AIB Group plc

AIB reported profit after tax of EUR 2.1 billion, RoTE of 25%, and EPS of EUR 0.933. Total income was EUR 4.5 billion, down 8%; net interest income was EUR 3.748 billion, down 9%; and net fee and commission income rose 4%. Costs were EUR 1.99 billion, up 1%, for a cost/income ratio of 44%. Gross loans were EUR 72.3 billion, up 2% reported and 3% underlying, with EUR 14.7 billion of new lending up 2%. ECL charge was EUR 172 million, or 24 bps of cost of risk, with ECL coverage at 1.6% and NPEs at 2.2% of gross loans. Customer deposits were EUR 117.2 billion, up 7%, and CET1 ended at 16.2%. Total distributions were EUR 2.25 billion, including a EUR 988 million proposed final ordinary cash dividend and a EUR 1 billion on-market buyback. For 2026, management guided to NII of circa EUR 3.8 billion, other income greater than EUR 750 million, costs up 2%, cost of risk of 20 to 30 bps, loan growth of 5%, deposit growth of 2% to 3%, and RoTE greater than 20%.

Colin Hunt framed 2025 as a milestone year, highlighting full private ownership, strong profitability, and the return of circa EUR 21 billion to the Irish state. His message was that AIB’s franchise, digital capability, and sustainability positioning are strong, with customer service, green lending, and investment in technology all supporting the next phase of growth. Tone-wise, he was upbeat and forward-looking, but repeatedly emphasized that 2025 was a milestone, not a destination.

Donal Galvin focused on the durability of earnings and the balance sheet. He pointed to EUR 3.748 billion of NII, a 44% cost/income ratio, EUR 172 million of ECL charge, 1.6% ECL coverage, and CET1 of 16.2% after 370 bps of organic capital generation. He also detailed 2026 guidance: NII around EUR 3.8 billion, other income above EUR 750 million, costs up 2%, cost of risk at 20 to 30 bps, loans up 5%, deposits up 2% to 3%, and RoTE above 20%. On capital allocation, he reiterated the ordinary payout range of 40% to 60% and said AIB retains optionality for buybacks and special dividends, while continuing SRTs and IRB model adoption.

Analysts pressed on the sustainability of NII, deposit growth, capital target timing, and whether AIB should participate more in the intermediary mortgage channel. Management said deposits should normalize to 2% to 3% growth in 2026, with no major mix change expected and deposit beta around 20%, while NII is underpinned by the structural hedge and a large granular deposit base. On mortgages, Colin Hunt said AIB does operate through Haven but prefers direct customer relationships, and he pointed to encouraging pipeline momentum after non-green rate adjustments. On capital, Donal Galvin said the >14% target reflects what the bank believes it needs to run the business, and that SRTs are primarily an RWA and risk-management tool rather than a capital-maximization exercise.