Press Releases

Comment by Eamonn Crowley, Chief Executive:

“The Bank delivered a strong performance in the third quarter, with continued momentum across all our key business lines. Relative to last year, our deposit book has grown 7%, our mortgage book is up 4%, and our Business Banking book is up 11%.

Our new mortgage lending year to date is up 64% to €2.1 billion and we expect revenue growth to return in the coming quarters as we benefit from continued loan growth and improved margins. Operating expenses were marginally lower for the first nine months and are on track to reduce to our full year target of €525 million. In addition, our liquidity and capital positions remain strong, with our CET1 ratio at 15.5% at the end of September.

Our guidance for 2025 remains unchanged, as does our intention to restart dividend payments to our shareholders next year, subject to financial position and required regulatory and other approvals. We are also confident of our ability to deliver sustainable returns for our shareholders as evidenced by our updated return on tangible equity (ROTE¹) targets of c. 9% in 2027 and c. 11% by 2028.”

KEY HIGHLIGHTS

(all comparisons 9 months to Sept 2025 vs. 9 months to Sept 2024, unless stated)

• Total operating income 4% lower
• Net interest margin (NIM) of 2.01%
• Total operating expenses marginally lower and we remain on track to reduce costs to our full year 2025 target of €525 million
• Asset quality remains strong with no impairment charge
• Total gross loans rose to €22.4 billion, up 3% since year end and 4% year-on-year (YoY)
• New mortgage lending up 64% to €2.1 billion with a new flow share of over 20%²
• New lending in Business Banking (SME and Asset Finance) up 11%
• Enhancements to our consumer term lending proposition
• Customer deposits of €25.4 billion at end September, an increase of 5% (€1.3 billion) since year end and 7% YoY
• The Bank maintains a strong capital position with a CET1 capital ratio of 15.5%
• Following our recent SREP review, our Pillar Two requirement has reduced 25bps. This equates to 14bps at CET1 level reducing our CET1 requirement to 10.69%.
• Our IRB mortgage model review is progressing with the Central Bank of Ireland and we will update the market when appropriate
• Inaugural €300 million Green Tier 2 bond issued with a coupon of 3.875%

UPDATE ON GUIDANCE AND TARGETS

• Our guidance for 2025 remains in line with prior market communications
• Reaffirming our 2027 ROTE target of c. 9% with a new medium-term target of c. 11% for 2028 (prior to any potential benefit from ongoing IRB mortgage model review process)

FINANCIAL PERFORMANCE

(all comparisons 9 months to Sept 2025 vs. 9 months to Sept 2024 unless stated)

Income

Net interest income for the first nine months reduced 6% as the effects of lower interest rates on our margin offset higher average interest earning assets. The net interest margin (NIM) was 2.01% for the first nine months and compares with 2.02% in the first half of 2025.

The Bank’s NIM has stabilised 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. Given this, we expect NIM to exceed 2.00% for the year as guided. 

Net fees and commissions were up 9% in the first nine months and as signalled previously, this growth primarily reflects one-off factors. In addition, net other income contributed €7 million (€4 million equivalent in 2024) of non-recurring revenue primarily due to favourability on foreign currency associated with customer transactions and a hedging gain related to our Tier 2 liability management exercise. On a combined basis, total non-interest income was up 14% YoY.

Operating expenses

Total operating expenses were marginally lower in the first nine months with underlying costs ex regulatory charges up c. 1% reflecting a temporary increase in investment costs in the quarter. Critically, we remain on track to meet our cost target of €525 million for the year. The cost income ratio on an underlying basis was c. 77% in the first nine months and the Bank remains focused on reducing this in the coming years.

The Bank’s voluntary severance scheme when combined with management actions is expected to reduce staff numbers by c. 300 in 2025 (excluding graduate intake). Staff numbers at the end of September were 3008, a reduction of 239 since year end.

Other cost reduction initiatives as part of our Strategic Business Transformation (SBT) programme, such as offering a fully online mortgage sales and service journey, are progressing and will enable us to both improve customer and colleague experiences while continuing to reduce costs in absolute terms.

Asset quality

Economic conditions in Ireland are supportive of our business and asset quality remains strong. Consequently, the Bank recorded a nil impairment charge in the first nine months. Non-performing loans at end September 2025 were €3m lower relative to the half year point and represented c. 1.7% of gross loans. 

The Bank will continue to closely monitor the impact of US trade tariffs on the Irish economy, however notwithstanding heightened uncertainty, PTSB has seen no deterioration in its asset quality and remains well provisioned.  As previously indicated, the review of our IFRS9 models continues.

BALANCE SHEET & BUSINESS PERFORMANCE

Customer loans

Total gross loans on the balance sheet rose to €22.4 billion at end September 2025, up 3% year to date (YTD) and 4% YoY.

Our share of new mortgage drawdowns over the first nine months was over 20%, which is within the range that we are targeting. Green mortgage lending accounted for 44% of all new loans in the first nine months as we supported customers in their transition to a low-carbon economy.

We recently announced reductions of 0.15%-0.2% on a range of fixed-rate mortgage products where the loan to value is between 80%-90%. This will help us remain competitive in the first-time buyer market, the segment which makes up the majority of new mortgages being written in Ireland currently.
Meanwhile we continue to make progress in diversifying our income, with new lending in Business Banking, which includes both SME and Asset Finance lending, up 11% YTD and growth in the book also of 11% YoY.

We also announced major enhancements to our consumer term lending proposition which demonstrates our ambition to grow our consumer finance book significantly in the coming years. The new rates are amongst the most competitive in the market and include a market-leading rate of 5.99% for loans from €25,000. The new proposition also provides a more simplified and easier to follow loan offering which customers can easily assess and apply for, and the digital application experience for PTSB customers is transformed.

Funding and liquidity

Customer deposits were €25.4 billion at end September 2025, up 5% YTD (€1.3 billion) or 7% YoY. Following a very strong performance in H1, deposit growth slowed in the quarter. This was in line with expectations with term deposits and current accounts both seeing modest growth in the quarter.

We recently announced further changes to our term deposit rates which took effect from 1 October 2025. The Bank’s 1-year and 6-month fixed-term deposit accounts decreased by 0.25%, to 2.00% and 1.25% respectively. The Bank’s 5-year fixed-term deposit increased by 0.50% to 2.00%, and the 3-year fixed-term deposit increased by 0.40% to 2.00%.

Our liquid assets were €7.3 billion at end September 2025 up from €6.5 billion at year end, with 69% of this representing debt securities.

The loan to deposit ratio of 87% and liquidity coverage ratio of 283% at end September 2025 provide the Bank with a strong liquidity position and a secure funding source for future growth in lending volumes.

Capital

The Bank's Common Equity Tier 1 (CET1) ratio at end September 2025 remains strong at 15.5% and is comfortably above our regulatory minimum. The Bank's leverage ratio at end September 2025 was 6.7%, compared with 7.1% at December 2024 and remains very strong for a bank with our residential mortgage exposure.  

Following our recent SREP assessment, our Pillar Two requirement has been reduced by 25bps. This equates to 14bps at CET1 level reducing our CET1 requirement from 10.83% to 10.69%. This is a welcome development and reflects the Bank’s improving risk profile.

We remain committed to optimising our MREL and capital stack over the coming years given the potential for efficiencies this could generate, particularly given that the Bank has returned to investment grade status. In this regard, we were particularly pleased with the issuance of our €300 million Green Tier 2 bond in October which priced with a coupon of 3.875% and a spread c. 165bps lower than our previous Tier 2 issuance. The transaction was a record 11.5 times oversubscribed, the highest recorded level for a European bank euro denominated Tier 2 bond. We also had a very successful take-up on our tender offer for our €250 million Tier 2 notes that had a call date in May 2026.

OUTLOOK AND MEDIUM-TERM TARGETS

Trading conditions remain positive and our guidance for 2025 remains in line with prior market communications. As regards our IRB model application, this is progressing with the Central Bank of Ireland and we will update the market when appropriate.

Today, we are also issuing an update to our medium-term financial targets, extending them out to 2028. In summary, our 2027 ROTE target of c. 9% remains unchanged and this is now expected to rise to c.11% in 2028.

The principal drivers behind ROTE expansion in 2028 are: income growth driven by higher volumes and NIM widening; a decline in cost/income ratio; and further benefits from refinancing the Bank’s debt stack. As previously indicated, these targets are based on current capital models. They also assume the Bank returns to paying dividends each year, subject to financial position and required regulatory and other approvals, starting from a modest base and building to a 40% payout ratio over time.

Updated medium-term targets

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Analyst conference call

Eamonn Crowley, CEO and Barry D’Arcy CFO will host a conference call today at 10.00 Irish Time/GMT for 30 minutes.
To participate in the Conference Call, register using the link below: 
https://www.netroadshow.com/events/login/LE9zwo3jkZc7aP4NPdoxhrgNaTlnCwqDzoG
Alternatively, operator Assisted Dial-In: 
Ireland (Local): 01 6917842
United Kingdom (Local): +44 20 3936 2999 
United Kingdom (Toll-Free): +44 808 189 0158 
Global Dial-In Numbers 
Access Code: 086492 

Replay will be available until Thursday, November 06, 2025 at:
UK (Local): 020 3936 3001 
USA (Local): 1 845 709 8569 
Access Code: 823873 

¹ Return on tangible equity is profit attributable to shareholders (excl. all exceptional items) divided by notional equity (average RWAs * CET1 of c. 14%)
² Based on BPFI data for Q1-Q3 2025

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