Irish Banks: In defence of the deposit base; AIBG on Positive Catalyst Watch with NII upside

研报英文原文证据摘录

Irish Banks: In defence of the deposit base; AIBG on Positive Catalyst Watch with NII upside

given the financial literacy gap. The generational shift towards neobanks is one Recent notes:

to watch, but will take time to play out, giving Irish banks an opportunity to defend

Irish Banks: Development of a Wealth

share through higher investment (with a step-up already seen this year) and improved

market (here)digital capability. Thus, we believe the market’s narrative of deposit terminal

value erosion for AIBG/BIRG is too conservative. Irish Banks: Riding the Shamrock wave;

Upgrading AIBG to OW, BIRG to N (here)

We see value in high-quality deposit bases which deserve a premium valuation

vs the sector in an environment where liquidity risk presents the biggest threat,

whether from digital money (here), cyber (here) or otherwise. AIB holds this market

position with leading shares of 40%/50% of the stock/flow of Retail current accounts

and 49% share of Business current accounts in Ireland (as discussed in Irish Banks:

Riding the Shamrock wave), with investments being made into digital capabilities

(noting the Group’s new mobile app was released a few weeks ago), although from

a low technological base. We expect AIBG to re-rate towards our exit PE of c12x 27E

(vs current PE of 10.6x) as the sector re-rates, at a c8.5% implied cost of equity, slightly

below our LT expectation of the sector’s cost of equity of c9% (see Outlook). Our

preference remains for AIBG (OW), trading at 10.6x PE, 1.8x PTNAV for a ROTE

of 16.7% 27E, over BIRG (N).

• NII guidance upgrade likely – placing AIBG on Positive Catalyst Watch:

System deposit flows remain resilient at +7% y/y (May ‘26) and above

conservative FY26 management guidance levels of 2-3% for AIBG and c3%