#122 20 20 2020 Interim Results Announcement 30 June 2020 Bank of Ireland#2Empty#3Group CEO Francesca McDonagh Bank of Ireland 2020 Interim Results Bank of Ireland 3#4Empty#5H1 2020 Summary Bank of Ireland 2020 Interim Results Total income reduced 13%; lower business income and valuation item movements H1 Performance Asset Quality Transformation Capital €669m Underlying loss before tax €937m IFRS 9 impairment charge 3% Reduction in costs 13.6% Fully loaded CET1 ratio • • • Stable net interest income; NIM of 2.02% Strong cost discipline continues; costs reduced by further 3% vs. H1 2019 Net lending growth €0.2bn including €1.3bn of revolving credit facilities; Irish mortgage market share increased to 25% Impairment charge of €937m, of which 60% relates to performing Stage 1 and Stage 2 loans; prudent and comprehensive approach Increased NPE ratio 5.8%; credit migration in Q2 and implementation of new Definition of Default regulatory framework Proven track record of working with customers to find sustainable solutions; diversified balance sheet across portfolios and geographies Cost reduction in each of past five reporting periods; 10% lower vs. H2 2017 Launched new mobile app; strong progress against key milestones Further Wealth and Insurance digital platforms launched Impairment on intangible software assets €136m Strong capital position; fully loaded CET1 ratio 13.6%, regulatory CET1 ratio 14.9% Pre-impairment organic capital generation of 45bps Completed €675m AT1 transaction in Q2 Bank of Ireland 5#6Supporting our customers during COVID-19 Customers Relationship Net Promoter Score (NPS) improved by 10 points from end 2019; reflecting actions taken to support customers Over 100k payment breaks approved for personal and business customers in Ireland and the UK Residential development lending fund increased by €0.4bn to €2bn to support homebuilding Additional €1bn in funding for green mortgages and loans launched through the Bank of Ireland Sustainable Finance Fund to support a green recovery Issued over 50% of all business loans under the government COVID-19 Working Capital Loan Scheme since launch Over £0.2bn of approved new lending to businesses in the UK through government guarantee schemes Ready to support €2bn Irish Credit Guarantee Scheme 1 Total approved initial 3 month payment breaks as at 24 July 2020 2 Includes retail business banking property exposures 3 Based upon 3 month expiration / responses from c.75% of Irish customers at 24 July 2020 4 Based upon 3 month expiration / responses from c.54% of UK customers at 24 July 2020 Bank of Ireland 2020 Interim Results Payment Breaks Ireland' No. of accounts Exposure Mortgages Consumer SME² Total 21k €3.1bn 8k €0.1bn 13k €2.8bn 42k €6.0bn % of accounts % of portfolio UK1 11% 4% 11% 9% 13% 6% 30% 18% Mortgages Consumer SME² Total No. of accounts Exposure % of accounts 23k €3.3bn 14% 32k €0.4bn €0.4bn 8k 63k €4.1bn 10% 16% 11% % of portfolio 15% 12% 15% 15% 105k / €10.1bn initial 3 month payment breaks approved in Ireland (€6.0bn) and the UK (€4.1bn) Proactively contacting customers with options at the end of initial 3 month payment break; of those customers contacted: - - In Ireland, c.54% of mortgage accounts and c.62% of SME accounts have availed of a 3 month payment break extension with remainder resuming capital and interest payments³ In the UK, c.33% of mortgage accounts and less than 10% of consumer accounts have availed of a 3 month payment break extension with remainder resuming capital and interest payments4 Bank of Ireland 6#7. Enabling our colleagues and communities to thrive Colleagues Colleague engagement up 8 points since Q4 2019 to a high of 70%, surpassing the Global Financial Services benchmark for Engagement for the first time 87% of colleagues believe that the Group is quickly adapting to the changing ways of doing business; new ways of working established for H2 2020 Launched Family Carers Ireland 'Caring Employers' Programme Allowance scheme for colleagues working in front line and on site locations was extended to July 2020 Colleague supports include mental and physical wellbeing app, 24/7 health support line, and COVID-19 communications hub Over 119k learning courses completed by colleagues in H1 2020 Bank of Ireland 2020 Interim Results Communities Proactive and regular engagement with Irish Government and state bodies to support re-boot of Irish economy Customers' view that Bank of Ireland 'cares about community' is a key driver of improvement in relationship NPS to June 2020 ESG progress reflected in improved Sustainalytics ESG Risk Rating from 29.3 to 22.4 Fast tracking of payments to more than 1,000 SME suppliers nationwide extended for the remainder of 2020 Donated €1m in emergency funding for communities with urgent needs Launched €3m Begin Together campaign to improve financial, physical and mental wellbeing 'Best Bank in Ireland' Euromoney Awards for Excellence 2020 Bank of Ireland 7#8Economic activity has increased but uncertainties remain Bank of Ireland 2020 Interim Results 5.0% 5.6% 2019a Ireland 13.5% (7.0%) 2020f GDP1 Unemployment² 8.2% 6.0% • • 2021f UK 7.0% 5.8% 3.8% 1.5% 2019a (9.5%) 2020f GDP1 Unemployment² 6.7% 2021f • • Significant contraction in our core markets March - May 2020, but high frequency data points to an improving environment in Q2 2020 Reopening of the Irish economy accelerated during Q2 €7.4bn additional fiscal stimulus announced in July to provide further support towards economic recovery Irish government's response now c.€24bn / c.11% of GNI* Claimants of Pandemic Unemployment Payment down to 48% of peak; supportive of continued recovery in H2 2020 Consumer spending, investment and exports will make positive contribution to Irish GDP growth in 2021 Alert to risks such as a potential second wave and on-going Brexit uncertainties Sources: Forecasts (July 2020) by Bank of Ireland Economic Research Unit; CSO; Department of Finance; Department of Employment Affairs and Social Protection; Department of Taoiseach; ONS Bank of Ireland 1 Annual real growth 2 Annual average rate 8#9High frequency Irish data show improving trends 650,000- Number of Pandemic Unemployment Payment recipients; 52% below peak Bank of Ireland 2020 Interim Results BOI Economic Pulse reflects the gradual reopening of Ireland's economy 110- 100- 550,000- 90- 80- 450,000- 70 60- 350,000- 50- 40- 250,000 30- 07-Apr 05-May 02-Jun 30-Jun 28-Jul Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Aggregate credit and debit card spend¹ (Єm) is now broadly in-line with the pre-COVID level Housing sentiment tracking higher 1,600 120- 1,500- 100- 1,400- 1,300- 80- 1,200 60- 1,100- 1,000- 40- 900- 800 20- 07-Mar 03-Apr 30-Apr 27-May 23-Jun 20-Jul Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Sources: Dept. of Employment Affairs & Social Protection; Bank of Ireland Economic Pulse; Bank of Ireland Housing Pulse; Central Bank of Ireland 1 Card spend data are presented on a 7 day moving sum basis Bank of Ireland 9#10Increasing trend to digital engagement accelerating Longer term trend of decline in over-the-counter branch transactions and services (61%) Mobile app now accounts for over 60% of digital traffic Bank of Ireland 2020 Interim Results >65% of high volume product applications fulfilled digitally (28%) Branch ATM E H1 2018 H1 2019 E H1 2020 (38%) +7% +5% 36% 39% 65% 47% 64% 61% 53% Cheque H1 2018 H1 2019 35% 4% 20% 30% 34% 96% 80% 66% 70% 100% + + H1 2020 ROI ROI ROI Current Deposits Credit accounts cards ROI UK Personal Deposits Personal loans loans UK Mobile app traffic Non-app digital traffic <10% branch transactions are completed over-the-counter 1 Active digital users: customer has logged in during the past 90 days 1.2m active digital users¹ representing c.70% of the current account base Over 20m visits per month to digital channels Digitised Assisted New current account origination journey launched H1 2020; fully digitised 100% Cloud service including biometrics Bank of Ireland 10#11Transformation delivering customer and cost benefits • Key milestones delivered New mobile app deployment; +19 point improvement in mobile app Customer Effort Score since launch Enhanced verification capability using embedded third party API technologies New card payment technology including migration of 2m customers New relationship management tools (Life Goals, Financial Wellbeing) Committed milestones on roadmap Fully digitised mortgage application process (Q3 2020) New digitised small business lending proposition (Q4 2020) Digital payments for mobile app (Q4 2020) Refreshed 'Pay to Mobile' peer-to- peer payment service (Q4 2020) >85% of day-to-day product journeys digitised (Q1 2021) Card control features for mobile and online customers (Q1 2021) Bank of Ireland 2020 Interim Results Delivering market leading digital platforms in Wealth and Insurance Favourable Irish demographics, growing pension demand, increased deposit base and strength of our franchise provide significant opportunity Group Pensions Launch of MyPension365; first customers on- boarded in H1 2020 Full digitisation and automation of end- to-end processes for advisers and employers 90% reduction in on- boarding times from 10 weeks to 5 days Customers able to manage personal pension in real-time using mobile, tablet or desktop Forecast growth in defined contribution assets of c.8%¹ per annum 1 Thinking Ahead Institute research Global Pension Assets Survey 2020 . • • • Digital Wealth and Insurance Advice Platforms Roll-out of digital advice platform commenced Allows end to end digital sale and fulfilment; all sales to be migrated onto platform in H2 2020 Digital Insurance Wallet launched in Dec 2019 providing customers with choice of provider, quick, easy purchase of general insurance Self-service for product adjustments and efficient renewal Portal and o broker, adviser connectivity Launch of Broker portal provides secure access point for external and internal advisors Allows customers to access self-service options and policy information Enables seamless, digital, end-to-end fulfilment experience for brokers and customers 41% of insurance sales through digital wallet in H1 2020 Bank of Ireland 11#12Capturing all tactical and strategic opportunities to further reduce our cost base Consistent Costs reduced by 10% vs. H2 2017 Costs have reduced during each of the past five reporting periods €964m Broad-based Cost reduction broad based across staff and non-staff costs since 2017 Bank of Ireland 2020 Interim Results Efficient €262m in gross cost savings since FY 2017 created capacity to absorb investment in our people and infrastructure €933m (5%) Change €919m demand/ €903m €882m €872m (13%) efficiencies €26m €67m Sourcing strategically €156m Simplifying the organisation H217 H118 H218 H119 H219 H120 Staff Non-staff Ways of Working €13m €1.9bn €1.9bn €1.85bn €1.79bn Future focus <€1.65bn • • • 2021 costs now expected to be below previous guidance of €1.65bn Review underway to further reduce costs beyond 2021: Continued investment in digital capabilities Simplifying and automating customer journeys Additional investment in business model restructuring Enhanced property footprint, supported by modern and agile ways of working Guidance update to be provided at FY 2020 2017 2018 2019 2020 2021 Beyond 2021 Bank of Ireland 12#13Strategic progress in Retail UK business with further restructuring required Retail UK £258m £239m (£16m) (£6m) £1m (£155m) (£147m) (£136m) (£12m) (£31m) (£250m) • . H1 20181 H1 2019 H1 2020 Net interest income £250m Other income Costs Impairment JV income £15m £14m • £1m Underlying profit/(loss) £90m £80m Cost income ratio Loan book 64% £24.2bn 60% £24.8bn £24.5bn (£145m) 57% • Deposits ₤19.0bn £19.2bn £19.5bn 1 Excludes credit cards, exited 2019 Bank of Ireland 2020 Interim Results Net interest income: back book deleveraging, lower base rates and mortgage competition impacting NII; partial offset from actions taken on pricing of deposits and new lending Other income: commission mix enhanced; income increased £7m vs. H1 2019 Costs: 7% cost reduction in H1 2020; 23% reduction since 2017 Asset quality: Increased impairments from deteriorating macro-economic outlook; historic loan losses favourable to industry average JV income: no. 1 travel business (FRES) in UK; 2020 income impacted by COVID-19 and reduced travel Loan book: improving loan book mix; bespoke mortgage growth and legacy portfolio 30% lower Strategic imperative to improve returns Protracted difficult market conditions necessitate further restructuring of our retail businesses in UK. A multi-year restructuring programme now commenced: GB Retail restructuring A smaller balance sheet and higher margin business: Run-down of lower margin and less profitable mortgages over time (UK mortgage loan book £19.6bn) Grow bespoke mortgage business; c.150 brokers / £320m of new lending since launch Leverage expertise in travel money and car finance Smaller balance sheet will enable further funding cost reductions Material reduction in cost base from smaller scale, efficiency and operating model Northern Ireland Retail • Strategic review recently commenced to assess options impacting: £2.5bn of consumer, mortgage and business loans Northern Ireland - £5.0bn of deposit and current accounts c.200k consumer and business customers GB Bank of Ireland 13#14Empty#15Group CFO Myles O'Grady Bank of Ireland 2020 Interim Results Bank of Ireland 15#16H1 2020 Financial Summary • Underlying loss before tax €669m • Total income 13% lower; net interest income stable • Strong cost discipline; costs reduced by 3% • IFRS 9 impairment charge €937m • • • Bank of Ireland 2020 Interim Results Net lending growth €0.2bn including €1.3bn of revolving credit facilities Pre-impairment organic capital generation 45bps Strong capital position; fully loaded CET1 capital ratio 13.6%, regulatory ratio 14.9% Bank of Ireland 16#17H1 2020 Financials H1 2019 H1 2020 (€m) (€m) Net interest income 1,069 1,079 Business income 311 266 Additional gains, valuation and other items 31 Total income 1,411 Operating expenses (123) 1,222 (903) (872) Levies and Regulatory charges (73) (70) Impairment of goodwill (9) Operating profit pre-impairment 435 271 Net Impairment gains /(charges) (79) (937) Share of associates/JVs 20 (3) Underlying profit/(loss) before tax 376 (669) Non-core items (61) (153) Profit before tax 315 (822) • H1 2019 H1 2020 (€m) (€m) Net interest margin (NIM) Cost income ratio¹ Underlying earnings per share 2.16% 2.02% 65% 66% 25.2c (58.8c) 1 See slide 53 for calculation Bank of Ireland 2020 Interim Results Underlying loss before tax €669m Total income 13% lower; net interest income stable Business income 14% lower from reduced economic activity Falling equity markets and widening credit spreads impacting Wealth and Insurance valuations 3% reduction in operating expenses Net impairment charge €937m reflects: IFRS 9 macro-economic outlook and model update €432m Management adjustment related to payment breaks €184m Actual loan loss experience €321m Non-core items include charges associated with: Impairment of intangible asset €136m Restructuring costs €27m Bank of Ireland 17#18Stable net interest income €1,069m 285bps (17bps) Net interest income¹ / NIM €1,081m 280bps (21bps) H1 2019 H2 2019 H1 2020 Loan asset spread² Liquid asset spread² 2.14% (6bps) NIM movement (4bps) (2bps) Bank of Ireland 2020 Interim Results €1,079m 278bps (24bps) Stable net interest income / NIM 2.02% Net interest income benefitting from loan book growth since 2017 and reduced liability costs offsetting lower structural hedge income and UK competitive pressures NIM 2.02% is 12bps lower than FY 2019 reflecting: - - Growth in liquid assets Impact of low rate environment on structural hedge Competitive pressure in the UK mortgage market Strong commercial pricing discipline Q2 exit NIM 1.97% Outlook . FY 2020 NIM to be c.1.95% primarily reflecting: - Lower new lending volumes Growth in liquid assets Impact of low rate environment on structural hedge Net interest income in 2020 to be c.5% lower than 2019 2.02% FY 2019 Liquid asset growth Structural hedge UK competitive pressures H1 2020 1 Excludes IFRS income classifications which are included in NIM calculation 2 Spread Loan asset yield or Liquid asset (excl. NAMA bonds) yield less Group's average cost of funds Bank of Ireland 18#19Net lending growth of €0.2bn Group loan book movement €5.8bn €1.3bn (€6.9bn) (€0.9bn) (€2.1bn) Total €0.2bn net lending €79.5bn €76.7bn Dec 19 New RCF Redemptions Impairment FX/ Other Loan book Lending activity Jun 20 Loan book New lending² and redemptions by quarter €3.2bn €3.9bn €3.3bn Bank of Ireland 2020 Interim Results 19 19 Net lending growth of €0.2bn in H1 2020 . • • • New lending €5.8bn decreased by 19% vs. H1 20191: - - Retail Ireland new lending €2.3bn, (14%) vs. H1 2019 Retail UK new lending €2.4bn, (18%) vs. H1 2019 Corporate new lending €1.1bn, (30%) vs. H1 2019 Redemptions 7% higher vs. H1 2019 due to higher Corporate redemptions in Q1 2020 RCF drawdown by Corporate customers in H1 2020 of €1.3bn Maintaining commercial discipline on risk and pricing Reduced lending and economic activity in Q2 2020 • Q2 2020 new lending 2 48% lower than Q2 2019 Redemptions 7% lower than Q2 2019 Irish mortgage applications 28% lower in Q2 2020 vs. Q2 2019 Q2 2020 UK mortgage applications 32% lower than prior year Outlook Improving outlook and government measures supportive 2020 gross new lending volumes expected to be c.70% of 2019 volumes €3.1bn • €3.8bn €3.8bn €3.8bn 48% • €1.3bn €1.5bn €1.5bn €2.0bn €1.1bn €0.8bn €1.0bn €0.8bn €0.3bn . €1.3bn Q1 19 €1.4bn Q1 20 €1.4bn €0.9bn • Q2 19 Q2 20 ■Retail Ireland Corporate Retail UK Redemptions 1 On a constant currency basis 2 Excluding revolving credit facilities Bank of Ireland#2020 20 Lower business income from reduced economic activity Wealth and Insurance Retail Ireland Bank of Ireland 2020 Interim Results 14% decrease in business income • 16% decrease in Wealth and Insurance: New business sales (APE) decreased by 21% vs. H1 2019 Decrease in existing book income due to COVID-19 impact on returns and experience vs. 2019 Retail Ireland 20% lower vs. H1 2019: H1 2019 (€m) H1 2020 (€m) 119 100 129 103 Retail UK (11) 2 Corporate and Treasury 77 67 Group Centre and other (3) (6) Business Income 311 266 - Additional Gains 3 2 IFRS income classifications¹ 10 (16) Valuation and other items 18 (109) Other Income 342 143 Business income by quarter €152m €144m €167m 32% • - Reduced economic activity driving lower current account income Decrease in FX income from reduced travel Q2 card transactions 9% lower than Q1 2020 Retail UK €13m increase due to lower commissions paid Corporate and Treasury income impacted by lower FX income Valuation and other items (€109m) • €114m • Falling equity markets and widening credit spreads relating to unit linked assets and bond portfolio valuations in Wealth and Insurance (€90m) Financial instruments valuation adjustments and other items (€19m) Outlook Q1 19 Q1 20 Q2 19 Q2 20 • Increased economic activity and accelerated reopening 2020 business income to be 20%-30% lower than 2019 1 IFRS income classifications include c.€6m of interest income in H1 2020 on 'Life loan mortgage products' which on transition to IFRS 9 were mandatorily classified as FVTPL, with all income on such loans reported in 'net other income'. IFRS income classifications are fully offset in net interest income Bank of Ireland#2121 21 Strong cost discipline - €31m / 3% reduction €903m Cost Movement Bank of Ireland 2020 Interim Results Strong cost discipline - €31m / 3% reduction • (€47m) . €4m €12m €872m H1 2019 Cost initiatives COVID-19 costs Other costs H1 2020 • €31m / 3% net reduction after absorbing wage inflation of 2.6% Gross cost savings €47m: - Process efficiencies, organisational design and sourcing strategically (€21m) Change demand reduction and efficiencies driving lower levels of investment spend and value for money savings (€26m) COVID-19 costs €12m, incremental expenditure managing response to the pandemic Non-core items • €136m charge included in non-core related to impairment of intangible assets: Charge incurred on software assets, as no longer expected to provide future economic benefits No impact on capital ratios €27m of charges related to business model restructuring H1 2019 Non-core items (€m) H1 2020 (€m) Impairment on intangible assets (136) - Customer redress programme (62) (7) - Tracker Mortgage Examination (55) (7) - Other programme (7) Cost of restructuring programme (27) (27) • Investment return on treasury stock held 1 17 • for policyholders Other 27 Total non-core items (61) (153) Outlook 2020 costs to be lower than 2019 2021 costs to be below previous guidance of €1.65bn Bank of Ireland#22222 H1 2020 impairment charge €937m - prudent and comprehensive approach H1 2020 • • IFRS 9 models macro-economic update €432m Updated IFRS 9 models incorporating impact of Forward Looking Information (FLI) from latest macro- economic outlook Central scenario¹ assumes a deep downturn, gradual recovery and an orderly Brexit Reduced weighting towards upside scenario Will reflect mitigating impacts of government support schemes Payment breaks Bank of Ireland 2020 Interim Results €184m Management adjustment to reflect increased risk related to: Estimated rates of migration from payment breaks to forbearance / arrears Assessment of mortgages, consumer loans, higher impacted sectors at risk from COVID-19 impact Actual loan loss experience €321m Actual loan loss experience on Stage 3 loans: - Property and construction €179m, includes €166m related to legacy investment property exposures Non-property SME and corporate €115m Mortgage and consumer portfolios €27m - - 2020 Outlook • A change in the macro- economic outlook would lead to a change in IFRS 9 expected credit loss H1 2020 impairment charge incorporates risk of credit migration of customers on payment breaks Actual loss experience in H2 will reflect timing of loan migration to Stage 3 and final payment break outcomes While uncertainties remain, subject to no further deterioration in the economic environment or outlook, 2020 impairment charge expected to be in a range of c.€1.1bn to €1.3bn 1 See slide 44 for 2020-2024 macro-economic assumptions used in IFRS 9 models Bank of Ireland#23Impairment coverage increased to 2.7% Net impairment charge €77m €76m €37m €25m €6m Mortgages (ROI) Mortgages (UK) €365m corporate €246m €24m €124m (€11m) Property and construction Consumer Non-property SME and - H1 2019 I H1 2020 Impairment loss allowance (ILA) by portfolio Dec-19 Jun-20 ILA % of ILA % of ILA ILA gross gross (€m) (€m) loans loans Mortgages ROI 369 1.6% 448 2.0% Mortgages UK 63 0.3% 133 0.6% Non-property SME and 487 2.4% 818 4.0% corporate Property and construction 230 2.8% 455 5.6% Consumer 159 2.8% 268 5.1% Total 1,308 1.6% 2,122 2.7% Stage 1 impairment coverage 0.2% 0.7% Stage 2 impairment coverage 3.4% 3.4% 31.5% 29.4% Bank of Ireland 2020 Interim Results Impairment coverage increased to 2.7% • • Net impairment charge €888m1 / 222bps (H1 2019: 21bps) on loans and advances to customers Increased impairment charge driven by: - - Change in macro-economic outlook due to COVID-19 Estimated future credit migration related to payment breaks Actual loan loss experience (€0.3bn) primarily in corporate and property portfolios, including €0.2bn on legacy property exposures 60% of impairment charge recognised on performing Stage 1 and Stage 2 loans ILA increased by €0.8bn to €2.1bn since Dec 2019, €0.5bn of increase on performing Stage 1 and Stage 2 loans Group impairment coverage increased from 1.6% to 2.7% at June 2020 Stage 3 impairment coverage 1 Net impairment charge €888m on loans and advances to customers, net impairment charge on other financial instruments €49m, total net impairment charge €937m Bank of Ireland 23#24Macro-economic outlook increasing Stage 2 balances 1.6% €80.5bn €0.1bn €3.1bn €5.6bn €71.8bn Dec 19 Gross loans by stage €78.5bn €0.1bn €4.4bn €11.3bn €62.7bn Jun 20 Stage 1 Stage 2 Stage 3 POCI ILA movement 2.7% Bank of Ireland 2020 Interim Results Macro-economic outlook increasing Stage 2 loans €5.7bn increase in Stage 2 loans since Dec 2019 reflecting deteriorated macro-economic outlook: • - Non-property SME and corporate portfolio Stage 2 loans increased €3.7bn Property and construction Stage 2 loans increased €1.9bn Stage 3 loans of €4.4bn, increase of €1.3bn since Dec 2019: €0.9bn increase from implementation of new Definition of Default; remainder from credit migration in corporate and property portfolios ILA increased by €0.8bn to €2.1bn since Dec 2019: - €0.5bn increase on performing loan books €0.3bn increase in Stage 3 ILA from credit migration in Non-property SME and corporate and Property and construction portfolios €1,308m €337m €477m €2,122m Dec 19 Stage 1/2 Stage 31 Jun 20 ILA % of gross loans 1 Includes Purchased Other Credit Impaired (POCI) Bank of Ireland 24#25Residential mortgages Gross loans by stage 0.9% €432m €46.3bn €1.7bn €1.7bn €42.9bn Dec 19 Residential mortgages Bank of Ireland 2020 Interim Results €44.3bn • Mortgage portfolios 57% of Group loan book €2.2bn • €1.7bn €40.4bn ROI mortgage portfolio €22.9bn at June 2020: - Average LTV of 60% on stock - 81% of the portfolio has LTV <80% ■Stage 1 Stage 2 Stage 3 ILA movement UK mortgage €21.5bn at June 2020: - Average LTV of 62% on stock Jun 20 1.3% €55m €94m €581m • 82% of the portfolio has LTV <80% Implementation of new Definition of Default regulatory framework driving increase in stage 3 loans €149m impairment loss allowance increase largely on performing loans including management adjustment relating to payment breaks Impairment coverage increased from 0.9% to 1.3% at June 2020 Dec 19 Stage 1/2 Stage 3 Jun 20 ILA % of gross loans Bank of Ireland 25#26Non-property SME and corporate €20.4bn €0.8bn €2.2bn Gross loans by stage €20.7bn €1.1bn • 2.4% €487m €17.5bn Dec 19 €5.9bn €13.7bn ■Stage 1 Stage 2 Stage 3 Jun 20 ILA movement €91m €240m Dec 19 Stage 1/2 4.0% €818m Stage 3 Jun 20 ●ILA % of gross loans Bank of Ireland 2020 Interim Results . Non-property SME and corporate Non-property SME and corporate portfolio well diversified by geography and sector Predominantly secured portfolios; government measures providing additional support €3.7bn increase in Stage 2 loans since Dec 2019 reflecting macro-economic outlook on higher impacted sectors: - Wholesale and retail trade Stage 2 loans increased by €0.3bn to €0.6bn Accommodation and food service activities Stage 2 loans increased by €0.7bn to €0.9bn Acquisition Finance Stage 2 loans increased by €1.0bn to €1.3bn Increased impairment coverage across higher impacted sectors and portfolios: - Wholesale and retail trade exposures €2.5bn, impairment coverage 5.0% (3.3% Dec 2019) Accommodation and food service activities exposures €1.7bn, impairment coverage 3.3% (1.6% Dec 2019) • - Acquisition Finance exposures €4.8bn, impairment coverage 3.5% (1.4% Dec 2019) €240m / 73% of increase in ILA related to performing Stage 1 and Stage 2 loans Impairment coverage increased from 2.4% to 4.0% at Jun 2020 26 26 Bank of Ireland#27Property and construction Gross loans by stage 2.8% €230m €8.1bn €0.6bn €1.5bn €6.0bn Dec 19 Stage 1 Stage 2 Stage 3 ILA movement €46m Dec 19 Stage 1/2 €179m Bank of Ireland 2020 Interim Results €8.2bn • €1.1bn €3.4bn €3.7bn Jun 20 5.6% €455m • Property and construction 10% of Group loan book; €7.4bn Investment Property; €0.8bn Development lending >40% Investment property exposures in Dublin; 30% UK exposures Investment Property exposures largely Retail (37%), Office (33%), Residential (19%) and Other (11%); 75% of the book LTV <70% Development lending portfolio comprises exposures to active development sites Deterioration in macro-economic outlook driving stage migration including forecast decrease in commercial property prices Legacy investment property exposures driving €179m increase in Stage 3 ILA Impairment coverage increased from 2.8% to 5.6% at June 2020 Stage 3 Jun 20 ●ILA % of gross loans 27 27 Bank of Ireland#28Consumer €5.7bn Gross loans by stage 2.8% €159m €0.1bn €0.2bn €5.4bn Dec 19 ■Stage 1 Stage 2 Stage 3 ILA movement €12m €97m Dec 19 Stage 1/2 • €5.3bn €0.1bp €0.3bn €4.9bn Jun 20 5.1% €268m Bank of Ireland 2020 Interim Results Consumer • • • • 7% of Group loan book; exit of UK Credit Cards in 2019 €2.0bn Ireland consumer exposure; €0.8bn motor, €0.8bn consumer loans. €0.4bn credit cards €3.3bn UK consumer exposure; €2.1bn motor, €1.2bn consumer loans €109m impairment loss allowance increase largely on performing loans including management adjustment relating to payment breaks Impairment coverage increased from 2.8% to 5.1% at June 2020 Stage 3 Jun 20 Bank of Ireland ILA % of gross loans 28#29NPE ratio increase to 5.8% 6.3% 4.4% €5.0bn €3.5bn NPE movements €0.5bn €0.6bn 5.8% • €4.6bn Dec 18 Dec 19 Inflows Definition of Default Jun 20 Mortgages (ROI) Non-property SME ⚫ NPE ratio NPEs by portfolio €1.5bn €1.6bn €0.9bn and corporate €1.1bn Property and €0.6bn construction €1.1bn Mortgages (UK) €0.5bn €0.6bn Consumer €0.1bn (ROI & UK) €0.1bn Dec 19 Jun 20 1 See slide 45 Bank of Ireland 2020 Interim Results Non-performing exposures • • NPE ratio increased by 140bps to 5.8% €0.6bn inflows primarily from credit migration in Non-property SME and corporate, and Property and construction portfolios Implementation of new Definition of Default regulatory framework increased NPEs by €0.5bn No NPE transactions completed in H1 2020 due to market conditions Group NPE coverage ratio increased by 10% to 47% at Jun 2020 Jun 20 Coverage Ratio . 29% 73% 42% 21% Outlook Proven track record of working with customers to implement sustainable solutions; significantly below industry average for arrears management¹ NPE transactions dependent on market conditions 29 29 Bank of Ireland#30Strong capital position 40bps (65bps) RWAS €49.9bn 45bps 13.8% Fully loaded CET1 ratio Impairment EL offset (190bps) 90bps RWA reduction 35bps Net impact (65bps) Bank of Ireland 2020 Interim Results (15bps) (15bps) (60bps) 40bps 10bps RWAS €47.6bn (20bps) Regulatory capital demand 13.6% Dec 19 Pre-impairment organic capital generation¹ 2019 Dividend Credit deterioration Loan Growth/ RWA² Transformation investment Definition of Default / IRB models SME supporting factor Other / Pension Jun 20 Headroom to 2020 CET1 regulatory capital requirements 2020 Regulatory Requirements (excl. P2G) 13.6% Jun-20 Fully Loaded CET1 Ratio 9.27% 14.9% Jun-20 Regulatory CET1 Ratio c.560bps headroom Strong capital position • Fully loaded CET1 ratio +10bps since Q1 2020 Regulatory CET1 ratio +50bps since Q1 2020 2% reduction in RWA density Outlook 2020 regulatory CET1 ratio to remain above 13.5% • No dividend deduction assumed for 2020 1 Pre-impairment organic capital generation primarily consists of attributable profit excluding impairment and movements in regulatory deductions 2 Loan Growth / RWA movements from net loan growth, changes in asset quality and book mix and movements in other RWAS Bank of Ireland 30#31Outlook Profitability Asset Quality • • • 2020 gross new lending volumes expected to be c.70% of 2019 volumes Net interest income in 2020 to be c.5% lower than 2019 2020 business income to be 20%-30% lower than 2019 Costs will continue to reduce: - 2020 costs to be lower than 2019 2021 costs to be below previous guidance of €1.65bn While we expect economic recovery commencing in H2 2020, COVID-19 and Brexit are ongoing uncertainties Subject to no further deterioration in the economic environment or outlook, 2020 impairment charge expected to be in a range of c.€1.1bn to €1.3bn Bank of Ireland 2020 Interim Results Capital • 2020 regulatory CET1 ratio to remain above 13.5% No dividend deduction assumed for 2020 Longer term impacts of COVID-19 on the economy and the Group's financial performance remain uncertain, our medium term targets should therefore no longer be considered current in these circumstances Bank of Ireland 31#32Summary and conclusion Bank of Ireland 2020 Interim Results Trading outlook While uncertainties remain, accelerated economic activity is supporting improved outlook for 2020 lending and income vs. Q1 outlook Capital Strong capital position with fully loaded CET1 ratio of 13.6%, regulatory CET1 ratio 14.9% Asset quality Proven track record, over a sustained period, of working with customers to find sustainable solutions Transformation Efficiency UK retail Multi-year programme delivery against milestones; delivering agile, digitised solutions for customers and creating cost efficiencies All tactical and strategic opportunities being captured to further reduce our cost base; 2021 costs to be below previous guidance of €1.65bn Further restructuring required to improve returns; strategic review of Northern Ireland retail business recently commenced Bank of Ireland 32 32#33Empty#34Appendix Bank of Ireland 2020 Interim Results Bank of Ireland 34#35• Appendix BOI overview - customer loans / new lending volumes • ROI mortgage loan book Income Statement Net interest income analysis Structural hedge Interest rate sensitivity Asset Quality - Non-performing exposures by portfolio Portfolio by stage Non-property SME and corporate by stage Forward Looking Information - macro-economic scenarios - ROI Mortgages UK customer loans Ordinary shareholders' equity and TNAV Capital Capital and liquidity - CET1 ratios - Regulatory capital requirements Risk weighted assets Transformation investment / operating expenses Cost income ratio: Jun 2020 Defined Benefit Pension Schemes Forward-Looking statement Contact details Bank of Ireland 2020 Interim Results Slide No. 36 37 38 39 40 41 42 43 4 2 2 2 2 2 ± 47 46 44 45 48 49 50 51 52 53 55 SSSSSSS 54 56 Bank of Ireland 35#36BOI Overview Composition (Jun 20) Mortgages Non-property SME and corporate SME Corporate Property and construction Investment Development Consumer Customer loans (gross) Geographic (%) €2.7bn Retail Ireland Profile of customer loans¹ at Jun 20 (Gross) Bank of Ireland 2020 Interim Results ROI UK RoW Total Total (€bn) (€bn) (€bn) (€bn) (%) 22.9 21.4 0.0 44.4 57% 10.8 5.1 4.7 20.6 26% 7.1 1.6 0.0 8.7 11% 3.7 3.5 4.7 11.9 15% 5.3 1.9 1.0 8.2 10% 4.7 1.7 1.0 7.4 9% 0.6 0.2 0.0 0.8 1% 2.0 3.3 0.0 5.3 7% 41.1 31.7 5.7 78.5 100% 53% 40% 7% 100% Gross new lending volumes £2.5bn €2.3bn Retail UK Corporate Banking €2.1bn €1.0bn £2.1bn €0.9bn £1.3bn €0.6bn €0.3bn £1.2bn €0.2bn €0.5bn €1.1bn² €0.6bn €0.7bn €1.5bn €1.2bn £1.1bn £0.1bn £0.7bn £0.2bn €0.2bn H1 2019 H1 2020 H1 2019 €0.4bn H1 2019 €0.3bn €0.1on H1 2020 ■Mortgages Consumer 1 Based on geographic location of customer 2 Excludes revolving credit facilities Business Banking Property H1 2020 Corporate Ireland Acquisition Finance Corporate UK Bank of Ireland 36#37ROI Mortgages: €22.9bn New Lending volumes and Market Share 23% €1.0bn 24% €1.3bn €23.7bn 25% €9.5bn €0.9bn H1 2019 H2 2019 New Lending Volumes H1 2020 Market Share Bank of Ireland 2020 Interim Results ROI Mortgages (gross) €23.0bn €22.9bn €11.1bn €11.6bn €4.4bn €3.2bn €3.0bn €9.8bn €8.7bn €8.3bn Dec 18 Dec 19 Jun 20 Tracker Variable Rates Fixed Rates 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.94% of our new lending in H1 2020, up from c.30% in 2014 Distribution strategy - continued expansion into broker channel • Establishing a large network of active brokers at a national level; brokers accounted for 30% of the market in H1 2020 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 1 Average customer pay rate of 111bps less Group average cost of funds of 39bps LTV profile • • Average LTV of 60% on mortgage stock at Jun 2020 (Dec 19: 59%) Average LTV of 76% on new mortgages in H1 2020 (2019: 74%) Tracker mortgages • €7.9bn or 95% of trackers at Jun 2020 are on a capital and interest repayment basis 82% of trackers are Owner Occupier mortgages; 18% of trackers are Buy to Let mortgages Loan asset spread on ECB tracker mortgages was c.72bps in H1 2020 Bank of Ireland 37#38Income Statement Net interest income analysis Bank of Ireland 2020 Interim Results H2 2018 H1 2019 Average Gross Gross Volumes Interest Rate (€bn) (€m) (%) Average Gross Volumes Interest (€bn) (€m) Gross Rate (%) H2 2019 Average Gross Gross Volumes Interest Rate (€bn) (€m) (%) H1 2020 Average Gross Volumes Interest Gross Rate (€bn) (€m) (%) Ireland Loans¹ 34.4 595 3.43% 34.2 582 3.43% 33.7 583 3.43% 33.4 561 3.38% UK Loans 27.6 391 2.82% 27.5 377 2.76% 28.0 375 2.66% 28.5 356 2.52% C&T 14.6 294 3.98% 15.8 314 3.99% 16.8 330 3.90% 17.4 324 3.74% Total Loans and Advances to Customers 76.6 1,280 3.31% 77.5 1,273 3.31% 78.5 1,288 3.26% 79.3 1,241 3.15% Liquid Assets 22.7 38 0.33% 22.9 33 0.29% 23.9 30 0.25% 26.6 16 0.12% NAMA Sub Debt 0.1 2 5.24% 0.1 2 5.40% 0.1 2 5.26% 0.0 1 5.22% Total Liquid Assets 22.8 40 0.35% 23.0 35 0.31% Total Interest Earning Assets 99.4 1,320 2.63% 100.5 1,308 Ireland Deposits 20.7 (8) (0.08%) 20.7 (7) Credit Balances² 32.8 3 0.02% 34.5 3 UK Deposits C&T Deposits 18.6 (88) (0.94%) 18.3 (91) 2.62% (0.07%) 21.0 0.02% (1.00%) 24.0 102.5 32 0.27% 26.6 17 0.13% 1,320 2.56% 105.9 1,258 2.36% (5) (0.05%) 21.3 (2) (0.02%) 36.6 6 4.9 (9) (0.37%) 5.1 (9) (0.35%) Total Deposits 77.0 (102) (0.26%) 78.6 (104) (0.27%) Wholesale Funding³ 11.0 (52) (0.94%) 10.3 (54) (1.06%) 18.6 5.0 81.2 9.9 (103) 0.03% (1.09%) 18.7 39.6 8 0.04% (90) (0.97%) (9) (0.34%) 4.7 (4) (0.16%) (111) (0.27%) 84.2 (88) (0.21%) (62) (1.24%) 9.7 (55) (1.13%) Subordinated Liabilities 2.1 (51) Total Interest Bearing Liabilities 90.1 (205) (4.86%) (0.45%) 90.9 2.0 (49) (4.85%) 1.5 (41) (5.44%) 1.5 (34) (4.61%) (207) (0.46%) 92.6 (214) (0.46%) 95.4 (177) (0.37%) Other4 (30) (22) Net Interest Margin as reported 99.4 1,085 Average ECB Base rate 2.17% 0.00% 100.5 1,079 2.16% 102.5 (18) 1,088 (18) 0.00% 2.11% 0.00% 105.9 1,063 2.02% 0.00% Average 3 month Euribor (0.32%) (0.31%) (0.40%) (0.31%) Average BOE Base rate Average 3 month LIBOR 0.70% 0.82% 0.75% 0.75% 0.36% 0.84% 0.78% 0.35% 1 Includes average interest earning assets of c.€0.3bn in 2020 carried at FVTPL with associated FY20 interest income of c.€6m 2 Credit balances in H1 2020: ROI €31.1bn, UK €3.8bn, C&T €4.7bn 3 Includes impact of credit risk transfer transactions executed in Dec 2016, Nov 2017 and Dec 2019 4 Includes IFRS 16 lease expense, interest on certain FVPTL items and adjustments that are of a non-recurring nature such as customer termination fees and EIR adjustments Bank of Ireland 38#39Structural Hedge Interest income on structural hedge¹ Average structural hedge volume 1.5% 1.0% 0.5%- 0.0% -0.5% + €32.7bn €85m Overview Bank of Ireland 2020 Interim Results • €35.8bn Structural hedging is used to help mitigate volatility in earnings from interest rate movements €68m €51m €34m €34m H1 2019 EUR GBP EUR structural hedge €34m H1 2020 Income from structural hedging has supported interest income as market rates have declined Average structural hedge volume in H1 2020 of €35.8bn (EUR 84%, GBP 16%): c.75% of equity and credit balances hedged Weighted average life of hedges is c.3.5 years c.15% of existing hedges are re-hedged annually Hedging of incremental growth in credit balances paused in H1 2020 Interest income of €68m from structural hedge in H1 2020; c.6% of Group's net interest income (c.8% in 2019) Impact of lower interest rate environment incorporated in net interest income and NIM 2020 guidance Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jun-20 - EUR structural hedge yield External EUR 7yr swap rate 1 Gross interest income from fixed leg of hedging swap 51bps Bank of Ireland 39#40Interest Rate Sensitivity Bank of Ireland 2020 Interim Results 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 The above sensitivities are based on certain simplifying assumptions such as: Dec 19 (€m) Jun 20 (Єm) c.210 c.250 (c.250) (c.270) 40 40 the assumption of a static balance sheet by size and composition; . assets and liabilities whose pricing is mechanically linked to market / central bank rates are assumed to reprice accordingly; and the sensitivities should not be considered a forecast of future performance in these rate scenarios as they do not capture potential management action in response to unexpected changes in the interest rate environment. Bank of Ireland#41Non-performing exposures by portfolio Bank of Ireland 2020 Interim Results Advances Non-performing Non-performing Impairment Composition (Jun 20) (€bn) exposures (€bn) exposures as % of advances loss allowance Impairment loss allowance as % of (€bn) non-performing exposures Residential Mortgages 44.4 2.2 5.0% 0.6 26% - Republic of Ireland 22.9 1.6 6.9% 0.4 29% - UK 21.4 0.6 3.0% 0.1 21% Non-property SME and corporate 20.7 1.1 5.4% 0.8 73% - Republic of Ireland SME 7.1 0.6 9.1% 0.4 66% - UK SME 1.7 0.1 6.8% 0.1 57% - Corporate 11.9 0.4 3.1% 0.3 89% Property and construction 8.2 1.1 13.3% 0.5 42% - Investment 7.4 1.1 14.4% 0.4 39% - Development 0.8 0.0 4.0% 0.0 118% Consumer 5.3 0.1 2.4% 0.3 208% Total loans and advances to customers 78.5 4.6 5.8% 2.1 47% Non-performing Advances Composition (Dec 19) (€bn) exposures (€bn) Non-performing exposures as % of advances Residential Mortgages 46.3 1.9 - Republic of Ireland 23.0 1.5 - UK 23.2 0.5 Non-property SME and corporate 20.4 0.9 - Republic of Ireland SME 7.3 0.5 - UK SME 1.7 0.1 - Corporate 11.4 0.2 Property and construction 8.1 0.6 - Investment 7.2 0.6 - Development 0.9 0.0 25525-2669 4.2% Impairment loss allowance (€bn) 0.4 Impairment loss allowance as % of non-performing exposures 22% 6.3% 0.4 25% 2.1% 0.1 13% 4.3% 0.5 55% 7.5% 0.3 54% 6.3% 0.0 46% 2.0% 0.1 60% 7.3% 0.2 39% 7.7% 0.2 37% 3.8% 0.0 64% Consumer 5.7 0.1 1.7% 0.2 159% Total loans and advances to customers 80.5 3.5 4.4% 1.3 37% Bank of Ireland 41#4242 42 Portfolio by stage Composition (Jun 20) Bank of Ireland 2020 Interim Results Gross carrying amount Impairment loss allowance ILA % (before impairment loss allowance) Sectoral analysis by stage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI 2 Total of gross loans Residential Mortgages - Republic of Ireland €m 40,435 1,680 20,106 1,209 1,565 €m €m €m €m €m €m €m €m €m 2,199 3 44,317 105 41 435 581 1.3% 3 22,883 50 22 376 448 2.0% - UK 20,329 471 634 21,434 55 19 59 133 0.6% Non-property SME and corporate 13,686 5,899 1,047 27 20,659 154 220 437 7 818 4.0% - Republic of Ireland SME 5,344 1,128 636 7,108 108 68 251 427 6.0% - UK SME 1,074 497 106 1 1,678 6 22 37 65 3.9% - Corporate - Investment - Development 7,268 4,274 305 26 11,873 40 130 149 326 2.7% Property and construction 3,684 3,426 1,027 60 8,197 12 82 345 16 455 5.6% 3,470 2,834 993 60 7,357 214 592 34 840 Consumer 4,905 265 128 5,298 - Motor Lending UK 1,954 83 22 2,059 - Loans UK 1,216 41 36 1,293 - Motor Lending ROI 767 21 788 - Loans ROI 600 107 33 740 - Credit Cards ROI 368 34 16 418 Total 62,710 11,270 4,401 90 78,471 1-5266272 11 58 330 16 415 5.6% 24 15 40 4.8% 42 75 268 5.1% 13 8 10 31 1.5% 17 30 153 11.8% 8 14 1.8% 19 10 18 47 6.4% 7 9 23 5.5% 385 1,292 23 2,122 2.7% Composition (Dec 19) Gross carrying amount (before impairment loss allowance) Impairment loss allowance ILA % Sectoral analysis by stage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total of gross loans €m €m €m €m €m €m €m €m €m €m Residential Mortgages 42,898 1,677 1,693 3 46,271 16 36 380 432 0.9% - Republic of Ireland 20,610 1,133 1,289 3 23,035 7 22 340 369 1.6% - UK 22,288 544 404 - 23,236 9 14 40 63 0.3% Non-property SME and corporate 17,474 2,175 757 27 20,433 56 78 353 487 2.4% - Republic of Ireland SME 5,799 1,011 495 7,305 33 39 225 297 4.1% - UK SME 1,382 225 78 2 1,687 3 8 38 49 2.9% - Corporate Property and construction - Investment - Development Consumer 10,293 939 184 25 11,441 20 31 90 141 1.2% 5,985 1,513 549 65 8,112 6 42 5,418 1,251 519 65 7,253 5 40 567 262 30 859 1 5,421 206 100 5,727 64 - Motor Lending UK 2,147 58 21 2,226 6 - Loans UK 1,232 40 24 1,296 42 - Motor Lending ROI 821 14 835 3 - Loans ROI 681 74 30 785 9 - Credit Cards ROI 540 34 11 585 4 Total 71,778 5,571 3,099 95 80,543 142 22223-1668 180 230 2.8% 162 209 2.9% 18 21 2.4% 63 159 2.8% 10 19 0.9% 17 21 80 6.2% 6 9 1.1% 19 34 4.3% 7 17 2.9% 976 2 1,308 1.6% Bank of Ireland#43Non-property SME and corporate by stage 1,2 Composition (Jun 20) Sectoral analysis by stage Non-property SME and corporate - Manufacturing - Wholesale and retail trade - Administrative and support service activities Bank of Ireland 2020 Interim Results Gross carrying amount Impairment loss allowance ILA % (before impairment loss allowance) Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 €m €m €m €m €m €m €m Stage 3 POCI €m of gross Total loans €m €m 3,013 1,305 117 4,435 1,723 569 147 1 2,440 1,705 562 95 26 2,388 - Accommodation and food service activities 783 889 105 1,777 - Agriculture, forestry and fishing 1,347 202 119 1,668 - Human health services and social work activities 766 620 68 1,454 - Transport and storage 675 367 71 1,113 - Other services - Arts, entertainment and recreation. - Financial and insurance activities - Real estate activities - Education - Other sectors Total Composition (Dec 19) Sectoral analysis by stage Non-property SME and corporate - Manufacturing - Wholesale and retail trade - Administrative and support service activities 615 221 145 981 - Professional, scientific and technical activities 462 176 14 652 308 306 31 645 535 51 24 610 397 118 73 588 374 71 1 446 983 442 37 1,462 222277656240389 46 21 17 12 14 17 9 11 10 13,686 5,899 1,047 27 20,659 154 227824452 12 9 18 15 4233224561823 79 29 TINTI 115 2.6% 123 5.0% 100 4.2% 59 3.3% 55 3.3% 87 6.0% 63 5.7% 55 69 7.0% 19 2.9% 11 31 4.8% 14 2.3% 42 7.1% - 7 1.6% 11 34 2.3% 7 818 4.0% Gross carrying amount (before impairment loss allowance) Impairment loss allowance ILA % Stage 1 Stage 2 Stage 3 POCI Total €m €m €m €m €m Stage 1 €m Stage 2 Stage 3 POCI Total of gross loans €m €m €m €m 3,963 356 99 2,031 327 129 1,987 142 - Agriculture, forestry and fishing 1,523 127 - Accommodation and food service activities 1,476 193 - Human health services and social work activities 1,018 414 - Transport and storage 902 137 - Other services 778 98 - Financial and insurance activities 662 14 - Professional, scientific and technical activities 597 67 - Real estate activities 435 90 - Arts, entertainment and recreation 364 62 - Education 426 8 - Electricity, gas, steam and air conditioning supply 363 38 - Other sectors 949 102 226220422202-32 1 4,418 2,488 67 25 2,221 94 1 1,745 49 1,718 1,462 08773 4 10 11 10 15 1,085 3 999 19 695 1 9 673 2 585 3 18 444 1 435 1 404 1 10 1,061 3 HUS56USTIMSMINS 41 29 16216527 62 1.4% 63 81 3.3% 39 51 2.3% 41 2.3% 19 28 1.6% 41 2.8% 34 42 3.9% 60 6.0% 7 1.0% 10 1.5% 35 6.0% 11 2.5% 1 2 0.5% 2 4 1.0% 2 7 12 1.1% Total 17,474 2,175 757 27 20,433 56 78 353 487 2.4% 1 The Non-property SME and corporate portfolio is analysed by NACE code. The NACE code classification system is a pan-European classification system that groups organisations according to their business activities. Bank of Ireland 2 Exposures to NACE codes totaling less than €400 million are grouped together as 'Other sectors'. The NACE codes reported in the table above can therefore differ period on period. 43 43#44Forward Looking Information - macro-economic scenarios Bank of Ireland 2020 Interim Results 30 June 2020 Downside -30% scenario probability weighting GDP growth¹ GNP growth¹ Unemployment rate² 2020 Republic of Ireland 2021 United Kingdom 2022-2024 2020 2021 2022-2024 (12.0%) 5.7% 2.5% (13.0%) 7.9% 1.6% (14.0%) 6.9% 2.1% n/a n/a n/a 14.8% 10.9% 7.5% 9.5% 7.9% 6.3% Residential property price growth³ (10.0%) (5.0%) (0.7%) (10.0%) (5.0%) (0.7%) Commercial property price growth³ (14.0%) (9.0%) (0.3%) (15.0%) (9.0%) (0.3%) Central -50% scenario probability weighting GDP growth¹ (8.3%) 6.1% 2.7% (9.3%) 8.8% 1.8% GNP growth¹ (11.6%) 7.3% 2.3% n/a n/a n/a Unemployment rate² 13.0% 8.2% 4.8% 7.3% 6.0% 4.5% Residential property price growth³ (10.0%) (1.0%) 1.0% (10.0%) (2.0%) 1.0% Commercial property price growth³ (14.0%) (2.0%) 0.7% (15.0%) (3.0%) 1.0% Upside - 20% scenario probability weighting GDP growth¹ (5.0%) 8.5% 2.9% (6.0%) 10.7% 2.2% GNP growth¹ (7.0%) 9.7% 2.5% n/a n/a n/a Unemployment rate² 9.8% 6.2% 4.5% 6.3% 4.2% 4.0% Residential property price growth³ (7.0%) 1.0% 1.7% (7.0%) (1.0%) 2.0% Commercial property price growth³ (10.5%) 0.0% 1.8% (11.5%) (0.5%) 1.8% 1 Annual growth rate 2 Average yearly rate 3 Year-end figures Bank of Ireland 44#45ROI Mortgages Continued proactive arrears management >90 days arrears¹ Industry Average Industry Average 15.7% Bank of Ireland Bank of Ireland 6.5% 3.8% 1.9% Owner Occupier Owner Occupier Buy to let Buy to let >720 days arrears¹ Industry Average Industry Average 12.1% Bank of Ireland Bank of Ireland 4.3% 1.0% 2.1% Owner Occupier Owner Occupier Buy to let Buy to let 1 As at March 2020, based on number of accounts, industry average excluding BOI Bank of Ireland 2020 Interim Results >90 days arrears . Bank of Ireland is significantly below the industry average for both Owner Occupier (29% of industry average) and Buy to Let (24% of industry average) >720 days arrears • Bank of Ireland is significantly below the industry average for both Owner Occupier (23% of industry average) and Buy to Let (17% of industry average) 45 45 Bank of Ireland#4646 46 UK Customer Loans £29.1bn (€31.7bn) Scotland £1.2bn ■Rest of England £9.1bn UK Mortgages - £19.6bn South East £2.0bn Wales £0.8bn Greater London £3.3bn Northern Ireland £1.1bn Outer Metropolitan £2.1bn Other UK Customer Loans - £9.5bn £0.1bn £3.1bn £0.1bn £0.5bn £1.3bn SME Corporate £0.1bn £3.0bn £1.0bn £0.2bn Land & Development Consumer Investment Property Performing loans Non-performing exposures UK Mortgages Analysis - £19.6bn • . . Bank of Ireland 2020 Interim Results Total UK mortgages of £19.6bn; (NPES: 3.1%): Average LTV of 62% on existing stock at Jun 2020 (Dec 19: 63%) Average LTV of 71% on new UK mortgages in H1 2020 (2019: 73%) 68% of the current mortgage portfolio originated since January 2010 are standard owner occupier mortgages BTL book is well seasoned with 62% of these mortgages originated prior to January 2010 Average balance of Greater London mortgages is c.£194k, with 91% of Greater London mortgages having an indexed LTV <70% Other UK Customer Loans Analysis - £9.5bn Non-performing exposures of £0.8bn with strong coverage ratios Performing loans of £8.7bn: SME: broad sectoral diversification with low concentration risk Corporate: specialist lending teams in Acquisition Finance and Corporate lending through a focused sector strategy Investment Property: primarily retail, office and residential sectors Consumer (£3.1bn): Northridge (£1.9bn): Asset backed motor finance business; net loan book stable in H1 2020; mid-market targeting prime business only; below industry arrears and loan losses Personal loan volumes (£1.2bn): net loan book increase of £0.1bn in H1 2020 Bank of Ireland#47Ordinary shareholders' equity and TNAV Bank of Ireland 2020 Interim Results Movement in ordinary shareholders' equity Ordinary shareholders' equity at beginning of period 2019 (€m) H1 2020 (€m) 9,243 9,625 Movements: Profit attributable to shareholders 448 (726) Dividend paid to ordinary shareholders (173) Distribution on other equity instruments - additional tier 1 coupon (net of tax) Re-measurement of the net defined benefit pension liability (31) 39 562 Debt instruments at FVOCI reserve movements 26 (40) Cash flow hedge reserve movement (5) 11 Foreign exchange movements Other movements Ordinary shareholders' equity at end of period Tangible net asset value 132 (168) (85) (2) 9,625 9,231 2019 Jun 20 (€m) (€m) Ordinary shareholders' equity at the end of period 9,625 9,231 Adjustments: Intangible assets and goodwill (838) (720) Own stock held for benefit of life assurance policyholders 30 35 Tangible net asset value (TNAV) 8,817 8,546 Number of ordinary shares in issue at the end of the period excluding treasury shares TNAV per share (€) 1,074 1,072 €8.21 €7.97 Bank of Ireland 47#48Capital and liquidity Bank of Ireland 2020 Interim Results 48 48 Funding and liquidity remains strong from stable customer deposits and MREL issuance Customer deposits: €86.5bn Growth of €2.5bn principally due to higher current account credit balances predominantly from the impact of COVID-19 restrictions and lower consumer spending Wholesale funding: €9.5bn • AT1 and senior debt issuance of c.€0.75bn during H1 2020 MREL ratio of 24.4% based on RWA at Jun 2020 Leverage Ratio Fully Loaded Leverage Ratio: 6.3% Regulatory Leverage Ratio: 6.8% Tangible Net Asset Value TNAV decreased to €7.97 Liquidity Dec 2019 Jun 2020 (€bn) (€bn) Customer loans Liquid assets Other assets Total assets 79 77 27 29 26 26 132 132 Customer deposits 84 87 Wholesale funding 11 10 10 Shareholders' equity 10 9 • Other liabilities 27 26 Total liabilities 132 132 TNAV per share Closing EUR/GBP FX rates €8.21 €7.97 • 0.85 0.91 Dec 2019 Jun 2020 Liquidity Coverage Ratio 138% 149% Net Stable Funding Ratio 131% 135% Loan to Deposit Ratio 95% 89% Bank of Ireland#49Capital - strong fully loaded and regulatory CET1 ratios Bank of Ireland 2020 Interim Results Capital ratios - Jun 2020 Total equity Less Additional Tier 1 Deferred tax Intangible assets and goodwill Foreseeable dividend Expected loss deduction Pension Fund Asset IFRS 9 Regulatory Addback Other items 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 49 49 Regulatory ratio Fully loaded ratio (€bn) (€bn) 9.9 10.0 (0.7) (0.7) (0.7) (1.2) (0.6) (0.6) (0.3) (0.2) (0.6) (0.6) 0.4 (0.2) (0.3) 7.1 6.5 41.8 41.5 4.4 4.4 1.7 1.7 47.9 47.6 14.9% 13.6% 18.7% 17.4% 6.8% 6.3% • Deferred tax assets - certain DTAs are deducted at a rate of 60% for 2020, increasing annually at a rate of 10% thereafter until 2024 IFRS 92 - the Group has elected to apply the transitional arrangement. The transitional arrangement allows a 100% add-back in 2020 and 2021, decreasing to 75%, 50%, and 25% in subsequent years 1 Deferred tax assets due to temporary differences are included in other RWA with a 250% risk weighting applied 2 The IFRS 9 addback to the Regulatory CET1 was c.70bps at 30 Jun 2020, increased from c.15bps at 31 Dec 2019 Bank of Ireland#50Regulatory Capital Requirements Bank of Ireland 2020 Interim Results Pro forma CET1 Regulatory Capital Requirements 2019 2020 2021 Pillar 1 CET1 4.50% 4.50% 4.50% Pillar 2 Requirement (P2R) 2.25% 1.27% 1.27% Capital Conservation Buffer (CCB) 2.50% 2.50% 2.50% ROI Countercyclical buffer (CCyB) UK Countercyclical buffer (CCYB) O-SII Buffer (phase in July each year) Systemic Risk Buffer - Ireland Pro forma Minimum CET1 Regulatory Requirements Pillar 2 Guidance (P2G) 0.60% 0.00% 0.00% 0.30% 0.00% 0.00% 0.50% 1.00% 1.50% 10.65% 9.27% 9.77% Not disclosed in line with regulatory preference Regulatory Capital Requirements The Group's 2020 regulatory CET1 requirement, excluding P2G, has reduced by 218bps, from 11.45% to 9.27%: - Pillar 2 Requirement (P2R): ECB announced change in composition of P2R of 2.25%, which reduced the Group's CET1 P2R by 98bps to 1.27% Countercyclical Buffer (CCYB): the Financial Policy Committee UK (FPC) and the Central Bank of Ireland reduced the UK and ROI CCуB rates to 0% until at least Q1 2022, which reduced the Group's CCyB by c.120bps CET1 headroom of c.560bps to Dec 2020 regulatory capital requirements of 9.27% Regulatory total capital ratio of 18.7% provides headroom of c.495bps above total capital requirement of 14.75% pending further AT1 / Tier 2 issuance to meet increased Tier 1 / Tier 2 requirements following P2R composition change Bank of Ireland 50#51Risk Weighted Assets (RWAs) / Leverage Ratio Customer lending average credit risk weights - Jun 20201.2 (Based on regulatory exposure class) Bank of Ireland 2020 Interim Results EBA Transparency Exercise 2019 Country by Country Average IRB risk weights Residential Mortgages - Jun 2019 EAD³ RWA (€bn) (€bn) Avg. Risk Weight Sweden 4.2% Belgium 10.1% United Kingdom 10.2% ROI Mortgages 23.4 6.4 27% Austria 10.7% UK Mortgages 22.0 4.1 19% France 10.9% Netherlands 11.0% SME 17.0 11.7 69% Germany 14.3% Spain 14.4% Corporate 10.5 10.3 98% Denmark 14.6% Other Retail 5.9 4.2 71% Finland 15.8% Portugal 18.0% Italy 18.9% Customer lending credit risk 78.8 36.7 47% Norway 20.9% Ireland 35.0% . IRB approach accounts for: - - 67% of credit EAD (Dec 19: 69%) 72% of credit RWA (Dec 19: 73%) Regulatory RWA has decreased from €50.1bn at Dec 2019 to €47.9bn at Jun 2020. The decrease is primarily due to net loan book growth being more than offset by application of revised SME supporting factor rules, reduction in RWA due to changes in asset quality and mix and FX movements Leverage Ratio • Fully Loaded Leverage Ratio: 6.3% • Regulatory Leverage Ratio: 6.8% EBA Risk Dashboard Q2 2019 Country by Country Average Leverage ratio Regulatory Leverage Ratio - Jun 2019 Sweden 4.4% Germany 4.5% Netherlands 4.6% Denmark 4.6% United Kingdom 5.1% France 5.1% Spain 5.6% Finland 5.6% Italy 5.8% Belgium 6.2% Norway 7.0% Austria 7.0% Portugal 7.6% Ireland 10.1% 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 2019) 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 51#5252 62 Transformation Investment / Operating expenses Transformation Investment: €1.4bn (2016-2021) Average of €275m p.a. €306m €263m €195m €105m Transformation Investment • • Bank of Ireland 2020 Interim Results Average annual investment of €275m from 2018-2021; equates to CET1 capital of c.50-60bps Investment of €109m in H1 2020 split across the income statement (26%), balance sheet (49%) and non-core items (25%) Total transformation investment of €1.4bn 2016-2021 unchanged 2016 2017 2018 2019 2020 2021 H1 2019 H1 2020 Operating Expenses Total staff costs - Staff costs (€m) (€m) 414 425 350 361 - Pension costs 64 64 Other costs 277 288 Depreciation 149 131 Operating Expenses 840 844 Transformation Investment charge 63 28 Operating Expenses (before levies and 903 872 regulatory charges) Levies and Regulatory charges 73 70 Total Operating Expenses 976 942 Average staff numbers 10,368 10,383 Cost income ratio¹ 65% 66% Bank of Ireland 1 See slide 53 for additional detail#53Cost income ratio: Jun 2020 Headline vs. Adjusted Net interest income Other income Bank of Ireland 2020 Interim Results H1 2020 Headline (€m) 1,079 Pro forma adjustments (€m) H1 2020 Pro forma (€m) 1,079 - Business income 266 266 - Additional gains 2 (2) - Other valuation items¹ (125) 109 (16) Total Income 1,222 107 1,329 Costs - Operating expenses 844 - Transformation Investment 28 Costs Cost income ratio 872 71% • Cost income ratio excludes: - - Levies and Regulatory charges Non-core items 1 Excludes IFRS income classifications which is fully offset in net interest income • 844 28 872 66% H1 2020 adjusted cost income ratio is adjusted for: Additional gains and valuation items¹ €107m Bank of Ireland 53#54Defined Benefit Pension Schemes Group IAS19 Defined Benefit Pension (Deficit) / Surplus 1.60% 2.10% 2.00% Bank of Ireland 2020 Interim Results Total Group Defined Benefit Pension Scheme Assets (%) €7.1bn €7.2bn €7.2bn €8.4bn €8.5bn 1.45% 1.30% €0.53bn 58% 55% 65% 65% 68% (€0.23bn) (€0.14bn) (€0.48bn) 17% 21% 23% 23% 21% 25% 24% 12% 12% 11% Dec 17 Dec 18 Dec 19 Jun 20 Jun 16 Dec 17 Dec 18 Dec 19 Jun 20 ■IAS19 DB Pension (Deficit) / Surplus EUR Discount Rate Diversified assets Credit / LDI / Hedging (€1.19bn) Jun 16 €313m IAS19 Pension Deficit Sensitivities (Jun 2016 / Dec 2017 / Dec 2018 / Dec 2019 / Jun 2020) €181m €173m €162m €153m €166m €118m €102m €109m €33m Interest Rates¹ Credit Spreads² €122m €128m €71m €90m €102m €118m €28m €28m €38m €19m Inflation³ Global Equity4 1 Sensitivity of Group deficit to a 0.25% decrease in interest rates 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 • . • Listed equities 'Diversified assets includes infrastructure, private equity, hedge funds and property IAS19 Pension surplus of €0.53bn at Jun 2020 (€0.14bn deficit Dec 2019). Schemes in deficit €0.18bn, schemes in surplus €0.71bn Discount rates increased from year end - a significant fall in risk free interest rates was more than offset by a rise in credit spreads The interest rate hedging in the investment portfolios largely compensated for the impact of the reduction in risk free rates, and widening credit spreads resulted in an overall improvement in the balance sheet position Long term inflation assumptions have also decreased in the period with the reduction in liabilities partially offset by the reduction in inflation hedging assets De-risking strategies in recent years have also reduced the schemes' sensitivity to global equity movements. Listed equity asset holdings have been reduced in favour of increases in Diversified assets and Credit / LDI / Hedging allocations Bank of Ireland 54#55Forward-Looking statement Bank of Ireland 2020 Interim Results 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 the 6 months ended 30 June 2020 beginning on page 28 and also the discussion on risk in the Group's Annual Report for the year ended 31 December 2019. 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 55#56Contact Details For further information please contact: Group Chief Financial Officer Myles O'Grady Investor Relations Darach O'Leary tel: +353 76 624 3291 tel: +353 76 624 4711 Eoin Veale tel: +353 76 624 1873 Philip O'Sullivan tel: +353 76 623 5328 tel: +353 76 624 9051 Catriona Hickey Capital Management Lorraine Smyth Alan Elliott Alan McNamara tel: +353 76 624 8409 tel: +353 76 624 4371 tel: +353 76 624 8725 Group Communications Damien Garvey tel: +353 76 624 6716 Investor Relations website www.bankofireland.com/investor [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Bank of Ireland 2020 Interim Results Bank of Ireland 56#57Empty#58Empty#59Empty#60Empty