From PTSB sale to Revolut’s mortgage entry: why 2026 is set to be busy year in banking

Irish financial stocks delivered their strongest annual showing in 2025 since 2013, the year the State exited its international bailout programme.

The Iseq financial index – dominated by the three surviving banks – advanced by about 75 per cent during 2025, buoyed by AIB and Bank of Ireland upgrading their net interest income forecasts as the European Central Bank (ECB) cut interest rates less aggressively than expected and there was an ongoing influx of cheap deposit funding from households.

Investor sentiment towards AIB was boosted further as the Government returned the company to full private ownership – selling its last shares in June and a bunch of stock warrants in October. Taxpayers have recovered a total of €20.2 billion from the bank since its €20.8 billion crisis-era bailout – leaving a shortfall of just over €600 million.

However, PTSB stole the spotlight. The smallest of the three firms doubled in value as it put itself up for sale.

More action lies ahead in 2026, with a potential PTSB deal, a long-awaited new mortgage entrant and a looming reckoning for Bank of Ireland over the UK car loans saga among five key themes set to unfold.

PTSB sale

Two years into the job as chief executive of NatWest, Paul Thwaite set out last summer to tidy up loose ends in the Irish banking market.

In June, the group’s Ulster Bank Ireland unit returned its banking licence, drawing a line under 165 years in the Republic. The Irish unit, renamed Ulydien DAC, was downgraded to operating as a retail credit firm as it continues a “phased and orderly” withdrawal of its operations.

Thwaite decided in July to sell the remaining shares that NatWest had received from PTSB as part payment for €6.8 billion Ulster Bank loans acquired between 2022 and 2023. It resulted in the UK bank raising a total of more than €181 million from the sale of the 16.7 per cent stake in two tranc