Earnings call transcript: Permanent TSB Q3 2025 sees stock surge 18%

Permanent TSB Group Holdings PLC (PTSB) reported its Q3 2025 earnings, highlighting a notable performance in the Irish banking sector. The company’s stock surged 18.26% to €2.41, reflecting positive investor sentiment following the earnings call. This surge contributes to PTSB’s impressive 57% price return over the past six months, with the stock now trading near its 52-week high of €2.81. According to InvestingPro analysis, the stock appears overvalued based on its Fair Value assessment, with an RSI suggesting overbought territory. The bank’s strategic initiatives and robust financial metrics have reinforced its competitive position in the market.

Key Takeaways

• Permanent TSB’s stock price jumped 18.26% following the earnings announcement.
• New mortgage lending increased by 64% to €2.1 billion.
• Customer deposits rose to €25.4 billion, marking a 7% year-on-year increase.
• The bank launched a formal sales process to seek a new long-term owner.

Company Performance

Permanent TSB demonstrated strong performance in Q3 2025, with significant growth in new mortgage lending and customer deposits. The bank’s strategic focus on expanding its business banking segment and maintaining a strong market share in mortgages has positioned it well in the competitive Irish banking landscape. The successful issuance of a green Tier 2 bond and the absence of impairment charges further underscore its financial stability.

Financial Highlights

• Total operating income for the first nine months of 2025 decreased by 4%.
• Net Interest Margin (NIM) stood at 201 basis points.
• Total gross loans increased to €22.4 billion, reflecting a 4% year-on-year growth.
• CET1 capital ratio remained strong at 15.5%.

Outlook & Guidance

Looking forward, Permanent TSB has set ambitious targets, including a Return on Tangible Equity (ROTE) of approximately 9% by 2027 and 11% by 2028. The bank anticipates maintaining a NIM above 200 basis points for the year and aims to reduce its cost-income ratio below 60% by 2028. Additionally, potential capital distributions through buybacks are under consideration.

Executive Commentary

CEO Eamonn Crowley emphasized the importance of sustainable growth, stating, "Our continued sustainable growth is critical to ensure competition in the market and provide choice for customers." CFO Barry D’Arcy highlighted cost management efforts, noting, "We see our cost-income ratio come back to below the 60% level in 2028."

Risks and Challenges

• The ongoing review of the Internal Ratings-Based (IRB) model with the Central Bank of Ireland could impact regulatory compliance.
• Macroeconomic pressures and changes in interest rates may affect the bank’s NIM and overall profitability.
• The competitive landscape in the Irish banking sector remains challenging, with potential pressure on market share.

Q&A

During the earnings call, analysts inquired about the formal sales process (FSP) initiated by the bank. CEO Eamonn Crowley confirmed that the process is open to both trade and financial buyers, with the government, holding a 57% stake, supportive of the initiative. The bank expects to complete the FSP and announce a successful bidder in the first half of 2026.

Full transcript - Permanent TSB Group Hold (PTSB) Q3 2025:

Sammy, Call Coordinator: Hello, everyone, and thank you for joining us today for the Permanent TSB Group Holdings PLC conference call. My name is Sammy, and I’ll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad to remove yourself from a question queue. I’ll now hand over to our host, Eamonn Crowley, CEO, to begin. Please go ahead, Eamonn.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Great. Good morning, everyone, and thank you for joining the call. I’m joined here with our CFO, Barry D’Arcy, and there are three topics which we would like to cover with you in the next half hour. First, we announced this morning that the board of PTSB, with the support of our largest shareholder, Ireland’s Minister of Finance, has decided to launch a formal sales process, or FSP, in accordance with the Irish takeover rules. This puts the bank into a formal offer period. As a result, we’re quite restricted in what we can say, but we’ll do our best to explain how the process will work and answer your questions. Second, we’d like to briefly take you through our third quarter results for 2025, which continue to show that PTSB is making great progress in delivering on our strategy and improving returns for our shareholders.

Finally, we’ll provide an update on our guidance and medium-term targets. If I start with the FSP, I’m sure you’re aware that PTSB has seen a significant increase in appetite for its shares from international investors. We’ve had a very successful exit of NatWest from the register back in July, and more recently, we saw unprecedented demand for our green Tier 2 issuance from an extended number of investors who also operate in the equity space. This is against a backdrop of increased consolidation activity in the European banking sector. In recent years, PTSB’s business has also fundamentally transformed. We’ve built a sustainable business model that is competing very strongly in the Irish personal and business banking markets, supported by a refreshed, customer-focused brand.

Therefore, with the support of the Minister of Finance, the board of PTSB has concluded that now is the right time to seek a new long-term owner to support the next phase of the bank’s growth and strategic development under the framework of an FSP. The board believes that such a process could identify a new long-term owner of the bank, one which, subject to agreeing the terms satisfactory to the board and the requisite shareholder and regulatory approval, could be a value increaser for shareholders and beneficial for customers and colleagues. In terms of how the process will work, the FSP will enable PTSB to have conversations with potential bidders on a confidential basis and within a structured sales process.

There’s no prescribed or statutory timeline under the Irish takeover rules, but if the FSP proceeds as anticipated, the Board will publicly announce the identity of a successful bidder in the FSP and the terms of their offer during the first half of 2026. It is currently expected that any recommended offer would be for the entire issued share capital of PTSB, and that offer would then be subject to shareholder approval and applicable regulatory consents. There’s no impact on customers as a result of this announcement, and PTSB’s operations, products, and services are unaffected by the formal sales process. Our customers can continue to avail of our products and services normally, and have our team of dedicated colleagues that are available to support customers through our voice and digital channels, as well as through our network of 98 branches nationwide.

PTSB is committed to the Irish retail banking market, and as always, customers can be assured of the safety and security of their funds, along with our continued focus to deliver exceptional customer experiences. There will be no change for our colleagues either, and the FSP won’t cause any changes for those colleagues during the process. Our people are fundamental to the success of the business, and it is our colleagues across the organization that have driven our success in recent years. While we are happy to take questions on the FSP today, we are limited in what we can say in addition to the formal announcement that issued this morning. What I can say is that the commencement of an FSP is a usually positive development for PTSB and evidence of the bank’s position of strength in the Irish retail banking market.

Our continued sustainable growth is critical to ensure competition in the market and provide choice for customers. At this point, I will ask our CFO, Barry D’Arcy, to take you through the highlights of our quarter three results for 2025.

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: Thanks, Eamonn, and good morning, everyone. Looking at the key elements of our P&L, total operating income for the first nine months of 2025 reduced 4%, and we had a net interest margin, or NIM, of 201 basis points over the period. The bank’s NIM has stabilized, and we expect it to exceed 200 basis points for the year as guided. Total operating expenses were marginally lower over the first nine months, and we remain on track to reduce the costs for the full year to our target of €525 million. Asset quality remains strong, with no impairment charge in the first three quarters, and the bank remains well provisioned. Total gross loans rose to €22.4 billion, up 3% since year-end and 4% year-on-year.

Our new mortgage lending was up 64% to €2.1 billion during the first nine months, which gave us a share of over 20% of new business written in the market. Meanwhile, new lending in business banking, which is our SME and asset finance business, was up 11%. We recently announced enhancements to our consumer term lending proposition with new attractive rates ranging from 5.99%, and we have already seen a positive uptick in business as a result. Customer deposits were €25.4 billion at the end of September, an increase of 5% or €1.3 billion since year-end, and around 7% year-on-year, which is a very strong performance. Meanwhile, the bank maintains a strong capital position with a CET1 capital ratio of 15.5% at the end of September. Following our recent SHREP review, our Pillar 2 requirement reduced by 25 basis points.

This equates to 14 basis points at the CET1 level, reducing our CET1 requirements to 10.69%. Our IRB model review is also progressing with the Central Bank of Ireland, and we will update the market when appropriate. I’d also like to highlight the successful issues of our green Tier 2 bond, where we raised €300 million with a coupon of just 3.875%. That transaction was a record 11 and a half times oversubscribed, and it was a great validation of the progress we had made. We also announced this week the redemption of our €125 million AT1 bond due in November, and these two transactions will help us improve our capital structure, which is a key objective we’ve spoken about a number of times. With that, I will hand you back to Eamonn, who will provide an update on our medium-term targets.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Thank you, Barry. If I can turn to our guidance, as we outlined in our trading statement this morning, 2025 is progressing well, and hence our guidance for the year remains in line with the prior market communication. Today, we’re also reaffirming our 2027 return on tangible equity target of circa 9%, and we’re also issuing a new return on tangible equity target of circa 11% for 2028. The principal drivers behind the expansion in the return on tangible equity as we move into 2028 are income growth driven by higher volumes, and we’ve seen that volume coming through in the first three quarters already, NIM widening, a decline in our cost-income ratio, and further benefits from refinancing the bank’s debt stack, which mature to 2027 and into 2028, reflected in that 2028 number.

Once again, these targets are prior to any potential benefit from the ongoing IRB model review process. Thank you for your attention, and Barry and I will be happy to take your questions. Given some of the restrictions, we have to acknowledge the restrictions we have on the FSP process, but we’re happy to take any questions you have now. Over to you, please.

Sammy, Call Coordinator: Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Dennis McGoldrick from Goodbody. Your line is open, Dennis. Please go ahead.

Good morning, Eamonn and Barry, and thank you for taking my questions. Just two, please, if I may. In relation to the sales process, I’m just wondering, can you give a little bit more color on what has triggered the announcement, and the process that the board went through to arrive at it? Secondly, I guess, just why the board believes that now is the right time to go into this process given the expected benefits, which we all believe are to come from the updated IRB mortgage models. Thank you.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Yeah. Just to, I’ll take your second question first in the sense of, you know, we’ve seen very positive performance in our share price over the last year. In fact, if you look at even now, our share price has obviously hit €2.85 or around that. Within the last 12 months, it was around the €1.30 level. We’ve seen significant outperformance in our share price and our value. By the way, I would argue that not much has changed from my perspective versus a year ago in the sense of how the business is operating and indeed our ambition in that sense. We are closer to the IRB outcome, but in effect, from a business point of view, it’s still actually quite similar. I would say why now, in the sense of our positioning has changed. Fundamentally, the bank has transformed itself. We are working on growing our income.

We are working on managing our cost base within an environment of some regulatory change that we also have to adhere to, such as SEP instance, etc., but we are managing that well. Our position is clear now as a pillar bank in the Irish economy. We’re very well positioned from that perspective, by way of where we are. We also see that, while the IRB model isn’t clear at this moment, it has progressed, and we would expect in 2026 for that to come through, but we’ve yet to close that with the central bank, but it is progressing well. We’ve clearly highlighted our capital position is strong as well.

When I look at the 2028 numbers, they actually reflect what is a position without our IRB, and then it’s about potential bidders then reflecting on what the IRB impact could be on the bank and valuing that in the sense of how they would consider the bank normalizing itself from a capital perspective. To come back to where the board has considered this, the board has taken all of these items into account, and we do have, under the framework agreement, ongoing discussions with our main shareholder, and that’s covered by the framework agreement.

Through that process and through the board’s discussion on this, taking into account the value increase we’ve had over the last year, our positioning in the market, and indeed, the timing and where our main shareholder sits in the sense of owning their shares, the board came to a decision to actually launch the sales process. We’ve faced into this process with a lot of confidence, a lot of confidence in where the bank is, how it’s positioned, and indeed ensuring that all shareholders get the right price for the bank as we move forward, including, obviously, our main shareholder, who is the anchor tenant and indeed, as we know, bailed the bank out originally, supported the bank over more difficult times, and indeed now as a shareholder is looking to also get a return from their shareholding as we launch this process.

Okay, thank you.

Sammy, Call Coordinator: Our next question comes from Borja Ramirez from Citigroup. Your line is open, Borja. Please go ahead.

Hello. Good morning. Thank you very much for taking my questions. I have two. The first is probably being answered, but I would like to ask why are you undertaking this process so publicly? A second question would be a bit more technical, but given the capital treatment in Ireland with a higher RV density, and even though you have an IRB benefit to come, I would like to ask if there could be any regulatory relief on capital requirements for any acquirer that is maybe based outside of Ireland.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: With regard to the second question, that is not something that we would have any particular awareness of, and it’d be subject to any bidder deciding how they would think about that in due course, but it’s not something that we have on our agenda. With regard to a public process, the reason why we’re launching a public process is to ensure that the availability of PTSB as the third bank in Ireland, a pillar bank in what is a growing market with a very safe balance sheet, probably the safest balance sheet that exists in European banking, if not including the U.S., by way of our provision levels and indeed our capital coverage at this moment, is an attractive acquisition for a party who’s interested in acquiring a bank.

Therefore, we want it to be as public as possible because we believe we can generate and achieve the best price by having the most interest in the bank that is available in a bidding process. That is really why it is in such a public way. We want to demonstrate to all our shareholders that we’ve done everything possible to achieve the correct price for PTSB in a very positive sense. That’s why it’s in the public domain.

Thank you. Very clear.

Good questions, yeah.

Sammy, Call Coordinator: Our next question comes from Andrew Stimpson from Keefe, Bruyette & Woods. Your line is open, Andrew. Please go ahead.

Morning. Thanks for doing this call. I suppose I’m not sure if you can answer or whether I’m repeating a question. I suppose I’ve got the same kind of why now question as the other guys, because you’re just in the middle of the model review process, which I think we’re all agreed could have a really material positive impact on your profitability and therefore the valuation. If I was a buyer, I would just be placing a probability below 100% that there’s a good outcome from that model review process. I would assume that you guys have got closer to 100% given you undertook that process.

I appreciate your shares are higher now than where they were a year ago, which is good news, but they’re still below tangible book value and still a fraction of where you’d expect them to be, versus the new 11% ROTE you’ve set for 2028, which would also have some upside from the model review process. I suppose maybe it’s not even a question, maybe more a statement. It feels like you’re selling just before things get a lot better.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: No, I disagree with that because it would go back two or three years, Andrew, and we could have a different discussion about where the bank was pre-the Ulster transaction. At this moment, we are in a very, very strong position. We’re more than halfway through the IRB model review because, you know, in order to start that process, you have to create the models. You have to validate them. You have to go through a fairly significant and detailed process before you even submit them to the regulator. All of that has happened, and now we’re in discussions with the regulator and progressing in that sense. It’s clear that any buyer will want to know, and if I was a buyer, I would want to have clarity with regard to where the models are.

We will be, as best we can, ensuring that clarity is provided to borrowers in an adequate way in order for them to make a proper offer. We think about that through the process. Indeed, if I was buying the bank, I would buy it subject to having that clarity as well. That’s just how I would look at it if I was buying. I think we are very well progressed at this moment, but we still have to get through a regulatory process. We’re confident, but it hasn’t closed out. Barry, do you want to comment on that as well, just to?

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: I think a key element in that on the IRB is we have done everything in our control. It’s with the regulator right now. It is progressing. The key element on that is the timing. This process, we have said, should conclude in 2026. I think the timing of this will align.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Okay.

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: Exactly. That’s our position as well, in the sense of how we think about this. As I say, if you were a buyer, you’d want clarity on that as well. We will be able to manage that.

Okay. That’s really good to know. I’ve got a second one. I appreciate my first question was about 10 minutes long. The loan growth was actually super, super strong. I know the loan growth had struggled for a while, but that was a very, very good performance in the third quarter. Can you talk us through how you think that speed of that could evolve? Just because quarter on quarter, that looked very, very quick.

What we’ve seen, Andrew, this year to date is actually on the mortgage market size side, we are actually, you know, maintaining that greater than 20% level over the year. In business banking, it is consistent in terms of our expectation as to where that’s going to close for the year as well. It is all pretty much in line with what we kind of set out at the start of the year. I think a key difference this year and prior is actually we’re delivering to those expectations in a very clear way. We see that across the board in terms of what we’re doing. We launched, in recent weeks, the consumer finance offering as well. We’ve seen a pretty strong increase week to week on that product line alone, just in terms of simplifying our product set and pricing it at the right level.

We’re well positioned in terms of some of the lending pricing changes we did as well on the first-time buyer side and affect the 80 to 90% level too. That was just to remain competitive, reposition ourselves in the right way there, because it’s the most important segment in the marketplace. In its broad sense, we’re not surprised by the outcome. It’s pretty much in line with what we expected and what we’ve communicated.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: If you look at the Bank of Ireland results yesterday, you can see momentum in their growth as well. If you just look at the broader mortgage market in Ireland, government policy, where first-time buyers are, and the wider population, there’s a very exciting mortgage market ahead of us. We’re an anchor tenant there. We’re in the mortgage business for well over 200 years, and we know how to do it and do it well. All of this will be reflected in how we talk to potential bidders and how we extract value in that sense as well. We face into this process with a lot of confidence and indeed a backdrop of an Irish credit market that is now growing, when for many years it was either contracting or flat. Thanks for your question.

Yep. It certainly does. Thanks very much, guys.

Sammy, Call Coordinator: Our next question comes from Aman Rak from Barclays. Your line is open, Aman. Please go ahead.

Yeah. Hi, guys. It’s Aman Rakoff from Barclays. Thanks very much for taking the questions. I had two kind of broad questions, please. One around the sale process. Can I clarify it? I don’t know if you can answer this, but is there existing interest from a potential buyer that you are currently fielding or, you know, is there somebody—you don’t have to mention, obviously, who that is—but is there existing interest, a conversation that’s taking place at the moment that you can kind of point to? I was interested in.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: No, there isn’t. Sorry, there isn’t. Just to be clear, there is not.

Okay. Thank you so much. I was interested in the value accretion that you’ve kind of alluded to a number of times as part of the call, which I guess I take as kind of value extraction synergies, be it costs and revenues. It’s also going to be a function of the potential buyer in terms of a bank is seemingly going to be able to extract value out of this transaction, more so than a non-bank buyer. I don’t know. Qualitatively, could you kind of give an indication of what you’re referring to around value accretion? What do you envisage? What value do you envisage a buyer seeing in Permanent TSB from here that can only be extracted as part of a bigger entity rather than standalone?

I guess my second question, I appreciate I’m taking liberty here, but I note that you’ve downgraded your cost-income ratio target for 2027, I think, to 62%. What is the driver of that downgraded cost-income outturn? Because it looks like the income drivers are actually better than, you know, there’s confidence your outturn’s better, but the forward looks better. Is that in any way related to what’s being announced today?

Yeah, just that the 2028 numbers reflect purely how we see 2028 evolving, which is primarily an income growth story. Barry will talk to cost in a second, but it’s primarily our expansion in income. You know, the perception broadly is that we have a cost problem. We don’t have a cost problem. We have an income issue by way of our ability to grow scale as an organization. We’ve demonstrated in the last five years, we brought our balance sheet from a $20 billion balance sheet to a $30 billion balance sheet. It’s about how do we grow that balance sheet now in an environment? By the way, that was an environment where there was no credit growth. How do we then grow this balance sheet over the next number of years in an environment where there is credit growth and credit availability?

For instance, a bank buyer could bring different products, different experiences, for instance, more wealth management, more larger corporate-type exposure that we wouldn’t have that experience in. Different bank buyers can bring different areas of where we could tag onto. That is yet to be played out. Different buyers have different value propositions that they can bring to an organization. I’ve seen that myself in my own past by way of buying different operations where you can increase value. That’s one aspect. Naturally, one of the issues around value for us has been the overhang, the government overhang, and the fact that, you know, when will the government sell down? How will they sell down, etc.? That’s been an issue by way of how the share price has operated.

This provides absolute clarity now with regard to how we think about extracting value in the sense of both multiples, opportunity, and a clear positioning in the government now looking to exit as well. I think that’s value-enhancing, and it’s supported by how the share price has moved today. I appreciate it’s only this morning. I appreciate it’s only a couple of hours, but saying that, it has moved to its highest level now in an extended period of time. To come back, the value leverage for us is on the income side and how we grow as a pillar bank in Ireland in an environment where we will have lower capital requirement, which we’ll be able to demonstrate through the process as well. That will extract the value that we need. On the cost side, Barry, do you want to comment on that?

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: Yeah. Just, again, kind of continuation from Eamonn’s perspective on the income side. What we want to try and do is protect the growth that we’re seeing on the lending side out through time. We do see our cost-income ratio come back to below the 60% level in 2028 or at or below. It is an inflationary environment in which we’re operating. We’re trying to manage everything within our control, but we also have to keep an eye on growing the bank. That is a core element of the decision to actually increase the bank’s marginally, it’s about €10 million in real terms. On a cost base of just over €500 million, it is relative. The opportunity from the income side is stronger. We’re also seeing, in a broader sense, the macro environment is stabilizing, and the growth in the macro is actually more positive than what we anticipated.

We are moving away from a hard cost number toward a cost-income because we see expansion on the income side taking place. It does require continued investment to maintain that position. We are trying to continue to invest in our digital offering and actually bring value for our customers. In the context of the broader picture, we are still seeing that reduction coming back from the 77% level that we see today. For 2027 to 2028, we’re comfortable that that is probably the best position the bank can be in, from a cost perspective.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Thank you so much.

Sammy, Call Coordinator: Our next question comes from Seamus Murphy from Carraghill. Your line is open, Seamus. Please go ahead.

Hi. Thank you. Hi. I have just a couple of questions. Was the decision to commence the sales process in response to an approach that was made to the government about the stake, or was it a more strategic decision taken by the board itself? That’s question number one. The second question is, when we look at the projected evolution of your excess capital over the coming three to four years, it rises to well over €350 million into 2028, maybe €500 million at that time. The value of your DTAs, the lower funding costs, and also the fact that you’re probably going to be growing now. I suppose a directed buyback is clearly much more accretive for all shareholders when we move in that direction.

I suppose when the board presented this kind of organic scenario to the government in response to the sales process, how did the government respond to the organic story that’s going to emerge in Permanent TSB Group Holdings PLC over the next couple of years? Lastly, this comes to the crux of the issue as well. I know you’ve appointed an advisor yourselves, but do we know who’s advising the government on this? It just seems like a ridiculous time for the government to initiate a sales process on the basis that we’re going to get this enormous value creation over the next three to four years. It just seems like it doesn’t mean you don’t get a knockout price, but it just seems that the representations that the board made about the value, the organic value in Permanent TSB Group Holdings PLC, how did they respond to that?

Thank you.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: There’s a good bit in all of that, Seamus, so we’ll just be able to as we move along. As far as I’m aware, no approach has been made to the government. That’s the information I have, that there was no approach. It was very clear, and it has been clear for an extended period of time that the minister is not a long-term shareholder in PTSB. They’ve stated on numerous occasions, and indeed, as recently as the July selldown by NatWest, if you recall, the comment from the minister at that stage that they were looking at all options with respect to their shareholding in the bank. Just to say that. Indeed, the minister is very supportive of the announcement today. You know, that’s telling you the minister is a seller.

In that sense, as a 57% shareholder, by way of the capital evolution, based on projections, we would expect we would have excess capital. The question we had is what we would do with that excess capital. No decisions have been made with respect to how that excess capital would be distributed, whether we’d need it for new lending. You can see our lending is growing, but you’d expect at a lower risk rate. We would also be interested in expanding the business in that sense as well. That was something that is always of interest to us to get more scale and indeed to look at then how we distribute the capital in the sense of whether it was directed buybacks or not. Some of those directed buybacks, we’d have to go through a process with our shareholders in order to get that approved as well.

It would take some time to execute those buybacks. By way of the growth story, there’s no doubt that in a sales process, we will be clearly communicating to bidders and indeed, with the support of the wider analyst market, to show that there is value in this bank, that there is value in where the market is. Look at where analysts are. One analyst has us as low as €1.30 or €1.60 by way of share price. Generally, analysts are around €3. I appreciate there’s value in the market, but the analyst community isn’t exactly communicating that either in the sense of where this value will come from. That’s based on projections we have out in the public domain. It is an interesting point in the sense of value creation over time.

Currently, projections are supporting clearly what is the current share price and indeed our ability to knock out and to get a very good price for the bank, which we believe, and I believe, is a prized asset. It’s not often that somebody can actually buy a number-three position in a market with a macro background and a position that Ireland has. I would say that’s extremely attractive. We’d be looking to extract the best price in that respect. Lastly, it is in the public domain that Rothschilds are advising the government in this sense. That is already out there, Seamus.

Sammy, Call Coordinator: Okay. Thanks, Eamonn. Our next question comes from John Cronin from Sea Point Insights. Your line is open, John. Please go ahead.

Hi, both. Just by way of follow-up on a couple of those questions. Going back to Eamonn’s question and Seamus’s question on what’s kind of prodded this right now, can I just double-check, Eamonn? You’re saying that there’s categorically been no engagement with an interested party and that there isn’t any live engagement or there wasn’t any recent engagement. Just trying to kind of clear that up in my own head because typically, my experience would be kind of formal sales processes where it’s when there is, you know, one or two maybe, and it’s an attempt to get more competitive attention into the mix. I appreciate every situation is unique, and I hear your point on seeking to extract the best price, which is clearly critical as we’ve seen. Secondly, curious on the board’s view on financial buyers, so non-trade buyers, so private equity, those kind of outfits.

I presume it’s just a question of best price here, but would be interested in your take on that. Thanks.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Sorry, John, I just missed the last point. What was it again?

Just the potential for financial buyers to, you know, just come into the mix here.

Okay. There’s no restriction on any buyers to express interest in the bank. There’s a process that they have to go through. They approach Goldman Sachs in order to start that process. There’s no restriction with regard to who would like to buy the bank if it’s an open process in that respect. I can’t comment on the detail that you’ve mentioned, but the bank has had no approach or no interest in that sense. We are opening this process as a public process, and we’re looking for bidders to express interest in buying PTSB and making an offer for it.

Okay. Thanks.

Thanks, John.

Sammy, Call Coordinator: Our next question comes from John Hickey from Streetsdraw PDAC. Your line is open, John. Please go ahead.

Could I just ask, just to follow up on the last few questions there regarding the process, what gives you the confidence that there are interested parties? Like to John’s question there, presumably at least one or two parties had expressed an interest or else you would risk launching this process into a vacuum. What gives you the confidence that there are interested parties that are interested in acquiring the bank? Thanks.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: I can’t talk about those details at all. The process is launched. It’s open. It’s clear our position is very interesting. Even the questions we’re being asked today would highlight to you that we have a very interesting position here, that interested parties will see. The process will speak for itself. If it doesn’t succeed, we’re at the status quo of where we are, and that’s we still have a strategy that we’re executing. We would still stand by the numbers that we’re putting forward, and we’d execute them. In that sense, the process will describe the level of interest in that regard, John.

Okay. To that point, based on the confidence that you have in that there would be a successful outcome here for shareholders, how would you think about that if you were in our shoes?

We can just use the NatWest selldown in July as the basis. There was significant over-demand for the stock on that sale, and there’s been a lot of commentary and demand for when the government will sell down their stock as well. We know there’s interest in the bank. We know there’s interest in our future and our positioning, and indeed their input to how we think about this process as well.

In terms of from here, if and when there are people who enter the FSP, I think it says in the statement that there will be communication with the market. The company will update the market regarding the FSP in due course. What are the staging posts from here that we should expect to see as regards to what market announcements in terms of progress?

We’ll update the market when appropriate. There’s no particular staging points, John. We’ll update it when it’s appropriate to update the market. We won’t be updating the market in speculation because that would be absolutely incorrect, nor will we be able to comment on market speculation, but we’ll update the market when it’s appropriate to provide definitive information with regard to where the process has gone.

Cool. Appreciate it. Thank you.

Sammy, Call Coordinator: Our next question comes from Rob Noble from Deutsche Bank. Your line is open, Rob. Please go ahead.

Morning. Thanks for taking my questions. I’ve got a rather pedestrian question, it feels like now, just on net interest margin. What’s the drivers of the step up from 2.2% to 2.25% in 2027 to greater than 2.3% in 2028? What can you give us a sense of the key moving parts in that year that makes it jump? Thanks.

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: Yeah. I’ll take that, Rob. Broadly, what we’re seeing coming forward is actually as, you know, our fixed-term mortgages, which are typically three to five years, as they mature over the coming years, we’ll see a step up in terms of the rates that will be applicable to those loans. Typically, we have a retention rate of around the 90% level. Ideally, we’ll see that unfold, and that’s what we’ve captured in our forecast. On the depositor liability side, we had a three-year 3% level three years ago. That’s now starting to mature. We had a one-year 2.75% rate that will mature as well over the next one to two to three years in effect. We see that come forward. We’re actually, in terms of the environment we’re operating right now, quite in perspective. We keep a close eye on it.

At this moment, as we look out with those core changes, we believe we’re in a good position to see that outcome. Hence, we’re updating out to confirming what we see in 2027 and updating 2028 in that context as well.

In terms of the business mix expectation in 2028, I presume that’s higher yield, corporate increasing in the mix.

Yes. What we’re seeing is a steady increase in our business banking mix. We are very solid in terms of our mortgage market share. We expect that to be in the greater than 20% level, as we’ve seen right now. Actually, we’ve seen the accretion at a stronger level on the business banking side. What we have said previously is that we would like to see a 4 to 5% growth overall, with 3% or so in the mortgage side and a 15% level on the business banking, which includes SME and asset finance. It’s consistent with that mix change over time.

Okay, great. Thank you very much.

Sammy, Call Coordinator: Our next question comes from Phil Fuller from Decker Investments. Your line is open, Phil. Please go ahead.

Hello. This is Phil from Decker. Can you hear me?

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Yes, Phil. Yeah.

My first question for the credit investors would more be on rating down rates or having the state rating the same. Are you committed that if PTSB is sold to whoever it may be, that ratings will stay at least at the level where they are now?

We don’t have any backdrop to the Irish government. Even though the Irish government are a major 57% shareholder or a majority shareholder, we don’t rely on the Irish government in that sense. Our rating is independent of that shareholding. It’s on a standalone basis rather than, you know, with any particular support. We don’t see any impact on our rating into this process. Barry, do you want to comment as well?

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: No. What we’re seeing in recent times is actually the improvement in investment grades is fundamentally due to the improved balance sheet that we have and the income levels that we’ve seen accrue in the last number of years. If you look at us, we are a low-risk bank. We are primarily a mortgage operation, and we’ve seen very limited NPL evolution in recent times. Impairment levels continue to be, we’re very well provisioned. We don’t see any negative outlook in any shape or form in that regard. Actually, what we’re seeing is the broader macro environment is looking better than what we anticipated even 6 to 12 months ago. At this moment in time, I would say we’re in a very positive space in that regard. I don’t expect any change, only maybe to a better outcome.

Okay. My second question would be on bonus. As far as I know, currently, you’re not paying bonuses to your employees. Will you pay bonuses to your employees and management for next year? How much could it cost?

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: No. There’s no, in the Irish environment, there’s a supertax which is applied to bonuses to employees of the banks that were bailed out by the state, and we were one of those banks. There’s no bonuses of any material level in the bank. We do pay bonuses up to €20,000, but with regard to the senior management bonuses, they’re nonexistent. It’s not an issue. I think we can finish there. Unless there’s one more question from somebody, we can close it off then. Thank you, by the way, Phil. There’s no more questions.

We have one more question we can answer if you’re happy to.

Okay, this will be our last question.

Of course. Our last question comes from Marina Chiriva from Jefferies. Your line is open. Please go ahead.

Hello. Thank you very much for taking my question. I was just trying to understand a bit what your return on tangible equity targets could be if you get the IRB approval. Anything around that would be helpful in terms of, for example, in your base case, if you do get the approval, what would you expect your risk density on the mortgage book to come down to? Is it more coming down in line with peers in the market, or could it be even lower than that? Thank you.

Barry D’Arcy, CFO, Permanent TSB Group Holdings PLC: Hi, Aruna. Our ROTE guidance at this moment in time is exceeding IRB change. What we’ve been very consistent with in our storyline here is that we haven’t provided any guidance in terms of what IRB would actually come out to be. We haven’t done so in recent weeks, and we’re not doing so as we go into this process. That has been a very consistent approach that we’ve taken. Obviously, the bank is going to be updating its models from where it was in 2017. The better overall position the bank is in, we’ll ideally see a better outcome, but we can’t comment and clarify or color in any shape or form that picture at this time.

Eamonn Crowley, CEO, Permanent TSB Group Holdings PLC: Thank you for your question, and I think we can end the call now, please.

Of course. We currently have no further questions. Eamonn, would you like any closing remarks?

No, just one thing with respect to some of the questions on the process. The process is governed by the Irish takeover rules, which are quite prescriptive. Going back to a question from John Hickey around information to be provided, it’s very prescriptive. We won’t be speculating. We won’t be commenting. We’ll provide information when we have clarity to the market in that sense. There will be no stage polls in that sense. That’ll be in the public domain. Just to say that’s governed by the Irish takeover rules. Thank you very much for your interest and for partaking in the call. We’ll take it easy and goodbye. Thank you.

Sammy, Call Coordinator: This concludes today’s call. We thank everyone for joining. You may now disconnect your lines.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.