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StocksMedium•4 November 2026•
4 min read

AIB raises 2026 net interest income forecast to more than €3.85 billion

Key Facts

1Net interest income was €2.87 billion, up 2%, and total income rose 3% in the nine months ended in September 2026.
2AIB raised its 2026 net interest income forecast to more than €3.85 billion, from more than €3.8 billion previously.
3Total lending rose to €76.3 billion, and new lending increased 17% to €12.3 billion in the first nine months of 2026.
4Customer deposits rose 2.7% to €120.4 billion, while costs increased 3% and the cost-to-income ratio was 44%.

AIB Group raised its forecast for net interest income in fiscal 2026 to more than €3.85 billion, from more than €3.8 billion previously, according to an update published by the group on November 4. The move came after net interest income reached €2.87 billion in the nine months ended in September, up 2% from the same period in 2025. Total income rose 3% over the same period, The Irish Times reported. The newspaper linked net interest income growth to higher average business volumes, while the bank's update showed an expansion in new lending. The revised income forecast is based on the assumption that the European Central Bank deposit rate will remain at 2.5% and the Bank of England rate at 4% in December 2026.

The forecast increase comes as the bank's total lending has risen by €4 billion since the end of 2025, reaching €76.3 billion, up 5.6%. In the first nine months of 2026, new lending rose 17% to €12.3 billion, according to figures reported by The Irish Times. The increase shows that credit activity was a tangible driver of the bank's business expansion over the period, alongside the higher average business volumes to which the newspaper attributed interest income growth. AIB also raised its forecast for full-year customer loan growth to a range of 5–6%, compared with about 5% in its previous estimate. The loan forecast revision, together with the higher interest income target, reflects continued balance-sheet expansion in the bank's estimates for the rest of the year.

The increase in new lending included Irish mortgage loans, which reached €3.2 billion in the first nine months of 2026, up 4% from the corresponding period. Customer deposits rose 2.7% to €120.4 billion, according to bank data cited by the newspaper. The figures put growth in loans and deposits at the heart of the banking expansion over the period, as increased funding to customers came alongside an increase in funds deposited with the bank. Activity growth was not limited to mortgages: new lending overall rose 17% to €12.3 billion. Chief Executive Colin Hunt said the bank had another "strong quarter," attributing it to the resilience of the Irish economy and noting that AIB serves 3.5 million customers.

AIB's costs, meanwhile, increased 3% in the first nine months, and its cost-to-income ratio was 44%, according to The Irish Times. The bank attributed part of the cost pressure to wage inflation. Over the same period, average employee numbers fell 3% year on year, from 10,351 to 10,017 at the end of September 2026. The newspaper said the decline in staff numbers partly offset the impact of pay inflation, while total costs remained elevated compared with the previous period. The comparison between cost growth and total income growth shows that both rose 3% over the nine months, while the cost-to-income ratio remained at 44%.

The year-end outlook for net interest income depends on the interest-rate path assumed by the bank, rather than on a stated forecast of a change: its calculation put the European Central Bank deposit rate at 2.5% and the Bank of England rate at 4% in December 2026. Against the backdrop of 2026 performance, AIB recorded first-half profit after tax of €939 million, according to results published for investors. Net interest margin was also 2.72% in the nine months ended in September, according to data reported by Investing.com. The group forecast that return on tangible equity would exceed 20% in fiscal 2026. Common Equity Tier 1 capital stood at about 15.7% in September, excluding nine-month profits, according to the third-quarter trading update.

Investors are looking to the bank's next strategic move after its operational forecast update. Hunt said AIB would brief the market in March 2027 on its strategic direction for the next cycle, extending through 2030. The announced date sets a later milestone for presenting the group's priorities after the current year, while current figures focus on growth in interest income, lending and deposits, alongside cost trends. The published update did not provide further details on the content of the upcoming strategy. The December interest-rate assumptions remain part of the basis for the revised 2026 net interest income target.