Permanent TSB Group Holdings plc

Reported 2025 total operating income fell 3%; net interest income was EUR 590 million, down 4%; total operating costs were EUR 519 million, down 2%; profit before exceptional items and tax was EUR 175 million, down 3% or EUR 5 million; EPS was EUR 0.206; RoTE was 7.3%; CET1 was 17.5% pro forma and 15.9% reported; lending was EUR 3.4 billion, up 31%; deposits rose 6% or EUR 1.5 billion; the mortgage book grew over 3% / 3.5% to EUR 20.4 billion; fees and commissions rose 5% to EUR 58 million; the impairment result was a EUR 39 million release. Guidance for 2026 includes NIM greater than 210 basis points, cost-to-income ratio less than 70%, cost of risk at nil/0 charge, and RoTE above 9%; medium-term targets remain around 13% RoTE by 2028, cost-to-income below 60%, NIM of 2.3%, and cost of risk rising to 20-25 basis points.

Eamonn Crowley framed 2025 as a transformational year and said the bank is now better positioned to compete because legacy issues are receding and IRB approval gives it more optionality in mortgages. He emphasized strategy execution across customer experience, digital mortgage tools, app improvement, business-lending expansion, and AI adoption, while highlighting a 10% FTE reduction and the first dividend in 18 years. His tone was upbeat but disciplined, repeatedly noting the formal sales process limits what he can say about capital actions and forecasts.

Barry D'Arcy focused on the mechanics behind the financials: lower margins from ECB and mortgage rate cuts, higher deposit costs, and then stabilization in H2, with year-end NIM at 203 basis points and a Q4 exit NIM of 208 basis points. He pointed to costs of EUR 519 million, regulatory charges of EUR 25 million, a EUR 39 million impairment release, EUR 47 million of exceptional items, and a provision stock of EUR 320 million or 1.4% of loans. On capital and funding, he highlighted CET1 at 17.5% pro forma, MREL over 36%, and RWA reductions of over EUR 900 million from IRB, while noting 329 FTE reductions and annualized VS savings of circa EUR 21 million.

Analysts pressed management on deposit-cost relief, whether Ulster loans will move to IRB, mortgage market share durability, headcount economics, 2026 cost direction, the formal sales process, and the right capital level for the bank. Management said deposit rates are already rolling off from higher legacy levels and that current term pricing is 2%, but they would not give precise 2026 cost guidance beyond saying they are cost-conscious. On market share, management said it is comfortable with about 20% in mortgages and has more optionality after IRB; on capital, they kept the CET1 target at 14% and said further distributions are not planned while the sales process continues.