1、1,Bank of Ireland Investor Presentation | August 2010 Financial information for the 6 months ended 30 June 2010,2,2,Forward-looking statement,This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934 and Section 27A of the U
2、S Securities Act of 1933 with respect to certain of the Bank of Ireland Groups (the “Group”) plans and its current goals and expectations relating to its future financial condition and performance and the markets in which it operates. These forward looking statements can be identified by the fact th
3、at they do not relate only to historical or current facts. Generally, but not always, words such as “may,” “could,” “should,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “assume,” “believe,” “plan,” “seek,” “continue,” “target,” “goal,” “would”, or their negative variations or similar expr
4、essions identify forward looking statements. Examples of forward looking statements include among others, statements regarding the Groups future financial position, income growth, business strategy, projected costs, projected impairment losses, capital ratios, margins, future payments of dividends,
5、the outcome of the current review of the Groups defined benefit pension schemes, estimates of capital expenditure, discussions with the Irish, European and other regulators and plans and objectives for future operations. Forward looking statements should not be read as a guarantee of future performa
6、nce or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the con
7、trol of the Group and are difficult to predict, that may cause the actual results, performance, achievements or developments of the Group or the businesses in which it operates to differ materially from any future results, performance, achievements or developments expressed or implied from the forwa
8、rd looking statements. A number of material factors could cause actual results to differ materially from those contemplated by the forward looking statements, including, among other factors, the following: general economic conditions in Ireland, the United Kingdom and the other markets in which the
9、Group operates; declining property values in Ireland and the United Kingdom; the potential exposure of the Group to various types of market risks, such as interest rate risk, foreign exchange rate risk, credit risk and commodity price risk; financial uncertainties within the EU and in certain member
10、 countries and the potential effects of those uncertainties on the Group; the ability of the Group to access sufficient funding to meet its liquidity needs and the cost to the Group of such funding; the level of net interest margins achieved by the Group; the outcome of the Groups participation in t
11、he Credit Institution (Financial Support) Scheme 2008 and the Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009; the implementation of the final European Commission restructuring plan; changes in the Groups credit ratings or in the credit ratings of Irish Government debt; the effects
12、of the Irish Governments stockholding in the Group (through the National Pension Reserve Fund Commission); the outcome of the Groups participation in National Asset Management Agency (“NAMA”); changes in the Irish banking system; the making of further contributions to the Groups pension schemes; cha
13、nges in applicable laws, regulations and taxes in jurisdictions in which the Group operates; the effects of competition and consolidation in the markets in which the Group operates; and the success of the Group in managing the risks involved in the foregoing.Any forward looking statements speak only
14、 as at the date they are made. The Group does not undertake to release publicly any revision to these forward looking statements to reflect events, circumstances or unanticipated events occurring after the date hereof. The reader should, however, consult the risk factors set forth in the Groups Annu
15、al Report in Form 20-F for the period ended 31 December 2009 and in the Groups interim results announcement for the six months ended 30 June 2010 and any additional disclosures that the Group may make in documents that it may file or submit to the US Securities and Exchange Commission.Disclaimer: Th
16、is presentation, together with any verbal briefings or discussions, comprises materials (the “Materials”) provided by Bank of Ireland by way of general update to debt investors (the “Purpose”). The Materials are only to be used for the Purpose. They include information confidential to Bank of Irelan
17、d / Bank of Ireland Group and are not to be disclosed save with prior written consent of Bank of Ireland. While reasonable care has been taken in the collation of the Materials, they are for information only. Bank of Ireland accepts no responsibility for reliance thereon. You should take independent
18、 appropriate advice in respect of any investment decisions.Bank of Ireland is incorporated in Ireland with limited liability. Bank of Ireland is authorised by the Irish Financial Regulator. Registered Office - Head Office, 40 Mespil Road, Dublin 4, Ireland. Registered Number - C-1. In the UK, Bank o
19、f Ireland is authorised by the Irish Financial Regulator; regulated by the Financial Services Authority for the conduct of UK business. Details about the extent of our authorisation and regulation by the Financial Services Authority are available from us on request.,3,Contents,1. Bank of Ireland ove
20、rview 2. Irish economy & Government finances 3. Group loan book & asset quality 4. National Asset Management Agency (NAMA) 5. Funding & capital 6. Outlook 7. Appendices Group financial highlights June 2010 Contact information,4,Bank of Ireland Group overview,A diversified financial services group es
21、tablished in 1783 Strategic bias towards Ireland and our international businesses where we have clear competitive strengths and capabilities Bank of Ireland a systemically important bank playing a critical role in the operation of the Irish economy Leading position in Ireland no. 1 or no. 2 in all o
22、ur principal product segments* Significant progressed achieved in 6 months to end June 2010 Successfully addressed a range of issues necessary to bring further stability to the Group Bank of Ireland emerged a changed, more focused and strengthened Bank While challenges are not to be underestimated,
23、investment case remains intact continued focus on delivery,*Note: latest data available,Credit Ratings,5,5,Progress made to stabilise the Group,6,Good strategic positions in well defined core markets,Capital and resources dedicated to core businesses where we have competitive strengths and capabilit
24、ies strong positions markets with attractive growth opportunities Funding of core portfolios largely by customer deposits Ongoing focus on credit quality and cost efficiency,6,7,Interim results June 2010,1 Underlying excluding non-core items 2 This figure excludes the impairment charge against asset
25、s held for sale to NAMA and the loss arising on sale of assets to NAMA. During the period ended 30 June 2010 the impairment charge on assets held for sale to NAMA was 466 million together with loss on sale of assets to NAMA of 466m; in the nine month period ended 31 December 2009 the impairment char
26、ge on assets held for sale to NAMA was 2,231 million (no loss on sale of assets to NAMA).,Capital,Income Statement1,Group Profitability,Funding,8,Financial targets 2013,8,1This figure excludes the impairment charge against those assets held for sale to NAMA. At 30 June 2010 the impairment charge on
27、assets held for sale to NAMA was 466m; at 31 December 2009 the impairment charge on assets held for sale to NAMA was 2,231m 2 Loans exclude assets held for sale to NAMA 3 Equity excluding 2009 Preference Stock 4 Expected that impairment charges on non-NAMA loans peaked in 2009 and to reduce progress
28、ively in 2010, 2011 and 2012,9,Contents,1. Bank of Ireland overview 2. Irish economy & Government finances 3. Group loan book & asset quality 4. National Asset Management Agency (NAMA) 5. Funding & capital 6. Outlook 7. Appendices Group financial highlights June 2010 Contact information,10,Irish eco
29、nomy returns to growth,Irish GDP rose by 2.7% on a seasonally adjusted basis during Q1 2010, formally signalling the end of the Irish recession This positive outturn followed eight consecutive quarters of negative GDP and represented the fastest economic growth in the OECD A strong performance from
30、the export sector was the main driver of economic activity during Q1 The pace of recovery prompted market participants to revise up their growth forecasts for 2010 We retain our forecast for GDP growth of 1% in 2010,10,11,Exports driving upturn in economy,Irish exports grew by almost 7% in Q1 the fa
31、stest pace of expansion since Q1 2007 The positive trend in industrial production also implies an increase in future foreign sales Exports will continue to be the main driver of economic activity, supported by recovery in the global economy and depreciation of the euro, particularly relative to ster
32、ling The growth trends in service exports and in high value areas such as pharmaceuticals highlights how the composition of Irish exports has shifted away from traditional manufacturing areas,11,12,Indicators pointing to a broadening of recovery,Purchasing Managers Indices (PMIs) are showing service
33、s and manufacturing sectors are growing Personal consumption fell by just 0.2% in Q1 and leading indicators, including a significant upturn in retail sales, signal a strong likelihood that consumer spending will rise in Q2 The overall trend in industrial production is showing sizeable increases driv
34、en by strong export demand Irish unemployment has risen sharply, however the rate may be at or near peak Overall, the domestic economy is lagging but there are encouraging signs the recovery is broadening,12,13,Ireland dynamic, open and flexible economy,Ireland is one of the most open economies in t
35、he world and recovery in the global economy should support Irish export performance Irish competitiveness has improved amid falling unit labour costs and the depreciation of the euro Historically, Ireland has been extremely successful at attracting FDI. Key features of the Irish economy include; You
36、ng, highly educated workforce Knowledge and experience in key sectors Low corporate tax regime Pro-business environment,13,14,Underlying Government deficit stabilising,The Irish Government has taken decisive action to restore budget sustainability through tax increases and expenditure cuts and as a
37、result, we are starting to see some signs of stabilisation in revenue sources At the end of July, tax revenue was broadly in line with the Department of Finance forecasts, despite income tax lagging behind target Government spending is being tightly controlled with net voted expenditure down 7% duri
38、ng the year to date The Government is committed to reducing the General Government Deficit to 3% of GDP by 2014 The National Treasury Management Agency (NTMA) has already completed its funding requirements for 2010 Irelands debt to GDP ratio is moving into line with the Euro Area average and is expe
39、cted to rise to 87% at the end of 2010 (versus a Euro average of 85%) Irelands net debt ratio will be lower when the cash balances of the NTMA and assets of the National Pension Reserve Fund are taken into account,14,15,Contents,1. Bank of Ireland overview 2. Irish economy & Government finances 3. G
40、roup loan book & asset quality 4. National Asset Management Agency (NAMA) 5. Funding & capital 6. Outlook 7. Appendices Group financial highlights June 2010 Contact information,16,Profile of total loans1 - 125bn at June 2010 Excluding loans held for sale to NAMA,Group loan book1 Group loan book 125b
41、n at 30 June 2010 Core loan portfolio of 82bn Run-off portfolio of 43bn2 119bn on a constant currency basis at 30 June 2010, down 2% on 31 Dec 2009. Subdued demand for new loans given economic conditions and borrowers seeking to reduce debt levels Non-core portfolios reduced by 1.4bn (3%) in the six
42、 months to 30 June 2010 (UK intermediary mortgage book 1.1bn lower, non-core International corporate book 0.3bn lower) Pace of deleverage of UK Intermediary sourced mortgages slower than anticipated 9% rundown in Stg balances from peak since loan book placed in run-off.,16,Residential mortgages 50%
43、/ 62bn,Property and construction 19% / 24bn,Non property corporate and SME 28% / 35bn,RoI - 2% UK - 1%,RoI - 23% UK - 27%,RoI - 12% UK - 9% RoW - 7%,RoI - 7% UK - 11% RoW - 1%,Consumer3% / 4bn,1 Before balance sheet impairment provisions of 3.7bn at 30 June 2010 2 Run-off portfolio consists of UK in
44、termediary sourced mortgages - 32bn, ICS Building Society mortgages - 7bn and Non core international lending portfolios - 4bn.,% of Group Loan Book,Run-off portfolios2 43bn,Core lending porfolios82bn,125bn,125bn,17,Impairment charge by portfolio Excluding loans held for sale to NAMA,1 Before balance
45、 sheet impairment provisions of 3.7bn at June 2010,17,18,UK Residential mortgages - 28bn / 34bn June 20101,UK mortgages 55% of total Group mortgages (27% of Group loans and advances to customers) Bank of Ireland has c. 256k residential mortgages in the UK Modest decline in book June 10 vs June 09: (
46、2.6%) June 10 vs Dec 09: (1.3%)Strategic decision to de-leverage Group balance sheet - withdrawal from UK intermediary sourced mortgage business (Jan 09) Decline in Intermediary sourced Mortgage book below anticipated levels June 10 vs June 09: (6.5%) June 10 vs Dec 09: (3.3%)House prices up 6.6% ye
47、ar on year July 2010; down 9% from peak in Oct 2007 to July 2010 (Nationwide)Asset quality: Impairment charge Annualised 6 mth impairment charge to 30 June 10 21bps Annualised 6 mth impairment charge to 31 Dec 09 31bps Annualised 6 mth impairment charge to 30 June 09 31bps Negative equity Quantum of
48、 net negative equity at 30 June 2010 165m (Dec 2009: 260m) Possessions 301 properties in possession or 0.12% of book at 30 June 10 305 properties in possession or 0.12% of book at 31 Dec 09 307 properties in possession or 0.12% of book at 30 June 09 371 new possessions in 6 mths to 30 June 10 (191 i
49、n 3 mths to 30 June 10, 180 in 3 mths to 31 Mar 10) 385 new possessions in 6 mths to 31 Dec 09 (163 in 3 mths to 31 Dec 09, 222 in 3 mths to 30 Sept 09) 442 new possessions in 6 mths to 30 June 09 (185 in 3 mths to 30 June 09, 257 in 3 mths to 31 Mar 09),18,Book - segment split,1 Before balance sheet impairment provisions of 118m / 145m 2 Cases 3 months excluding possessions,Asset quality - arrears,Standard,47%,BTL,37%,Self-cert,16%,19,Irish Residential mortgages - 28bn June 20101 Excluding loans held for sale to NAMA,
