Irish Banks: Mid-year musings, T2 > Holdco

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Irish Banks: Mid-year musings, T2 > Holdco

ising competition BKIR: A good 2H

The Irish banking market has consolidated following exits of Ulster Bank (2021) and KBC Thoughts into 2026

Bank Ireland (2023), leaving three dominant lenders. Competitive pressures are

Autumn leaves us feeling positiveincreasing, with Bankinter expanding via Avant Money in 2025, Investec applying for an

Irish banking licence in May 2026 and Revolut growing to 3.4mn customers, aided by the Wish list: top pick AIB

historical lack of instant mobile payments before Zippay's 2026 launch. Despite this, we

expect the impact on incumbents to be manageable. Bank of Ireland and AIB retain

leading positions across mortgages, SME and corporate banking, with large, sticky

deposit franchises. High regulatory barriers should constrain new entrants' ability to Exhibit 1: Recommendations in report

scale, while increased fee income contribution helps reduce reliance on NII. We prefer Tier 2 to Holdco at this juncture

Bond New rec Old rec

Limited PTSB spread impact from BAWAG acquisition Holdco

In April, Austrian lender BAWAG agreed to acquire PTSB for €1.62bn in an all-cash AIB 3.75 MW -

transaction, with completion expected in 4Q26–1Q27 subject approval. We view the AIB 4 MW -

AIB 4.625 MW MW

transaction as credit positive for PTSB, adding scale and support from a larger, higher- AIB 5.25 MW MW

rated bank. However, given already tight spreads, we think upside is more limited. We BKIR 3.875 OW -

prefer the PTSB €3.875% Tier 2 ‘35s (reiterate OW) >40bps wide of BAWAG Tier 2 (the BKIR 3.625 MW -

€6.75 ‘34s). Though the PTSB bond is ~1.5Y longer to the call than the BAWAG bond, we BKIR 3.625 MW OW

still think this differential looks wide, especially given BAWAG’s acquisition interest and BKIR 4.625 MW -