This article first appeared on GuruFocus .
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Profit After Tax:EUR2.1 billion.
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Return on Tangible Equity (ROTE):25%.
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Earnings Per Share (EPS):EUR0.933.
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Total Income:EUR4.5 billion, down 8% year-on-year.
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Net Interest Income (NII):EUR3.75 billion, down 9%.
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Cost to Income Ratio:44%.
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Gross Loans:EUR72.3 billion, up 2%.
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New Lending:EUR14.7 billion, up 2% year-on-year.
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Customer Deposits:EUR117.2 billion, up 7%.
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Common Equity Tier 1 (CET1) Ratio:16.2%.
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Total Distributions:EUR2.25 billion, payout ratio of 105%.
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Net Promoter Scores:All-time highs in five of six key customer journeys.
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Green and Transition Lending:EUR23 billion deployed since 2019.
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Assets Under Management (AUM):EUR18 billion, with AIB Life AUM at EUR3 billion, up 20%.
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Cost of Risk:24 basis points.
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Non-Performing Exposures (NPEs):2.2% of gross loans.
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Structural Hedge Program:EUR15 billion increase in 2025.
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Investment Spend:Increased to EUR350 million in 2025, rising to EUR400 million in 2026.
Release Date: March 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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AIB Group PLC ( AIBRF ) delivered a profit after tax of over EUR2.1 billion, representing a return on tangible equity (ROTE) of 25%.
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The company achieved a resilient net interest income (NII) of EUR3.75 billion, exceeding expectations.
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AIB Group PLC returned to full private ownership in 2025, having returned approximately EUR21 billion to the Irish state.
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The company made significant progress in sustainability, with 43% of new lending being green, and aims to reach a 70% target.
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AIB Group PLC's digital transformation is advancing, with 88% of personal loans applied for digitally and a strong digital engagement with customers.
Negative Points
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Total income for AIB Group PLC decreased by 8% in 2025, with net interest income down by 9%.
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The company's mortgage market share fell to 30%, with a 4% decline in new mortgage lending.
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AIB Group PLC's cost to income ratio stood at 44%, with costs slightly higher than expected.
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The company faced challenges in the Climate & Infrastructure capital segment, with a high cost of risk of 110 basis points.
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Despite strong capital generation, AIB Group PLC's CET1 ratio of 16.2% is above its medium-term target of greater than 14%, indicating potential inefficiencies in capital utilization.
Q & A Highlights
Q: Can you discuss the components of the EUR3.8 billion NII guidance for 2026 and provide insights on NII beyond this year? A: Donal Galvin, CFO, explained that the deposit market is expected to normalize in 2026, with a projected increase of 2% to 3%. The deposit beta is expected to remain around 20%, similar to 2025. The NII guidance is based on a 5% growth assumption over the coming years, with 2026 numbers slightly better than consensus. The return on tangible equity is expected to remain above 20% for 2027 and 2028.
Q: When do you expect to reach your greater than 14% capital target, and what are the key drivers for new lending growth? A: Colin Hunt, CEO, stated that AIB is not out of the intermediary mortgage channel and prioritizes direct customer relationships. The adjustments to non-green mortgage rates have shown encouraging pipeline growth for 2026. Donal Galvin added that the 14% capital target is a baseline for running the business successfully, and the focus is on optimizing capital through initiatives like mortgage SRTs, even if it temporarily moves away from the target.
Q: How are you planning the split of distributions going forward, and what is the potential for capturing AIB customers in wealth services? A: Donal Galvin mentioned that the distribution strategy involves engaging with investors and regulators, focusing on delivering consistent returns. The cash dividend is set at the top end of the 40% to 60% range. Colin Hunt highlighted that the new app will enhance customer engagement, and the acquisition of Goodbody and establishment of AIB Life have significantly increased AUM, with further growth expected.
Q: Can you provide an update on capital generation, particularly regarding SRTs and potential headwinds? A: Donal Galvin explained that commercial real estate is a significant beneficiary from Basel IV, but the impact won't be clear until 2026 or 2027. SRTs are used for RWA optimization and risk management, with a focus on regular, smaller transactions across multiple asset classes. Each transaction aims to save 20 to 25 basis points of CET1.
Q: What are the expected returns and risks in the Climate Capital segment, and how do IRB changes affect your capital targets? A: Donal Galvin noted that the Climate Capital segment has a risk weighting density of around 75% post-model approval, with a margin of 2.2%. The cost of risk was high in 2025 due to fiber transactions, but excluding those, it was around 5 to 6 basis points. The segment is expected to be accretive, with a cost of risk below 20 basis points. IRB changes are being monitored, but no immediate impact on pillar two requirements is expected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
