Log In Get Started
Stock Markets April 15, 2026 05:55 AM

Barclays Raises Bank of Ireland Rating, Revises Outlook Across Irish Banks

Brokerage upgrades Bank of Ireland and lifts Permanent TSB while keeping AIB at neutral as it cites earnings, valuation and capital strength

By Derek Hwang
Barclays Raises Bank of Ireland Rating, Revises Outlook Across Irish Banks

Barclays has adjusted its stance on Irish lenders, upgrading Bank of Ireland to overweight from equal weight, moving Permanent TSB to equal weight from underweight, and retaining AIB Group PLC at equal weight. The bank set price targets for the three lenders and provided multi-year forecasts for net interest income, statutory profit before tax, return on tangible equity and CET1 ratios, saying the sector appears resilient with upside driven by rate sensitivity, credit quality and capital generation.

Key Points

  • Barclays upgrades Bank of Ireland to overweight, keeps AIB at equal weight, and raises Permanent TSB to equal weight.
  • Price targets set at €19.50 for Bank of Ireland, €10.50 for AIB Group PLC and €2.97 for Permanent TSB Group Holdings Plc; Barclays forecasts rising net interest income and strong return on tangible equity across the banks through 2028.
  • Barclays describes the Irish banking sector as "Resilient with upside," citing rate sensitivity, solid credit quality and capital generation; it expects net interest income expansion through 2028.

Barclays adjusts ratings and sets price targets

Barclays has re-evaluated the ratings for three Irish banks, upgrading Bank of Ireland to "overweight" from "equal weight," promoting Permanent TSB Group Holdings Plc to "equal weight" from "underweight," and keeping AIB Group PLC at "equal weight." The brokerage framed its view of the Irish banking sector as "Resilient with upside," highlighting rate sensitivity, credit quality and capital generation as supporting factors.

Price targets and valuation

Barclays assigned a price target of €19.50 for Bank of Ireland, €10.50 for AIB Group PLC and €2.97 for Permanent TSB Group Holdings Plc. The firm noted relative valuation metrics across the group, estimating Bank of Ireland to trade at about 7.5x 2028 earnings, AIB Group PLC at about 9x 2028 earnings, and Permanent TSB Group Holdings at about 7x 2028 earnings. Barclays said its earnings forecasts for Bank of Ireland are about 5-10% ahead of consensus for the 2026-2028 period, a view it attributes in part to rates.

Detailed forecasts for Bank of Ireland

For Bank of Ireland, Barclays projects net interest income of €3.52 billion in 2026, €3.81 billion in 2027 and €4.12 billion in 2028, compared with €3.37 billion in 2025. Statutory profit before tax is forecast at €1.80 billion in 2026, €2.11 billion in 2027 and €2.47 billion in 2028. Return on tangible equity is seen at 17.4% in 2026, 19.9% in 2027 and 22.8% in 2028. The broker's CET1 ratio projections are 14.6% in 2026 and 14.5% through 2027-2028.

Projections for AIB Group PLC

Barclays expects AIB Group PLC to record net interest income of €3.83 billion in 2026, €4.02 billion in 2027 and €4.19 billion in 2028. Statutory profit before tax is forecast at €2.25 billion in 2026, €2.41 billion in 2027 and €2.55 billion in 2028. Return on tangible equity is projected at 23.3% in 2026, rising to 24.5% by 2028. Barclays anticipates AIB's CET1 ratio at 15.4% in 2026, declining to 14.1% in 2028.

Outlook for Permanent TSB Group Holdings Plc

Permanent TSB Group Holdings Plc is modelled with net interest income of €0.65 billion in 2026, €0.71 billion in 2027 and €0.77 billion in 2028. Statutory profit before tax is estimated at €0.19 billion in 2026, €0.21 billion in 2027 and €0.27 billion in 2028. Barclays forecasts Permanent TSB's CET1 at 18.1% in 2026 and 17.8% in 2028, and sees net interest margin rising from 2.19% in 2026 to 2.40% in 2028.

Sector-wide expectations

Across the Irish banking sector, Barclays projects net interest income growth through 2028 with the brokerage's 2028 net interest income estimates at €4.12 billion for Bank of Ireland, €4.19 billion for AIB Group PLC and €0.77 billion for Permanent TSB Group Holdings. Net interest margin projections for 2028 are 2.92% for Bank of Ireland, 2.72% for AIB Group PLC and 2.40% for Permanent TSB Group Holdings.

Capital returns and credit outlook

Barclays said AIB Group and Bank of Ireland are positioned to deliver "sustained double-digit cash return yields," supported by capital generation. The brokerage also stated that credit risks remain low and suggested that earnings' sensitivity to interest rates could yield more than a 10% uplift in earnings per share under higher rate scenarios.

Note: The projections, ratings and price targets reported above reflect Barclays' published estimates and views as stated. No additional sources or commentary have been introduced beyond those figures and statements.

Risks

  • Earnings sensitivity to interest rates - Barclays notes EPS could rise by more than 10% under higher rate scenarios, implying outcomes depend on rate movements, which affect bank earnings and market valuations.
  • Capital ratio trajectory - Projections show differing CET1 paths for the banks (for example AIB CET1 declining to 14.1% by 2028), indicating potential variability in capital returns and regulatory headroom.
  • Forecast uncertainty relative to consensus - Barclays' earnings forecasts for Bank of Ireland are around 5-10% ahead of consensus for 2026-2028, highlighting potential model or assumption risk if conditions differ from Barclays' view.

More from Stock Markets

Australian Shares Slip as Healthcare, Financials and Gold Weigh on Index Apr 29, 2026 Fuchs posts Q1 results above forecasts, raises sales outlook for 2026 Apr 29, 2026 Huhtamaki Tops Q1 Expectations but Flags Rising Polymer Costs as Margin Risk Apr 29, 2026 Kambi Holds FY26 EBITA Target Despite €4m Colombia Tax Hit Apr 29, 2026 Pernod Ricard Calls Off Merger Negotiations With Brown-Forman Apr 29, 2026