PTSB and its advisers are on track to call on parties circling the bank to submit firm expressions of interest by the end of January, in order to determine whether to push the process into a binding bidding round, according to industry sources.
The expectation is that Goldman Sachs, which is managing the process, will set a target date in the second half of January for pitches, but keep this somewhat fluid in order to maximise participation at that stage of the process.
While PTSB’s shares have fallen back 9 per cent in the past month as investors tempered early optimism about the prospects of a deal in early 2026, the process is understood to have attracted solid initial interest, including private equity and banking industry players.
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Still, PTSB’s current market valuation, at €1.58 billion, is almost 25 per cent above where it stood before chief executive Eamonn Crowley announced in late October that the group was being put on the block.
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A spokeswoman for the bank declined to comment on the sale process. The State owns 57 per cent of PTSB.
Austrian bank Bawag, which owns the Moco mortgage brand in Ireland, has been widely speculated by banking industry executives and analysts as a leading contender for PTSB. While Spain’s Bankinter, owner of Avant Money, has also been tipped, PTSB’s bricks and mortar branch set-up is at odds with the digital model the group has pursued in this market.
Industry sources say that the sale has also attracted several international private equity firms that typically look at banking assets.
Lone Star has been among the most active such firms since the financial crisis. Its actions include: the purchase of IKB Deutsche Industriebank in 2008; the acquisition of 75 per cent of Portugal’s Novo Banco in 2017, before agreeing to sell it on to French banking giant Groupe BPCE during the summer; and an attempt in 2022 to buy Bank of Cyprus.
JC Flowers, Apollo, Cerberus and Blackstone are also among US private equity firms that have taken controlling stakes in European banks since the financial crisis.
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A sale of PTSB would complete the return to private ownership of the domestic banks that survived the 2008 financial crisis.
PTSB, by far the smallest of the three, has been dogged by low returns ever since, due to its scale – even after increasing its balance sheet by about 50 per cent between 2022 and 2023 as it acquired €6.8 billion of Ulster Bank loans – and the fact it has to hold higher levels of expensive capital relative to loans than its larger peers.
The bank’s forecast €525 million running costs for this year will still equate to more than 75 per cent of total income – compared to figures below 50 per cent at AIB and Bank of Ireland. PTSB has set itself an objective of reducing its cost-income ratio to 62 per cent in 2027, as the other two banks continue to see theirs remaining below 50 per cent. This is the benchmark that most European retail banks aim for.
A successful bidder would be expected to ramp up actions to reduce costs.
The Business Post reported on Sunday on a detailed analysis by Autonomous Research in London of how Bawag could benefit from buying PTSB. It estimates that Bawag acquiring PTSB could result in more than €300 million of additional net profits to the Austrian group by 2028 – including synergies from a deal.
PTSB received a €4 billion State bailout in 2011 and has so far repaid €2.8 billion. The total includes cash received from the sale of PTSB’s former sister company Irish Life, share sales, redemption of bailout bonds, guarantee fees and interest payments. The State’s remaining stake has a market value of about €900 million.
