655 million, 3% lower

·   Net Interest Income of €590 million, 4% lower due to a reduction in
interest rates

·   Net Interest Margin (NIM) of 2.03% (2.20%)

·   Operating Costs of €519 million, 2% lower

·   Cost Income Ratio 3  (#_ftn3) of 75%, 1 ppt higher

·   Impairment Release of €39 million (-18bps Cost of Risk)

·   CET1 ratio of 15.9% or 17.5% on a pro-forma basis under new IRB
models 4  (#_ftn4)

·   A recommended final dividend of €10 million or 1.835 cents per share,
the first since 2008

OTHER HIGHLIGHTS:

·     Total Gross Loans of €22.6 billion, up 4% on an underlying
basis 5  (#_ftn5)

·     Total New Lending of €3.4 billion, up 31%

·     New Mortgage Lending of €2.9 billion, up 39% with our share at c.
20% 6  (#_ftn6) (2024 16.4%)

·     New Lending in Business Banking (SME and Asset Finance) up 4% and
growth in the book of 9%

·     Customer Deposits of €25.6 billion, up 6% (€1.5 billion)

·    The number of employees (Full Time Equivalent 7  (#_ftn7) ) reduced by
more than 300 or 10% to 2,918, through voluntary severance and natural
attrition

·     SREP Pillar Two Requirement reduced by 25bps, equating to a 14bps
reduction in CET1 to 10.69%

·   New IRB mortgage models approved, transforming annual capital generation
and the Bank's ability to compete on a more equal footing

·     Medium-Term Targets reflect our new IRB models, with RoTE rising to
>10% and c. 13% for 2027 and 2028 respectively

 

FINANCIAL PERFORMANCE

(all comparisons vs. 2024 unless otherwise stated)

Income

Net Interest Income (NII) of €590 million was 4% lower, primarily due to
falling interest rates as a reduction in margins offset higher average
interest earning assets. However, NII in H2 was level with H2 2024 and 5%
higher when compared with H1 2025.

The Net Interest Margin (NIM) was 2.03% for 2025 (2024 2.20%) which is
consistent with our guidance of >2.0% for the year. The Q4 exit NIM was
2.08% and the Bank's margin is recovering as the carryover effect of falling
ECB rates on our assets is offset by an easing in the average cost of term
deposits, and a benefit from maturing fixed rate mortgages refinancing onto
higher rates.

Non-interest income was €65 million up 9% (2024 €60 million) boosted by
€7 million in other income (2024 €5 million) relating to foreign currency
and hedging gains. Core net fees and commissions were up 5% to €58 million
driven largely by growth in current account fee income.

Operating Costs

Total operating costs reduced 2% to €519 million during 2025 (€531
million). Regulatory charges were lower than expected at €25 million (2024
€33 million) as the Bank incurred no charge for the Single Resolution Fund
or Deposit Guarantee Scheme during the year. Excluding these charges, the
Bank's Cost Income Ratio was 75%, with the ratio falling from over 76% in H1
to closer to 74% in H2.

Addressable costs before depreciation and regulatory costs, which comprise
staff and other costs reduced 1% to €410 million. The number of employees
(Full-time Equivalent) reduced by more than 300 or 10% to 2,918, reflecting
the Bank's voluntary severance scheme and natural attrition. The voluntary
severance scheme is expected to generate annualised savings of circa. €21
million, less than half of which came through in 2025. A generalised pay rise
of 4%, and continued investment in customer enhancements and technology
resilience partly offset the benefit of lower FTE.

The Bank's Strategic Business Transformation (SBT) programme that focuses on
operational improvements and cost efficiency is also progressing well and will
support our strategy through our different value streams. These initiatives
include digitalising customer correspondence, contact service transformation
and delivery of a fully online mortgage sales and service journey. Together
they will enable us to both improve customer and colleague experiences while
continuing to reduce costs.

Exceptional charges were €47 million, €35 million of which related to the
voluntary severance scheme, and €12 million comprised provisions for other
non-core items.

Asset Quality

Asset Quality remains strong and we recorded an impairment release of €39
million or a cost of risk (COR) of -18bps which compared with guidance of
0bps. This was the fifth year in a row the Bank recorded an impairment
release. Non-Performing Loans reduced to €0.3 billion at December 2025
(€0.4 billion at December 2024) primarily due to a loan sale announced last
November (gross value of €73 million). These loans were derecognised at year
end and replaced with a receivable. NPLs represented 1.4% of gross loans at
December 2025, which is below our European peers and compares with c. 28% at
its peak.

Our total provisions were €320 million at year end which included €57
million of model overlays. This compares with €392 million and €92 million
respectively at year end 2024. Our coverage ratio reduced to 1.4% of gross
loans at end 2025 (1.8% December 2024), reflecting the completion of our IFRS
9 model review which covered staging, PD and LGD models for the mortgage
portfolios. Much of the reduction in provisions related to stage one coverage
on our home loan book which are now at levels much closer to peers.

BALANCE SHEET & BUSINESS PERFORMANCE

Sustainable Business Growth

PTSB differentiates itself through exceptional customer experiences and the
Bank's investment in its brand, products and services continues to resonate
with customers. This helped to deliver improved relationship net promoter
scores, which increased by a further 2 points to +24, or 14 points when
measured relative to three years ago. We continue to score 9 out of 10 with
customers for many of our key customer journeys and customer consideration of
PTSB for their next financial product is a very encouraging 71%.

The Bank continued to invest in its digital offering, with further
enhancements delivered throughout 2025, including new in‑app functionality
such as Biometrics, Quick Balance, and gambling‑block features.  We also
invested significantly in our payment's infrastructure, introducing SEPA
Instant, which enables customers to receive euro payments in less than 10
seconds, 24 hours a day, 365 days a year. We further enhanced security with
new verification features designed to ensure payments reach the correct
recipient.

Our Sustainability Strategy 2025-2027 was launched in May 2025 and focuses on
channelling our investment and directing our impact toward areas that enhance
societal well-being. A key programme delivered under this commitment includes
the development of the Bank's science-based carbon emission reduction targets
(SBTs) aligned with Science Based Targets initiatives (SBTi) standards.

To support our customers as they take practical steps to make their homes more
energy‑efficient, in January 2026 we launched a new bespoke Home Upgrade
Tool that provides homeowners with personalised upgrade solutions, from full
retrofits to individual measures such as attic insulation. We also introduced
a market‑leading rate of 2.99%, with reductions of up to 0.56% on SBCI Home
Energy Upgrade Loans.

We are also seeing sustainability drive commercial growth across our Business
Banking Portfolio, with €56m (+16% YoY) of new lending in 2025 being
categorised as Impact Lending, supporting businesses that are delivering
positive social or environmental outcomes.

In addition, PTSB received an upgraded MSCI ESG Rating of 'A' and improved its
CDP (formerly the Carbon Disclosure Project) rating from a 'C' to a 'B'. These
upgrades recognise the progress that the Bank is making in actively managing
our environmental impact, while demonstrating a commitment to long-term
sustainability.

Customer Loans

Total gross customer loans were €22.6 billion at year end and were up 4% for
the year on an underlying basis. Our core mortgage book rose over 3% and our
share of new mortgage drawdowns was c. 20% for the year, up from 16.4% in
2024. Fixed-rate products accounted for around 94% of our new mortgage
lending, with Green lending accounting for 44% of new mortgages as we
supported customers in their transition to a low-carbon economy.

PTSB is fully committed to competing in the Irish mortgage market and
providing increased choice for customers, and we recently announced some
changes to our fixed rate mortgage offering with reductions of up to 0.45%.
These new rates are in addition to PTSB's existing competitive 2+2 mortgage
cashback offering, where customers receive 2% cashback within 40 days of
mortgage drawdown and those who pay their mortgage via a PTSB Explore account
also benefit from a further 2% cashback on mortgage repayments up to 31(st)
December 2030.

Throughout 2025, we introduced a range of new products and competitive rate
changes to better meet customers' needs, including a major overhaul of our
personal loan offering last September. Interest rates on some loans were
reduced by up to 4.9%, with rates now among the most competitive in the
market, including a market‑leading 5.99% rate for loans from €25,000.
Existing customers can apply online via Open24.ie or through the PTSB mobile
app, with real‑time decisions and instant transfer of funds to their PTSB
account when approved. These enhancements to our proposition have resonated in
the market. New personal term lending was up 10% for the year having been down
6% at the half-year stage, and growth in the book was 12% in 2025.

We continue to make progress in diversifying our loan book with new lending in
Business Banking (SME and Asset Finance) up 4% and growth in the book of 9% to
c. €1.3 billion. SME had a stronger year than Asset Finance with growth in
the book of 15%. Overall, the Bank sees a significant long-term opportunity to
grow this part of our business.

Funding and Liquidity

Customer deposits were €25.6 billion at end 2025, an increase of 6% (€1.5
billion). Current account balances accounted for around one fifth of this
growth rising 4%, reflecting growth in the general economy and the reduced
attractiveness of term accounts as interest rates declined. We announced a
number of changes to our term deposit rates during the year and the average
cost of our deposits is reducing as our more expensive term balances mature.

Our loan/deposit ratio was 87% at year end and our Liquidity Coverage Ratio
was 277% (89% and 255% at December 2024 respectively) demonstrating a strong
liquidity profile. MREL was 36.5% at year end which was comfortably above our
requirement of 28.2%. As this buffer would increase further if measured using
our new IRB models, we will review our issuance requirements over the coming
years.

Capital

The Bank's Common Equity Tier 1 (CET1) ratio at December 2025 remained strong
at a reported 15.9% (14.7% December 2024). This is net of a deduction for our
proposed dividend and is well above our 2025 regulatory requirement of c.
10.69%.

Risk weighted assets (RWAs) reduced from €11.5 billion at the end of 2024 to
€10.9 billion at the end of 2025, with CRR3 contributing to a reduction of
€0.9bn which was partly offset by growth in the loan book. On a pro-forma
basis, adjusting RWAs for the impact of our new IRB models, RWAs would have
been lower by a further €0.9 billion generating 1.5% of capital. Factoring
in a small additional benefit from our recent loan sale (0.1%), CET1 on a
pro-forma basis would rise to 17.5%.

The Bank's Leverage ratio at December 2025 was 6.5% (7.1% at December 2024)
and remains very strong for a bank with our high level of residential mortgage
exposure.

In September, the Bank successfully issued a €300 million Green Tier 2 bond,
which priced at a coupon of 3.875% and was almost twelve times
over-subscribed. This was accompanied by a successful tender of our existing
€250 million Tier 2 notes that have a call date in May 2026, achieving close
to an 80% take‑up. Together, these actions facilitated a call (with no
replacement) of a €125m AT1 instrument which carried a coupon of 7.875% in
November. The Bank is committed to further optimising its debt and capital
stack over the coming years.

2026 OUTLOOK AND MEDIUM-TERM TARGETS

The Bank entered 2026 with a strong pipeline of new business. In addition, net
interest margin is recovering. Our guidance for 2026 is as follows:

·     NIM >2.10%

·     Cost/Income ratio of <70%

·     Cost of Risk 0bps

·     Exceptional Costs c. €10 million, excluding Formal Sale Process
(FSP)

·     RoTE  >9% 8  (#_ftn8)

On 21(st) January, the Bank informed the market that its new IRB models had
been approved by the Central Bank of Ireland. As our new models will
materially reduce our risk weighted assets when compared to our Medium-Term
Plan, we raised our RoTE targets for 2027 and 2028 from c. 9% and c. 11% to
>10% and c. 13% respectively.

 

The Bank is considering the impact of the new IRB models on its distribution
capacity, nonetheless at this time does not plan to recommend further
distributions to shareholders in light of the ongoing FSP.

 

Updated medium-term targets post IRB model approval

                    2027         2028
 NIM %              2.20%-2.25%  >2.30%
 Cost/Income ratio  c. 62%       <60%
 Cost of risk       <20bps       20-25bps
 RoTE %             >10%         c. 13%

 

- Ends -

For Further Information Please Contact:

 Scott Rankin                                                      Ed Micheau

 Head of Investor Relations                                        Corporate Affairs & Communications

 Email: scott.rankin@p (mailto:scott.rankin@ptsb.ie) tsb           Email: e (mailto:ed.micheau@ptsb.ie) d (mailto:ed.micheau@ptsb.ie) .m
 (mailto:scott.rankin@ptsb.ie) .ie (mailto:scott.rankin@ptsb.ie)   (mailto:ed.micheau@ptsb.ie) icheau (mailto:ed.micheau@ptsb.ie) @p

                                                                 (mailto:ed.micheau@ptsb.ie) tsb (mailto:ed.micheau@ptsb.ie) .ie
 Phone: +353 87 001 0504                                           (mailto:ed.micheau@ptsb.ie)

                                                                   Phone: +353 86 803 7155

 

 

 

Note on Forward-Looking Information:

This announcement contains forward-looking statements, which are subject to
risks and uncertainties because they relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends, and
similar expressions concerning matters that are not historical facts. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or achievements
of the Bank or the industry in which it operates, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. The forward-looking statements referred to in
this paragraph speak only as at the date of this announcement. The Bank
undertakes no obligation to release publicly any revision or updates to these
forward-looking statements to reflect future events, circumstances,
unanticipated events, new information or otherwise except as required by law
or by any appropriate regulatory authority.

 1  (#_ftnref1) Underlying Profit Before Tax is Profit before Exceptional
Items and Tax

 2  (#_ftnref2) Return on Tangible Equity is Profit Attributable to
Shareholders (excluding Exceptional Items) divided by Notional Equity

 3  (#_ftnref3) Cost Income ratio is calculated as Operating Costs (excl.
Regulatory Charges and Exceptional Items) divided by Total Operating Income

 4  (#_ftnref4) Pro-forma for new IRB models and the conclusion of loan sale
announced in Nov'25

 5  (#_ftnref5) Adjusting for loan sale announced in November 2025.  These
assets were derecognised from the balance sheet at year end

 6  (#_ftnref6) BPFI data at Q4 2025

 7  (#_ftnref7) The Full-time Equivalent figure of 2,918 does not include
seasonal workers, staff on maternity leave, career breaks, or long-term
absence

 8  (#_ftnref8) Notional equity for 2026 based on average RWAs in 2026
reflecting new IRB models

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