Permanent TSB Group (PTSB) H2 2025 earnings summary

Executive summary

• 2025 marked a transformational year with record lending of EUR 3.4 billion, a 6% increase in deposits, and a 3% rise in the mortgage book, alongside the first dividend since 2008.

• The bank met or exceeded guidance on all key metrics, including income, costs, impairment, capital, and returns, and announced its first dividend since 2008.

• Strategic focus included digital transformation, customer experience, and diversification of income streams, with significant progress in AI adoption and sustainability initiatives.

• Return on Tangible Equity (ROTE) was 7.3%, with CET1 ratio at 17.5% pro-forma.

Financial highlights

• Total income declined 3% year-over-year to EUR 655 million, with net interest income down 4% to EUR 590 million.

• Operating costs fell 2% to EUR 519 million, outperforming guidance and 2024 levels.

• Profit before exceptional items and tax was EUR 175 million, down 3% from 2024; Return on Tangible Equity was 7.3%.

• Cost-income ratio rose to 75% but improved to 74% in H2; impairment release of EUR 39 million for the fifth consecutive year.

• EPS for the year was EUR 0.206, down 8% year-over-year.

Outlook and guidance

• Return on Tangible Equity is expected to rise above 9% in 2026 and reach around 13% by 2028.

• Net interest margin guidance for 2026 is above 2.10%, assuming ECB deposit rates remain at 2%.

• Cost-income ratio targeted below 70% in 2026 and below 60% by 2028.

• Lending growth expected to accelerate from the current 4% rate, driven by mortgage market expansion and business banking diversification.

• Cost of risk modeled to rise modestly to 20-25 basis points by 2028.