Permanent TSB Group (PTSB) H2 2025 earnings summary

Executive summary

• 2025 marked a transformational year with record lending of EUR 3.4 billion, the highest in 18 years, and a 6% increase in deposits, alongside a 3% rise in the mortgage book.

• 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 on 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.

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

Financial highlights

• Net interest margin (NIM) at 2.03%, down 17bps year-over-year; total operating costs reduced by 2% to EUR 519 million, EUR 6 million below guidance.

• Cost/income ratio increased to 75% from 74% year-over-year, but improved to 74% in H2.

• Profit before exceptional items and tax was EUR 175 million, down 3% from 2024.

• Net impairment release of EUR 39 million, maintaining a low cost of risk (-18bps), the fifth consecutive year of such releases.

• Exceptional items totaled EUR 47 million, mainly due to voluntary severance.

Outlook and guidance

• Medium-term targets unchanged, with lending growth expected to accelerate from 4% and NIM to rise to 2.3% by 2028.

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

• ROTE projected to exceed 9% in 2026 and reach 13% by 2028.

• Cost of risk expected to move from zero in 2026 to 20-25bps by 2028.