AIB Group plc

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Good morning and welcome to the presentation of AIB Group's results for 2025, a landmark year for our company. I'm going to spend some time outlining the macroeconomic backdrop and giving an overview of the progress on our 23 to 26 strategy before handing over to Donal, our CFO, who will bring us through the details of our financial performance. 2025 was another year of successful delivery by AIB Group against our strategic objectives, priorities and targets. We're pleased to be delivering a profit after tax of over €2.1 billion, representing a roti of 25%. In a looser monetary policy environment, our NII remained resilient, coming in ahead of expectations of €3.75 billion. The strength of our financial performance and the scale of organic capital generation allowed us to grow our business, to invest in our business and to propose total distributions of 2.25 billion euro, a payout ratio of 105%, while still delivering an exceptionally strong capital outturn with CET1 ending the year at 16.2%. And 2025 was the year that AIB returned to full private ownership, having returned a cumulative circa 21 billion euro to the Irish state. So it was a landmark year, a year of progress and closure, a year that positions us to build an ever better, ever stronger, trusted AIB in the interests of all our stakeholders and the economies and the communities that we serve. We remain resolutely committed to the sustainability agenda, an agenda that sits at the core of our strategy and at the very heart of our purpose. We're making good progress towards meeting our long-established 2030 targets, with almost €23 billion of green and transition lending deployed since 2019, and last year's new green lending reached an all-time high for us of 43% of all new lending, well on track to hit the 70% target we've set for ourselves. We're also continuing to decarbonise our own business with 92% of our electricity needs sourced from our virtual power purchase agreement from the output of two solar farms. The scale of the environmental and social lending opportunity and our excellent credentials in this space create the platform for continued success in ESG bond issuance and I'm very proud of the fact that AIB is now one of the world's leading issuers of ESG paper globally. Our confidence in the outlook for AIB in 2026 and beyond is underpinned by continuing solid and consistent performance by the Irish economy. Growth in modified domestic demand surprised somewhat on the upside in 2025, and it's expected to hover around 2.5% to 3% over the next few years, a rate of expansion that is reasonable in an Irish context and stellar compared to our neighbouring economies across the Irish Sea and indeed further afield. Our population continues to grow and it's likely to exceed 6 million in the next decade. And our labour force exceeded 2.8 million people at the end of last year, representing an increase of an incredible 59% since 2000. And now that demographic bounty is a key driver of Ireland's economic success, and it creates a very positive operating backdrop for AIB, Ireland's leading financial institution. And while we've seen remarkable growth in the numbers at work and in the country's GDP, the balance sheets of the country, businesses, households, individuals, are all very conservatively positioned. Net government debt fell to 40% of gross national income last year, and the downward trajectory is expected to remain a feature of the budgetary landscape over the coming years. The government is in a very strong position to deliver on its ambitious national development plan, which will see €275 billion deployed in building a world-class public and social infrastructure here over the next decade. And meanwhile, households continue to deliver with debt to disposable income running at about 40% of the post-GFC peak, with the savings ratio running at 15%, an indicator which is very well reflected in our own liabilities performance. Ireland remains a preferred destination for foreign direct investment. Now, we will, of course, continue monitoring the international trade climate, but it's only fair to say that the performance in 2025 surprised on the upside, both in terms of investment and also in terms of export volumes. I made mention already of the government's NDP, a plan which will see a much-needed ramping up of investment in critical infrastructure. And if this country is to consolidate and sustain its economic progress, we need to close existing gaps in housing, water, energy and transport infrastructure, and we need to do it at pace. We look forward to continued progress on the delivery of new housing, with 2025 seeing over 36,000 new homes being completed. And that was the best output performance since the GFC, but it's still well adrift of the level of housing completions needed to satisfy demand. We expect to see housing output continuing to grow year in, year out, with the level of completions forecast at 45,000 in 2028, representing an increase of some 25% on the 2025 performance. But given the scale of unsatisfied demand that's out there, housing supply is going to have to reach levels well ahead of in-year structural demand if the market is to return to equilibrium. So challenges remain, but we are seeing good progress and we are optimistic about the supply outlook and the opportunities that creates for our lending businesses, both in mortgages and development finance. Looking back to the lending performance last year, new lending was 2% higher than in 2024. We saw 4% decline in new mortgage lending in a growing market, with our mortgage market share falling to 30%. Now, I've remarked on many occasions that we do not target mortgage market share per se. Instead, we are focused on writing the right business at the right price. That said, it is important to note that not all mortgage market shares are the same, and we have a strong preference for having direct relationships with our customers as they embark on the biggest financial decisions of their lives. In the direct-to-consumer market, we remain by some distance the leading player, with a market share of 46%, and the pipeline for the early months of 2026 looks very good. Personal lending was 4% ahead, and now 88% of personal loans are applied for digitally across the group. Total property lending saw an increase of 25% off the subdued base of recent years. Corporate lending had a good performance with new lending up 8%, but this was offset by a quieter year for climate and infrastructure capital in a noisy external environment. A number of deals which we expected to close in December tipped into January, and that business is off to a very good start this year. Given the macro backdrop and the strong and visible pipeline ahead for the operation divisions, we are confident in our ability to deliver a medium-term lending growth CAGR of 5% out to the end of 2027. Our franchise remains exceptionally strong, and we are very pleased to be now serving more than 3.4 million customers, with more new customers choosing AIB than any other financial institution in Ireland. And the trust that our customers, both longstanding and new, place in us is underpinned by the resilience of our digital offering, with level one service availability running at 99.99% in 2025, and by the strength of our physical presence, with AIB having the largest branch network in Ireland. And that community engagement is key to our relationship with our customers, particularly for the very biggest moments in their financial lives, who know that we are digitally trustworthy and we are there in person when it really matters. I'm pleased with the response of our customers to our enhanced savings and investment offering through AIB Life and Goodbody, with total AUM now comfortably exceeding €18 billion, with plenty of growth in the pipeline. On a standalone basis, AIB Life is now showing real traction, with AUM reaching €3 billion, which was a 20% increase in 2025. Now, as Ireland ages and government policy evolves, we believe there is potential for significant additional growth in savings and investments in 26 and beyond. We remain the bank of choice for new account openings, with the group enjoying a market share of 49% of the flow and 40% of the stock of current accounts in 2025. Our corporate and business banking franchise remains exceptionally strong and we're going to continue to invest in secure and speedy digital enablement over the years ahead as we meet the evolving needs of these critical parts of Ireland's economic success. And of course, we remain the country's leading green bank, a standing we will maintain as we grow the share of green lending and broaden and enhance the range of green products and services across the group. Looking now at the first of our strategic priorities, the focus on customers, their expectations and their needs is key to the long-term success of AIB. Through a data-driven approach to customer segmentation, we understand those expectations and needs like never before. And that unrelenting focus on our customers is paying dividends in the form of net promoter scores with all-time highs in five of the six key customer journeys being recorded in 2025. Meanwhile, service levels in our customer engagement centres remain very strong, and we continue to invest in delivering an easier, more engaging and protective relationship with our customers. And we will use AI extensively to help us deliver that high-quality relationship of real trust. Abby, our AI digital assistant, whom we launched in December of 2024, is engaging now with an ever greater number of customers. Covering 66 customer journeys, Abby has assisted over 1.3 million customers since her rollout. And the feedback has been very positive, with particular reference being made to the speed and the ease of dealing with our digital assistant. 80% of our customers who call our engagement centres choose to continue dealing with Abbey. We're continuing to make steady progress on our second strategic priority, greening our business. We're playing an active role in financing the transition to a more sustainable future. We've now deployed almost €23 billion of the €30 billion Climate Action Fund. And we lent an additional €6.3 billion in new green and transition lending in 2025. with the greatest contribution coming from retail banking, predominantly in the form of green mortgages, which now account for 62% of all new Republic of Ireland mortgage lending. Across corporate and business banking, we are the leading player in financing sustainable lending to the engines of economic development, while climate and infrastructure capitalists continue to play an important role in funding solar, wind, bioenergy, waste-to-energy assets in Ireland, Britain, the European Union and in North America. The loan book in this division has now expanded to more than €6 billion and we expect to see further significant growth in 2026 and beyond. And notwithstanding our ambition to be a champion of the transition to a greener future, the scale of the opportunity is simply enormous and continues to grow, allowing us to be highly selective in choosing the technologies and the geographies where we are willing to put the group's capital to work. Our third strategic priority speaks to ever greater operational efficiency and resilience, and I am very pleased to report accelerating progress right the way across the organisation. We've invested significantly in resilience because it is fundamental to customer trust and trust is the prerequisite for any credible digital ambition. We're continuing to strengthen, simplify and streamline AIB with a 40% decline in the number of legal entities within the group, an ongoing decommissioning of legacy applications and increased digital automation of customer contact. We've invested wisely in AI with Copilot now deployed across the organisation and the first wave of internal agentic assistance is now being deployed. We're making great progress in enhancing credit decisioning through Encino, which now handles two-thirds of all new SME lending. Our platforms remain resilient with world-class level one service availability and zero critical cyber incidents in 2025. And the rollout of push notifications on our app is making a material difference to the quality of our everyday customer engagement. There's so much more to come with our next generation app set to launch in the summer. And by design, it will be more agile and flexible than any other app previously deployed by us. And it will be capable of rapid and high frequency enhancements. Allied with the imminent launch of Zippy across the Irish retail banks, our customers are going to enjoy and experience a significant improvement in the quality of their digital interaction with us over the coming months. Now, this foundation gives us the right to accelerate. Our new digital platforms can scale confidently because the underlying estate is stable, secure and well-governed. The pace of technological change that we're seeing is unprecedented in the history of banking. Now, our team has demonstrated clearly and consistently the efficiency, security, resilience and customer experience gains that they are capable of delivering. And given that track record of achievement and the speed of change that is now readily apparent, we believe that we can credibly build the future faster at AIB. Our annual investment in the business has increased from an average of €300 million recent years to €350 million last year and will rise to €400 million this year and beyond. And the bulk of that increase is devoted to strategic projects, which will allow us to continue enhancing our customer experience, our digital agility and the resilience and the durability of our systems. We will build the future faster here and in so doing continue to earn the trust of our €3.4 million and growing customer base. We are now well embarked on the final year of the strategic cycle. And while we're very focused on delivering on our targets for 2026 and continuing to generate attractive shareholder returns, our minds are inevitably turning to the next strategic cycle, which will bring us to 2030. And as we move through the months ahead, our plans and our targets will take more concrete form and seek board approval for what comes next in December before we share the full details with our investors and the analyst community. Now, it would be premature of me at this stage to outline the set of performance indicators and parameters which will guide the next phase of AIB's development. However, they will, I believe, be fully reflective of my own 2030 ambitions for this organisation. I want AIB to be the best bank in Europe and the most trusted brand in Ireland. These may be audacious aspirations, but they're grounded in what we have already achieved together. We've made huge progress in recent years in reshaping and transforming the group in the interests of all our stakeholders. We have the leading customer franchise. We're generating shareholder value, including a roti of 25% and return on assets of 1.4%. Our organisation is in great shape, with 370 basis points of organic capital generation and €2.25 billion return to our shareholders. And I'm very excited about what I know it can and will deliver over the months and years ahead. 2025 was a landmark year. We delivered against the commitments we set for ourselves, we performed ahead of expectations, and we did so with positive momentum across the business. However, 2025 was a milestone. It wasn't a destination. We've come a huge way in recent years with a strong capital base, a very clear strategic ambition, and a market-leading position. AIB is well positioned for the future, and I remain convinced that our best days still lie ahead as we work relentlessly to build a better, stronger, more resilient AIB in the interests of all those who put their trust in us. Donal.

Thank you very much, Colin, and good morning, everyone. I'm very happy and pleased to be able to deliver at the financial highlights for AIB for 2025. We've delivered a profit after tax of 2.1 billion euros with a return on tangible equity of 25% and earnings per share of 93.3 cents. Our total income was 4.5 billion euros, which was down 8% on the year. That's broken down between a net interest income reduction of 9% and net fee and commission income increase of 4%. Our costs were slightly lower than expected, at 1.99 billion euros, which is up 1% on the year. And that gave us a cost-income ratio of 44%, and our FTEs were 3% lower year to year. Our gross loans increased 2% or 3% on an underlying basis to €72.3 billion, and that included €14.7 billion of new lending, which was up 2% year on year. Our asset quality remains resilient, and our ECL coverage remains at 1.6%. We had an ECL charge of 172 million euros, which represents a 24 basis points cost of risk. And our NPEs finished the year at 2.2% of gross loans, which is the lowest for a number of years in AIB. Our funding position remains exceptionally strong. We have customer deposits of 117.2 billion euros, and that represents a 7% increase on the year, which is well ahead of our own expectations. Within wholesale markets, we issued AT1, Tier 2, Euro Senior and Dollar Senior, leaving us with a very strong funding position. Our capital at the end of the year, our CET1, was 16.2%, well ahead of regulatory requirements, but that incorporates very strong organic capital generation of 370 basis points and very strong performance on RWA optimisation initiatives. Our total distributions for the year are 2.25 billion euros, representing a 105% ratio. 263 million euros was already paid in November as an interim. We have a 988 million proposed final ordinary cash dividend. And we've announced and already begun to execute a 1 billion euro on market buyback. I'll say on the income statement, I don't want to really repeat myself too much. Obviously, income was down 8%, as I previously mentioned. But notwithstanding that fact, we can see earnings per share flat year on year. Total cash dividend per share of 58.58 cents is up 58%. So really strong performance there, we feel, on the returns. Our bank levies and regulatory fees were €114 million in the year, and that includes €94 million for the Irish banking levy. As we look into 2026, we don't expect any material exceptional items, and our bank levies and regulatory fees we currently estimate will be around €140 million. Net interest income of 3.748 million, down 9%. I'll just try to walk through the moving parts here. There's a 42 basis points benefit from our structural hedge program. Obviously related to this, a 45 basis points reduction in net interest margin from cash held with central banks. Customer loans and investment securities are down 22 and 19 basis points. Again, just reflecting those lower interest rates. And on the liability side, we had a strong benefit from wholesale funding costs of 119 million euros. And we had an associated cost of 88 million euros as customers termed out some of their deposits. Our Q4 exit NIM was 269 and it ends the year overall at 2.73%. This is an important slide, I think, for us to show how we have managed our interest rate exposure through the last number of years. Obviously, interest rates going from minus 50 up to 4% and landing down at 2% has meant that we have had to proactively manage our balance sheet. As we give our guidance for 2026, the assumptions that we make is that we'll have an ECB deposit rate of 2% and that deposit beta will remain at 20% as it was throughout 2025. We're very comfortable with our NII resilience, which we believe we have shown over the last number of years. And what gives me the great confidence going into 26 and beyond is that we have a growing and granular deposit base, which we have seen grow significantly over the last number of years. We see growth in all of our core markets of around 5% per annum. And we very proactively manage our balance sheet. We do this through our structural hedge program. I think last year in the mid-year, I would have referenced a 15 billion euro increase in our structural hedge in 2025. Already this year, in the last number of days, we have executed an additional 10 billion euros of structural hedge. The average yield on that was 2.3% and the average life was five years. So the impact that has is reducing our NII sensitivity to 100 basis points move or shock from 378 million euros down to 286 million euros. Some of the other moving parts with the structural hedge are that we expect to have 6 billion euros of swaps maturing in 26, 6 billion euros of swaps maturing in 27. Throughout 24, 25 and even earlier this year, I have talked about wanting to extend the duration, which is now expected to be 5% by the end, 5 years by the end of 2026. So we expect at the end of 26 to have a received fixed yield of 2.3% on euros and 2.7% on sterling. In addition, as we've talked about before, we have a large quantum of fixed rate mortgages of around 21 billion euros. They have a yield of 3.1% and a weighted average life of 1.9 years. And that's relevant because we leave them unhedged really to add a little bit of natural duration to our balance sheet. I've really tried to summarise the position for year end. We'll have an average life of 5.1 years on our euro hedge and that will remain in place over the next number of years and our receive fixed yield is around 2.3% so at stroke in the money. So looking through that or looking at that, that's what really underpins and gives us the confidence for our NII guidance. to be circa 3.8 billion euros in 2026. Other income was 756 million euros, and our net fees and commissions were up 4% in the year. I think the main standouts really was in our cards business, which was up 11%, our wealth and insurance business, which was up 7%. And as we've talked about previously, this is a huge area of focus for the organisation going forward. We have 18.3 billion euros of AUM, as Colin would have mentioned, a number of years ago. Obviously, that would have been a much lower number or approximately zero. But obviously, post the acquisition of Good Bodies, post the start-up of our joint venture with AIB Life, we feel we have a very strong foundation. So the Good Bodies AUM is 15.3 billion euros, which grew by 7% in the year. The AIB Life AUM is 3 billion euros, which grew 20% in the year. I think in the coming years, what you should expect to see in this area is AUM growth of 10% per annum and revenue growth of 15% per annum. But that is going to be a massive area of focus for the organisation, linked to the huge customer numbers that we have, obviously linked to a lot of the activity we are embarking on with respect to digitalisation and personalisation. Other income, some of the other line items can always be a little bit more volatile. I tried to just update and guide as the year progresses. But overall for 2026, other income greater than €750 million. Our cost performance was strong in 2025, a turn of 1.99 billion euros, which is up 1%. A few different moving parts here. Staff costs were down 1%, mainly due to reduction in headcounts. G&A expenses up 6%. We're seeing some inflationary impacts there, higher business volume impacts there, and also higher OPEX-related investment spends. So not all of our technology spends get capitalised. Some also goes through our OPEX, and you will see it here. And our depreciation number is down 3% on the year as we really tightly manage the execution of our big programmes. So overall, that gives us a cost income ratio of 44%. Like I said, our FTE reduction was down 3%, ending the year with 10,207 employees. And this is a trajectory we expect to maintain in the coming years. We believe that we'll be able to do it on an organic basis, obviously, as we go through the next number of years. Colin mentioned that we were going to increase our investment spend from 300 to 350, up to 400 million euros now in 2026. And we're going to really look to accelerate our digitisation, which will enable faster innovation, scalability, enhanced security and obviously operational efficiency. As a result of this, you can expect to see our depreciation grow by 3% or 4% per annum, but that is obviously going to be partially offset by ongoing cost-saving initiatives and efficiencies that come from the rollout of these large programs. But for 2026, we expect our cost to increase by 2%. With respect to asset quality, we had an ECL charge of $172 million for the year, which represents a 24 basis points cost of risk. I'll just really simply break it down into three different areas. We had a write-back of €52 million from macros, and that's really reflecting the fact that the way we saw the different range of outcomes post-Liberation Day, the outturn, particularly in Ireland, ended up being significantly better. We had a 210 million net charge relating to underlying credit performances, which is really just the normal movement of credit between stages. And lastly, with our PMA, we had a small charge of 14 million euros in the year, leading us overall to that charge of 172 million euros. So we have an ECL stock of 1.1 billion euros and an ECL cover rate of 1.6%. where PMA of 254 million represents around 26% of our ECL stock. Notwithstanding all of the volatility that remains in the world at the moment, we feel we are very, very conservatively provided. So for 2026, we expect a cost of risk within the range of 20 to 30 basis points, and I look to narrow that as the year progresses. Main movements on the balance sheet side, obviously loans increased 2%, liabilities increased 7%. That obviously gives us an excess liquidity position. So what you're seeing here is an increase in the amount of investments we make in the Treasury world. We bought an additional €2.4 billion worth of bonds in the sovereign and supranational space in the Eurozone. And for 2026, I think you can expect to see that grow by another €4 or €5 billion. Loans to banks was €48 billion, which included €36 billion at the CBI and €3.8 billion sterling with the Bank of England. Overall, our loans increased by 3% on an underlying basis or 2% on a reported basis. Big FX impacts in the year, slight impact from some disposals in the year. But overall, I think we are more confident now than ever that we'll be able to reach and achieve our 5% asset growth targets for 26 and 27. What we saw in 2025, I would say, was our wholesale businesses performed very strongly. Property market still a little bit muted, recovering from the interest rate changes and valuation shock. Our personal consumer business performed very, very strong. And on our mortgage business, we saw growth overall in the year. As I look to 2026, I think what you can expect to see is growth in all of these areas, just slightly more. So our funding and capital position remains very strong. LDR of 61%, LCR of 204%, and a net stable funding ratio of 163%. Our MRL ratio was 35.2% in excess of our requirements, so a very strong foundation there. But I think the big story on the liability side or the balance sheet side for 2025 was really deposits and the deposit growth. So notwithstanding the fact that we had a movement of around 2.4 billion euros of our customers moving to term, we actually had an increase overall in our current account and demand deposits. So 7% growth is an exceptionally strong outturn, though we do expect that to temper somewhat in 2026, more in line with modified domestic demand. There's no other reason there, no competitive environments that we're necessarily concerned about. It's just we feel that 2025 was maybe an unusually large growth area, but that remains to be seen, and we will obviously be able to watch that quarter by quarter. Capital generation for 2025 in AIB was exceptionally strong. We started the year at 15.1%, and then early in Q1, we had a Basel IV impact of 120 basis points. We had organic capital generation of 370 basis points from our business activity. We have a reduction of 390 basis points for distributions, as we've talked about. We engaged with the government and we cancelled the warrants that they were granted in 2017 around the time of the IPO, and that had a cost of 70 basis points. Given our strong business performance, we had really strong DTA utilization benefit of 40 basis points. with some other equity movements of 20 basis points cost, which is really just AT1 coupons. And then in other RWA movements, we have a number of RWA optimization items where we had a strong outperformance. That includes execution of a mortgage SRT in quarter four, the sale of our 49% shareholding in AIB merchant services, and also the implementation of a new IRB model for our climate and infrastructure capital business, which also had a positive benefit. That doesn't even incorporate the €1.2 billion directed buyback that we did with the government in the first half of the year, where we bought back €1.2 billion of stock at a price of €6.25, because that was obviously deducted from the prior year's returns. So the outturn of 16.2% is very strong, over 6% of capital generated in the year, which is really, really strong. And we're very happy with that. Obviously, comfortably above all of our buffers. With respect to how we think about capital, same as prior years, come in on the 1st of January and drive as strong a business performance as is possible. So obviously 370 basis points was the out term for 2025, but I think you should be thinking even for the medium term, greater than 320 basis points on a sustainable basis on our deferred DTA benefit of circa 35 basis points steady state going forward. We're going to invest in our business in two ways. Number one, increase our investment spend and change in technology up to 400 million euros. And we're obviously going to utilise more of our capital as we grow our balance sheet on a 5% annualised basis. We will continue to optimise our balance sheet wherever we can in whichever format we can. So we will do this through SRTs where we've already issued two transactions, two different asset types. Obviously, the corporate transaction was done in 24. The mortgage, AIB mortgage transaction was done in 25. And now in 2026, we will look to execute an SRT transaction within our project finance or climate and infrastructure capital portfolio. IRB model adoption and development is an ongoing theme. We do expect to have 80% of our balance sheet on IRB models by 2028. I'd mentioned the benefit from the project finance model. 2026, we have two different portfolios which we're hoping to review and conclude, that being EBS mortgages and commercial real estate, but it's a little bit too early to know what the outturns there are going to be. And lastly, we look to deliver market-leading distributions. We've paid out over 100% in 2024 and 2025. We've paid out €6.5 billion in distributions since 2023. For our ordinary dividend policy, we look to pay a sustainable dividend within a 40% to 60% payout range. Our ordinary dividend will be paid in cash. Our interim dividend will be paid at one third of the prior year's ordinary distribution, ordinary dividend per share. With respect to additional distributions, we have capacity for above policy payouts subject to annual review and necessary approvals. We have optionality to utilise share buybacks, special dividends or a combination of both as we look to move towards our medium term target of greater than 14%. So wrapping it all up, our 2025 performance we feel was strong. Already achieved or outperformed our 2026 targets. 2026 guidance will be interest income, circa 3.8 billion euros. Other income greater than 750 million euros. Costs are expected to grow by 2%. We expect a cost of risk between 20 and 30 basis points. Loans will grow by 5% and we expect deposits to grow by 2 or 3% and will deliver a return on tangible equity greater than 20%. So for 2026 and beyond, we expect to deliver a strong performance in the final year of our strategy. Moving into the next strategic cycle, we have a lot of positive momentum in our business. Sustainable business growth and returns, strong organic capital generation, increased investment in our business and market-leading shareholder distributions. Our medium-term targets continue to guide the business and will be refreshed for our next strategic cycle this time next year. Thank you all very much.

Thank you very much indeed, Donal. And now we're going to take some time for questions and we're going to the phone lines. The first question comes from Dennis McGoldrick in Goodbuddy. Good morning, Dennis.

Good morning, Colin and Donal, and thank you for taking my questions. Just two, please, if I may. So firstly, you're guiding to circa 3.8 billion NII for 2026. Can you talk us through the moving parts within that year-on-year along with any colour you could give on an AI beyond this year, please. And then secondly, you delivered 7% positive growth in 2025. Could you talk us through the mix within that between interest and non-interest bearing and how you see that evolving this year? Thank you.

Thanks, Dennis. I'll take that one. Look, on the liability side, it's... I think it's fair to say that the savings ratio in Ireland is a little bit higher than what people would have imagined. And I think the impact on the Irish banking system was pretty consistent. Notwithstanding that fact, we do think that the deposit market will normalise in 2026, which is why we think that the increase will be 2 to 3%. So it seems like a big drop, but I would argue that that's more due to 2025 outperformance. But, you know, we will be able to keep an eye on this on a quarterly basis. I think we don't expect any particular change in mix. Our deposit beta in 2025 is around 20%. 2026, we expect to see something similar. So I would just use the same mix as you go forward. And overall with NAI, really nothing new here. I think, I mean, taking the year-round position of 2025, believing and putting that 5% growth over the coming years, I think is how you will be able to get closer to the numbers I have. Indeed, as I look at, if I look at consensus for 2026, 27, 28, I've obviously given you 26 numbers, which are slightly better than consensus here. 27, you know, is in or around where we see things. I think 2028 consensus seems a little bit light on loans and obviously on associated interest income. But for all of those years, 27, 28 will be greater than 20% return on tangible equity as well. I can certainly commit to that.

Thank you very much indeed, Donald. We're now going to Dermot Sheridan and Davey. Morning, Dermot.

Donal, thank you for taking my questions, too, as well, if I may, please. Just firstly on the capital and distributions, could I just invite you to maybe talk to us about when you expect to get to your greater than 14% target, please? And I guess, Donal, you provided some of the outlining measures, but just given how strong capital generation is, I mean, unless you're significantly exceeding your distributions that you've exceeded, that you've delivered in the last couple of years, it's kind of hard to see how it gets to that level without something maybe from an inorganic or, you know, maybe there's something we're missing. I think the question just on new lending, just in terms of what the key drivers to get from to bridge from that kind of 2% to 5% growth, underline 3% in 2025, and specifically just on the mortgage market, I get the point you make around the direct channel. Clearly, the broker channel has become a much more significant part. I just challenge you as to whether it's sensible to remain out of that channel or, you know, is that an area that you're comfortable not to play a significant role in? Thank you.

First of all, we don't remain out of the mortgage channel, out of the intermediary channel. We have... a presence there through Haven. And we've had a big prioritisation of green mortgages in the past number of years. And in the final quarter of last year, we made some adjustments to our non-green mortgage rates. We haven't really seen a huge increase in the size of the intermediary channel in the past number of years. But we do prioritise our direct relationship with our customers. That's what we want to maintain, that direct relationship with our customers. But certainly on foot of the quality of our digital engagement, quality of our in-branch advisory service, the length and breadth of the country, and given those price adjustments we made for non-green rates in the closing quarter of last year, what we're seeing coming through now is in terms of pipeline is very, very encouraging about the volume of mortgage growth we were reporting in 2026.

Hi, Dermot. Yeah, I think with respect to the capital question, moving towards our medium-term target of 14%, being ambition for quite a period of time, that obviously as a baseline represents the amount of capital the organisation thinks that it needs to run the business successfully. which is why we are focused on trying to get to that as soon as we possibly can. I would say 2025 was more around a significant outperformance on the capital front than any reluctance to return capital. I mean, I'd say every of the big initiatives that we worked on, we came out on the right side of that, which isn't always the case. But generating 6% of CET1 in any particular year is a particularly large amount. But look, that's what we worked hard to do. And on any opportunity where we get to look at our balance sheet or any of our activities and make things more efficient, we are going to do that. You know, even if it drags me or pulls me further higher away from 14%, we will do that. OK, so we executed a mortgage SRT in quarter four cost me money, generated 25 basis points of CET1, but it was an applied cost of equity of, you know, 3% or 4%. Okay, so we will continue to look to do the right things to optimise our capital. And on an annual basis, that's what puts us in as strong a position as possible to move towards that 14%, give our stakeholders, the regulator, the board, the comfort and confidence, you know, for us to maintain payouts similar to the last number of years. Thanks very much.

Now we're going to Sheil Shah at JP Morgan. Good morning.

Great, thanks. Two questions from my side, please. Firstly, on the distributions. So the dividend payout ratio looks to be at the top end of your target range. Can I ask how you're thinking about the split of distributions going forward into 26 and beyond? Would you expect DPS to to, for example, grow, considering that we're already at the top of the payout ratio range and maybe attributable profits may be taking a bit of a step down next year. And then secondly, can I ask about the investment spend and maybe sort of leaning towards, you know, the mobile app and your data insights? Could I ask how much sense do you have of the number of AIB customers that can be potential wealth customers and how much leakage do you have in terms of AIB customers that maybe go to other providers for services I'm wondering how much of this you can capture within the group going forward thank you I'll take the second question and then Donald can do the distributions do you want to go first Donald

Yeah, look, with respect to the distributions, I mean, from the half year, obviously, we knew the position that we were going to be in, by and large, financially speaking. So, I mean, the way we tried to look at our distributions, you know, we'll talk to investors, we'll engage with the regulator, and then we'll have our own particular thoughts on what the right mix is. This is the first year for us, obviously, being out of state ownership. We announced a new dividend policy, obviously, last year as well. And we were very focused on ensuring that we delivered cleanly, clearly and consistently against that. So then the make up with respect to the buyback and the cash dividend, it was a number of factors we had to take into account, one of them being market liquidity as well. We do. you know, a buyback that was particularly larger, it might even be difficult to execute within a particular year as well. So that's something that goes into our thoughts. You know, we came out for the first time last year and we said we'll pay a cash dividend within the range of 40% to 60%. And we've decided to pay out of the top end of that range for 2025. Obviously, that's a strong indication of our desire to deliver strong returns to our shareholders. But look, on a go forward basis, the most important thing, having a conversation around distributions. It goes back to how we think about capital and how we manage ourselves. When we come in on the 1st of January, work hard, deliver on the plans, then you'll generate strong returns. Like, without doing that, you're not even having a conversation. So that really is our focus. And then we look and analyse the best make-up of returns in the last quarter of the year.

Thanks very much indeed. In relation to the app, we have 3.4 million customers. 85% of our customers are digitally active. The app is in the final stages of development. In fact, we have a pilot out there, which is getting very, very positive reaction at the moment, and we look forward to launching it in the summer months, and it's going to be a significant change to what we currently offer. It's going to be far, far more intuitive, far, far easier to navigate, far, far better functionality, and it will encompass all aspects of your relationship with AIB Group. The simple truth is that we really didn't have savings and investment products in the wealth space until we acquired GoodBuddy and until we established AIB Life. And we've seen our AUM now grow to the point of 18.3%. There's significant further gains to be made there. I've absolutely no doubt about it over the next number of years. And the app is going to make a difference in that regard as well. But that isn't the sole reason that we're increasing our investment spend. What we're looking at is a progressive transformation of our architecture. We've built a data warehouse in the cloud, world class. We are investing in a new credit lifecycle management system. We are building a unified mortgage platform, all of which will allow us to respond to our customers' needs in a far from more agile, rapid and secure way, because ultimately this is about trust. We're going to turn now to a man at Barclays. Good morning.

Thank you very much for taking the questions. I want to just come back on capital, please. There's quite a few moving parts in terms of capital generation going forward. In particular, the SRTs and potential headwinds. I think previously you've kind of called out CRE, the kind of give back of the CRE component within Basel. as a potential headwind. I don't know if you could kind of give us a kind of updated take on whether you still think that is the case and if you could in any way quantify that, that'd be really, really helpful. And I just wanted to just ask a bit more about SRTs and around the quantum, like is there a limit on the amount of SRTs, you know, aggregate or cumulative SRTs that you'd be looking to have out at any one point in time? I just want to get a sense of the kind of ongoing run rate of SRTs, you know, beyond the kind of existing stock when we're thinking about building out capital. Thank you so much.

Yeah, look, with respect to commercial real estate, huge beneficiary from Basel IV, effective rough numbers, the risk weightings went from around 100% down to 80%. I don't think that I'm going to have line of sight on that outturn until probably the end of 2026. And I don't actually expect an inspection until 2027. But I'm naturally just going to assume that we'll be given up some of that, but I can't quantify that at the moment. With respect to SRTs, the way we think about those and the way I've talked about this from the start, I want to have a programme set up on multiple asset classes executed over multiple years. The reason I want to do this, it's not necessarily for capital generation. OK, we have plenty of capital. And obviously, with every SRT, I'm moving away from 14 percent. But it's really, for me, an RWA optimization tool and a risk management tool. You know, it helps us at entity level or business level manage returns. So corporate transaction done successfully in 24, AIB mortgages in 25. Similar sizes, like we look to target 20, 25 basis points of CET1 per transaction. We don't look to be very aggressive and do massive jumbo deals, okay, because that is not the exercise that we are trying to execute. In 2026, we'll look at our climate and infrastructure business. It has a newly approved project finance model, a slotting approach. I'm going to imagine there will be less inefficiencies, so the SRT may be less effective than others that we've done. It's just I want to have that asset class in an SRT program, which will help us risk manage it going forward. Beyond that, I will look at commercial real estate. I need to understand all of the data that we're getting from our IRB analysis, and then that will help me figure out how we want to target that market. That's more than likely going to be 2027. And then EBS mortgages as well. is another area and another portfolio that I want to look at. I need to wait for the EBS to complete and conclude its own IRB on-site inspection, again, so we can see what the underlying data is telling us. I think they're the main asset classes that I want to get up and running. I want to have them up and running. They will endure. They will remain in perpetuity, certainly as long as they're allowed. I think the question sometimes comes up. You know, if different firms maybe max out, let's say, quantums, etc., then there's kind of questions from the regulator, you know, around associated counterparty risk. But we kind of want to do regular, smaller transactions, very diverse investor base over the coming years. But each transaction, look to save 20 to 25 basis points of CET1. Each transaction probably going to cost 10, 15 million euros. Cost of equity, you know, to date has been, you know, very, very attractive for us. But they're the kind of metrics you should be thinking about.

Thanks very much indeed. Now we're turning to Guy Stebbings at BNP. Good morning, Guy.

Hi, morning there. Thanks for the question. I think most of my questions will be covered, but just one bigger pitch question for Colin. You talked about wanting to be the best bank in Europe in sort of longer term. It could be seen as sort of quite an ambitious statement. I guess best bank means different things to different people. So just interested in terms of what sort of metrics you would be thinking about when benchmarking yourself as such. Thank you.

Yeah, it's an interesting question and one that was predicted to be landed on top of me today. Ultimately, we won't decide if we're the best bank in Europe. It'll be our stakeholders that do. So how do our customers regard us? How do our shareholders regard us? How do our employees regard us? And of course, very importantly, how do our regulators look at us? And so it'll be a compendium of their views that will determine if we will be adjudged to be the best bank in Europe. I know what the team here are capable of. I know the scale of the ambition that we have. And I am very confident that we are going to do our utmost. to be ranked amongst all those stakeholder groups as the best bank in Europe. And we'll obviously be updating you in 12 months time when we have the actual parameters and metrics around how we are going to evaluate that. But it will be in the eyes of the various important stakeholder groups that we deal with every single day. Now turning to Rob Noble, Deutsche Bank.

Good morning, can you hear me?

Yes, we can, yep.

Hi, thanks for taking my questions. Two from me, please. So the climate capital segment is the one that's growing fastest, and presumably will grow fastest going forward as well. There's quite a pickup in stage three loans, and the cost of risk has stepped up. What's going on in this division and what sort of returns do you see that part of the business generating compared to the group as it scales up? And then just a follow up on all the capital questions. At the bottom line, what sort of RWA growth are you expecting in 2026 pre the unknown IRB changes? And then do those IRB changes, Do they affect your pillar two requirement at all? And could that potentially lead you to lower the 14% quarter one target?

Thank you. Hi, Rob. Thanks for the questions. I'll take that. With respect to Pillar 2, let's wait and see. Overall, we have very detailed programmes in place, working with the regulator where we're trying to close out various items on the to-do list. We've been very, very, I would say, efficient in closing those down and over the last number of years have seen a slow, steady improvement in our add-ons. But we are very ambitious in this area, as obviously our add-ons are one of the key ingredients to our medium-term targets. With respect to climate capital, a few different things there. So I mentioned that we have a new slotting model, which is approved, which is really what is used for the bulk of the activities in that area. We've begun to roll that out in quarter, quarter three and quarter four, but looking through it all, If that business had a risk weighting density of around 90% pre that model, post the model, it's around 75%. So that's one of the key inputs that you need for your returns analysis. The margins on the business are pretty consistent in different jurisdictions. And I would probably think about that being like a 2.2 percent margin business. Or certainly that's what we model for when we're looking at the business and its growth and its trajectory. Costs are very low, obviously, given it's a very small professional wholesale team. And then it comes down to the cost of risk factor. For 2025, that division standalone had a very high cost of risk of around 110 basis points. Within that, there was around half a billion euros, 500 million euros worth of fibre type transactions, all originated around 2019, 2020. And that's to do with the rollout of fibre throughout Europe. Ireland, UK, France, Germany, Italy, etc. So all of those deals are now, or a lot of them, some are performing exceptionally well, such as in Ireland. UK, not so much. Delays from COVID, etc., etc. They're coming through now. We took a few PMAs, quite an amount of PMAs, really just to ensure that in all eventualities we were really well provided for. So you are seeing refis and equity recaps happening in that business at the moment. But if you took out that fibre portfolio, the cost of risk for that book was probably five or six basis points. And certainly for our planning assumptions, we use a cost of risk of less than 20 basis points. So if you put all that together, you can see the growth trajectory and you can see that this is an accretive business for AIB and very heavily supported and strategically important for us.

Thank you. We'll now go to RBC. Good morning, Pablo.

Question. I wanted to ask on the income first question. So you're guiding to AUM CAGR of 10% to 2028 with related revenue growth above that at 15% per year. So could you just please provide a bit more detail on what would drive that revenue growth going forward besides the demographic trends that you have already mentioned and perhaps also what the required investment, additional investments are in that part of the business going forward? My second question was more on your deposit growth. I know that you've mentioned you expect that deceleration from 7% that you saw in 2025 to be more in line with the evolution of MDT. And I believe you also mentioned that you didn't necessarily expect a material headwind from changes in the competitive environment in Ireland. So I just wanted to check. what you have been seeing in the last month, in this year as well, and if you expect any material disruption given potential new entrants into the market, the ongoing transaction in Ireland, et cetera. Thank you.

Yeah, look, on the wealth, the way we're set up, and I'll just try to explain the guidance a little bit there. We imagine 10% AUM growth. I'd like to imagine that that is on the conservative side. We have two businesses, high net worth within Goodbodies and then more mass market through AIB Life. Goodbodies is obviously, I mean, if we're able to acquire any smaller roll-up businesses in that space, we're really aggressively looking to pursue that avenue. And that will be, I would say, in Ireland, we would say a million euros up of net worth. The AIB Life business has performed really, really well. It only started up a number of years ago. That is now fully functioning within the AIB construct. So it's a joint venture with Great West Life Co., but there's 140 advisors operating throughout the country. and working through AIB branches with AIB colleagues. I think the statistics were maybe 40,000 face-to-face meetings or 35,000 face-to-face meetings last year with our customers. And we do expect this to just grow as we continue to roll out new products. And obviously, as the population matures and also educates a bit more on wealth products. So that's what gives us the confidence in this area. Massive area of focus for us, not just with respect to customer acquisition, but also connectivity with our mobile presence, our mobile banking apps as well, making that as easy as we possibly can for customers. our deposits it's um look it's it's it's where i'm trying to be as open uh and clear about this as uh as possible you know and i will admit over the last number of years i have uh i have underestimated liability growth uh for for the organization uh we're certainly very comfortable with our position in the market okay uh 49 50 of all new accounts being opened and that's a huge area of focus for us 40 of the stock so We have no concerns necessarily over competitive threats in this area. It's just we felt that at some stage a normal savings ratio deposit impact is going to come to pass. I was expecting a slightly different outturn in 2025. obviously I was wrong and there was an outperformance. So let's see how it turns out in 2026. Is it conservative? I mean, who knows? But certainly that's what our econometric models would show us. And indeed, if it's wrong, I'm sure we'll know at the next quarterly Central Bank of Ireland report in any case.

Now we're past the top of the hour and we're going to run matters to a close there. Thank you so much indeed for your attendance and for your questions this morning. If you have any other questions or any points of clarification, please do reach out to Niamh, to Siobhan, to John and Bernie on the IR team. And we look forward to engaging with you and indeed our investors face-to-face as the roadshow commences later on today. Thank you so much indeed.

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