AIB Group plc

AIB reported profit after tax of EUR 2.1 billion for 2025, with return on tangible equity of 25% and EPS of EUR 0.933. Total income was EUR 4.5 billion, down 8% year on year, reflecting a 9% decline in net interest income to EUR 3.748 billion and a 4% increase in net fee and commission income; costs were EUR 1.99 billion, up 1%, and the cost/income ratio was 44%. Gross loans were EUR 72.3 billion, up 2% reported and 3% underlying, with new lending of EUR 14.7 billion up 2%; deposits were EUR 117.2 billion, up 7%. ECL charge was EUR 172 million, or 24 bps cost of risk, ECL coverage was 1.6%, and NPEs were 2.2% of gross loans. CET1 finished at 16.2%, supported by 370 bps of organic capital generation, and total distributions were EUR 2.25 billion, including EUR 263 million already paid, a proposed EUR 988 million final ordinary cash dividend, and a EUR 1 billion buyback. For 2026, management guided to NII of circa EUR 3.8 billion, other income above EUR 750 million, costs up 2%, cost of risk of 20 to 30 bps, loans up 5%, deposits up 2% to 3%, and RoTE above 20%; bank levies and regulatory fees are expected around EUR 140 million.

Colin Hunt framed 2025 as a landmark year that completed the return to full private ownership and showed AIB can grow, invest, and return capital at the same time. He emphasized the strength of the Irish economy, housing supply opportunity, customer franchise, and the bank’s digital and branch model as supports for future growth. Strategically, he focused on customer trust, sustainability, and operational resilience, and said the group is investing more in technology and AI to “build the future faster.” His tone was confident and aspirational, including a stated ambition for AIB to be the best bank in Europe and the most trusted brand in Ireland.

Donal Galvin highlighted the hard numbers behind the year: EUR 2.1 billion profit after tax, 25% RoTE, EUR 3.748 billion NII, EUR 1.99 billion costs, and 16.2% CET1. He explained the NII bridge using the structural hedge, lower rates on cash held with central banks, and deposit behavior, and said the new EUR 10 billion of hedge executed recently reduced 100 bps NII sensitivity from EUR 378 million to EUR 286 million. He also pointed to balance sheet strength with EUR 117.2 billion of deposits, LDR of 61%, LCR of 204%, and NSFR of 163%, while describing capital generation as exceptionally strong at 370 bps and noting future capital management through SRTs, IRB model adoption, and buybacks/dividends. He guided to cost growth of 2% in 2026, cost of risk of 20 to 30 bps, and said medium-term organic capital generation should remain above 320 bps.

Analysts pressed on whether 2026 NII guidance of circa EUR 3.8 billion could be sustained beyond next year and on the assumptions behind deposit growth after 7% growth in 2025. Management said deposit growth should normalize to 2% to 3%, with deposit beta expected to stay around 20%, and said they see enough visibility in the balance sheet and hedge book to support the NII outlook. Questions also focused on capital and the >14% target, with management saying 2025’s 16.2% CET1 was driven by unusually strong capital generation and balance-sheet optimization, while SRTs are used mainly as an RWA and risk-management tool rather than to simply maximize capital. Analysts challenged the mortgage strategy and broker-channel exposure; Colin said AIB does participate through Haven, but prefers direct customer relationships, and pointed to a strong pipeline after pricing changes on non-green mortgages.