AIB Group (LON:AIBG) reported first-half 2026 profit after tax of €939 million, producing a return on tangible equity of 23.2% as loan growth, stable margins and higher fee income supported the result.
The bank said gross loans rose 3% from the start of the year to €74.5 billion after new lending increased 10% year-over-year to €7.5 billion. Customer deposits increased 1.3% to €118.8 billion. AIB reiterated its guidance for approximately 5% customer-loan growth and deposit growth above 3% for the full year.
Income, costs and credit quality
Total income rose 2% to €2.282 billion, while costs increased 2% to just over €1 billion, resulting in a cost-to-income ratio of 44%. Net interest margin was 2.68%, with an exit margin of 2.71%.
Donal said net interest income remained resilient through the interest-rate cycle and that AIB expects net interest income of more than €3.8 billion in 2026. The bank expects other income of around €800 million for the year after reporting €411 million in the first half, up 15%, aided by wealth and insurance activity.
AIB recorded an expected credit loss charge of €91 million, equivalent to a 25-basis-point cost of risk. Its expected-credit-loss coverage ratio was unchanged at 1.6%. The bank expects a full-year cost of risk between 20 and 30 basis points, costs to rise 2%, and return on tangible equity to exceed 20% in 2026.
Lending momentum and mortgage activity
Colin said lending demand was broad-based across personal, small and medium-sized enterprise, property and corporate banking. Mortgage lending totaled €2.1 billion, and AIB’s mortgage market share was 30% in the first half. The bank said it remained the largest direct-to-customer mortgage lender, with a 46% share of that channel.
Addressing analysts, Colin said AIB does not target mortgage market share “per se,” but instead focuses on “writing the right business with the right customers at the right price.” He said the bank had made rate adjustments in the final quarter of the prior year and continued to monitor the market closely.
The bank said 90% of personal loans were delivered digitally in the first half. Digital mortgage delivery also increased, with 29% of mortgages completed digitally, compared with about 25% during the prior year, according to Colin.
Climate and Infrastructure Capital new lending doubled to €1.2 billion after what Colin described as a sluggish 2025, partly due to geopolitical considerations. Green and transition lending represented 61% of total new lending, including 60% of new mortgage lending.
Climate lending, technology and customer growth
AIB said 41% of all new lending in the half qualified as greener-transition lending. It has deployed €26 billion of its €30 billion Climate Action Target, or 87% of the total. The group has also issued €8.2 billion of ESG bonds since 2020.
The bank said it had exceeded its 2026 first-time-buyer lending target and supported approximately 23,000 customers in purchasing their first homes. Total customers reached 3.5 million for the first time, while 84% of personal customers were digitally active.
AIB launched a rebuilt cloud-based mobile app in June and expects to complete its rollout by the end of October. The bank said it plans to continue investing around €400 million annually in technology, resilience and innovation.
Colin said artificial intelligence had moved beyond experimentation at the bank and was being used across hundreds of workflows. Its digital assistant, Abi, was handling about 6,500 calls per day, up roughly 25% from year-end, and supported 90 customer journeys in customer engagement centers. AIB said Abi was triaging roughly 70% of incoming calls and handling around 16% overall.
Capital plans and next strategy cycle
The bank said it intends to maintain a 40% to 60% ordinary dividend payout policy, while retaining the capacity for additional shareholder distributions subject to annual review and approvals. Management said it could use buybacks, special dividends or a combination of both as it moves toward its medium-term CET1 target of 14%.
AIB also plans a synthetic risk transfer transaction on its project-finance portfolio in the fourth quarter. Donal said the transaction is expected to target more than €1 billion of risk-weighted assets and generate a CET1 benefit of 25 to 30 basis points, with an expected net interest income cost of about €10 million.
The group is preparing its next strategic plan through 2030, with updated medium-term targets due alongside full-year 2026 results in March 2027. Colin said the strategy would continue to focus on customers, greening the business, and operational efficiency and resilience, while considering structural trends including electrification, digitalization and demographic change.
About AIB Group (LON:AIBG)
AIB Group plc operates predominantly in Ireland and the United Kingdom. Our shares are quoted on the Euronext Dublin and the London stock exchange and we are a member of the FTSE4Good index. Our three core segments are: Retail Banking, Capital Markets and AIB UK. We also operate wholesale treasury activities along with control and support functions.
