**Summary**
Permanent TSB Group Holdings plc (PTSB) announced on January 21, 2026, that the Central Bank of Ireland has approved its new Internal Ratings-Based (IRB) Mortgage Models. These models, submitted in May 2025 and operational from January 30, 2026, will reduce the banks risk weighting on its residential mortgage portfolio from 36.4% to approximately 32.8%. This adjustment lowers total risk-weighted assets (RWAs) by €0.7 billion, from €10.9 billion to €10.2 billion, as of June 2025. Consequently, PTSBs Common Equity Tier 1 (CET1) ratio increases from 15.5% to 16.6%, releasing €0.1 billion in capital, well above the regulatory requirement of 10.69%.
The new models will significantly reduce capital intensity for future mortgage lending, with forecast RWAs expected to be 10% lower by 2028 compared to the Medium-Term Plan. This improvement has led to adjusted Return on Tangible Equity (ROTE) targets of >10% for 2027 and ~13% for 2028, up from ~9% and ~11%, respectively. The Board will assess the impact on the Internal Capital Adequacy Assessment Process (ICAAP) and Medium-Term Plan, with updates expected at the 2025 full-year results on March 5, 2026.
PTSB CEO Eamonn Crowley highlighted the approval as a milestone in the banks transformation, enhancing its competitive position in Ireland and supporting growth and shareholder returns. The bank also reaffirmed its intention to recommend a final dividend for 2025, subject to regulatory approvals. An analyst conference call was scheduled to discuss the announcement further.