Moody's Upgrades Ratings of Allied Irish Banks, p.l.c. and Affiliates

Strategic Insights -

Moody's Investors Service has upgraded the long-term ratings and assessments of Allied Irish Banks, p.l.c. (AIB) and its holding companies AIB Group plc (AIBG) and EBS d.a.c. by one notch, citing reduced asset risk, strong capitalization, and improved core profitability. The upgrades reflect the bank's reduced problem loans, high levels of liquid assets, and strong market shares across its lending activities.

Key Takeaways:

  • Moody's upgraded AIB's Baseline Credit Assessment (BCA) to a3 from baa1, reflecting reduced asset risk, strong capitalization, and improved core profitability.
  • The bank's problem loans to gross loans ratio was 2.9% as of June 2025, well below historical levels, with high levels of provisioning to protect against asset risk pressures.
  • AIB's capitalization is strong, at 19.7% of tangible common equity to risk-weighted assets (TCE/RWA) as of June 2025, although expected to decline over the medium term.
  • The bank's leading deposit franchise and strong market shares across its lending activities, including mortgage lending, have supported improved core profitability.
  • AIB's net income to tangible assets was 1.04% in the first half of 2025, and the bank expects to achieve net interest income of EUR3.6 billion in 2025.
  • AIB's BCA is also supported by Ireland's growing and resilient economy, which has exhibited 8% average nominal GDP growth between 2022 and 2024.
  • The upgrade of EBS d.a.c.'s (EBS) BCA and long-term deposit ratings follows that of its parent AIB, and reflects high integration of EBS with AIB.

Statistics:

  • Moodys' Baseline Credit Assessment (BCA) score for AIB: a3
  • Problem loans to gross loans ratio: 2.9% as of June 2025
  • Tangible common equity to risk-weighted assets (TCE/RWA): 19.7% as of June 2025
  • Net income to tangible assets: 1.04% in the first half of 2025
  • Net interest income: EUR3.6 billion expected in 2025

Sources:

  • Moody's Ratings. (2025, June). AIB Group plc. Retrieved from https://ratings.moodys.com/rmc-documents/432741
  • Moody's. (2024, November). Banks. Retrieved from https://ratings.moodys.com/rmc-documents/432741
  • Moody's. (2024, November). Rating Methodologies. Retrieved from https://ratings.moodys.com