PTSB chief executive Eamonn Crowley. Photo: Photo: Frank McGrath
Plans to sell PTSB have been given a boost after the Central Bank confirmed that a key application from the bank to the regulator has been approved.
Last year PTSB applied to the Central Bank of Ireland seeking approval to use new IRB Mortgage Models – essentially arguing that mortgage on its books are now less risky than after the crash.
The regulator has now approved the new models which will become operational from 30th January 2026.
The likely effect of the change means the bank can lend more with the capital it has and ultimately should help driver greater profits in future. It puts the bank on a more level footing with key rivals AIB and Bank of Ireland.
While approval by the Central Bank had been expected the timing is a boost to plans to sell the bank, because it provides clarity to would-be buyers relatively early in that process.
PTSB, which is majority State owned, put itself up for sale last October, initial formal expressions of interest are expected around the end of this month. So the update comes at an important time.
PTSB chief executive Eamonn Crowley. Photo: Photo: Frank McGrath
News in 90 seconds Wednesday 21 January
The bank said the new models will reduce the risk weighting on its total residential mortgage portfolio from a previously reported 36.4pc at end June 2025 to a pro-forma c. 32.8pc.
Pro-forma for the impact of the new Models, PTSB’s total risk weighted assets (RWAs) at the end of June 2025 would be lower by around €700m.
The bank said application of the new models will materially reduce the capital intensity of PTSB’s new mortgage lending.
“Therefore, the capital benefit will increase over time as the Bank grows its new lending volumes – forecast total RWAs will be lower by an estimated c. 10pc by end 2028 when compared to our Medium-Term Plan.”
PTSB CEO Eamonn Crowley said the news from the Central Bank was “extremely positive”.
“Today’s announcement is an extremely positive outcome for PTSB which reflects our strategy, prudent credit risk approach and strong asset quality. It is a significant milestone in our ongoing transformation, strengthening our position as a competitive force in the Irish market and enabling further growth and sustainable returns for our shareholders. I want to acknowledge the very constructive engagement with the Central Bank of Ireland throughout this intensive process.”