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Permanent TSB Group Holdings PLC on Wednesday said that its application to use its new internal ratings-based mortgage models has been approved, a decision it called an ‘extremely positive outcome.’ The Dublin-based lender said the models were submitted to the Central Bank of Ireland last May and will become operational from January 30. The models will reduce the bank’s risk weighting on its total residential mortgage portfolio from a previously reported 36.4% at end June 2025 to a pro-forma 32.8%, it explained. Excluding mortgages on the standardised approach, the reduction in risk weight intensity for the IRB Home Loan book equates to 5 percentage points. Pro-forma for the impact of the models, total risk weighted assets at the end of June 2025 would be lower by €700 million reducing from €10.9 billion to €10.2 billion. This would translate to an increase in the bank’s CET1 ratio from the previously reported 15.5% at end June 2025 to 16.6% on a pro-forma basis, releasing the equivalent of €100 million in capital. ‘This is comfortably above PTSB’s total CET1 requirement of 10.69%,’ the bank noted. Looking forward, Permanent TSB said the application of the new models will ‘materially’ reduce the capital intensity of its new mortgage lending. ‘Therefore, the capital benefit will increase over time as the bank grows its new lending volumes,’ it added. Forecast total RWAs will be lower by an estimated 10% by end 2028 when compared to the firm’s medium-term plan. Factoring in this lower path for RWAs, the bank estimates a 2027 return on tangible equity of more than 10%, up from around 9% before, with the target for 2028 raised to 13% from 11%. Chief Executive Eamonn Crowley said: ‘Today’s announcement is an extremely positive outcome for PTSB which reflects our strategy, prudent credit risk approach and strong asset quality. It is a significant milestone in our ongoing transformation, strengthening our position as a competitive force in the Irish market and enabling further growth and sustainable returns for our shareholders.’ Shares in Permanent TSB were up 2.0% at €3.05 in London late Wednesday morning. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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