#1Credit Presentation 30 June 2019 Bank of Ireland#2Empty#3Bank of Ireland Overview 2019 Interim Results Credit Presentation Bank of Ireland 2#4H1 2019 Highlights Profitability Growth Transformation Capital €376m Underlying profit before tax NIM of 2.16% 2019 Interim Results Credit Presentation · • Cost reduction continues, 3% lower (€30m) vs. H1 2018 NPE ratio improved by 100bps to 5.3% €1.2bn Net lending growth 3% Reduction in costs 13.6% CET1 increased by 40bps • • • New lending of €7.7bn; largest lender to the Irish economy Irish mortgage market share of 23%; increased SME market share Corporate Banking net lending growth of €1.0bn Continue to create a leaner and more agile organisation Foundations of the new core banking platform have been built; now prioritising channel experience and customer migration UK Business being enhanced - exit from UK cards, ATMs and current accounts; attractive loan growth in Consumer; costs reduced Organic capital generation of 90bps Securitisation of Irish Mortgage NPES, unlocked 30bps of CET1 capital • Dividend accrual of €100m Bank of Ireland 3#5Economic and Interest Rate Outlook • • Solid growth in Ireland; UK expanding more moderately 8.1% 8.2% 4.8% 3.8% LLI 1.8% 1.4% 2019 Interim Results Credit Presentation Unemployment rate in Ireland and UK at low levels Lower for longer interest rates now expected 6.7% 5.7% 4.6% 4.2% 4.4% 1.2% 1.4% 4.1% 3.8% 3.8% 0.68% 0.40% 0.96% 100bps decline (0.20%) (0.32%) (0.04%) 2020f Dec 2019 Dec 2020 Dec 2021 -- Jan 19 Jul 19 2017 2018 ROI GDP 2019f 2020f 2017 2018 UK GDP (annual real growth) The Irish economy is continuing to expand at a solid pace and faster than the Euro area average Growth has moderated in the UK Brexit-related uncertainty is weighing on consumer and business sentiment, with some firms in Ireland putting their plans on hold and a clear weakening in business investment in the UK 2019f ROI unemployment rate UK unemployment rate (annual average) With the unemployment rate in Ireland and the UK at a low level, both economies are effectively at full employment Sources: Bank of Ireland Economic Research Unit, CSO, Office for National Statistics, GFK, Markit, EU Commission. GDP and unemployment forecasts assume current UK-EU trading arrangements apply over the forecast horizon consistent with a further extension of Article 50 or a transition period • (Euro 5yr swap rate) Material change in interest rate outlook with interest rates expected to be lower for longer Geopolitical risks impacting global growth Bank of Ireland 4#6Strategic Priorities: Transform the Bank 2019 Interim Results Credit Presentation Culture H1 2019 Progress Systems Business model • Colleague engagement continuing to improve, up +7% since 2017 Target Outcomes • • Continue to create a leaner, simplified and agile organisation with 70% of end state spans and layers structure completed to date ATM and debit cards successfully migrated to new platform Mobile app technical version produced ahead of customer launch later in 2019 Automated over 100 business processes through robotics, reducing operational risk and processing times, improving efficiency and customer experience Exit from Credit Cards, unprofitable ATMs and Current Accounts in the UK • Strengthened culture Cost base to reduce to c.€1.7bn in 2021 Absolute cost level declining year-on-year to 2021 Income growth Bank of Ireland 5#7Strategic Priorities: Serve Customers Brilliantly 2019 Interim Results Credit Presentation Embedding voice of customer Investing in digital and physical channels New brand strategy in our businesses H1 2019 Progress • Leading supporter of home building and home buying in Ireland; • - Approved €750m in development financing €1bn Green Fund launched; and Expanding mortgage distribution platform through mortgage broker network Launched Ireland's first Financial Wellbeing programme designed to help customers to better understand, plan and improve their finances • Established a Vulnerable Customer Relationship Unit • . . Continued investment in our branch network, contact centre and digital channels is improving our customer experience Digital application tracker launched, initially for personal loans, facilitating real-time order tracking by customers New brand strategy launched supported by multi-year customer strategies Target Outcomes • Significant improvement in customer satisfaction and advocacy • Straight through processing; digital journeys API foundation for Open Banking • #1 for customer experience and brand in Ireland Bank of Ireland 6#8Strategic Priorities: Grow Sustainable Profits 2019 Interim Results Credit Presentation Improved profitability Efficient business Robust capital position Sustainable dividends 1 See Slide 56 for calculation امر if H1 2019 Progress 2021 Target Headline ROTE of 6.8% Adjusted ROTE of 6.5%¹ ROTE in excess of 10% Cost reduction of €30m (3%) vs. H1 2018 Cost base of c.€1.7bn Costs reduce every year: 2018-2021 Cost income ratio of c.50% Fully loaded CET1 ratio of 13.6% CET1 ratio in excess of 13% 7 Dividend accrual of €100m - equivalent to an annualised dividend per share of 18.5c Increase prudently and progressively; over time will build towards a payout ratio of around 50% of sustainable earnings Bank of Ireland#9Operating Performance 2019 Interim Results Credit Presentation Bank of Ireland 8#10Underlying profit before tax of €376m Income Statement H1 2018 H1 2019 (€m) (€m) Total income 1,398 1,411 Operating expenses (before levies and (933) (903) regulatory charges) • Levies and Regulatory charges (67) (73) Net Impairment (losses) / gains 81 (79) Share of associates / JVS 21 20 • Underlying profit before tax 500 376 Non-core items (46) (61) Profit before tax 454 315 Net interest margin (NIM) 2.23% 2.16% Adjusted ROTE¹ 6.8% 6.5% Dec 18 Jun 19 Customer loans (net) €77.0bn €78.0bn Customer deposits €78.9bn €80.2bn Non-performing exposures (NPEs) €5.0bn €4.2bn • CET1 Ratios: Fully Loaded 13.4% 13.6% Regulatory 15.0% 14.9% Total Capital Ratio: Regulatory 18.8% 18.0% Liquidity Metrics: LCR 136% 134% • NSFR 130% 128% LDR 97% 97% • Leverage Ratios: Fully Loaded 6.3% 6.6% Regulatory 7.0% 7.2% 1 See Slide 56 for calculation 2019 Interim Results Credit Presentation Net interest income of €1,069m Other income of €342m includes sustainable and diversified business income of €311m Operating expenses (before levies and regulatory charges) of €903m; reduction of €30m (3%) vs. H1 2018 • Total transformation investment in H1 2019 of €138m Net impairment charge of €79m; write backs in H1 2018 not repeated in H1 2019 Non-core charge of €61m for the period primarily related to costs associated with customer redress on Tracker Mortgage Examination and the Group's restructuring programme Balance Sheet Group loan book of €78.0bn at Jun 2019 reflecting; - New lending of €7.7bn; broadly in line with H1 2018 Redemptions of €6.5bn; 8% reduction vs. H1 2018 Customer deposits of €80.2bn predominantly sourced through retail distribution channels • NPES of €4.2bn with NPE ratio now at 5.3%, a reduction of 100bps in six months Continued organic capital generation with 90bps of capital generated in H1 2019 HoldCo senior investment grade ratings of Baa3, BBB- and BBB from Moody's, S&P and Fitch. Positive Outlook from Moody's and S&P (see Slide 24 for full ratings) Bank of Ireland 9#11Net lending growth of €1.2bn Group loan book movement €7.7bn (€6.5bn) €0.2bn (€0.3bn) (€0.1bn) Total €1.2bn €77.0bn¹ €78.0bn¹ • Dec 18 Loan Book New Lending Redemptions Loan Book Acquisitions Irish Mortgage NPE FX / Other Jun 19 Loan Book Securitisation Net lending of €1.2bn €0.7bn €0.6bn H1 2018 H2 2018 2019 Interim Results Credit Presentation Net lending growth of €1.2bn in H1 2019 • Expect further net lending growth in H2 2019, while maintaining our risk and commercial discipline Ireland: €0.2bn net lending growth • Mortgages net lending €0.2bn lower with market share of 23% SME net lending €0.1bn lower: growth in market share Consumer net lending growth of €0.1bn Corporate Banking net lending growth of €0.4bn UK/International: €1.0bn net lending growth • Mortgages net lending €0.1bn lower; new lending down 15% on H1 2018 reflecting market dynamics Consumer net lending growth of €0.2bn; strong performance through AA brand Northridge net lending growth of €0.4bn; distribution expanding, risk appetite unchanged SME/Other net lending €0.2bn lower due to continued wind down of legacy portfolio Corporate UK net lending growth of €0.3bn; maintaining disciplined approach to growth with Brexit focus Acquisition Finance: net lending growth of €0.4bn; remain risk focussed with 4 out of 5 loans declined €1.2bn . HT 2019 1 Includes UK Credit Card portfolio €0.6bn classified as held for sale as at June 2019. Sale completed in mid July 2019 Bank of Ireland 10#12NIM - Strong commercial discipline on pricing 2019 Interim Results Credit Presentation Net interest margin drivers NIM of 2.16% in H1 2019 . H1 2019 NIM of 2.16% Maintaining strong commercial pricing discipline - loan asset spreads stable at 284bps in H1 2019 The impact on NIM from competitive pressures in the UK mortgage market have stabilised in H1 2019 2.23% 2.17% 2.16% 282bps 283bps 284bps • (11bps) (12bps) (17bps) H1 2018 H2 2018 H1 2019 Loan Asset Spread¹ Liquid Asset Spread¹ Net Interest Margin 0.40% (0.32%) Dec 2019 Lower for longer interest rates 0.68% (0.20%) Outlook • During 2019, the expected EUR 5 year swap rate in 2021 declined by 100bps 2019 is expected to be slightly lower than H1 NIM of 2.16% 2020/2021: trending mid to high single digit bps lower than 2.16% • 0.96% 100bps decline (0.04%) Dec 2020 Dec 2021 Jan 19 Jul 19 (Euro 5yr swap rate) 1 Spread = Loan asset yield or Liquid asset (excl. NAMA bonds) yield less Group's average cost of funds Bank of Ireland 11#13Costs continue to reduce - net reduction €30m (3%) €1.9bn Operating expenses continue to reduce €1,796m €1,739m €840m €104m 2017 €113m 2018 €63m 2019 2020 Operating expenses Transformation Investment charge Operating Expenses (including transformation investment charge) c.€1.7bn 2021 2019 Interim Results Credit Presentation Transformation of cost base continues • Expect operating expenses (including transformation investment charge) in 2019 to be lower than 2018 and to reduce every year to c.€1.7bn in 2021 Operating expenses (before levies and regulatory charges) of €903m reduced by €30m net (3%) vs. H1 2018 Operating expenses of €840m - down €42m (4.8%) Staff costs decreased by €19m (5%) vs. H1 2018 reflecting; 4% lower average staff numbers Changing staff mix with fewer management layers, partially offset by Wage inflation of c.2.6% under the Group Career and Reward framework Other costs and depreciation reduced by €14m from process efficiencies and strategic sourcing, partially offset by higher depreciation from investment in technology Includes cost reduction of €26m relating to exiting UK Cards and ATMs H1 2018 (€m) H1 2019 (€m) Total staff costs 442 414 • - Staff costs 369 350 - Pension costs 73 64 • Other costs¹ 339 277 Depreciation¹ 101 149 Operating Expenses 882 840 51 63 Operating Expenses (before levies and 933 903 regulatory charges) . €63m (46%) charged to the income statement Levies and Regulatory charges 67 73 Total Operating Expenses 1,000 Average staff numbers 10,752 Cost-income ratio² 66% 976 10,368 65% • Levies and Regulatory charges of €73m Expect levies and regulatory charges to total €115m - €120m for FY 2019 Transformation Investment charge Transformation Investment charge of €63m • Total transformation investment in H1 2019 of €138m, in line with expectations 1 The adoption of IFRS 16 resulted in a decrease in other costs of €42m and an increase in depreciation of €38m 2 See Slide 55 for calculation Bank of Ireland 12#14NPE ratio now at 5.3%; a reduction of 100bps in six months Non-performing exposures (NPEs) €5.9bn 7.5% €5.0bn 220bps reduction in 12 months 6.3% €4.2bn 5.3% Jun 2019 • Jun 2018 Dec 2018 NPEs as a % of gross customer loans Non-performing exposures 18bps €72m Net impairment gains /(charges) (9bps) (21bps) 2019 Interim Results Credit Presentation Asset quality continues to improve . NPE ratio improved by 100bps to 5.3% in H1 2019 • NPES of €4.2bn, a reduction of €0.8bn (16%) during H1 2019; NPE reductions achieved broadly within impairment loss allowance NPE resolution strategies • • Irish Buy to Let mortgage securitisation (c.€0.4bn) was executed in April 2019, unlocking 30 bps of CET1 capital. Further c.€0.2bn of loans prioritised for transaction in H2 2019 NPE reduction strategies will be kept under review to respond to the associated and evolving regulatory framework Expect further reductions in H2 2019 and beyond. Pace will be influenced by a range of factors including new 'Definition of Default' regulatory rules expected to be implemented by the Group during 2020 Net impairment charge of €81m / 21bps in H1 2019 • Net impairment charge on loans and advances to customers of €81m for H1 2019 (21bps) Absent a change in the economic environment or outlook, expect net impairment charge to be in the range of 20bps - 30bps p.a. during 2019-2021 Bank of Ireland (€36m) • (€81m) HT 2018 H2 2018 H1 2019 Net impairment gains /(charges) Net impairment gains /(charges) bps 13#15ROI Mortgages Continued proactive arrears management >90 days arrears¹ Industry Average Industry Average 17.3% 7.1% Bank of Ireland 2.1% Owner Occupier Owner Occupier Bank of Ireland 4.9% Buy to let Buy to let >720 days arrears¹ Industry Average >90 days arrears . 2019 Interim Results Credit Presentation Bank of Ireland is significantly below the industry average for both Owner Occupier (30% of industry average) and Buy to Let (28% of industry average) >720 days arrears • Bank of Ireland is significantly below the industry average for both Owner Occupier (24% of industry average) and Buy to Let (18% of industry average) NPE Resolution strategies • Continued progress on reduction in Irish mortgage NPES, c.€0.5bn reduction in H1 2019 • Securitisation of Irish BTL mortgage NPES (c.€0.4bn) was executed in April 2019 Industry Average 13.4% . 4.6% Bank of Ireland Bank of Ireland 2.4% 1.1% Owner Occupier Owner Occupier Buy to let Buy to let Further c.€0.2bn of loans prioritised for transaction in H2 2019 • NPE reduction strategies will be kept under review to respond to the associated and evolving regulatory framework 1 As at March 2019, based on number of accounts, industry average excluding BOI Bank of Ireland 14#16Dec 2018 Jun 2019 (€bn) Capital and liquidity available to support growth Strong liquidity ratios Liquidity Coverage Ratio: 134% 2019 Interim Results Credit Presentation • (€bn) • Customer loans Liquid assets Wealth and Insurance assets Other assets 7575 Net Stable Funding Ratio: 128% 78 25 23 17 18 7 • . Loan to Deposit Ratio: 97% Customer deposits: €80.2bn Customer deposits predominantly sourced through retail distribution channels Total assets 124 126 Customer deposits 79 80 Wholesale funding 11 10 Wealth and Insurance liabilities 17 18 Other liabilities 7 8 Shareholders' equity 9 9 Additional Tier 1 security & other 1 1 Total liabilities 124 126 TNAV per share €7.87 €7.88 Dividend per share 16.0c 18.5c Closing EUR/GBP FX rates 0.89 0.90 Wholesale funding: €10.3bn Monetary Authority borrowings of €1.9bn² have reduced by €0.8bn since Dec 2018 primarily due to repayment of funding drawn under the ECB's TLTRO • MREL target of €13.3bn (representing 26.4% of RWA at Dec 2016) to be met by 1 Jan 2021: - MREL ratio of 21.1% based on RWA at Jun 2019 (22.3% pro forma including €600m senior debt issued in July 2019) Modest MREL eligible issuance of c.€1bn - €2bn p.a. anticipated Leverage Ratio • Fully Loaded Leverage Ratio: 6.6% Regulatory Leverage Ratio: 7.2% 1 Dividend accrual of €100m (c.20bps of CET1 capital) in H1 2019, equivalent to an annualised dividend per share of 18.5c 2 Monetary Authority borrowings of €1.9bn at Jun 19 included €0.3bn of ECB TLTRO funding and €1.6bn of BOE funding through TFS (c.€1.4bn) and ILTR (c. €0.2bn) Bank of Ireland • 15#17H2 2019 Outlook Growth Efficiency 2019 Interim Results Credit Presentation Returns Net lending growth while maintaining commercial discipline on risk and pricing NIM in 2019 expected to be slightly lower than H1 NIM of 2.16% Continued growth in Wealth and Insurance business • • . Costs in 2019 to be lower than 2018 Expect further reduction in NPES Expect net impairment charge to be in the range of 20bps 30bps p.a. during H2 20191 - Continue to generate strong organic capital • Dividend to increase prudently and progressively; over time will build towards a payout ratio of around 50% of sustainable earnings ROTE target: in excess of 10% by 2021 1 Absent a change in the economic environment or outlook Bank of Ireland 16#18Strategic Outlook 2019 Interim Results Credit Presentation Bank of Ireland 17#19Leading Irish retail and commercial bank; unlocking growth in our home market H1 2019 - €3.8bn new lending in Ireland Corporate €0.5bn Consumer €0.3bn Property €0.6bn 2019 Interim Results Credit Presentation Irish credit growth emerging Annual % Change 5 0 Mortgages €1.0bn Business Banking €1.5bn Unique franchise... • Over 2 million consumer, business and wealth and insurance customers • Largest lender to the Irish economy for 6 years running • Leading market shares in mortgage, SME, consumer and wealth products • Ireland's only bancassurer Leading Business Bank in Ireland #1 lender to Corporate Ireland Largest branch physical footprint, with 265 branches • Digitally enabled with 80% of customers digitally active Ireland is the fastest growing economy in Europe Demographics support further growth with youngest population in Europe • 2017 2018 Stock of lending to households Stock of lending to businesses (non-financial corporations)1 ...with growth and efficiency upside 2019 Leading supporter of home building and buying €750 million in development finance approved Mortgage market expected to grow significantly • €1bn green fund launched supporting mortgage, consumer and SME customers Supporting and partnering our business customers helping them navigate Brexit; €2bn Brexit fund launched • Continued growth in penetration of wealth product holdings for bank customers; launch of digital pensions platform in H2 2019 ⚫ Serving customers brilliantly with efficiencies through customer journey automation and simplification 1 Source: Central Bank of Ireland, Banks balance sheet basis, excludes loan sales and securitisations Bank of Ireland 18#20Execution of strategy improving UK returns Invest Reposition Improve . H1 2019 Progress Increased market share and new lending in higher margin personal loans and Northridge businesses (supported by broadened distribution network), accounting for 42% of H1 2019 new lending (33% in H1 2018) • Successful launch of higher margin bespoke mortgages with £100m in offers in first 100 days • Disciplined commercial and risk focus maintained in context of ongoing macro uncertainty • Costs reduced by 19% vs. H1 2018 with cost-income ratio of 60% (H1 2018: 66%) Inaugural wholesale funding transaction completed in June 2019 • Sale of UK credit cards portfolio adding c.0.7% to UK ROTE • Exit from Post Office current accounts and unprofitable Post Office ATMs 2019 Interim Results Credit Presentation Future focus Continue to progress higher margin lending initiatives while maintaining disciplined risk focus • Further significant reduction in costs (targeting c.50% cost-income ratio) • Ongoing margin optimisation across lending and deposit books Ongoing wind-down of legacy portfolios Increase ROTE to high single digit by 2021 Bank of Ireland 19#21Continued delivery on transformation H1 2019 milestones achieved 2019 Interim Results Credit Presentation Future milestones planned 20 20 • First Data migration completed, the largest in the bank's history, to enable further capability enhancements • Modernised payments infrastructure established, providing greater capacity, improved stability and higher speed processing • New digital Life Assurance underwriting system delivering faster decisions • Strengthened security and cyber defences Bank's mobile app to launch in Q4 2019; customer migration to begin in Q4 2019 and continue into 2020 • Launch of Group Pensions digital platform and expansion of Wealth Advice digital platform in H2 2019 Operationalisation of single view of the customer in 2020 Improve customer Support growth Drive efficiency experience Bank of Ireland#22Delivery of 2021 targets to be our constant focus 2019 Interim Results Credit Presentation Relentless focus on cost opportunities Continued delivery Efficient on transformation and IT change capital allocation Levers to mitigate changing environment Selective growth in key areas Prudent price management Business model simplification Efficient business Robust capital position if Sustainable dividends 21 21 Target is to increase ROTE to in excess of 10% by 2021 Bank of Ireland#23Capital & MREL 2019 Interim Results Credit Presentation 22 22 Bank of Ireland#24Corporate Structure BOIG established in 2017 Unchanged Corporate Structure New HoldCo 2019 Interim Results Credit Presentation Bank of Ireland Group plc (BOIG) Bank of Ireland Group AT1 Tier 2 Senior unsecured 100% The Governor and Company of the Bank of Ireland (GovCo) Bank of Ireland → 100% Senior unsecured 100% New Ireland Assurance Company plc Bank of Ireland Mortgage Bank (BOIMB) Bank of Ireland → Bank of Ireland (UK) plc Bank of Ireland UK 100% NEW IRELAND ASSURANCE Capital/MREL 23 23 Funding • Irish Covered Bonds (ACS) Resolution Authorities preferred strategy for the Group consists of a Single Point of Entry (SPE) bail-in strategy through the Group holding company (BOIG) Transparent and well-defined resolution strategy in comparison to other jurisdictions BOIG introduced on top of the existing group structure supporting an SPE preferred resolution strategy - No change to any of the Group's existing operating companies Bail-in at BOIG is the primary resolution tool. MREL requirements are expected to be met through junior and senior issuance from BOIG Losses are passed to BOIG by the write-down of intragroup assets. BOIG investors bear loss in accordance with the resolution² hierarchy. Resolution authorities required to apply the "No Creditor worse off" principle in application of the bail-in tool Funding requirements may also continue to be met, as required, through the issue of Irish Covered Bonds (ACS) by Bank of Ireland Mortgage Bank and senior unsecured issuance by GovCo 1 100% shareholding via intermediate holding company 2 Per Regulations 87 and 96 of the European Union (Bank Recovery and Resolution) Regulations 2015 Bank of Ireland#2524 24 BOI Credit Ratings Investment grade ratings for BOIG and GovCo BOIG Issuer Ratings GovCo Issuer Ratings Progress on BOI Credit Ratings Key Rating Drivers Upside could develop from: STANDARD & POOR'S BBB- (Positive) BBB+ (Positive) Oct 2018: GovCo rating upgraded one notch from BBB to BBB+ and BOIG rating BBB- affirmed (outlook remains Positive) Dec 2018: Affirmed the BBB- and BBB+ ratings on BOIG and GovCo respectively (outlook remains Positive) • Significant improvement in asset quality metrics, while at the same time capitalisation remains a ratings strength and internal capital generation improves Positive outlook reflects BOI's superior asset quality track record relative to domestic peers MOODY'S • • MOODY'S Baa3 (Positive) A2 (Stable) Dec 2018: GovCo rating upgraded one notch from Baa1 to A3 and BOIG rating Baa3 affirmed (outlook remains Positive) Jul 2019: GovCo rating upgraded one notch from A3 to A2 (outlook revised to Stable) and BOIG rating Baa3 affirmed (outlook remains Positive) Further significant reductions in non-performing loans or improvements in provision coverage Maintenance of good capitalisation and risk absorption capacity, while maintaining; stable profitability, funding and liquidity metrics 2019 Interim Results Credit Presentation Fitch Ratings BBB (Stable) BBB (Positive) Nov 2017: One notch upgrade for both BOIG and GovCo issuer ratings to from BBB- to BBB, Stable outlook Nov 2018: Affirmed the BBB ratings on BOIG and GovCo; GovCo outlook revised to Positive from Stable (BOIG outlook remains Stable) Further reductions in non- performing loans; while reducing capital encumbrance Successful execution of strategy to improve cost efficiency and profitability Irish Covered Bonds (ACS) Aaa Bank of Ireland#26Strong capital generation and robust capital position 0.2% 13.2% Fully loaded CET1 ratio Increased by 40bps 2019 Interim Results Credit Presentation 90bps (30bps) (25bps) (20bps) 30bps (5bps) 13.6% 1 Jan 19 CET1 (post IFRS 16 impact 20bps) Organic capital generation! Loan Growth/ RWA² Transformation investment Dividend Accrual NPE Disposal Other Jun 19 CET1 CET1 ratio CET1 movements 25 25 Capital position . • Strong capital position with fully loaded CET1 ratio of 13.6% at June 2019, net increase of 40bps during H1 2019 Continued organic capital generation with 90bps of capital generated in H1 2019 Securitisation of Irish BTL mortgage NPES (c.€0.4bn) completed in April 2019 unlocked 30bps of CET1 capital No change to capital guidance; The Group expects to maintain a CET1 ratio in excess of 13% on a regulatory basis and on a fully loaded basis by the end of the O-SII phase-in period³ This includes meeting applicable regulatory capital requirements plus an appropriate management buffer4 1 Organic capital generation primarily consists of attributable profit and movements in regulatory deductions 2 Loan Growth / RWA primarily consists of RWA movements from net loan growth and changes in asset quality and book mix 3 The Other Systemically Important Institution (O-SII) buffer was introduced at 0.5% in July 2019, increasing to 1.0% in July 2020 and 1.5% in July 2021 4 The Central Bank of Ireland has requested the power to introduce a Systemic Risk Buffer (SyRB) in Ireland, which could increase capital demand. The size, timing and application of any potential SyRB are currently unknown Bank of Ireland#27Strategic investment and rigorous allocation of capital Organic capital generation (90bps) 2019 Interim Results Credit Presentation 1 Growth in loan book 200-250bps 2 Transformation 50-60bps p.a. 3 Regulatory . . • capital demand • • Investment / allocation of capital CET1 of c.200-250bps to accommodate loan book growth of c.20% over 4 years (2018-2021) Net lending growth of €1.2bn (c.30bps) in H1 2019 Transformation Programme: investment of 50-60bps p.a. (2018-2021) Transformation investment of €138m (c.25bps) in H1 2019 On track to reduce costs in 2019 and every year to c.€1.7bn in 2021 IFRS 16 impact of c.20bps on 1 Jan 2019 Evolving regulatory framework including EBA and ECB guidelines (Definition of Default, IRB models, NPE requirements, etc.) could consume c.80bps of CET1 by end 2021 The Central Bank of Ireland has requested the power to introduce a Systemic Risk Buffer (SyRB) in Ireland, which could increase capital demand. The size, timing and application of any potential SyRB are currently unknown Will pursue opportunities to unlock capital in balance sheet as appropriate 4 Dividend / distributions • Dividend accrual of €100m (equivalent to an annualised dividend per share of 18.5c) • No change to dividend policy or guidance Bank of Ireland 26 26#28Robust capital ratios CET1 Ratios: Dec 2018 Jun 2019 Fully Loaded 13.4% 13.6% Regulatory 15.0% 14.9% Tier 1 Ratios¹: Fully Loaded 14.4% 14.8% Regulatory 16.0% 16.1% • Total Capital Ratios¹: Fully Loaded 17.2% 16.7% Regulatory 18.8% 18.0% MREL: Regulatory MREL ratio 23.1% 21.1% Leverage Ratios: Fully Loaded Regulatory 6.3% 6.6% 7.0% 7.2% Risk Weighted Assets: Fully Loaded €47.6bn €48.7bn Regulatory €47.8bn €48.9bn 2019 Interim Results Credit Presentation CET1 • The Group's fully loaded CET1 ratio increased by c.20 basis points to 13.6% and the regulatory CET 1 ratio decreased by c.10 basis points to 14.9% in H1 2019 Tier 1 & Total Capital¹ • Tier 1 ratios reflect movements in CET1 ratios and a reduction in the adjustment under Article 85 of CRR Total Capital ratios reflect movements in CET1 ratios, the redemption of a €750m Tier 2 instrument in June 2019, the continued amortisation of other bullet Tier 2 instruments and a reduction in the adjustment under Article 87 of CRR MREL • MREL target of €13.3bn (representing 26.4% of RWA at Dec 2016) to be met by 1 Jan 2021: MREL ratio of 21.1% based on RWA at Jun 2019 (22.3% pro forma including €600m senior debt issued in July 2019) Modest MREL issuance of c.€1bn - €2bn p.a. anticipated Risk Weighted Assets • RWA has increased from €47.8bn at Dec 2018 to €48.9bn at Jun 2019 primarily driven by net loan book growth, changes in asset quality and book mix offset by the impact of the disposal of NPES 1 Further to EBA Q&A 2017_3329 the calculation of Tier 1 and Total Capital ratios is stated after a prudent application of the requirements of Articles 85/ 87 of CRR. The application of the requirements of Articles 85 /87 by SSM banks is under review by the ECB Bank of Ireland 27#29Regulatory Capital Requirements 2019 Interim Results Credit Presentation Range 4.50% 1% -2.25%² 2.50% 2017 4.50% 2.25% 1.25% 2018 CBI 0% - 2.50% FPC (UK) 0% - 2.50% 0.30% 2019 2020 4.50% 4.50% 4.50% 4.50% 2.25% 2.25% 2.25% 2.25% 1.88% 2.50% 2.50% 2.50% 0.30% 0.90% 0.90% 0.90% 0.60% 0.60% 0.60% 0.30% 0.30% 0.30% 2021 Fed/Various 0% - 2.50% CBI Minister for Finance 0% - 2.00% 0% - 3.00% 8.00% 8.93% 0.50% 1.00% 1.50% TBC TBC 10.65% 11.15% 11.65% Not disclosed in line with regulatory preference Pro forma CET1 Regulatory Capital Requirements Set by Pillar 1 - CET1 Pillar 2 Requirement (P2R) Capital Conservation Buffer (CCB) Countercyclical buffer (CCyB)1 Ireland (c.60% of RWA) (from 5 July 2019) UK (c.30% of RWA) (from November 2018) US and other (c. 10% of RWA) O-SII buffer (from 1 July 2019) Systemic Risk Buffer - Ireland Pro forma Minimum CET1 Regulatory Requirements Pillar 2 Guidance (P2G) CRR SSM CRD Regulatory Capital Requirements • A minimum CET1 ratio of 10.65% on a regulatory basis • The Central Bank of Ireland has requested the power to introduce a Systemic Risk Buffer (SyRB) in Ireland under Article 133 of CRD IV which could increase the minimum regulatory capital demand. The size, timing and application of any potential SyRB are currently unknown Pillar 2 Guidance (P2G) is not disclosed in accordance with regulatory preference. The increase in Capital Conservation Buffer (CCB) in 2019 was offset by a like for like reduction in the P2G. In addition the P2G reduced for 2019 following the outcome of the 2018 EBA Stress Test 1 CCyB could be set in excess of 2.50% in exceptional circumstances. A change in the CCYB could also be implemented in less than 12 months in exceptional circumstances 2 This is the expected range for P2R, which is subject to annual review Bank of Ireland 28#30MREL¹ Loss absorption amount Recapitalisation + amount 26.39% MREL Target 1.5% O-SII² 2.5% CCB2 2.25% P2R2 8% Own Funds Pillar 1 Requirement 2019 Interim Results Credit Presentation Market Confidence Charge 1.5% O-SII² -1.25% 2.75% 2.5% CCB2 -0.86%3 2.25% P2R2 8% Own Funds Pillar 1 Requirement 9.39% 14.25% The Group has been advised of the decision by the SRB and the Bank of England of its binding MREL requirement to be met by 1 January 2021 This has been set at a level of 12.86% of total liabilities and own funds as at December 2016 (equivalent to 26.39% of risk weighted assets) Current MREL target calibration excludes UK & ROI CCyBs. CCyBs expected to be included in future target calibrations • Modest issuance of c.€1-2bn p.a. expected to meet this requirement Minimum Requirement for Own Funds and Eligible Liabilities as at 30 June 2019 2 Other Systemically Important Institution (O-SII), Capital Conservation Buffer (CCB) and Pillar 2 Requirement (P2R) 3 Bank Specific Adjustment of 0.86% Bank of Ireland 29 29#3130 30 Risk Weighted Assets (RWAs) / Leverage Ratio Customer lending average credit risk weights - June 20191/2 (Based on regulatory exposure class) 2019 Interim Results Credit Presentation EBA Transparency Exercise 2018 Country by Country Average IRB risk weights Residential Mortgages - June 2018 Sweden 4.2% Belgium EAD³ RWA Avg. Risk (€bn) (€bn) Weight 9.7% ROI Mortgages 23.8 7.5 32% UK 10.3% UK Mortgages SME 21.7 4.1 19% Finland 10.7% France 11.3% 15.8 12.1 76% Netherlands 11.6% Corporate 11.6 10.6 91% Austria 11.9% Spain 12.8% Other Retail 6.4 4.4 69% Denmark 14.1% Customer lending credit risk 79.3 38.7 49% Germany 14.3% Norway 17.9% Portugal 19.5% • IRB approach accounts for: Italy 19.9% Ireland 70% of credit EAD (Dec 2018: 70%) 71% of credit RWA (Dec 2018: 74%) • RWA has increased from €47.8bn at Dec 2018 to €48.9bn at Jun 2019 primarily driven by the introduction of IFRS16, net loan growth and changes in asset quality and book mix Leverage Ratio • Fully Loaded Leverage Ratio: 6.6% Regulatory Leverage Ratio: 7.2% 38.0% EBA Risk Dashboard Q1 2019 Country by Country Average Leverage ratio Regulatory Leverage Ratio - March 2019 Sweden 4.4% Netherlands 4.7% Denmark 4.7% Germany 4.7% France 5.1% UK 5.3% Finland 5.5% Spain 5.6% Italy 5.6% Belgium 5.7% Austria 6.6% Norway 7.0% Portugal Ireland 7.4% 10.0% 1 EAD and RWA include both IRB and Standardised approaches and comprise both non-defaulted and defaulted loans 2 Securitised exposures are excluded from the table (i.e. excludes exposures included in CRT executed in Nov 2017 and Dec 2016) 3 Exposure at default (EAD) is a regulatory estimate of credit risk exposure consisting of both on balance exposures and off balance sheet commitments Bank of Ireland#32Capital/MREL Summary Highlights . Ratings • 2019 Interim Results Credit Presentation BOIG (HoldCo) investment grade ratings with positive outlook from S&P and Moody's The key ratings driver across all agencies is continued delivery of the Group's NPE reduction strategies Economy Continued economic growth in core markets; supporting strong organic capital generation of 90 bps in H1 2019 . Regulatory Ratios . The Group expects to maintain a CET1 ratio in excess of 13% on a regulatory basis and on a fully loaded basis by the end of the O-SII phase-in period' Robust regulatory ratios provide significant buffer to credit investors (c.400bps buffer to MDA) • The Group's MREL position at 30 June 2019 is 21.1% (22.3% pro forma including €600m senior debt issued in July 2019) MREL . Based on current MREL ratio and SRB MREL Policy, modest MREL issuance of c. €1bn-€2bn p.a. anticipated 1 The Other Systemically Important Institution (O-SII) buffer was introduced at 0.5% in July 2019, increasing to 1.0% in July 2020 and 1.5% in July 2021 Bank of Ireland 31#33Appendix 2019 Interim Results Credit Presentation 32 32 Bank of Ireland#34Empty#35Appendix • • BOI Overview 2019 Interim Results Credit Presentation Slide No. 34 =4 - Business profile - Historic financial results Profile of customer loans Gross new lending volumes in H1 2019 ROI mortgage loan book UK mortgage loan book Income Statement Divisional performance Interest Rate Sensitivity Net interest income analysis Non-core Items Transformation Investment Asset Quality Non-performing exposures by portfolio Debt Securities at fair value through other comprehensive income (FVOCI) UK Customer Loans Capital CET1 ratios Capital Guidance and Distribution Policy Defined Benefit Pension Schemes Ordinary shareholders' equity and TNAV Cost income ratio: Jun 2019 Return on tangible equity (ROTE) Forward-Looking statement Contact details 35 37 39 40 41 42 43 44444 45 46 47 48 49 50 51 52 53 54 55 56 57 58 SASGASO • Bank of Ireland#36BOI Overview: Ireland Ireland's leading retail and commercial bank Retail Ireland Consumer Business Wealth 2019 Interim Results Credit Presentation Corporate Ireland Corporate Banking Ireland Property Finance Unique customer franchise ÅÅÅÅ Supporting local communities & enterprises Extensive engagement via digital channels • 1.7m active consumer customers • 200k SME customers ⚫ 500k Wealth and Insurance customers ⚫ 265 branches, >2,800 front line staff • Reinventing branches with workbenches and event spaces driving local community, enterprise and business development activity • 440 community and enterprise events including National Enterprise Week and National Enterprise Town Awards, supporting local businesses and community groups • 80% digitally active current account base • 75% of sessions/visits are via mobile device. • Average of >23m interactions in our digital channels every month ⚫ #1 Corporate Bank in Ireland ⚫ #1 Bank for FDI into Ireland • Country-wide coverage via regional hubs • Banking relationship with 60% of Ireland's top companies • >500 corporate customers: average 5 products held per customer • Disciplined approach to risk management • · 60 Specialist staff; >175 customers Leading lender of investment property and construction Markets & Treasury • Leading treasury service provider • Track record of innovation Bank of Ireland 35#37BOI Overview: UK / International 2019 Interim Results Credit Presentation Attractive UK and International businesses provide diversification and further opportunities for growth Retail UK Partnerships Northern Ireland Niche Businesses Corporate UK / International Corporate Banking UK Acquisition Finance Over 40 years in Great Britain • 11.5k branches through Post Office partnership ⚫ #1 travel money business in the UK (FRES) • Access to 3.2m AA members Full service retail and commercial bank . A distribution network of 28 branches, including six business centres Over 190 years since first branch opened Motor asset finance and motor lease finance business Proven track record of strong growth and disciplined risk appetite £2.1bn loan book with c.200k customers • Sector focused business in UK with 5 specialist industry sectors, industrials & manufacturing, technology, consumer & hospitality, media and business services • >80 Customers • Scalable platform with highly disciplined approach and attractive growth opportunity •Mid market • • US / European Acquisition Finance business; strong 20 year+ record Well recognised lead arranger 6 international offices - Opened Madrid office in H1 2019, supporting our existing customers in that region • >200 customers, c.75% business from repeat sponsors Bank of Ireland 36#38BOI Overview Income Statement 2019 Interim Results Credit Presentation 37 37 FY 2015 FY 2016² FY 20173 FY 2018 H1 2019 (€m) (€m) (€m) (€m) (€m) Total income 3,272 3,126 3,049 2,805 1,411 - Net interest income 2,454 2,298 2,248 2,146 1,069 - Other income (net) before additional gains and valuation items 626 615 662 672 311 - Additional gains, valuation and other items 192 213 139 (13) 31 Operating expenses (1,746) (1,741) (1,796) (1,739) (840) Transformation Investment charge (41) (104) (113) (63) Levies and Regulatory charges Operating profit pre-impairment (75) (109) (99) (101) (73) 1,451 1,235 1,050 852 435 Net impairment (charges) / gains (296) (178) (15) 42 (79) Share of associates / JVs 46 41 43 41 20 Underlying profit before tax 1,201 1,098 1,078 935 376 Non core items 31 (63) (226) (100) (61) Profit before tax 1,232 1,035 852 835 315 Net interest margin 2.19% 2.20% 2.29% 2.20% 2.16% Cost income ratio¹ 53% 57% 62% 66% 64% 1 Cost/income ratio is calculated as operating expenses (excluding levies and regulatory charges) divided by total income 2 Comparative figures for 2016 have been restated to reflect the impact of the reclassification of the charges relating to the Central Bank of Ireland's Tracker Mortgage Examination Review as non-core and the impact of the voluntary change in the Group's accounting policy for Life assurance operations 3 Comparative figures have been restated to reflect the impact of the reclassification of €7 million of costs from the Transformation Investment charge (formerly the Core Banking Platform Investment charge) to Operating expenses (before Transformation Investment and levies and regulatory charges) for 2017 Bank of Ireland#39BOI Overview Summary Balance Sheet 2019 Interim Results Credit Presentation Dec 15 (€bn) Dec 16 (€bn) Dec 17 (€bn) Dec 18 (€bn) Jun 19 (€bn) Customer loans¹ 85 78 76 Liquid assets 24 21 24 Wealth and Insurance assets 16 17 17 Other assets 6 7 6 Total assets 131 123 123 Customer deposits 80 75 76 Wholesale funding 14 14 13 Wealth and Insurance liabilities 16 17 17 Other liabilities 10 6 5 Subordinated liabilities and AT1 3 2 3 7275227753 17 124 79 11 17 Shareholders' equity 8 9 9 9 8272820720 23 18 126 10 18 9 Total liabilities & Shareholders' equity 131 123 123 124 126 Fully loaded CET1 ratio 11.3% 12.3% 13.8% 13.4% 13.6% Net stable funding ratio 120% 122% 127% 130% 128% Loan to deposit ratio TNAV per share (excl. DPS) Dividend per share (DPS) 106% 104% 100% 97% 97% €7.24 €7.40 €7.52 €7.87 €7.88 11.56 16.0c 18.5c2 1 Loans and advances to customers is stated after impairment loss allowance 2 Dividend accrual of €100m (c.20bps of CET1 capital) equivalent to an annualised dividend per share of 18.5c Bank of Ireland 38#40BOI Overview Profile of customer loans¹ at Jun 19 (Gross) 2019 Interim Results Credit Presentation ROI UK RoW Total Total Composition (Jun 19) (€bn) (€bn) (€bn) (€bn) (%) Mortgages 23.2 21.6 0.0 44.8 57% Non-property SME and corporate 11.0 4.82 4.5 20.3 25% SME 7.5 1.6 0.0 9.1 11% Corporate 3.5 3.2 4.5 11.2 14% Property and construction 5.8 2.0 0.7 8.5 11% Investment property 5.2 1.8 0.7 7.7 10% Land and development 0.6 0.2 0.0 0.8 1% Consumer 2.2 3.53 0.0 5.7 7% Customer loans (gross) 42.2 31.9 5.2 79.3 100% Geographic (%) 53% 40% 7% 100% 1 Based on geographic location of customer 2 Includes GB business and corporate loan books, which BOI is required to run down under its EU approved Restructuring Plan (Jun 2019: £0.4bn; Dec 2018: £0.4bn) 3 Includes UK Credit Card portfolio €0.6bn classified as held for sale as at June 2019. Sale completed in mid July 2019 Bank of Ireland 39#41Gross new lending volumes in H1 2019 €2.7bn Retail Ireland Retail UK €2.7bn £2.6bn £2.5bn €1.0bn €1.0bn 2019 Interim Results Credit Presentation Corporate Banking €2.1bn €2.1bn £1.3bn €0.6bn €0.6bn £1.6bn €0.2bn €0.3bn £0.4bn £0.3bn €1.4bn €1.5bn £0.7bn £0.5bn €0.5bn €0.5bn €0.5bn €0.7bn €0.5bn H1 2018 H1 2019 £0.1bn H1 2018 £0.1bn H1 2019 H1 2018 ■Mortgages Consumer Business Banking Northridge Property Corporate Ireland Acquisition Finance Corporate UK €0.4bn H1 2019 Bank of Ireland 40 40#42ROI Mortgages: €23.2bn New Lending volumes and Market Share 2019 Interim Results Credit Presentation ROI Mortgages (gross) 28% 28% €24.1bn €23.7bn €23.2bn 26% 26% €7.3bn 23% €9.5bn €10.4bn €5.8bn €4.4bn €3.5bn €1.3bn €1.2bn €1.0bn €1.0bn €10.9bn €0.8bn €9.8bn €9.3bn H1 2017 H2 2017 H1 2018 New Lending Volumes¹ H2 2018 Market Share H1 2019 Dec 17 Dec 18 Tracker Variable Rates Fixed Rates Jun 19 Pricing strategy • Fixed rate led mortgage pricing strategy which provides value, certainty and stability to our customers and to the Group • Fixed rate products accounted for c.92% of our new lending in H1 2019, up from c.30% in 2014 Distribution strategy - expansion into broker channel • Accelerating on-boarding of new brokers following successful re-entry into broker market in Q4 2018 (Brokers accounted for c.25% of the market in H1 2019) Wider proposition 7 in 10 ROI customers who take out a new mortgage take out a life assurance policy through BOI Group 3 in 10 ROI customers who take out a new mortgage take out a general insurance policy through BOI Group with insurance partners LTV profile • Average LTV of 61% on existing mortgage stock at June 2019 (Dec 18: 61%) • Average LTV of 74% on new mortgages in H1 2019 (Dec 18: 71%) Tracker mortgages • €8.8bn or 95% of trackers at June 2019 are on a capital and interest repayment basis • 80% of trackers are Owner Occupier mortgages; 20% of trackers are Buy to Let mortgages • Loan asset spread on ECB tracker mortgages was c.64bps² in H1 2019 1 Excluding portfolio acquisitions (H1 2017 - Nil; H2 2017 - €0.1bn; H1 2018 - Nil; H2 2018 - Nil; H1 2019 - Nil) 2 Average customer pay rate of 110bps less Group average cost of funds of 46bps Bank of Ireland 41#43UK Mortgages: £19.4bn / €21.6bn £20.0bn UK Mortgages (gross) £19.4bn £20.0bn £19.4bn £2.0bn 2019 Interim Results Credit Presentation UK Mortgages (gross) £19.4bn £1.7bn £19.4bn £1.6bn £9.6bn £10.4bn £11.0bn £7.5bn £7.5bn £7.4bn £3.3bn £2.7bn £2.4bn £10.6bn £10.2bn £10.4bn £7.1bn £6.3bn £6.0bn Dec 17 Dec 18 Tracker Variable Rates Fixed Rates Jun 19 LTV profile • Average LTV of 62% on existing stock at Jun 2019 (Dec 18: 62%) • Average LTV of 74% on new UK mortgages in H1 2019 (2018: 72%) Dec 17 Dec 18 Standard Buy to let Self certified Jun 19 Bank of Ireland 44 42#44Income Statement Divisional performance - all trading divisions have increased their operating profit pre-impairment 2019 Interim Results Credit Presentation Operating Profit 6 months ended Jun 19 pre-impairment (€m) (€m) Underlying profit/(loss) before tax and additional gains, valuation and other items/(losses) Additional gains, Underlying profit/(loss) before tax (€m) valuation and other items¹ (Єm) Retail Ireland 260 263 263 Wealth and Insurance 84 48 36 84 Retail UK - € 112 88 4 92 Retail UK - £ 97 77 3 80 Corporate and Treasury 250 230 (23) 207 Group Centre & other (208) (211) 4 (207) Transformation Investment charge (63) (63) (63) Group 435 355 21 376 Operating Profit 6 months ended Jun 18 pre-impairment Underlying profit/(loss) before tax and additional gains, valuation and other items/(losses) (€m) (€m) Retail Ireland 240 352 Wealth and Insurance 34 45 Retail UK - € 105 116 Retail UK - £ 92 102 Corporate & Treasury 244 228 Group Centre & Other (174) (170) Transformation Investment charge (51) (51) Group 398 520 (20) 1 Excludes IFRS income classifications which is fully offset in net interest income Additional gains, valuation and other items¹ Underlying profit/(loss) before tax (€m) (€m) E°ཕོབ༔8 345 34 113 99 233 (174) (51) 500 Bank of Ireland 43 43#45Interest Rate Sensitivity 2019 Interim Results Credit Presentation The table below shows the estimated sensitivity of the Group's income (before tax) to an instantaneous and sustained 1% parallel movement in interest rates Estimated sensitivity on Group income (1 year horizon) 100bps higher 100bps lower Dec 18 (€m) Jun 19 (Єm) c.180 c.200 (c.210) (c.230) The estimates incorporate certain management assumptions primarily related to: . the re-pricing of customer transactions; . the relationship between key official interest rates set by Monetary Authorities and market determined interest rates; and . the assumption of a static balance sheet by size and composition In addition, changes in market interest rates could impact a range of other items including the valuation of the Group's IAS19 defined benefit pension schemes Bank of Ireland 44#46Income Statement Net interest income analysis 2019 Interim Results Credit Presentation H2 2017 H1 2018 H2 2018 H1 2019 Average Gross Gross Volumes Interest Rate (€bn) (€m) (%) Average Gross Gross Volumes Interest Rate (€bn) (Єm) (%) Average Gross Volumes Interest (€bn) (Єm) Gross Average Gross Rate Volumes Interest (%) (€bn) (Єm) Gross Rate (%) Ireland Loans¹ 35.3 545 3.07% 34.6 531 3.09% 34.4 531 3.06% 34.2 517 3.05% UK Loans 28.0 430 3.05% 28.1 440 3.16% 27.6 447 3.21% 27.5 439 3.22%5 C&T Loans 12.8 253 3.92% 13.6 259 3.85% 14.6 287 3.89% 15.8 312 3.98% Total Loans & Advances to Customers 76.1 1,228 3.20% 76.3 1,230 3.25% 76.6 1,265 3.28% 77.5 1,268 3.30% Liquid Assets 20.8 NAMA Sub Debt 0.3 47 43 0.41% 22.1 35 0.32% 22.7 38 0.33% 22.9 33 0.29% 17 11.97% 0.2 4 Total Interest Earning Assets 97.2 1,288 2.63% 98.6 1,269 Ireland Deposits 20.4 (9) (0.08%) 20.5 (8) Credit Balances² 29.3 4 0.03% 30.5 2 UK Deposits C&T Deposits 18.2 (74) (0.80%) 18.9 (81) 5.2 (9) (0.35%) 4.7 (9) (0.39%) Total Deposits 73.1 (88) (0.24%) 74.6 (96) (0.26%) 3.50% 0.1 2.60% 99.4 (0.08%) 20.7 0.01% 32.8 (0.86%) 18.6 4.9 77.0 Wholesale Funding³ 12.3 (36) (0.58%) 12.3 (45) Subordinated Liabilities 1.8 (42) (4.80%) 2.1 (49) Total Interest Bearing Liabilities 87.2 (166) (0.38%) 89.0 (190) (0.73%) 11.0 (4.77%) 2.1 (0.43%) 90.1 2 1,305 (8) 3 (88) (9) (102) (52) (51) (4.86%) (205) (0.45%) 5.24% 2.60% (0.08%) 20.7 0.02% 34.5 (0.94%) 18.3 (0.37%) 5.1 (0.26%) 78.6 (0.94%) 10.3 0.1 2 5.40% 100.5 1,303 2.61% (7) (0.07%) 3 0.02% (91) (1.00%) (9) (0.35%) (104) (0.27%) (54) (1.06%) 2.0 90.9 (49) (4.85%) (207) (0.46%) IFRS Income Classification 5 7 7 2 Other (25) 9 (22) (19) Net Interest Margin 97.2 1,102 Average ECB Base rate Average 3 month Euribor Average BOE Base rate Average 3 month LIBOR 2.25% 0.00% 98.6 1,095 (0.33%) 2.23% 0.00% (0.33%) 99.4 1,085 2.17% 0.00% 100.5 1,079 2.16% 0.00% (0.32%) (0.31%) 0.32% 0.50% 0.38% 0.62% 0.70% 0.82% 0.75% 0.84% 1 Includes average interest earning assets of c.€0.3bn in H1 2019 carried at FVTPL with associated H1 2019 interest income of c.€7m 2 Credit balances in H1 2019: ROI €26.5bn, UK €3.5bn, C&T €4.5bn 3 Includes impact of credit risk transfer transactions executed in Dec 2016 and Nov 2017 4 Includes IFRS 16 lease expense and adjustments that are of a non-recurring nature such as customer termination fees and EIR adjustments 5 Excludes income (c.5bps) relating to the repositioning of the UK cards portfolio as non-core in H1 2019 due to classification as held for sale Bank of Ireland 45#47Non-core items 2019 Interim Results Credit Presentation H1 2018 (€m) H1 2019 (€m) Customer redress programme - Tracker Mortgage Examination (62) (55) - Other programme Cost of restructuring programme¹ (7) (51) (21) (Loss) gain on disposal / liquidation of business activities Gain on disposal of Property Investment return on treasury stock held for policyholders (3) 7 1 UK business divestments, net of disposal costs² 2 Gross-up for policyholder tax in the Wealth and Insurance business Total non-core items (2) 22 (46) (61) 1 Restructuring costs of €21 million in H1 2019 primarily relate to a reduction in employee numbers (€17 million), programme management costs (€2 million) and costs related to the implementation of the Group's property strategy (€2 million) Bank of Ireland 2 Relates to UK Credit Cards, Post Office ATMs and Post Office Current Accounts 46#48Transformation Investment of €1.4bn supporting growth / driving efficiencies Costs will decrease every year in absolute terms 2019 Interim Results Credit Presentation Investment: €1.4bn (2016-2021) c.65% c.65% c.€1.9bn €1,796m €1,739m €104m 2017 €113m 2018 2019 2020 Operating expenses Transformation Investment charge Cost income ratio c.50% c.€1.7bn €306m Average of €275m p.a. 2021 2016 2017 2018 2019 2020 2021 Transformation investments are supporting growth and driving efficiencies - Investor day targets 2018 H1 2019 Expected¹ Treatment (€m) (€m) Total (€m) % Cost target of c.€1.7bn in 2021 40% Transformation Investment charge 113 63 176 40% • Costs reduce every year: 2018 - 2021 40% Cost income ratio expected to improve from 65% to c.50% in 2021 20% Capitalised as Intangible Assets Non-core restructuring costs 100 54 154 35% 93 21 114 25% 100% Total 306 138 444 100% 50-60bps p.a. CET1 (bps) 60bps 25bps 1 As outlined at Investor Day in June 2018 in respect of the average investment of €275m p.a. for 2018-2021 Bank of Ireland 47#49Non-performing exposures by portfolio 2019 Interim Results Credit Presentation Advances Non-performing Non-performing Composition (Jun 19) (€bn) exposures (€bn) exposures as % of advances Impairment loss allowance (€bn) Impairment loss allowance as % of non-performing exposures Residential Mortgages 44.8 2.3 5.0% 0.5 23% - Republic of Ireland 23.2 1.8 7.6% 0.4 25% - UK 21.6 0.5 2.2% 0.1 16% Non-property SME and Corporate 20.3 1.1 5.5% 0.6 52% - Republic of Ireland SME 7.5 0.7 9.3% 0.4 51% - UK SME 1.6 0.1 6.8% 0.0 41% - Corporate 11.2 0.3 2.7% 0.2 58% Property and construction 8.5 0.7 8.4% 0.3 46% - Investment property 7.7 0.6 8.6% 0.3 45% - Land and development 0.8 0.1 6.6% 0.0 57% Consumer¹ 5.7 0.1 2.1% 0.2 139% Total loans and advances to customers 79.3 4.2 5.3% 1.6 38% Non-performing Advances Composition (Dec 18) exposures (€bn) (€bn) Non-performing exposures as % of advances Impairment loss allowance Impairment loss allowance as % of (€bn) non-performing exposures Residential Mortgages 45.4 - Republic of Ireland 23.7 - UK 21.7 Non-property SME and Corporate 19.5 - Republic of Ireland SME 7.6 - UK SME 1.6 Consumer - Corporate Property and construction - Investment property - Land and development Total loans and advances to customers 10.3 8.3 7.7 NNO FOOOOO 2.8 2.3 0.5 1.2 0.8 0.1 0.3 835283 6.0% 0.5 20% 9.5% 0.4 21% 2.3% 0.1 15% 6.2% 0.6 52% 11.2% 0.4 49% 6.1% 0.1 53% 2.6% 0.1 60% 0.9 11.0% 0.4 45% 0.8 10.7% 0.4 44% 0.6 0.1 14.0% 0.0 54% 5.2 0.1 2.1% 0.2 140% 78.4 5.0 6.3% 1.7 35% 1 Includes UK Credit Card portfolio €0.6bn classified as held for sale as at June 2019. Sale completed in mid July 2019 Bank of Ireland 48#50Debt Securities at fair value through other comprehensive income (FVOCI) 2019 Interim Results Credit Presentation ROI UK France (€bn) (€bn) (€bn) Other (€bn) Jun 19 (€bn) Dec 18 (€bn) Sovereign bonds 2.5 0.8 2.5 5.8 6.0 Senior debt 0.3 1.9 2.2 2.2 Covered bonds 0.2 0.2 0.9 2.3 3.6 3.7 Subordinated debt 0.1 0.1 0.1 Total FVOCI Reserve 2.7 0.2 0.3 2.0 6.7 11.7 12.0 0.2 0.2 • • The Group held €11.7bn of FVOCI debt securities at Jun 2019. Weighted average instrument level credit rating of the portfolio is A+ Other exposures include supranational entities (€1.6bn), Spain (€1.0bn), Sweden (€0.9bn), Belgium (€0.8bn) and Other (€2.4bn - all exposures less than €0.5bn) Portfolio • The Group holds NAMA subordinated bonds - €70m nominal value, valued at 103% at Jun 2019 (Dec 18 - 104%) NAMA 49 49 Bank of Ireland#51UK Customer Loans £28.6bn (€31.9bn) UK Mortgages - £19.4bn Scotland, £1.1bn Northern Ireland,, £1.0bn Rest of England,, £9.0bn Wales, £0.7bn Other UK Customer Loans - £9.2bn £0.1bn 2019 Interim Results Credit Presentation Greater London, £3.5bn Outer Metropolitan, £2.2bn South East, £1.9bn £0.1bn £3.1bn Consumer UK Mortgages Analysis - £19.4bn . Total UK mortgages of £19.4bn; (NPES: 2%) Average LTV of 62% on total book (2018: 62%) Average LTV of 74% on new mortgages (2018: 72%) • 70% of the current mortgage portfolio originated since January 2010 are standard owner occupier mortgages BTL book is well seasoned with 69% of these mortgages originated prior to January 2010 Average balance of Greater London mortgages is c.£190k, with 92% of Greater London mortgages having an indexed LTV <70% Other UK Customer Loans Analysis - £9.2bn Non-performing exposures of £0.4bn with strong coverage ratios Performing loans of £8.8bn; SME: broad sectoral diversification with low concentration risk Corporate: specialist lending teams in Acquisition Finance, Project Finance, and Corporate lending through a focused sector strategy Investment Property: primarily Retail, Office and Residential sectors Consumer (£3.2bn): Northridge (£1.7bn): Asset backed motor finance business; net loan book increase of £0.3bn in H1 2019; mid-market targeting prime business only; below industry arrears and loan losses Personal loan volumes (£0.9bn): net loan book increase of £0.2bn in H1 2019; improved credit risk process has driven increase in customer applications and drawdowns Credit cards (£0.5bn): classified as held for sale as at Jun 2019 Bank of Ireland £0.1bn £0.1bn £2.7bn £1.3bn £1.5bn SME Corporate Investment Property £0.2bn Land & Development Performing loans Non-performing exposures 50 50#52Capital - fully loaded CET1 ratio improved by 40bps CET1 ratios - Jun 2019 2019 Interim Results Credit Presentation Total equity Less Additional Tier 1 Deferred tax Intangible assets and goodwill Foreseeable dividend' Expected loss deduction Other items² Common Equity Tier 1 Capital Credit RWA Operational RWA Market, Counterparty Credit Risk and Securitisations Total RWA Common Equity Tier 1 ratio Total Capital Ratio Leverage Ratio Phasing impacts on Regulatory ratio Regulatory ratio Fully loaded ratio (€bn) (€bn) 10.1 10.1. (0.8) (0.8) (0.5) (1.1) (0.7) (0.7) (0.1) (0.1) (0.4) (0.4) (0.3) (0.4) 7.3 6.6 42.7 42.5 4.5 4.5 1.7 1.7 48.9 48.7 14.9% 13.6% 18.0% 16.7% 7.2% 6.6% • Deferred tax assets - certain DTAs³ are deducted at a rate of 50% for 2019, increasing annually at a rate of 10% thereafter until 2024 • IFRS 9-the Group has elected to apply the transitional arrangement which on a Regulatory CET1 basis resulted in minimal impact from initial adoption and will partially mitigate future impacts in the period to 2022. The transitional arrangement allows a 85% add-back in 20194, decreasing to 70%, 50%, and 25% in subsequent years 1 Dividend accrual of €100m (c.20bps of CET1 capital) in H1 2019, equivalent to an annualised dividend per share of 18.5c 2 Other items - the principal items being the cash flow hedge reserve, securitisation deduction and 10% / 15% threshold deduction 3 Deferred tax assets due to temporary differences are included in other RWA with a 250% risk weighting applied 4 The IFRS9 addback to the Regulatory CET1 was c.16bps at 30 Jun 2019, reduced from c.18bps at 31 Dec 2018 Bank of Ireland 51#53Capital Guidance and Distribution Policy 2019 Interim Results Credit Presentation Capital Guidance • The Group expects to maintain a CET1 ratio in excess of 13% on a regulatory basis and on a fully loaded basis by the end of the O-SII phase-in period¹ Distribution Policy • Dividend Accrual • This includes meeting applicable regulatory capital requirements plus an appropriate management buffer² • The Group expects that dividends will increase on a prudent and progressive basis and, over time, will build towards a payout ratio of around 50% of sustainable earnings • Dividend level and rate of progression will reflect, amongst other things: • Strength of the Group's capital and capital generation; - Board's assessment of growth and investment opportunities available; Any capital the Group retains to cover uncertainties; and Any impact from the evolving regulatory and accounting environments • Other means of capital distribution will be considered to the extent the Group has excess capital Regulatory rules require that an accrual is made at the half year in respect of potential dividends; in that regard the Group has made an accrual of €100m (c.20bps) in arriving at its CET1 ratio of 13.6% which would be equivalent to an annualised dividend per share of 18.5c 1 The Other Systemically Important Institution (O-SII) buffer was introduced at 0.5% in July 2019, increasing to 1.0% in July 2020 and 1.5% in July 2021 2 The Central Bank of Ireland has requested the power to introduce a Systemic Risk Buffer (SyRB) in Ireland, which could increase capital demand. The size, timing and application of any potential SyRB are currently unknown Bank of Ireland 52 59#54Defined Benefit Pension Schemes Group IAS19 Defined Benefit Pension Deficit 1.60% €1.19bn 2.20% 2.10% 2.00% 1.30% 2019 Interim Results Credit Presentation Mix of BSPF* Defined Benefit Pension Scheme Assets (%)¹ €4.0bn €5.6bn €6.1bn 45% 72% 72% 11% €0.45bn €0.48bn €0.23bn €0.29bn 44% 23% 5% Dec 18 23% 5% Jun 19 Jun 16 Dec 16 Dec 17 IAS19 DB Pension Deficit Dec 18 EUR Discount Rate Jun 19 €313m IAS19 Pension Deficit Sensitivities (Jun 2016 / Dec 2018 Jun 2019) €173m €174m €153m €122m €102m €122m €71m €28m €37m Inflation³ Interest Rates¹ Credit Spreads² 1 Sensitivity of Group deficit to a 0.25% decrease in interest rates €90m €97m Global Equity 2 Sensitivity of IAS19 liabilities to a 0.10% decrease in credit spread over risk free rates 3 Sensitivity of Group deficit to a 0.10% increase in long term inflation 4 Sensitivity of deficit to a 5% decrease in global equity markets with allowance for other correlated diversified asset classes Dec 12 Listed equities Diversified assets? Credit / LDI / Hedging * BSPF = Bank of Ireland Staff Pensions Fund Graphs shows BSPF asset allocation. BSPF represents approx. 77% of DB Pension assets 2 Diversified assets includes infrastructure, private equity, hedge funds and property . IAS19 Pension deficit of €0.29bn at Jun 2019: schemes in deficit €0.34bn, schemes in surplus €0.05bn • The primary drivers of the movement in the deficit were the net negative impact of changes in long term assumptions partly offset by the increase in assets and positive experience gains . • The Group has continued to support Trustees in diversifying asset portfolios away from listed equity into other return-seeking but potentially less volatile asset classes. In H1 2019, the BOI Group UK scheme (2nd largest Group scheme) de-risked by reducing the allocation to growth assets, emerging markets and absolute return and increased liability hedging with a transition of c.£117m into an LDI portfolio The Trustees of the New Ireland pension scheme (4th largest Group scheme) have also agreed a significant investment de-risking proposal which is currently being implemented BSPF asset returns of +10.9% and +4.8%.p.a. were achieved over 1 year and 3 years respectively to end June 2019 Bank of Ireland 53 53#55Ordinary shareholders' equity and TNAV 2019 Interim Results Credit Presentation Movement in ordinary shareholders' equity Ordinary shareholders' equity at beginning of period Movements: Profit attributable to shareholders Impact of adopting IFRS 9 Dividend paid to ordinary shareholders Remeasurement of the net defined benefit pension liability Debt instruments at FVOCI reserve movements Available for sale (AFS) reserve movements Cash flow hedge reserve movement Foreign exchange movements Other movements Ordinary shareholders' equity at end of period Tangible net asset value Ordinary shareholders' equity at the end of period Adjustments: Intangible assets and goodwill Own stock held for benefit of life assurance policyholders Tangible net asset value (TNAV) Number of ordinary shares in issue at the end of the period TNAV per share (€) Dividend per share (€) paid during period 1 Dec 2018 numbers have been restated to exclude treasury shares held for the benefit of life assurance policyholders 2018 (€m) H1 2019 8,859 (€m) 9,243 620 195 (31) (124) (173) 129 (61) 133 48 (341) (51) 8 19 10 (2) 39 (1) 9,243 9,257 Dec 181 (€m) 9,243 Jun 19 (€m) 9,257 (802) (811) 25 27 8,466 8,473 1,076 1,075 €7.87 €7.88 €0.115 €0.16 Bank of Ireland 54#56Cost income ratio: Jun 2019 Headline vs. Adjusted Net interest income Other income - Business income 2019 Interim Results Credit Presentation H1 2019 Headline (Єm) Pro forma adjustments (Єm) 1,069 H1 2019 Pro forma (Єm) 1,069 311 311 - Additional gains 3 (3) - Other valuation items¹ 28 (18) 10 Total Income 1,411 (21) 1,390 Costs - Operating expenses - Transformation Investment Costs Cost income ratio 840 63 903 64% 840 63 903 65% • Cost income ratio excludes; - Levies and Regulatory charges Non-core items . H1 2019 adjusted cost income ratio is adjusted for; Additional Gains and valuation items¹ (€21m) - 1 Excludes IFRS income classifications which is fully offset in net interest income Bank of Ireland 55 55#57Return on tangible equity (ROTE) H1 2019: Headline vs. Adjusted 2019 Interim Results Credit Presentation Additional gains, & valuations items¹ net of tax Adjustments 'Normalised' impairment adjustment, net of tax Adjusted for CET1 Ratio at 13% H1 2019 Headline (€m) Profit for the period 226 Non-Core items, net of tax 77 Coupon on Additional Tier 1 securities. (28) Preference share dividends (3) Adjusted profit after tax 272 Annualised profit after tax 579 (18) (36) At June 2019 Shareholders' equity 9,257 Intangible assets (811) Shareholders' tangible equity 8,446. Average shareholders' tangible equity 8,576 Return on tangible equity (ROTE) 6.8% H1 2019 Adjusted (€m) 254 543 (283) 8,974 (811) (283) 8,163 (196) 8,380 6.5% • H1 2019 Adjusted Return on Tangible Equity is adjusted for; Additional gains and valuations items¹, net of tax - €36m - - No adjustment to impairment charge - 'Normalised' impairment charge (21bps) in H1 2019 reflected in headline and adjusted numbers Average Shareholders' tangible equity calculated on a CET1 Ratio at 13% - adjustment of €196m 1 Excludes IFRS income classifications which is fully offset in net interest income Bank of Ireland 50 56#58Forward-Looking statement 2019 Interim Results Credit Presentation This document contains forward-looking statements with respect to certain of the Bank of Ireland Group plc (the 'Company' or 'BOIG plc') and its subsidiaries' (collectively the 'Group' or 'BOIG plc Group') plans and its current goals and expectations relating to its future financial condition and performance, the markets in which it operates and its future capital requirements. These forward-looking statements often can be identified by the fact that 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 expressions identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others: statements regarding the Group's near term and longer term future capital requirements and ratios, level of ownership by the Irish Government, loan to deposit ratios, expected impairment charges, the level of the Group's assets, the Group's financial position, future income, business strategy, projected costs, margins, future payment of dividends, the implementation of changes in respect of certain of the Group's pension schemes, estimates of capital expenditures, discussions with Irish, United Kingdom, European and other regulators and plans and objectives for future operations. Such forward-looking statements are inherently subject to risks and uncertainties, and hence actual results may differ materially from those expressed or implied by such forward-looking statements. Investors should read 'Principal Risks and Uncertainties' in the Group's Interim Report for half-year ended 30 June 2019 beginning on page 27 and also the discussion of risk in the Group's Annual Report for the year ended 31 December 2018. Nothing in this document should be considered to be a forecast of future profitability or financial position of the Group and none of the information in this document is or is intended to be a profit forecast or profit estimate. Any forward-looking statement speaks only as at the date it is 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. Bank of Ireland 57#59Contact Details For further information please contact: • Group Chief Financial Officer Andrew Keating tel: +353 76 623 5141 . Investor Relations Darach O'Leary tel: +353 76 624 4711 Eoin Veale Catriona Hickey tel: +353 76 624 1873 tel: +353 76 624 9051 • Chief Executive, Markets and Treasury Sean Crowe tel: +353 76 623 4720 • Capital Management Lorraine Smyth [email protected] [email protected] [email protected] [email protected] [email protected] Alan Elliott Alan McNamara Wholesale Funding Redmond O'Leary Deirdre Ceannt tel: +353 76 624 8409 tel: +353 76 624 4371 tel: +353 76 624 8725 tel: +353 76 624 4198 tel: +353 76 624 4219 Investor Relations website www.bankofireland.com/investor [email protected] [email protected] [email protected] [email protected] [email protected] 2019 Interim Results Credit Presentation Bank of Ireland 58#60Empty