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Investing.com -- J.P. Morgan has placed AIB Group (IR:AIBG) on Positive Catalyst Watch ahead of its third-quarter results, citing improving net interest income trends and stronger-than-expected deposit growth in Ireland.
The report said the trough in quarterly NII could be seen in the third quarter of 2025, supported by higher-margin balance sheet growth, with household deposits up 7% year over year in August and current accounts rising 5%.
Time deposit migration has slowed to a trickle, while deposit betas remain in line with expectations.
The European Central Bank’s deposit rate cut has also been delayed to December, with forward curves pointing to average ECB rates of about 200 to 220 basis points for 2026-2027, compared to J.P. Morgan’s forecast of 175 basis points.
AIB Group’s full-year 2025 NII guidance could be upgraded to above €3.7 billion, against consensus of €3.67 billion and current guidance of more than €3.6 billion.
J.P. Morgan expects this to be driven by stronger deposit growth, estimated at 5% versus guidance of about 3%, which also supports hedge expansion and gives more confidence in NII progression into 2026.
The bank’s estimates for 2026 NII are €3.67 billion, about 2% ahead of consensus. While the brokerage highlights near-term upside, it also flagged longer-term headwinds, including risks to foreign direct investment and economic growth as pharmaceutical capital expenditure shifts to the United States, along with changing competitive dynamics in Ireland.
However, it noted the recent joint payments service launch, “Zippay,” by Irish incumbents as a step to counter challenges from digital entrants such as Revolut.