Ronan Smyth: PTSB sale closes the final chapter of Ireland’s banking crisis

The State is about €1.3bn above break-even on its €29.4bn investment in AIB, Bank of Ireland, and PTSB.

When PTSB put itself up for sale in October last year, it finally signalled an end to one of the last remnants of the financial crisis, with the Government approving a move which would ultimately see it exit its majority shareholding position in the bank. 

However, the banking sector in this country has changed remarkably in that time but the three remaining pillar banks have not always kept pace.

The announced acquisition of PTSB by Austrian bank BAWAG for just over €1.6bn means the Government will finally be washing its hands of the bank bailouts after nearly two decades. Of the three pillar banks still operating in Ireland, PTSB is the smallest and unlike its two major competitors, it was not able to buy itself out of State ownership and on its own — and was never looking likely to do so.

The Government finalised its divestment from AIB in the summer of last year, when shareholders in the bank voted to buy back the last 2% the State held. The State fully divested from Bank of Ireland in 2022.

PTSB bailout

In 2011, PTSB received a €4bn bailout from the State which it has yet to fully repay. The bank paid back about €2.8bn of that initial bailout — a large portion of which came from the €1.3bn sale of its former Irish Life pensions and life assurance unit.

The bank had been making some progress over the last few years. In January 2025, its shares were languishing around €1.37 before increasing to €2.30 right before it put itself up for sale. However, news of the sale increased share prices further to the point where BAWAG is now paying €2.97 per share.

For its 57.5% stake in PTSB, the Government is expected to receive about €931m as part of BAWAG’s all-cash purchase. Which means the Government will lose about €270m all these years later.

However, according to finance minister Simon Harris, the Government has made its money back from PTSB if you include a combination of fees, dividend income, the bank levy, and disposal proceeds the State has recovered.

On an overall basis, this means the State is about €1.3bn above break-even on its €29.4bn investment in AIB, Bank of Ireland, and PTSB from direct shareholding-linked income and has recovered a further €1.8bn from the banking sector since the introduction of the bank levy.

While BAWAG’s acquisition of PTSB closes the book on the financial crisis, the sector has changed remarkably since then and the pillar banks have been taking their time adapting. BAWAG may need to adapt PTSB quickly if wants the investment to succeed and have a bank that can compete.

Launch of digital bank Monzo

It seems appropriate the announcement of BAWAG’s acquisition of PTSB came on the same day UK digital bank Monzo officially launched in Ireland. Monzo might feel its news has been a bit overshadowed by the PTSB announcement, but its entrance into the market does signal that, for the first time in a long time, there may be increasing competition in the Irish banking sector.

Monzo is very popular in the UK, with 15 million personal account users and 800,000 business account users. In the lead-up to its launch, it registered 100,000 people on its waitlist.

The three pillar banks have been laggards when it comes to adopting better features for their customers — features Revolut and Monzo have offered for years.

Only last month did AIB, Bank of Ireland, and PTSB launch Zippay — an in-app service offered through customers’ existing apps, which allowed customers to be able to send, request, and split payments instantaneously by using the mobile number of their contacts who are also using the service.

The banks attempted this before in a joint venture called Synch Payments, but this failed and was ultimately wound down.

All these features, and more, have been offered by digital banks for years.

In addition, Sepa instant payments were only finally introduced late last year just prior to the mandatory deadline of October 9.

While the banks failed to adapt, they ceded the digital banking space to other firms, most notably Revolut, which in its annual report last month noted Ireland as one of its “strongest markets” with 3.3 million customers as of the end of 2025 — an increase of 10% year-on-year.

Monzo coming into the market could add further competitive pressure to pillar banks, particularly as they intend to sell themselves on free banking and better customer experience. The detested account fees associated with the pillar banks' accounts may drive customers further into Monzo’s and Revolut’s arms.

BAWAG is now coming into the market via the country’s smallest bank and is expected to compete with far bigger established banks and more nimble digital alternatives. Navigating a way through those is going to be a tricky endeavour.