The Central Bank had approved PTSB's application to use its new IRB (Internal Ratings Based approach) Mortgage Models from the end of the month.
The bank said the move was an extremely positive outcome and reflected its strategy, prudent credit risk approach and strong asset quality.
PTSB said the new models will reduce its risk weighting on its total residential mortgage portfolio from a previously reported 36.4% at the end of June 2025 to a pro-forma 32.8%.
The new mortgage models were submitted to the Central Bank on May 30 2025 and will become operational from January 30.
PTSB said its total risk weighted assets (RWAs) at the end of June 2025 would be lower by about €0.7 billion, reducing from about €10.9 billion to about €10.2 billion.
This would translate to an increase in the bank's CET1 ratio from the previously reported 15.5% at the end of June 2025 to 16.6% on a pro-forma basis - releasing the equivalent of about €0.1 billion in capital.
This is comfortably above PTSB's total CET1 requirement of 10.69%, the lender added.
The bank also said today that in light of positive trading conditions, its annual financial results for 2025 - to be published on March 5 - are expected to close ahead of current market expectations.
As previously indicated, PTSB said it also expects to recommend a final dividend to shareholders this year - subject to the bank's financial position and the required regulatory and other approvals.
The announcement today does not have any implications on this, it added.
"Today's announcement is an extremely positive outcome for PTSB which reflects its strategy, prudent credit risk approach and strong asset quality", PTSB's chief executive Eamonn Crowley said.
"It is a significant milestone in our ongoing transformation, strengthening our position as a competitive force in the Irish market and enabling further growth and sustainable returns for our shareholders. I want to acknowledge the very constructive engagement with the Central Bank of Ireland throughout this intensive process," he added.
