Capital Raising Update

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This announcement is an advertisement and not a prospectus (or prospectus equivalent document) and is not an offer of securities for sale in any jurisdiction, including in or into the United States, Canada, Japan, South Africa or Australia. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by permanent tsb Group Holdings plc ("PTSB", or the "Company") in due course in connection with the proposed Placing and the Open Offer (as defined below) and, subject to meeting the respective eligibility criteria, the admission of all of its ordinary shares to (i) the primary listing segment of the Official List of the Irish Stock Exchange plc (the "ISE") and to trading on the ISE's Main Securities Market; and (ii) the standard listing segment of the Official List of the Financial Conduct Authority (the "FCA") and to trading on the main market for listed securities of the London Stock Exchange (the "LSE"). Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever. A copy of the Prospectus will, following publication, be available for inspection from PTSB's website at www.permanenttsbgroup.ie.

For immediate release

14 April 2015

permanent tsb Group Holdings plc

Capital Raising Update

On 11 March 2015, PTSB announced its plans for the Capital Raise (as defined below), the approval in principle of its Restructuring Plan by the European Commission (with formal approval by the European Commission subsequently confirmed on 9 April), the entering into of an agreement relating to the sale of certain of its non-core assets and its 2014 financial results. Today PTSB is providing further details in relation to the Capital Raise.

The Capital Raise will enable PTSB, together with its subsidiaries (the "Group") to: (i) address and secure the final amount of the capital shortfall identified under the adverse scenario stress test applied by the ECB as part of the Single Supervisory Mechanism Comprehensive Assessment which currently remains outstanding (the "SSM CA"); (ii) repurchase the €400 million of State-owned convertible contingent capital notes, which are due for redemption in 2016; and (iii) allow for expected losses on the proposed deleveraging of the non-core businesses in line with the Group's stated strategy.

As part of the Group's stated Capital Plan, the Company today confirms:

· its intention to raise €400 million of gross proceeds through a placing of new ordinary shares in the Company to institutional investors (the "Placing") and to issue €125 million of additional tier 1 capital instruments ("AT1 Securities") (together, the "Capital Raise");

· that existing qualifying shareholders will be able to subscribe for additional new ordinary shares at the same price as available to institutional investors in the Placing by way of an open offer (the "Open Offer"). The Irish State, as holder of 99.2% of the Company's existing ordinary shares, has confirmed that it will not participate in the Open Offer. The Open Offer is expected to be launched shortly after the pricing of the Placing;

· that the Company intends to seek admission of the whole of its ordinary share capital, issued and to be issued, to the primary listing segment of the Official List of the ISE and the standard listing segment of the Official List of the FCA (together, "Official Lists") and to trading on the respective main markets for listed securities of the ISE and of the LSE (subject to meeting the respective eligibility criteria) (together, "Admission");

· that as part of this migration to the Official Lists, the Company will cancel admission of its existing ordinary shares to trading on the Enterprise Securities Market (the "ESM") of the ISE, such cancellation to be effective immediately prior to Admission; and

· that, should the need arise, the board of directors of the Company may (to ensure the success of the Capital Raise and in the interests of shareholders) consider requesting the Irish State to sell a portion of its existing holding of ordinary shares concurrently with the Placing in order for the Company to meet certain ISE and UKLA minimum free float eligibility requirements.

The Company expects to complete both the Placing and the issuance of the AT1 Securities over the next four weeks with the Open Offer expected to complete by the end of May 2015. There can be no certainty that the Company will satisfy the required eligibility criteria to gain admission to the Official Lists as part of the Placing, in which case it would retain its trading facility on the ESM and seek to achieve Admission in due course.

Jeremy Masding, Group Chief Executive Officer, commented:

"Today represents another important step in the journey of PTSB. The proposed capital raise of €525 million represents the first stage in returning PTSB to private ownership and we are greatly encouraged by the significant level of investor interest that we have seen to date.

We are excited by the opportunity that PTSB has to be a successful and competitive force in the Irish banking sector, which we believe offers profitable growth opportunities. We have made significant progress in transforming the bank which, following completion of our non-core deleveraging, will have an exclusive focus on Irish retail opportunities where we believe that we have the brand and scale to achieve our medium term targets.

We would like to thank the Minister for Finance for the support that he has offered to PTSB during its restructuring phase and we look forward to continuing to work with him as a supportive major shareholder."

Overview of PTSB

PTSB is a focused domestic retail bank in Ireland with between, PTSB estimates, approximately 13% to 17% market shares in each of the current accounts, retail mortgage and retail deposit markets in Ireland. With approximately 1.1 million customers, 2,300 employees and 77 branches, PTSB is a significant retail bank in Ireland.

As at 31 December 2014, the Group held €28.2 billion in net loans, with €20.1 billion of such net loans held in its Irish retail banking business (the "Core Bank") and €8.1 billion of net loans held in its Irish CRE and UK Buy-To-Let mortgage businesses (the "Non-Core Assets"). As at 31 December 2014, €19.8 billion in deposits were held in the Core Bank. On 11 March 2015, the Group announced its having entered into an agreement to sell approximately €5 billion of Non-Core Assets and its plans to dispose of its remaining Non-Core Assets by the first half of 2016.

The 2014 tangible book value ("TBV") of PTSB was €2.2 billion as at 31 December 2014. Post new money and net of the negative capital impact of the announced deleveraging, the adjusted 2014 TBV as at 31 December 2014 would be €2.4 billion1.

Over the last two years, PTSB has made good progress in restructuring the Group, addressing legacy issues and returning the Group towards the path to profitability. During this time, the Group has successfully: created a highly effective asset management unit; undertaken significant cost base restructuring, including the closure of the defined benefit pension scheme; made branch closures; undertaken a voluntary severance scheme; agreed the deleveraging of approximately €5 billion of Non-Core Assets; received approval from the European Commission of the Restructuring Plan with commitments that are consistent with management's business plan; and delivered front book growth at attractive yields meeting the increasing demand for credit as the Irish economy recovers.

PTSB's 2014 results demonstrated this progress, with the Core Bank returning to profitability of €5 million (operating profit before exceptional items) in 2014 compared to a loss of €694 million in 2013. 2014 financial highlights include the Core Bank net interest margin ("NIM") (pre-ELG) improving to 121bps from 97bps in 2013. In addition the Group has experienced a significant decrease of 32% in mortgage arrears of more than 90 days through 2014 from its peak in 2013 and has recognised an impairment write-back of €42 million in 2014 compared to an impairment charge of €929 million in 2013. See PTSB's Current Trading and Outlook Announcement dated 14 April 2015 for more information on the Group's performance since 31 December 2014.

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Investment Highlights

Capturing growth opportunities arising from an improving macroeconomic environment: The Group has 130 years of experience in the Irish banking market. Given the Group's established brand, multichannel distribution capabilities and, product and service innovations, the Group believes it is well placed to capture profitable growth opportunities as the Irish macroeconomic environment continues to recover and there is improving sentiment in the Irish housing market.

Highly effective arrears management capability supporting potential future provision release:  Over the last three years, the Group has made significant investment in recruiting staff and, deploying new technologies and infrastructure to build the asset management unit ("AMU") platform, which has delivered strong arrears performance. As the performance of the AMU platform continues, and if house prices rise faster than assumed in the Group's business case, there is potential for future provision releases.

Positive margin outlook:  In the past, the Group has been paying higher deposit interest rates than most of its competitors in order to attract deposits. However, since mid-2013, this premium has been reducing, and PTSB believes that this trend will continue. This reduced deposit pricing combined with competitively priced new lending and reduced wholesale funding costs is expected to support further NIM improvement.

Strong Capital Position: PTSB believes that the strengthened capital position of the Group following the implementation of the Capital Raise will represent a strong capital foundation which will support the future stability of the Group, provide a better platform for profitable growth and delivery of long term sustainable shareholder value, and position the Group better to satisfy its regulatory and compliance requirements.

Focused on its core retail banking as it continues to dispose of less profitable Non-Core Assets: As announced on 11 March 2015 and further updated on 26 March 2015, the Group is in the process of disposing of its Non-Core Assets. The disposals of its Non-Core Assets should allow PTSB to focus more closely on its core Irish retail lending business.

Experienced management team with successful track record of delivering turnaround: Since 2012, the Group has undergone a significant transformation to rebuild its corporate governance foundation, develop its arrears management infrastructure, build credit risk and collection capabilities, close the defined benefit pension schemes and drive innovation in the Group's products, pricing and service. The Group now has strong and experienced Executive Director and Senior Executive teams, with a broad range of complementary experience and a clear strategy in relation to the future of the Group.

Key Medium Term Targets

Following the disposal of the Non-Core Assets scheduled to be completed by the first half of 2016, the Group will be effectively the Core Bank. The Group has set out a number of key medium term targets for 2018 year end for the Core Bank and Group as follows:

Core Bank

Ø Market share in key product offerings of between 13 - 17%;

Ø NIM of circa 1.70%;

Ø Cost to Income Ratio of circa 50%;

Ø Impairment charges as a percentage of net loans, also known as the Cost of Risk, is targeted to remain at less than 40 basis points;

Ø Overall target for Return on Equity of circa 10% for the Core Bank (based on a notional fully loaded CET1 ratio of 11%);

Group

Ø The Group is targeting a Loan to Deposit Ratio of less than 130% and Common Equity Tier 1 Ratio of over 11%.

Details of the Capital Raise

· PTSB intends, subject to meeting the respective eligibility criteria, to apply on the completion of the Placing for admission of the whole of the Company's ordinary share capital, issued and to be issued, to (i) the primary listing segment of the Official List of the ISE and to trading on the main market for listed securities of the ISE and (ii) the standard listing segment of the Official List of the FCA and to trading on the main market for listed securities of the LSE. PTSB would then cancel trading in its existing ordinary shares on the Enterprise Securities Market of the ISE immediately prior to Admission.

· The Capital Raise will comprise an offer of new ordinary shares to be issued by PTSB pursuant to the Placing to raise gross proceeds of approximately €400 million and an issuance of €125 million AT1 Securities. The net proceeds from the Capital Raise are intended to be used to address the SSM CA requirement, to repurchase the contingent capital notes, and to allow for expected losses on the proposed deleveraging of the Non-Core Assets in line with the Group's stated strategy. As indicated above, should the need arise, the board of directors of the Company may (to ensure the success of the Capital Raise and in the interests of shareholders) consider requesting the Irish State to sell a portion of its existing holding of ordinary shares concurrently with the Placing in order for the Company to meet certain ISE and UKLA minimum free float eligibility requirements.

· The Placing will comprise an offer of new ordinary shares: (i) to certain institutional investors in Ireland, the United Kingdom and elsewhere outside the United States; and (ii) in the United States only to qualified institutional buyers in reliance on an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

· The Company will also provide an opportunity, by way of the Open Offer, for existing qualifying shareholders (that is, existing shareholders who continue to be shareholders on the record date of the Open Offer other than (i) the Irish State; and (ii) shareholders resident in, or citizens of, or who have registered addresses in certain overseas territories with onerous legal or regulatory requirements) to invest in new ordinary shares at the same price as will be made available to institutional investors in the Placing in order to, at a minimum, maintain a percentage interest in ordinary shares following the Placing and the Open Offer, which is not less than they held prior to the Placing and the Open Offer.

· It is expected that the Company and the Irish State in respect of its holding of ordinary shares will agree to lock-up arrangements for a specified period of time following the Capital Raise.

· Full details of the Placing and the Open Offer will be included in the relevant Prospectus, expected to be published by the Company in due course.

Timing

PTSB expects to complete the Capital Raise by early May 2015 and expects the subsequent Open Offer to be completed by the end of May 2015. Cancellation of trading in the Company's ordinary shares on the Enterprise Securities Market of the ISE would only occur immediately prior to (and in conjunction with) Admission.

Deutsche Bank AG, London Branch ("Deutsche Bank") is acting as Sole Global Co-ordinator and Joint Bookrunner and J&E Davy ("Davy") is acting as Sole Sponsor and Joint Bookrunner in relation to the Placing and the Open Offer. Goodbody Stockbrokers and Keefe, Bruyette & Woods are acting as Co-Lead Managers.

Enquiries

DISCLAIMERS

The contents of this announcement, which has been prepared and issued by, and is the sole responsibility of the Company have been approved by Deutsche Bank AG, London Branch solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended, of the United Kingdom.

This announcement has been issued by the Company. None of the Minister for Finance, the Department of Finance, the Government of Ireland, the National Treasury Management Agency or any person controlled by or controlling any such person, or any entity or agency of or related to the Irish State, or any director, officer, official, employee or adviser (including without limitation legal and financial advisors and the Banks) of any such person (each such person, a "relevant person" for the purposes of this paragraph) accepts any responsibility for the contents of, or makes any representation or warranty as to the accuracy, completeness or fairness of any information in, this announcement or any document referred to in this announcement. Each relevant person expressly disclaims any liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this announcement. No relevant person has authorised or will authorise the contents of this announcement, or has recommended or endorsed the merits of the offering of securities or any other course of action contemplated by this announcement

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Neither this announcement, the publication in which it is contained nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"). The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company does not intend to register any securities referred to herein under the applicable securities laws of the United States or to conduct a public offering of any securities in the United States. This announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

This announcement is only addressed to and directed at ,in member states of the European Economic Area ("EEA") other than Ireland and the UK, persons who are qualified investors ("Qualified Investors") within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71 /EC and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State of the EEA) and any implementing measure in each Relevant Member State of the EEA (the "Prospectus Directive"). Any investment or investment activity to which this announcement relates is available only to and will only be engaged in such member states with such persons.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "target", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the Company or the Group will generate a particular rate of return.

Each of Deutsche Bank AG, London Branch, Davy, Goodbody Stockbrokers (trading as Goodbody), Nicolaus Europe Limited (trading as Keefe, Bruyette & Woods) and their respective affiliates (together, the "Banks"), the Company and each Group company expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

Any purchase of new ordinary shares in the proposed Capital Raise and/or Open Offer should be made solely on the basis of the information contained in a final Prospectus and before purchasing any shares, persons viewing this announcement should ensure that they fully understand and accept the risks that will be set out in the Prospectus to be issued by the Company. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is given at the date of its publication (unless otherwise highlighted) and subject to change. In particular, the proposals referred to herein are tentative and are subject to material updating, revision and amendment. This announcement has not been approved by the Central Bank of Ireland, the FCA or any other competent regulatory authority. The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment when the Prospectus is published.

The Capital Raise timetable, including the date of Admission, is subject to change and may be influenced by a range of circumstances such as market conditions. There is no guarantee that admission of the new ordinary shares expected to be issued pursuant to the Placing to (i) the primary listing segment of the Official List of the ISE and to trading on the main market for listed securities of the ISE and (i) the standard listing segment of the Official List of the FCA and to trading on the main market for listed securities of the LSE will occur and you should not base your financial decisions on the Company's intentions in relation to any such admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Capital Raise. The value of ordinary shares can decrease as well as increase. When considering what further action you should take you are recommended to immediately consult, if you are resident in Ireland, an organisation or firm authorised or exempted pursuant to the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) or the Investment Intermediaries Act 1995 (as amended) and, if you are resident in the United Kingdom, a person authorised under the Financial Services and Markets Act 2000, as amended, of the United Kingdom, or another appropriately authorised professional adviser if you are in a territory outside Ireland or the United Kingdom. Potential investors should consult a professional adviser as to the suitability of ordinary shares for the person concerned. Past performance cannot be relied upon as a guide to future performance.

The contents of this announcement are not to be construed as legal, financial or tax advice. Each prospective investor should consult his own legal adviser, financial adviser or tax adviser for legal, financial or tax advice, respectively.

Deutsche Bank AG, London Branch, which is authorised under German Banking Law (competent authority: European Central Bank) and, in the UK, by the Prudential Regulation Authority (the "PRA"), is subject to supervision by the European Central Bank and by BaFin, Germany's Financial Supervisory Authority, and is subject to limited regulation in the UK by the FCA and PRA, Davy and Goodbody Stockbrokers (trading as Goodbody), each of which is authorised and regulated in Ireland by the Central Bank of Ireland, and Stifel Nicolaus Europe Limited (trading as Keefe, Bruyette & Woods), which is authorised in the UK by the FCA , are each acting exclusively for the Company and no one else in connection with the Capital Raise and the Open Offer. They will not regard any other person as their respective clients in relation to the Capital Raise and the Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Capital Raise and the Open Offer, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Placing, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase ordinary shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such ordinary shares and other securities of the Company or related investments in connection with the Capital Raise or otherwise. Accordingly, references in the Prospectus, once published, to the ordinary shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by any of the Banks and any of their respective affiliates acting as investors for their own accounts. In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of ordinary shares. None of the Banks intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Banks, the Company or any of their respective directors, officers, employees, advisers agents, affiliates or any other person acting on their behalf accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of, the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or the Group, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.