This striking set-up had not gone unnoticed by the market, which was already valuing the group at a premium to its Old Continent peers-all the more so as the Irish bank was among the first to reach a solid double-digit return on equity.
Meanwhile, MarketScreener wrote in black and white that it was somewhat more measured, because while the group-restructured by force and strictly monitored by its regulator-dominating its market was hardly in dispute, its growth prospects now appeared largely blocked.
In hindsight, and following the release of its FY 2025 results, those precautions were justified: despite a noticeable rise in lending, net interest margin shrank for the third consecutive year, as did pre-provision income.
The cost base, meanwhile, is rising markedly, so that pre-tax profit falls by a quarter. The entire profit (€1.2bn) was returned to shareholders, through a distribution split evenly between dividends and share buybacks.
The bank is therefore valued at thirteen times the capital it returns to shareholders in 2025-an excellent vintage, with Irish GDP growth nearing 11%-and 1.6x its tangible equity. It thus trades near the top of the European banking pack, on a par for instance with Spanish banks or Italy's UniCredit.
More seasoned investors may recall that all these names were among the most severely discounted during the euro crisis fifteen years ago. In a state of insolvency, all these groups required emergency refinancing from the public sector.
That was hardly enough to dispel the market's extreme distrust of them. Even once those rescue plans were in place, their valuations long languished at a fraction of the value of their tangible equity.
Times have indeed changed.
