#120 22 21 2021 Debt Investor Presentation 30 June 2021 Bank of Ireland#2Bank of Ireland Overview Bank of Ireland 2021 Interim Results - Debt Investor Presentation Bank of Ireland 2#3Strong performance in H1 2021 H1 2021 Performance €465m Underlying profit before tax • • Asset Quality 5.5% NPE ratio Transformation 4% Reduction in costs Capital 15.3% Regulatory CET1 ratio . Bank of Ireland 2021 Interim Results - Debt Investor Presentation Operating profit pre-impairment +72% vs H1 2020 Total income +14%; higher net interest income, business income and valuation items Strong UK performance; operating contribution +52% on higher margins and lower cost Impairment charge of €1m reflecting improved economic outlook and minimal loan loss experience NPE ratio reduced to 5.5%, supported by €0.3bn Irish mortgage securitisation 99% of payment breaks now concluded with minimal impact on asset quality • 7th straight reporting period of sustainable cost reductions . • End-to-End customer journey programme delivering c.€60m in annualised cost savings Ongoing progress in systems transformation with digital fulfilment now at 75% • Strong capital position; Fully Loaded CET1 ratio 14.1% . Pre-impairment organic capital generation of 90bps H1 2021 vs 45bps H1 2020 Sufficient capital to execute proposed inorganic KBC and Davy opportunities Bank of Ireland 3#4Customers, Colleagues and Communities remain at the core of our strategy Serving Customers €1bn in new Irish mortgage lending Net Promoter Score improved+3pts y/y to -3 Bank of Ireland 2021 Interim Results - Debt Investor Presentation Enabling Colleagues IBCB² Colleague Survey People in BOI get things done for the customer Supporting Communities Sustainable lending fund +250% by 2024 €5bn €4m Begin Together programme (T) Brand consideration¹ +4pts y/y to 21% 99% of payment breaks concluded • • Net Promoter Score rebounded strongly in April (+11pts during the month, from -12 to -1) following March branch closure announcement Financial wellbeing campaign sees 138% increase in financial health checks Euromoney "Best Bank in Ireland" award for second consecutive year 1 Behaviours and Attitudes survey conducted for Bank of Ireland Group 53% 75% 2018 2021 Trust in senior leaders has increased by 14 points since 2018, and 82% trust their direct manager Market leading focus on colleague mental wellbeing during lockdown Developing skills and new ways of working with 130 new specialist in-house digital engineering roles and new hybrid working model 2 Irish Banking Culture Board is an independent industry initiative aimed at restoring trust in the sector €1.25bn Green Bond issuance in H1 2021 c.33% of Irish secondary schools participated in Money Smarts Challenge Industry leadership on provision of enhanced services to asylum seekers in Ireland; dedicated hub with access offered in 19 languages More than €1bn of Green Loans allocated to home owners and businesses Led launch of 'Employers for Change' Diversity & Inclusivity initiative, including dedicated training for all staff Bank of Ireland 4#5Irish economic data supports improved outlook Economic & Housing Pulse indices above pre-pandemic levels Bank of Ireland 2021 Interim Results - Debt Investor Presentation 120 100- 80 60 20 40 20 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Economic Housing 650,000- 550,000- 450,000- Pandemic Unemployment Payment (PUP) recipients; 68% below peak 350,000- 250,000- 150,000 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 5 Economic sentiment rebounds as economy reopens; housing market sentiment particularly strong . • • • . Bank of Ireland Economic Pulse at 89.3 in July, ahead of its pre-pandemic level of 86.4 in Feb 2020 While the ongoing reopening has lifted business sentiment, Pulse data show that costs are now rising for three in five firms House prices rose by +5.5% y/y in May, the fastest pace of growth in over two years, underpinned by the mismatch between supply and demand Pulse data shows 4 in 5 households expect further house price gains over the coming year The number of recipients of the Irish government's PUP has reduced for 24 successive weeks (to late-July) as the economy reopens Pent-up demand and elevated savings fuelling increased consumer spending; volume of retail sales in June was 13.4% above the same month in 2019 Consumer spending expected to recover further as restrictions around activity continue to ease Pulse data shows a third of households expect their financial situation to improve in the next 12 months Sources: Bank of Ireland Economic Pulse; Department of Social Protection 1 The Bank of Ireland Economic Pulse is based on a series of monthly surveys of households and firms in Ireland which cover a wide range of topics including the economy, their financial situation, spending plans, house price expectations, business activity and hiring intentions. Bank of Ireland#6Strong outlook as economic activity broadens 20.8% 5.9% Ireland 11.0% 6.5% 9.0% 6.2% 2020a 2021f ■GDP1 Unemployment² UK 2022f 5.2% 5.2% 4.6% 6.8% 5.8% (9.8%) Bank of Ireland 2021 Interim Results - Debt Investor Presentation Outlook for Irish economy continues to improve . • • Recovery continued in H1 2021 multinational sector leading recovery (GDP +10.7% y/y in Q1 2021) domestic economy expected to perform strongly in H2 2021 supported by growth of €18.5bn (+16.4%) in household deposits since the onset of the pandemic Irish government fiscal supports, equivalent to 22.7% of GNI*3 will continue to provide important breathing room over the coming months Irish unemployment rate projected to reduce in 2021 and 2022 New housing commencements (25,501 in the 12 months to May 2021) are now in-line with pre-pandemic levels, having troughed at 17,708 in the 12 months to Mar 2021 While there have been some challenges following last December's deal on Brexit, we see indications that most businesses are increasingly adjusting to the new trading arrangements Ireland vaccination rollout amongst the most successful in EU. c.85% of adults have received at least one dose, with c.70% now fully vaccinated 2020a 2021f GDP¹ Unemployment² 2022f Sources: Forecasts (July 2021) by Bank of Ireland Economic Research Unit; CSO; ECDC; Central Bank of Ireland; ONS; Department of Finance; Department of Housing, Local Government and Heritage 1 Annual real growth ² Q4 rate for both Ireland and UK; Ireland unemployment is the COVID-adjusted rate as calculated by the CSO 3 GNI*, or Modified Gross National Income, is an indicator designed to exclude globalisation effects that are disproportionally impacting the measurement of the size of the Irish economy Bank of Ireland 6#713% reduction in cost base since 2017 Consistent progress Costs reduced by €127m vs. H2 2017, net of wage inflation and transformation investment Costs have reduced during each of the past seven reporting periods . Bank of Ireland 2021 Interim Results - Debt Investor Presentation Broad based cost reduction 11% reduction in FTEs since Jun 2020 Headcount reductions will underpin cost savings from other initiatives including branch closures, property and End-to-End 2018 H1 2021 FTE reduction Shift to digital-led savings Previous focus on business model changes will now shift to digital-led simplification of customer journeys and internal processes 2017- H1 2021 gross cost savings €964m €872m €848m €837m 10.4k 10.4k 10.3k 9.8k 9.2k 11% reduction Strategic Sourcing €109m Simplifying the Organisation €155m €65m H2 17 H1 20 Digitalisation H2 20 H1 21 Dec 18 Dec 19 Jun 20 Dec 20 Jun 21 €1.9bn 2023 cost target supported by existing momentum and fresh initiatives >20% reduction €1.5bn €1.9bn €1.72bn <€1.65bn €1.5bn 2017 2020 2021 2023 • 2021 costs of < €1.65bn • 2023 costs of €1.5bn; sustainable cost reduction enabled by strategic decisions - Completion of successful voluntary redundancy scheme Simplified and digitised customer journeys supported by End-to-End Restructured UK business Reduced property footprint, supported by new ways of working New branch strategy including closures and reformatting Bank of Ireland 7#8Strategic progress with significant improvement in UK performance in H1 Retail UK Net interest income Other income H1 2019 H1 2020 £250m H1 2021 £239m £268m Costs (excl. intangibles) Operating profit Impairment JV income £14m Underlying profit/(loss) Cost income ratio Loan book Deposits NIM (£6m) £1m (£1m) (£147m) (£136m) (£121m) £97m £96m¹ £146m (£31m) (£242m) (£2m) £1m (£5m) £80m (£145m) £139m 60% 56% 45% £24.8bn £24.5bn £23.6bn £19.2bn £19.5bn £16.9bn 1.81% 1.66% 1.95% • Increase in Bespoke mortgage lending mix and margin 1.84% 0.98% 0.67% 3% 8% 21% • 97% 92% 79% Bank of Ireland 2021 Interim Results - Debt Investor Presentation 52% improvement in operating profit in H1 2021 vs H1 2020 • 12% increase in net interest income 11% reduction in costs Significantly reduced impairment charge Travel restrictions continue to impact retail FX JV income Lower lending balances (reduction of £0.9bn vs £24.5bn Dec 2020), in line with strategy of lower volume, higher margin balance sheet Reduction in deposits (£1.4bn lower vs £18.3bn Dec 2020) supporting margin performance (c.11bps improvement in deposit margins in H1 2021 vs H2 2020) Strategic actions to further improve returns Growth in Bespoke² as a proportion of new mortgage lending, with increased margins Bespoke new lending of £259m in H1 2021 (up 170% vs H1 2020); now represents 21% of total new mortgage lending (vs 8% H1 2020) Bespoke has lower LTV (72% H1 2021) than standardised (80%) Progress on cost initiatives including: Northern Ireland branch closures commenced in June >300 FTE (c.21%) leaving in 2021 under redundancy programme Building blocks to increase UK returns remain: - - Higher new lending margins - - a focus on value versus volume Reduced funding costs H119 H1 20 H1 21 Bespoke Margin ■Non-Bespoke Bespoke 1 Includes £8m goodwill intangible write-off 2 Bespoke is a personalised and flexible underwriting service for good quality more complex cases Lower operating costs Smaller balance sheet Bank of Ireland 8#9Wealth & Insurance delivering organic growth 37% of Group Business Income 35% Bank channel penetration (34% H1 2020) Bank of Ireland 2021 Interim Results - Debt Investor Presentation Rebound in performance in H1 2021, but remains impacted by restrictions • Operating profit grew 27% in H1 2021 vs H1 2020 c.€14bn Excess deposits held by HNW/ Affluent customer cohort Ireland's only universal bancassurer • Market leading positions in Life & • • • . Pensions and savings In-house product manufacturing and distribution platforms Over 600k customers and €21.2bn in AUM Irish household net worth at a record €855bn and Irish wealth market AUM expected to grow at 6% • Positive investment market performance of €22m • New premium sales increased 34% to €186m . Cost base improved 1% to €69m > €21bn • AUM (+17% y/y) . . Continuing to gather wealth assets through deposits and investment products, AUM +17% y/y Market share in single premium investment segment steady at c.33% Embedded value €994m; 10% increase since Dec 2020 Delivering on opportunities identified Deposit opportunity continues to grow; low risk investment product sales c.€0.5bn H1 2021 (+83% y/y) Digital platforms provide ability to scale - Broker portal: 68% of new individual pensions applications via digital Growth drivers in W&I . Building out wealth opportunity via existing relationships with HNW and affluent • • - Wealth advice platform: 6,000 . registrations, 60% digital STP and sign up time -66% Digital insurance wallet: generating c.40% of all general insurance policies customers Further growth in Life, Pensions & Investments activity (bulk deals +50% y/y in H1 2021) Increasing penetration of general insurance customer market, with c.85k home and motor policies already in place Wealth growth strategy supported by Davy acquisition¹ 1 Subject to regulatory and competition authority approvals Bank of Ireland 9#10• • • • • • . Strategy supported by two significant acquisition opportunities DAVY J&E Davy ("Davy") Agreement reached in July on acquisition of wealth management and capital markets businesses Davy founded in 1926; Ireland's market leading provider of mass affluent and high net worth wealth advisory and capital markets services Market leader in wealth management in Ireland with over €16bn AUM, including Davy Select, one of Ireland's leading investment platforms for self-directed investing Leading corporate advisory platform in Ireland (acting as corporate broker to 8 of the 10 largest Irish companies), €10bn+ of capital raised since 2017 > 700 employees and FY 2020 adjusted PBT of c.€33m and c.75%/25% split of business across wealth and capital markets Agreement reached for an enterprise value of €440m and expected CET1 capital ratio impact of c.80bps, financed through existing resources Strong strategic fit, strengthening the range of services available to the Group's wealth and corporate customers Ageing Irish population is increasingly wealthy and seeking advice; acquisition will unlock growth opportunities within the Irish market and diversify income • • • Bank of Ireland 2021 Interim Results - Debt Investor Presentation KBC KBC Ireland MOU agreed in April to acquire performing loan assets and deposit liabilities Acquisition on a portfolio basis, with commercial terms being negotiated Financed through existing resources KBC Ireland has c.300k customers; c.€9bn in performing loans and c.€5bn in deposits at the end of 20201 Acquisition will complement Group's strategy to grow core mortgage business in Ireland, and supports the investments being made in systems transformation OOO Completion on both transactions, subject to regulatory and competition authority approval, expected in 2022. Acquisitions expected to be accretive to ROTE. We will provide an update on the Group's financial outlook alongside refreshed medium term targets in 2022 1 KBC Bank Ireland and KBC Group public disclosures Bank of Ireland 10#11Bank of Ireland 2021 Interim Results - Debt Investor Presentation Our Responsible and Sustainable Business strategy is fundamental to our purpose of enabling our customers, colleagues and communities to thrive Pillar 1 Enabling all Colleagues to Thrive Developing digital ability and employability Upskilling and reskilling An inclusive and diverse workplace 50:50 gender target for new leadership appointments Pillar 2 Enhancing Financial Wellbeing Increasing capability and inclusion Protecting the most vulnerable Enabling better financial decisions Improve customer Financial Wellbeing2 Index to >70 Pillar 3 Supporting the Green Transition Setting Science Based Targets³ by end 2022 Providing Sustainable Finance Transparently report progress Own operations Net Zero by 2030 Key achievements on our RSB strategy in H1 2021 • 43% female appointments in management and leadership roles • 174 appointments into digital roles in H1 2021 of which 66% were internal appointments • A national financial wellbeing campaign: • • First Irish company to achieve the 'Disability Smart Standard' • • Partnered with DCU to support students from disadvantaged backgrounds the F-Word, led to Bank of Ireland receiving the #1 ranking in 'Brand Shout' tracking survey in July Targeted support to customers in long-term credit card debt; customers 3x more likely to take positive action afterwards Enhanced service to support asylum applicants; increase of >300% (Q/Q) in international protection applicants opening a basic bank account • • Raised €1.25bn Green Bonds Sustainable Finance Fund to increase by €3bn to €5bn, with €1bn already drawn Sustainability-linked mechanisms included in 10 customer deals in H1 2021 (aggregate of €362m gross facilities covered by this mechanism) Continued decarbonisation of our operations H2 2021 focus on implementation & embedding strategy across business, data requirements & developing SBTs³ TCFD TASK FORCE CLIMATE-RELATED FINANCIAL DISCLOSURES THE LEADERS GROUP ON SUSTAINABILITY BUSINESS UNEP PRINCIPLES FO FINANCE RESPONSIBLE INITIATIVE BANKING WORKING RESPONSIBLY 1 Full 'Investing in Tomorrow' RSB Strategy explained in RSB Hub on the Bank of Ireland Group website 2 National survey conducted by BOI covering saving, spending, borrowing and planning, scored on a 0-100 scale 3 Science Based Targets/SBTS - using methodology aligned with Partnership for Carbon Accounting Financials (PCAF) standards Bank of Ireland 11#12Bank of Ireland 2021 Interim Results - Debt Investor Presentation Operational Performance Bank of Ireland 12#13Strong recovery in H1 2021 financial performance Bank of Ireland 2021 Interim Results - Debt Investor Presentation • Operating profit pre-impairment +72% H1 2020 H1 2021 (€m) (€m) Net interest income 1,063 1,080 Business income 266 282 Additional gains, valuation and other items (107) 36 Total Income 1,222 1,398 Operating expenses (872) (837) Levies and Regulatory charges (70) (96) • Impairment of intangibles and goodwill (9) Operating profit pre-impairment 271 465 • Net impairment charges (937) (1) Share of associates/JVs (3) 1 Underlying profit/(loss) before tax (669) 465 Non-core Items (153) (59) • Profit before tax (822) 406 Net interest income 2% higher Business income² +8% with easing of COVID-19 restrictions supporting further growth in H2 2021 Valuation items benefitting from recovering bond and equity markets 4% reduction in operating expenses, net of inflation and transformation investment €1m net impairment charge (H1 2020 €0.9bn): Improving macro outlook as economy reopens Muted loan loss experience Non-core items include €69m of business model restructuring costs Net interest margin (NIM) Cost income ratio¹ Underlying earnings per share H1 2020 H1 2021 (€m) (€m) 2.02% 1.90% 66% 61% (59.7) 33.66 1 See page 58 for calculation 2 Including Share of Associates and JVs Bank of Ireland 13#14Net interest income +2% Bank of Ireland 2021 Interim Results - Debt Investor Presentation Net interest income €1,052m €1,063m €1,080m 278bps 284bps 294bps 25% (24bps) H1 20 Loan asset spread 27% 32% (26bps) H2 20 (32bps) H121 Liquid asset spread Liquid assets as % of AIEAS NIM movement 3bps 3bps (10bps) 7bps 2.00% (3bps) 2.00% • • Pricing discipline maintained - Loan asset spread' 16bps higher H1 2021 vs H1 2020 Application of negative interest rates on deposits and reduction in UK funding costs offsetting the impact of low rates on liquid assets and structural hedge €30m generated from application of negative interest rates (€11m H1 2020) €5.6bn increase in average deposit volumes attracting a negative rate €50m reduction in UK deposit funding costs Reflecting TLTRO participation and build-up of liquidity, liquid assets increased to 32% of AIEA (25% in H1 2020) TLTRO participation benefits net interest income, but mechanically lowers NIM TLTRO (10bps) 1.90% H FY 20 UK deposits Negative interest rates Other Liquid assets Structural hedge H121 1 Spread Loan asset yield or Liquid asset yield less Group's average cost of funds Bank of Ireland 14#15New customer lending +12% 12 New lending¹ by division €6.5bn €5.8bn €2.3bn €2.4bn Bank of Ireland 2021 Interim Results - Debt Investor Presentation Lending trends in H1 2021 • All divisions demonstrating solid recovery - Corporate new lending grew 38% €1.5bn €1.1bn €2.3bn €2.7bn H1 20 H1 21 ■Retail Ireland Corporate Retail UK Group loan book movement €7.2bn (€7.9bn) - Retail Ireland 15% higher with growth across all portfolios Retail UK new mortgage lending +4% with c.170% growth in new Bespoke drawdowns Excluding RCF usage, new lending increased to €6.5bn in H1 2021 vs €5.8bn in H1 2020 Net lending growth of €0.4bn in Retail Ireland and Corporate UK deleveraging of €1.0bn in line with strategy with this trend expected to continue €1.6bn (€0.3bn) €76.6bn Net Lending €77.2bn Dec 20 Loan book New Redemptions Lending NPE Transactions FX / Other Jun 21 Loan Book 1 Excluding Corporate revolving credit facilities of €1.3bn H1 2020 and €0.7bn H1 2021 2 On a constant currency basis Bank of Ireland 15#16Business income' +8% H1 2020 (€m) H1 2021 (€m) Wealth and Insurance Retail Ireland 100 105 103 101 • Retail UK 2 (2) Corporate and Markets 67 83 Group Centre and other (6) (5) Business Income 266 282 Share of associates /JVs (3) 1 Total Business Income incl. JVs 263 283 . Additional Gains 2 2 Valuation and other items (109) 34 Other Income 156 319 • 1 Including Share of Associates and JVs Bank of Ireland 2021 Interim Results - Debt Investor Presentation . • Total other income +€163m vs H1 2020 Wealth and Insurance increased 5% vs H1 2020 reflecting higher new business income and existing book income Retail Ireland reduced 2% as a result of lower card fee income Corporate and Markets income increased 24% with higher underwriting fee income and stable FX income JV income reflecting ongoing UK travel restrictions Valuation and other items provide contribution of €34m reflecting positive performance in derivative valuation adjustment, equity and bond markets Reopening to support increased activity and business income growth in H2 2021 Bank of Ireland 16#17Operating expenses -4% Bank of Ireland 2021 Interim Results - Debt Investor Presentation €872m Cost Movement (€23m) (€12m) €837m €35m reduction in costs reflects • Broad-based cost reduction while we continue to invest in our business - Staff costs -6% Depreciation charge -14% Absorbed wage inflation and higher pension costs of €11m H1 20 Net cost reduction Non-recurrence of COVID-19 costs H1 21 • Non-core items €69m charge for severance, property, UK and other restructuring H1 2020 Non-core items (€m) H1 2021 (€m) Cost of restructuring programme (27) (69) • Impairment on internally generated (136) computer software Customer redress charges (7) (5) Transformation investment in H1 2021 €149m split across income statement (€21m / 14%) balance sheet (€54m / 36%) Investment return on treasury stock held - 17 (6) non-core items (€74m / 50%) for policyholders Gross-up for policyholder tax position in (4) 15 Wealth and Insurance Other 4 6 Total non-core items (153) (59) Bank of Ireland 17#18Bank of Ireland 2021 Interim Results - Debt Investor Presentation €1m impairment charge reflecting improved economic condition H1 2021 • IFRS 9 models macro-economic update €9m Improved economic outlook resulting in a write-back of €163m €172m charge from model parameter updates primarily due to changes in residential mortgages LGD assumptions Group management adjustment (€8m) Net release of €8m while maintaining €229m stock of management adjustments for H1 2021 for latent risk associated with COVID-19 Requirement to hold will be assessed at FY 2021 2021 Outlook . Loan loss experience and portfolio activity (Net €0m) Muted loan loss experience in H1 2021 Net zero charge reflects a small number of offsetting outcomes across loan portfolios 30 June 2021 2021 2022 2023-2025 Central Scenario - 45% weighting Macro-economic scenarios¹ have been upgraded to reflect improved outlook compared to Dec 2020 Irish GDP growth 4.7% 4.9% 3.0% Irish Unemployment (unadjusted) 8.0% 7.4% 5.6% Existing COVID-19 government Irish House Price Index 3.0% 2.0% 1.3% supports expected to be phased out during H2 2021 Irish Commercial Real Estate (5.5%) (0.5%) 1.5% Subject to no material change in the economic conditions or outlook, we expect the H2 2021 impairment charge to be broadly similar to H1 2021 and supported by the current stock of ILAs of €2.1bn 1 See page 52 for 2021-2025 macro-economic assumptions used in IFRS 9 models Bank of Ireland 18#19NPEs reduce to 5.5% NPE movements 6.3% 4.4% 5.7% €5.0bn €3.5bn H Dec 18 Dec 19 + €4.5bn (€0.3bn) €0.2bn 5.5% €4.4bn H Dec 20 NPE Transaction Net Inflows Jun 21 Net impairment charges (gains) €365m €246m €124m €77m €47m €76m €14m €0m (€15m) (€34m) Mortgages (Ireland) Mortgages (UK) Non-property SME Property and and corporate construction Consumer 19 19 Bank of Ireland 2021 Interim Results - Debt Investor Presentation Non-performing exposures • • • NPES reduced by €0.1bn to €4.4bn and NPE ratio decreased 20bps to 5.5% Irish residential mortgage NPE transaction successfully completed in H1 2021 Government fiscal supports continue to be supportive Proven track record of working with customers to implement sustainable solutions Stock of ILA of €2.1bn • • Impairment coverage reduced slightly to 2.7%, remains significantly higher than pre-COVID (1.6% Dec 2019) Net impairment charge¹ €12m / 3bps (H1 2020: 222bps) ILA charge and increased impairment coverage on Irish residential mortgage portfolio relates to changes to LGD model parameters resulting in net increase of c.€135m including removal of Dec 2020 stage 3 management adjustment Group management adjustment of €0.2bn provides material coverage for further COVID-19 impairment Bank of Ireland - H1 2020 E H1 2021 1 Net impairment charge €12m on loans and advances to customers, net impairment gain on other financial instruments €11m, total net impairment charge €1m#20Asset quality remains strong Group loan book by portfolio Consumer €5.2bn UK mortgages €22.1bn Bank of Ireland 2021 Interim Results - Debt Investor Presentation • Diversified balance sheet with strong credit quality Mortgage portfolios 56% of Group loan book Non-property SME and corporate diversified by sector >80% of the Group loan book is predominantly secured Geographic breakdown of book . 7% 28% 11% ■Property and construction €8.9bn €79.0bn 26% Ireland mortgages €22.4bn 28% 1 Includes POCI Non-property SME and corporate €20.3bn Group loan book by stage 30.1% 29.7% €4.4bn €4.3bn €15.8bn €17.8bn 3.5% 3.7% - Ireland €40.6bn / 51% - UK €32.3bn / 41% Rest of the World €6.1bn / 8% Increase in stage 2 loans since Dec 2020 reflecting updated management adjustment assumptions; minimal ILA movement resulting from this movement - Ireland mortgages €1.3bn higher UK mortgages €1.0bn higher Ireland SME €0.6bn higher Improvements to FLI outlook supporting €1.0bn reduction in stage 2 corporate loans 0.6% 0.3% €58.2bn €56.9bn - FY 20 H121 Stage 1 Stage 2 Stage 3 31 Stage ILA coverage % 20 20 Bank of Ireland#21Capital & MREL Bank of Ireland 2021 Interim Results - Debt Investor Presentation 21 21 Bank of Ireland#22Bank of Ireland 2021 Interim Results - Debt Investor Presentation Strong accretion in capital ratios Fully Loaded CET1 ratio RWAS €48.0bn 15bps 90bps 13.4% (25bps) RWAs €48.9bn (30bps) 20bps 14.1% Dec 20 Organic Capital¹ NPE transaction Loan Growth/ RWA² Transformation investment Other Pension Jun 21 Headroom to 2021 CET1 regulatory capital requirements 15.3% 2021 regulatory requirements (excl. P2G) 14.1% 9.77% Jun 21 Fully Loaded CET1 Ratio Jun 21 Regulatory CET1 Ratio c.550bps headroom • • • Strong capital position driven by organic capital generation Capital supported by growth in operating profit, a minimal impairment charge and NPE transaction Fully Loaded CET1 ratio grew by 70bps RWAS increased by €0.9bn, primarily from higher corporate lending RWA density on mortgage lending lower; total loan book density unchanged on mix effects 1 Pre-impairment organic capital generation primarily consists of attributable profit excluding impairment and movements in regulatory deductions 2 Loan growth / RWA movements from changes in loan book mix, asset quality and movements in other RWAS Bank of Ireland 22 272#23Regulatory Ratios RWAs €48.4bn 14.9% (25bps) Bank of Ireland 2021 Interim Results - Debt Investor Presentation Regulatory CET1 ratio 15bps 75bps (20bps) RWAS €49.1bn (25bps) 20bps 15.3% + Dec 20 CRD Phasing Organic capital NPE Disposal Loan growth/ RWA Transformation investment Other / Pension Jun 21 Regulatory Capital Metrics Dec 20 Jun 21 CET1 CET1 Ratio Tier 1 Items/Instruments: 14.9% 15.3% Movement in CET1 ratio broadly aligned with movement in fully loaded ratios 2.0% 2.0% Tier 1 Ratio 16.9% 17.3% Tier 1 & Total Capital Tier 2 Items/Instruments: 2.3% 3.2% Total Capital Ratio¹ 19.2% 20.5% Risk Weighted Assets MREL Ratio Leverage Ratio 7.1% €48.4bn €49.1bn 24.6% 27.6% 6.5% MREL No change in Tier 1 bucket during H1 2021 Tier 2 bucket increased to 3.2% during H1 2021 supported by Green Tier 2 Senior debt issuance of c.€800m during H1 2021 MREL ratio of 27.6% based on RWA at Jun 2021 Bank of Ireland 1 Further to EBA Q&A 2017_3329 the calculation of the Total Capital ratio is stated after a prudent application of the requirements of Article 87 of CRR. The application of the requirements of Article 87 by SSM banks is under review by the ECB 23#24Balance Sheet Customer loans Liquid assets Other assets Total assets Dec 2020 (€bn) Jun 2021 (€bn) 77 77 • 31 46 26 27 134 150 • Bank of Ireland 2021 Interim Results - Debt Investor Presentation • • Funding & Liquidity LDR reduced from 86% to 85% on foot of growth in customer deposits TLTRO III drawdowns of €10.8bn and growth in customer deposits primary drivers of c.€15bn increase in liquid assets LCR increased from 153% to 177% driven by increase in liquid assets NSFR stable at 138% Customer deposits: €90.6bn Net growth of €2bn principally due to higher Retail and SME volumes in Ireland offset by a decrease in UK and Corporate and Markets volumes Wholesale Funding: €20.4bn Increase of c.€11bn following TLTRO III participation Senior bond of €750m and Tier 2 issuance of €500m (both Green format) during 2021 Capital and MREL requirements primary driver of new wholesale funding Tangible Net Asset Value • TNAV increased to €7.89 Customer deposits 88 Wholesale funding 89 9 91 Shareholders' equity 9 129 20 Other liabilities 27 Total liabilities 134 30 150 • TNAV per share €7.32 €7.89 Closing EUR/GBP FX rates 0.90 0.86 • Dec 2019 Liquidity Coverage Ratio 153% Jun 2021 177% • Net Stable Funding Ratio 138% 138% • Loan to Deposit Ratio 86% 85% Bank of Ireland 24#25Meaningful buffer to potential MDA' restrictions Regulatory CET1 ratio vs. MDA Threshold Bank of Ireland 2021 Interim Results - Debt Investor Presentation 15.3% Jun 21 Regulatory CET1 ratio 5.5% Current MDA Buffer 1.5% 2.5% • 1.27% 4.5% Dec 21 Regulatory CET1 ratio requirement Pillar 1 Pillar 2 Requirement ■ ССВ ■O-SII Regulatory CET1 ratio of 15.3% at Jun 2021 - Continued phase-in of existing transitional adjustments expected to consume c.20-40bps per annum to 2025 End 2021 CET1 ratios expected to increase by c.30bps 50bps above Jun 2021 levels O-SII buffer increased to 1.5% in Jul 2021 Jun 2021 Regulatory CET1 ratio of 15.3% provides a buffer of c.5.5% to MDA threshold MREL-MDA in effect from Jan 2022 45 25 1 The Maximum Distributable Amount is determined as a percentage of attributable profits earned in the period to which the buffer breach and MDA calculation pertains, and will vary depending on the extent of the breach of the CBR which is measured in quartiles (bottom quartile - 0%, second quartile - 20%, third quartile - 40% and top quartile - 60% of profits) Bank of Ireland#26Risk weighted assets (RWAS)/ leverage ratio Customer lending average credit risk weights - Jun 20211,2 (Based on regulatory exposure class) Bank of Ireland 2021 Interim Results - Debt Investor Presentation EBA Transparency Exercise 2020 Country by Country Average IRB risk weights Residential Mortgages - Jun 2020 Sweden Belgium United Kingdom 4.2% 10.2% 10.4% EAD³ RWA (€bn) (€bn) Avg. Risk Weight Austria 10.7% France 12.0% Netherlands 12.3% Germany 14.4% Ireland Mortgages 23.1 5.9 26% Spain 14.5% UK Mortgages 22.7 4.5 20% Denmark 14.7% Finland 16.9% SME 17.4 11.9 69% Portugal 20.1% Italy 20.3% Corporate 11.5 11.5 100% Norway 21.1% Other Retail 6.2 4.4 72% Ireland 29.7% Customer lending credit risk 80.9 38.2 47% EBA Risk Dashboard Q2 2020 Country by Country Average Leverage ratio Regulatory Leverage Ratio - Jun 2020 IRB approach at Jun 2021 accounts for: 59% of credit EAD (Dec 2020: 66%) 72% of credit RWA (Dec 2020: 73%) Regulatory RWA has increased from €48.4bn at Dec 2020 to €49.1bn at Jun 2021. The increase primarily reflects growth in the Group's corporate banking loan portfolio. Sweden 4.2% Germany Netherlands United Kingdom 4.6% 4.7% Denmark 4.8% 5.0% France 5.1% Spain 5.3% Finland 5.4% Italy 6.0% Belgium 6.0% Norway 6.6% Austria 6.6% Portugal Ireland 7.2% 9.4% 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 26#2730% 25% 20% 15% 10% 5% 0% IRB Lending: SME² EBA Transparency Exercise 20201 Bank of Ireland 2021 Interim Results - Debt Investor Presentation Bank of Ireland's IRB RWA density across major loan portfolios exceeds a wide distribution of European peers IRB RWA: Corporate³ 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 1 2 3 4 5 6 Bank Bank BOI Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank 10 11 12 7 8 9 2 6 7 4 1 3 BOI Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank 5 10 9 11 12 8 IRB RWA: Domestic Mortgage lending4 Bank 11 Bank 7 Bank 1 Bank 4 Bank 3 Bank 10 Bank 6 Bank 9 Bank 12 Leverage Ratio (Regulatory Basis)5 8% 7% 6% 5% 4% 3% 2% 1% 0% BOI Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank 6 2 5 8 10 7 4 3 11 9 12 1 Charts represent 30 June 2020 figures published by the EBA for ABN AMRO, Banco Comercial Português, Groupe BPCE, CaixaBank, Commerzbank, Danske Bank, DNB Bank, Erste Group, Svenska Handelsbanken, Intesa Sanpaolo, KBC Group, Lloyds Banking Group 2 Credit Risk IRB Approach Risk Exposure Amount divided by Exposure Value for "Corporates - Of Which SME" at 30 June 2020 3 Credit Risk IRB Approach Risk Exposure Amount divided by Exposure Value for "Corporates - Excluding SME & Specialised Lending" at 30 June 2020 4 Credit Risk IRB Approach Risk Exposure Amount divided by Exposure Value for "Retail - Secured on Real Estate Property" at 30 June 2020 5 "Leverage Ratio - Using a transitional definition of Tier 1 Capital" at 30 June 2020 Bank of Ireland 27 27#28Regulatory capital requirements Pro forma CET1 Regulatory Capital Requirements Pillar 1 CET1 Pillar 2 Requirement (P2R) Capital Conservation Buffer (CCB) Ireland Countercyclical buffer (CCyB) UK Countercyclical buffer (CCB) O-SII Buffer (phase in July each year) Systemic Risk Buffer - Ireland Pro forma Minimum CET1 Regulatory Requirements Pillar 2 Guidance (P2G) Bank of Ireland 2021 Interim Results - Debt Investor Presentation 2020 2021 2022 4.50% 4.50% 4.50% 1.27% 1.27% 1.27% 2.50% 2.50% 2.50% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.00% 1.50% 1.50% 9.27% 9.77% 9.77% Not disclosed in line with regulatory preference Regulatory Capital Requirements The Group is required to maintain a CET 1 ratio of 9.27% on a regulatory basis at 30 June 2021, increasing to 9.77% from 1 July 2021 (excluding P2G). CET1 headroom of c.550bps to Dec 2021 regulatory capital requirements of 9.77% Regulatory total capital ratio of 20.5% at Jun 2021 provides headroom of c.625bps above 2021 total capital requirement of 14.25% Bank of Ireland 28#29MREL Requirement Bank of Ireland 2021 Interim Results - Debt Investor Presentation 27.47% . Jun 21 MREL ratio of 27.6% (10.4% on a leverage basis) Interim binding MREL requirements, to be met by 1 Jan 2022, of 24.95% on an RWA basis and 7.59% on a leverage basis. 24.95% 4% 4%¹ 23.47%² 27.6% 20.95% 29 29 MREL Ratio CBR SRB Target MREL Requirement MREL RWA requirement consists of a Single Resolution Board (SRB) target of 20.95% (based on the Group's capital requirements as at 30 Jun 2020) and Group's expected Combined Buffer Requirement (CBR) of 4% on 1 Jan 2022 (comprising the Capital Conservation Buffer of 2.5% and an O-SII buffer of 1.5%) 2024 MREL requirement is expected to increase to c.28% (based on expected Dec 2021 regulatory capital requirements) as the SRB target is updated to reflect the phase-in of the O-SII buffer and the phase-out of MREL adjustments MREL eligible senior debt issuance of c.€1bn-€2bn p.a. anticipated Dec 20 Jan 22 requirement Jan 24 expected requirement 1 Expected CBR of 4% on 1 Jan 2022 comprising CCB of 2.5% and OSII of 1.5% 2 Expected Jan 2024 SRB Target of 23.47% assumes the MCC adjustment of 0.94% is reduced to 0.31% at Jan 2024 before reducing to 0% by Jan 2025 Bank of Ireland#30Credit Ratings Bank of Ireland 2021 Interim Results - Debt Investor Presentation (Stand alone BOIG ratings) GovCo MOODY'S Instrument Ratings Fitch Ratings S&P Global BOIMB BOIG GovCo BOIG GovCo BOIG GovCo (ACS)³ MOODY'S baa2¹ Stable A2 Stable Fitch Ratings bbb Negative Investment Grade Aaa Aaa Aaa c AAA AAA AAA AAA Aa1 Aa1 Aa1 AA+ AA+ AA+ AA+ Aa2 Aa2 Aa2 AA AA AA AA Aa3 Aa3 Aa3 AA- AA- AA- AA- A1 A1 A1 A+ A+ A+ A+ BBB+ Negative A3 22 A2 A2 S A2 A A A A A3 A3 A- A- A- A- Baa1 s Baa1 Baa1 BBB+ BBB+ S BBB+ BBB+ Baa2 Baa2 Baa2 BBB S BBB BBB BBB Baa3 T2 Baa3 Baa3 BBB- BBB- BBB- BBB- bbb² A- S&P Global Negative Negative Sub Investment Grade Ba1 Ba1 Ba1 BB+ T2 BB+ T2 BB+ BB+ T2 Ba2 AT1 Ba2 Ba2 BB BB BB T2 BB Ba3 Ba3 Ba3 BB- AT1 BB- BB- BB- B1 B1 B1 B+ B+ B+ B+ B2 B2 B2 B B B AT1 B B3 B3 B3 B- B- B- B- (...) (...) (...) (...) (...) (...) (...) Covered bond S Senior unsecured T2 Tier 2 AT1 Additional Tier 1 1 BOIG entity rating = Baa1 2 BOIG entity rating = BBB- 3 BOIMB is the Group's issuer of Irish Covered Bonds (ACS). Moody's has not assigned an issuer rating to BOIMB Bank of Ireland 30#31Corporate Structure Holding company Operating subsidiaries Bank of Ireland 2021 Interim Results - Debt Investor Presentation Bank of Ireland Group plc (BOIG) Bank of Ireland 100% AT1 Tier 2 Senior unsecured The Governor and Company of the Bank of Ireland (GovCo) 100% Bank of Ireland 100% New Ireland Assurance Company plc Bank of Ireland Mortgage Bank (BOIMB) NEW IRELAND Securing your future Bank of Ireland → Senior unsecured 100% Bank of Ireland (UK) plc Bank of Ireland Capital/MREL Funding • • • Irish Covered Bonds (ACS) UK RMBS Preferred resolution 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 In 2017 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, Residential Mortgage Backed Securities (RMBS) by Bank of Ireland (UK) plc 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, as amended Bank of Ireland 31#32Summary highlights Bank of Ireland 2021 Interim Results - Debt Investor Presentation Capital • Continued pre-impairment organic capital generation; Strong capital position with fully loaded CET1 ratio of 14.1%, regulatory CET1 ratio 15.3% Capital structure optimised following Tier 2 issue 32 32 RWA MREL Economy Asset Quality • • • • IRB RWA density across largest customer loan portfolios exceeds a wide distribution of European peers RWA Density offers potential mitigation against future implementation of Basel IV MREL Ratio of 27.6% at Jun 2021 Jan 2022 interim target of 24.95%; Jan 2024 target of c.28% MREL eligible senior debt issuance of c.€1bn-€2bn p.a. anticipated; Green bonds will continue to form part of capital and MREL issuance Irish economic sentiment rebounds as economy reopens; housing market sentiment particularly strong Ireland vaccination rollout amongst the most successful in EU. c.85% of adults have received at least one dose, with c.70% now fully vaccinated 99% of payment breaks now concluded with minimal impact on asset quality Proven track record of working with customers to implement sustainable solutions; significantly below industry average for arrears management Bank of Ireland#33Bank of Ireland 2021 Interim Results - Debt Investor Presentation Green Bond Framework Bank of Ireland 33#34Green Bond Framework Bank of Ireland 2021 Interim Results - Debt Investor Presentation Green Bonds are an important part of the Group's Responsible and Sustainable Business Strategy as we look to finance our customers' transition to the low carbon economy and take an active role in combating climate change through sustainable finance Key Features . Aligned to the Green Bond Principles published by ICMA in 2018 1 Use of Proceeds . Second Party Opinion provided by Sustainalytics . • . The Group will allocate an equivalent amount of the net proceeds to lending to eligible Green assets The Framework caters for secured, senior and subordinated issuance A 'lookback' period of 36 months has been applied to the Green Eligible Assets Portfolio ESG Ratings SUSTAINALYTICS MSCI +CDP AM Ratings & Benchmarking ESG Data, ESG Risk rating 20.3 (Medium Risk). Places the Group in the 17th percentile of Banks (Industry Group) BB (average) B (management level) 44 Green Bond Framework Pillars 2 An amount equivalent to net proceeds will be allocated to finance/ refinance: Green Buildings & Energy Efficiency Renewable Energy Clean Transportation 3 Management of Proceeds Net proceeds will be managed on a portfolio basis 4 . The Group will ensure that the balance of the Green Eligible Assets Portfolio matches or exceeds the total balance of Green bonds outstanding Project Evaluation and Selection Criteria Green Bond Working Group is responsible for the evaluation and selection of assets for inclusion in the Green Eligible Assets Portfolio The portfolio is reviewed on a quarterly basis with loans no longer meeting eligibility criteria being removed Reporting & External Review Allocation Report - will be published alongside external verification provided by an independent accredited provider Impact Report - the Group intends to provide investors with an impact report on the assets within the Green Eligible Assets Portfolio Bank of Ireland 34#35Use of Proceeds Green Bond Principles Eligible Category Eligibility Criteria Bank of Ireland 2021 Interim Results - Debt Investor Presentation Impact UN SDG Green Buildings & Energy Efficiency - Residential Green Buildings & Energy Efficiency- Commercial Renewable Energy Clean Transportation • • • • Residential property with an energy efficiency rating within the Top 15% in Ireland, equivalent to BER of 'B3' or better Residential property with a date of construction of 2015 or later New buildings where the net primary energy demand of the new construction is at least 20% lower than the primary energy demand resulting from the relevant NZEB requirements; and/or: Renovations to residential property achieving savings in net Primary Energy Demand of 30% Commercial property in Ireland, UK and US holding a BREEAM 'Outstanding' or 'Excellent' or LEED 'Platinum' or 'Gold' Certification Net primary energy demand of the new construction is a Commercial property belonging to the top 15% of buildings in Ireland and UK, in terms of energy efficiency* New commercial property where at least 20% lower than the primary energy demand resulting from the relevant NZEB requirements, and/or: Renovations to commercial property where the renovation achieves savings in net Primary Energy Demand of at least 30% Renewable energy generation facilities including onshore and offshore wind, solar and geothermal Financing of the purchase, manufacture and operation of Battery Electric Vehicles and electrically-powered public transport systems, and the infrastructure that supports clean transportation *As determined by reference to established energy performance benchmarks. Bank of Ireland anticipates drawing on the most current dataset available at the time of the allocation process (including datasets compiled by any retained technical consultants). As average building energy efficiencies and related datasets improve, relevant benchmarks and determinations involving proxies (e.g. Building Energy Ratings) will be updated accordingly. Annual energy efficiency improvements, MWh tCO2e avoided Annual energy efficiency improvements, MWh tCO2e avoided Renewable energy capacity added, MW tCO2e avoided tCO2e avoided MFORDABLE AND AND INFRASTRUCTURE CLEAN ENERGY 9 AND INFRASTRUCTURE PEASY NOTION AND INFRASTRUCTURE 11 USTANABE O AND COMMENTS Bank of Ireland 35#36Outlook Bank of Ireland 2021 Interim Results - Debt Investor Presentation Bank of Ireland 36#37Looking forward Growth opportunities • • • Bank of Ireland 2021 Interim Results - Debt Investor Presentation Strong growth opportunities in all our markets as economies recover from COVID-19 Changing market dynamics in our Irish franchise offer further opportunities to sustainably grow our businesses UK business turnaround, with a smaller more profitable business model, will continue to accrete value Inorganic opportunities . • KBC and Davy acquisitions' will further our ambition to be the National Champion Bank in Ireland The Group has sufficient capital to execute both of these transactions which are expected to be ROTE accretive State sell-down Medium term targets • • . Irish Government decision to reduce its 14% ownership is an important milestone in further normalising its relationship with the Group Bank of Ireland will be the first Irish bank to fully return to private ownership Medium term targets to be refreshed at strategy update; timing subject to proposed Davy and KBC transactions', expected in 2022 Subject to regulatory and competition authority approvals Bank of Ireland 37#38Updating guidance for improved 2021 outlook Bank of Ireland 2021 Interim Results - Debt Investor Presentation • • Profitability Asset Quality Capital H2 2021 total income expected to be c.5% higher vs H1 2021 reflecting Higher net interest income¹ Higher business income Valuation items broadly unchanged vs H1 2021 Costs will continue to reduce 2021 costs <€1.65bn 2023 costs of €1.5bn Subject to no material change in the economic conditions or outlook, we expect the H2 2021 impairment charge to be broadly similar to H1 2021 and supported by the current stock of ILAS of €2.1bn End 2021 CET1 ratios expected to increase by c.30bps - 50bps above Jun 2021 levels Additional balance sheet optimisation initiatives being progressed during H2 2021 Group has sufficient capital resources available to support execution of proposed inorganic opportunities Distributions to recommence on a prudent and progressive basis based on performance and capital outlook 1 Including c.€50m potential income benefit from TLTRO III if second benchmark achieved in Dec 2021 Bank of Ireland 38#39Appendix Bank of Ireland 2021 Interim Results - Debt Investor Presentation Bank of Ireland 39#40Appendix BOI overview - customer loans / new lending volumes Ireland mortgage loan book Income statement Net interest income analysis Structural hedge, liquid assets and negative interest rates Interest rate sensitivity Asset quality 40 40 Page No. 41 42 Bank of Ireland 2021 Interim Results - Debt Investor Presentation 43 34 44 45 - Payment breaks Non-performing exposures by portfolio Portfolio by stage 47 48 - Non-property SME and corporate by stage 49 - Residential mortgages & consumer loans - Non-property SME and corporate & property and construction 51 Forward looking information - macro-economic scenarios . ILA sensitivity to macro-economic scenarios Ireland mortgages Ordinary shareholders' equity and TNAV Capital CET1 ratios Transformation investment / operating expenses Cost income ratio: Jun 2021 • Return on tangible equity Defined benefit pension schemes āTཀུགཱཉྩཎྜཱཆེརིནྣེ 46 50 52 53 54 55 . Forward looking statement Contact details S °g⌘གྷ 62 59 60 56 57 58 Bank of Ireland#41Overview of customer loans Bank of Ireland 2021 Interim Results - Debt Investor Presentation Profile of customer loans' at Jun 2021 (Gross) Ireland UK ROW Total Total Composition (Jun 21) (€bn) (€bn) (€bn) (€bn) (%) Mortgages Non-property SME and corporate SME Corporate Property and construction Investment Development Consumer Customer loans (gross) Geographic (%) 22.5 22.0 0.0 44.5 56% 10.3 5.2 4.8 20.3 26% 7.0 1.8 0.0 8.8 11% 3.3 3.4 4.8 11.5 15% 5.8 1.9 1.3 8.9 11% 4.9 1.7 1.3 7.9 10% 0.9 0.2 0.0 1.1 1% 2.0 3.2 0.0 5.2 7% 40.6 32.3 6.1 79.0 100% 51% 41% 8% 100% €2.3bn Retail Ireland €2.7bn Gross new lending volumes £2.1bn €1.0bn Retail UK £2.0bn Corporate Banking2 €0.9bn €1.5bn €0.3bn £1.2bn £1.2bn €0.2bn €1.1bn €0.6bn €1.4bn €0.6bn €0.2bn €1.2bn £0.7bn £0.2bn H1 20 H1 20 H121 ■Mortgages Consumer Business Banking Property Corporate Ireland Acquisition Finance £0.6bn £0.1bn H121 €0.1bn €0.6bn €0.3bn €0.1bn €0.1bn H1 20 H121 Corporate UK 1 Based on geographic location of customer 2 Excluding Corporate revolving credit facilities Bank of Ireland 41#42Ireland mortgages: €22.4bn New lending volumes and market share 23% 25% €1.0bn €0.9bn Bank of Ireland 2021 Interim Results - Debt Investor Presentation Ireland mortgages (gross) €23.7bn €23.0bn €22.9bn €22.4bn 23% €9.5bn €11.1bn €12.2bn €12.6bn €4.4bn €3.2bn €2.9bn €2.5bn €1.0bn €9.8bn €8.7bn €7.9bn €7.3bn Dec 18 Dec 19 Dec 20 Jun 21 Tracker Variable Rates Fixed Rates H119 H1 20 H121 New Lending Volumes Market Share 42 42 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.95% of our new lending in H1 2021, up from c.30% in 2014 Distribution strategy - continued expansion into broker channel The Group has continued building out the broker channel expansion in 2021, establishing a large network of active brokers at a national level Wider proposition . 6 in 10 Ireland customers who take out a new mortgage take out a life assurance policy through the Bank of Ireland Group 4.5 in 10 Ireland customers who take out a new mortgage take out a general insurance policy through the Bank of Ireland Group with insurance partners Average customer pay rate of 112bps less Group average cost of funds of 12bps • • LTV profile Average LTV of 58% on mortgage stock at Jun 2021 (Dec 2020: 60%) Average LTV of 74% on new mortgages in Jun 2021 (Dec 2020: 75%) Tracker mortgages • • • €7.0bn or 96% of trackers at Jun 2021 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.100bps' in H1 2021 Bank of Ireland#43Income statement Net interest income analysis Bank of Ireland 2021 Interim Results - Debt Investor Presentation H2 2019 Average Gross Gross Volumes Interest Rate (€bn) (Єm) (%) H1 2020 Average Gross Gross Volumes Interest Rate (€bn) (€m) (%) H2 2020 Average Gross Gross Volumes Interest Rate (€bn) (€m) (%) H1 2021 Average Gross Volumes Interest (€bn) (€m) Gross Rate (%) Ireland Loans 33.7 583 3.43% 33.4 561 3.38% 33.0 546 3.29% 32.8 537 3.30% UK Loans 28.0 393 2.79% 28.5 371 2.62% 27.1 349 2.56% 27.8 350 2.54% C&T 16.8 312 3.69% 17.4 309 3.57% 16.9 292 3.44% 17.5 296 3.41% Total Loans and Advances to Customers 78.5 1,288 3.26% 79.3 1,241 3.15% 77.0 1,187 3.07% 78.1 1,183 3.05% Liquid Assets 23.9 30 0.25% 26.6 16 0.12% 28.7 (5) (0.03%) 36.8 (39) (0.21%) NAMA Sub Debt 0.1 2 5.26% 0.0 1 5.22% 0.0 (-) 0.00% Total Liquid Assets 24.0 32 0.27% 26.6 17 0.13% 28.7 (5) (0.03%) 36.8 (39) (0.21%) Total Interest Earning Assets 102.5 1,320 2.56% 105.9 1,258 2.36% 105.6 1,183 2.22% 114.9 1,144 2.01% Ireland Deposits 21.0 (5) (0.05%) 21.3 (2) Credit Balances¹ 36.6 6 0.03% 39.6 8 UK Deposits C&T Deposits 18.6 (103) (1.09%) 18.7 (90) 5.0 (9) (0.34%) 4.7 (4) Total Deposits 81.2 (111) (0.27%) 84.2 (88) Wholesale Funding² 9.9 (62) (1.24%) 9.7 (55) (1.13%) (0.02%) 21.6 0.04% 43.8 (0.97%) 16.5 (0.16%) 4.2 (0.21%) 86.1 9.1 (-) (0.00%) 22.2 6 0.05% 12 0.06% 47.1 18 0.08% (60) (0.72%) 15.5 (40) (0.52%) 2 0.09% 3.8 4 0.20% (46) (0.11%) 88.7 (12) (0.03%) (36) (0.78%) 14.6 (12) (0.17%) Subordinated Liabilities 1.5 (41) (5.44%) 1.5 (34) Total Interest Bearing Liabilities 92.6 (214) (0.46%) 95.4 (177) (4.61%) 1.4 (0.37%) 96.6 (28) (4.02%) 1.5 (30) (3.95%) (110) (0.23%) 104.9 (55) (0.11%) Other³ (18) (18) (20) (9) Net Interest Margin as reported 102.5 1,088 2.11% 105.9 1,063 Average ECB Base rate 0.00% 2.02% 0.00% 105.6 1,052 1.98% 114.9 1,080 1.90% 0.00% 0.00% Average 3 month Euribor (0.40%) (0.31%) (0.50%) (0.54%) Average BOE Base rate 0.75% 0.36% 0.10% 0.10% Average 3 month LIBOR 0.78% 0.35% 0.06% 0.07% 1 Credit balances in H1 2021: ROI €37bn, UK €4.6bn, C&T €5.5bn 2 Includes impact of credit risk transfer transactions executed in Dec 2016, Nov 2017 and Dec 2019 3 Includes IFRS 16 lease expense, interest on certain FVPTL items and adjustments that are of a non-recurring nature such as customer termination fees Bank of Ireland 43 43#44Structural hedge, liquid assets and negative interest rates Structural hedge¹ Liquid assets² • Average volume €35.6bn €35.1bn €26.6bn €31.0bn €68m €46m €34m €17m Interest Income €28m -€24m €34m €18m + H H1 20 H1 21 H1 20 H1 21 EUR GBP Application of negative interest rates delivering reduction in funding costs Period-end deposit volume on negative rates €3.3bn €8.5bn €8.5bn €30m €11m H1 20 €20m H2 20 H1 21 1 Gross interest income from fixed leg of hedging swap 2 Excludes any impact from TLTRO on liquid assets H Bank of Ireland 2021 Interim Results - Debt Investor Presentation Structural hedge & liquid assets Interest income from structural hedge and liquid assets reducing as a result of the negative interest rate environment - Average structural hedge yield fell from c.38bps to c.26bps between H1 2020 and H1 2021 The decline in liquid asset income arises primarily from i) a reduction in average 3 month Euribor rate (c.20bps) and ii) higher ECB balances (c. €3.5bn) Negative interest rates • • • As a mitigant to the impacts of the negative interest rate environment above, the application of negative interest rates to non-personal customers was expanded further during 2021 Volume of customer deposits on negative rates was €8.5bn at Jun 2021 reflecting some volume attrition. The threshold for the application of negative rates will be reduced for non-personal customers from €2.5m to €1m during Q3 2021 with further expansion to high net worth personal customers with balances >€1m during Q4 2021 The Group expects c.€15bn of customer deposits will attract a negative rate by Dec 2021 Bank of Ireland 44#45Interest rate sensitivity Bank of Ireland 2021 Interim Results - Debt Investor 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 20 (€m) Jun 21 (€m) c.220 c.260 (c.220) (c.240) The above sensitivities are based on certain simplifying assumptions such as: 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 45 45 Bank of Ireland#46Payment breaks Bank of Ireland 2021 Interim Results - Debt Investor Presentation Overview of total payment breaks granted and remaining outstanding as at 30 June 2021 46 46 Ireland Total payment breaks granted Total payment breaks exposure Payment breaks Payment breaks active exposure active % returned to pre-COVID-19 terms % of payment breaks active % with approved additional measures Mortgages 18k €2.7bn 0.0k €0m 95% 0% 5% Consumer 7k €0.1bn 0.0k €0m 94% 0% 6% SME¹ 11k €2.6bn 0.0k €0m 86% 0% 14% Total 36k €5.4bn 0.0k €0m 92% 0% 8% Total payment UK breaks granted Total payment breaks exposure active Payment breaks Payment breaks exposure active % returned to pre-COVID-19 terms % of payment breaks active % with approved additional measures Mortgages 21k €3.2bn 0.2k €26m 98% 1% 1% Consumer 28k €0.4bn 0.3k €4m 95% 1% 4% SME¹ 5k €0.3bn 0.0k €1m 97% 0% 3% Total 54k €3.9bn 0.5k €31m 97% 1% 2% 99.5% of initial 3 month payment breaks to personal and business customers in Ireland and UK have now expired • c.0.5k/ 0.5% of payment breaks remain in place, primarily relating to UK loans Of c.90k payment break cases granted, c.5% have had further forbearance measures approved 1 Includes retail business banking property exposures Bank of Ireland#47Non-performing exposures by portfolio Bank of Ireland 2021 Interim Results - Debt Investor Presentation Composition (Jun 21) Advances (€bn) Non-performing exposures (€bn) Non-performing exposures as % of advances Impairment loss allowance (€bn) Impairment loss allowance as % of non-performing exposures Residential Mortgages 44.5 2.0 4.4% 0.5 27% - Republic of Ireland - UK - Republic of Ireland SME - UK SME 22.5 22.0 Non-property SME and corporate 20.3 7.0 1.8 - Corporate 11.5 2827 Noooo 1.2 5.3% 0.4 35% 0.8 3.5% 0.1 14% 1.2 5.8% 0.9 73% 0.7 9.8% 0.5 71% 0.1 6.6% 0.1 63% 0.4 3.3% 0.3 79% Property and construction 8.9 1.1 12.5% 0.6 50% - Investment 7.9 1.1 13.8% 0.5 49% - Development 1.1 0.0 3.4% 0.0 76% 5.2 0.1 2.6% 0.2 142% Consumer Total loans and advances to customers 79.0 4.4 5.6% 2.1 49% Advances Non-performing Non-performing Composition (Dec 20) (€bn) exposures exposures as % of Impairment loss Impairment loss allowance as % of allowance (€bn) (€bn) advances non-performing exposures Residential Mortgages 44.8 2.2 4.9% 0.5 21% - Republic of Ireland 23.0 1.5 6.6% 0.4 25% - UK 21.8 0.7 3.2% 0.1 12% Non-property SME and corporate 19.9 1.1 5.5% 0.9 85% - Republic of Ireland SME 7.1 0.7 9.7% 0.5 72% - UK SME 1.7 0.1 7.1% 0.1 58% - Corporate 11.0 0.3 2.5% 0.4 128% Property and construction 8.5 1.1 12.9% 0.6 54% - Investment 7.6 1.1 13.9% 0.6 52% - Development 0.9 0.0 4.0% 0.0 113% Consumer 5.3 0.1 2.8% 0.2 160% Total loans and advances to customers 78.4 4.5 5.8% 2.2 49% Bank of Ireland 47#4848 48 Portfolio by stage Composition (Jun 21) Sectoral analysis by stage Residential Mortgages - Republic of Ireland - UK Non-property SME and corporate Republic of Ireland SME - UK SME - Corporate Property and construction - Investment - Development Bank of Ireland 2021 Interim Results - Debt Investor Presentation Gross carrying amount Impairment loss allowance ILA % (before impairment loss allowance) Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 of gross POCI Total loans €m €m €m €m €m €m €m €m €m €m 37,734 4,819 1,920 18,003 3,187 19,731 1,159 1,632 761 - 11,383 7,786 1,156 13 223 44,475 27 117 378 522 1.2% 22,351 11 87 318 416 1.9% 22,124 16 30 60 106 0.5% 20,338 70 401 387 858 4.2% 3,449 2,862 666 6,977 34 216 238 488 7.0% 1,072 642 113 1,827 6 38 32 76 4.2% 6,862 4,282 377 13 11,535 30 147 117 294 2.5% 2,814 5,019 1,051 63 8,947 4 106 430 19 559 6.2% 2,221 4,565 1,015 63 7,864 3 96 413 19 531 6.8% 593 454 36 1,083 1 10 17 28 2.6% Consumer 4,937 155 135 5,225 90 26 76 192 3.7% - Motor Lending UK 1,750 47 30 1,827 8 3 13 24 1.3% - Loans UK 1,314 47 42 1,403 61 18 32 111 7.9% 783 19 802 7 7 14 1.7% - Motor Lending Ireland - Loans Ireland 688 54 30 771 12 4 17 33 4.3% - Credit Cards Ireland 402 7 14 422 2 1 7 10 2.4% Total 56,868 17,779 4,262 78 78,987 191 650 1,271 19 2,131 2.7% Composition (Dec 20) Gross carrying amount (before impairment loss allowance) Impairment loss allowance ILA % Sectoral analysis by stage Stage 1 Residential Mortgages - Republic of Ireland - UK 20,464 Stage 2 €m €m 40,016 2,528 19,552 1,880 1,508 648 688 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total of gross loans €m €m €m €m €m €m €m €m 2,196 2 44,742 74 31 374 479 1.1% 2 22,942 44 20 329 393 1.7% 21,800 30 11 45 86 0.4% Non-property SME and corporate 10,637 8,181 1,014 19,858 134 368 416 13 931 4.7% - Republic of Ireland SME 4,155 2,246 672 7,073 96 144 261 - 501 7.1% -Loans Ireland - UK SME - Corporate Property and construction - Investment - Development Consumer - Motor Lending UK - Loans UK - Motor Lending Ireland - Credit Cards Ireland 1,064 612 114 1,790 9 37 26 72 4.0% 5,418 5,323 228 26 10,995 29 187 129 13 358 3.3% 2,639 4,869 1,021 62 8,591 9 126 442 19 596 6.9% 2,357 4,227 987 62 7,633 7 103 427 19 556 7.3% 282 642 34 958 2 23 15 40 4.2% 4,961 165 145 5,271 129 27 80 236 4.5% 1,798 71 31 1,900 10 5 13 28 1.5% 1,295 43 42 1,380 90 17 32 139 10.1% 751 - 22 773 8 - 8 16 2.1% 678 42 33 753 18 4 17 39 5.2% 439 9 17 465 3 1 10 14 3.0% Total 58,253 15,743 4,376 90 78,462 346 552 1,312 32 2,242 2.9% Bank of Ireland#4949 49 Gross carrying amount (before impairment loss allowance) Stage 1 Stage 2 €m €m Stage 3 €m 2,529 1,414 90 1,365 1,020 107 1,671 660 112 Non-property SME and corporate by stage Composition (Jun 21) Sectoral analysis by stage Non-property SME and corporate - Manufacturing - Wholesale and retail trade - Administrative and support service activities 1,2 Bank of Ireland 2021 Interim Results - Debt Investor Presentation Impairment loss allowance ILA % POCI €m Total €m Stage 1 €m Stage 2 €m Stage 3 POCI Total of gross loans €m €m €m 4,033 13 2,505 9 2,443 9 - Accommodation and food service activities 234 1,315 221 1,770 - Agriculture, forestry and fishing 1,214 352 127 1,693 - Human health services and social work activities 627 799 33 1,459 - Transport and storage 351 486 136 973 - Other services 540 265 111 916 - Professional, scientific and technical activities 404 180 16 600 - Arts, entertainment and recreation 812 150 17 979 - Financial and insurance activities 187 357 81 625 - Real estate activities - Education - Other sectors Total Composition (Dec 20) Sectoral analysis by stage Non-property SME and corporate - Manufacturing Wholesale and retail trade - Administrative and support service activities 81 379 52 512 374 63 2 439 994. 346 51 1,391 ST35272852238 5221342333-125 29 102 2.5% 61 44 114 4.6% 19 54 20 11 29 18 AR1562112 46 88 3.6% 46 102 5.8% 34 66 3.9% 10 68 4.7% 55 77 7.9% 65 7.1% 16 2.7% 14 1.4% 34 64 10.2% 14 41 8.0% 6 1.4% I 35 2.5% 11,383 7,786 1,156 13 20,338 70 401 387 858 4.2% Gross carrying amount (before impairment loss allowance) Impairment loss allowance ILA % Stage 1 €m Stage 2 €m Stage 3 POCI Total €m €m €m Stage 1 €m Stage 2 Stage 3 POCI Total of gross loans €m €m €m €m 2,076 1,742 82 - 3,900 1,388 926 96 26 2,436 1,520 688 141 2,349 236 1,354 131 1,721 - Agriculture, forestry and fishing 1,187 352 132 1,671 - Accommodation and food service activities 727 760 33 1,520 - Human health services and social work activities 436 489 69 994 - Transport and storage 431 370 119 920 - Other services 475 216 - Financial and insurance activities 588 85 - Professional, scientific and technical activities 308 190 - Real estate activities 78 389 - Arts, entertainment and recreation 311 99 - Education 876 521 22-2 15 706 23 696 89 587 62 529 1 411 21 1,418 SEDECOL3742727 19 75 36 25 39 55 wi 130 3.3% 13 132 5.4% 19 31 77 127 5.4% 5 46 40 91 5.3% 16 16 35 67 4.0% 10 55 10 75 4.9% 23 42 69 6.9% 12 1 2250260 15 48 66 7.2% 9 5 21 3.0% 7 16 2.3% 10 35 57 9.7% 17 38 7.2% 1 9 2.2% 18 8 33 2.3% - Other sectors Total 10,637 8,181 1,014 26 19,858 134 368 416 13 931 4.7% 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 totalling less than €400 million are grouped together as 'Other sectors' The NACE codes reported in the table above can therefore differ period on period#50Residential mortgages & consumer loans Gross loans by stage Residential Mortgages . Bank of Ireland 2021 Interim Results - Debt Investor Presentation Residential mortgages Mortgage portfolios 56% of Group loan book Consumer €44.7bn €44.5bn €5.3bn €5.2bn €2.2bn €1.9bn €0.1bn €0.1bn €2.5bn €4.8bn €0.2bn €0.2bn €40.0bn €37.8bn Dec 20 Jun 21 ■Stage 1 Stage 2 Stage 3 €5.0bn €4.9bn Dec 20 Jun 21 ■Stage 1 Stage 2 Stage 3 ILA movement Consumer Residential Mortgages 1.1% €479m €4m €39m 1.2% 4.5% €522m €236m (€40m) (€4m) 3.7% €192m Dec 20 Stage 1/2 Stage 3 Jun 21 Dec 20 Stage 1/2 Stage 3 ●ILA % of gross loans Jun 21 . • • - Average LTV of 58% on stock 88% of the portfolio has LTV <80% Stage 2 loans increased from €2.5bn at Dec 2020 to €4.8bn at Jun 2021 due to a staging adjustment following the re-assessment of management adjustment assumptions Stage 3 loans reduced by €0.3bn reflecting the NPE mortgage transaction, with stage 3 cover increasing to 20% at Jun 2021 (17% at Dec 2020) reflecting changes to LGD model. €43m increase in impairment loss allowance reflects impact of changes to the LGD model components, offset by improved FLI update Impairment coverage increased from 1.1% at Dec 2020 to 1.2% at Jun 2021 Consumer • 7% of Group loan book - €2.0bn Ireland exposure; €0.8bn motor, €0.8bn consumer loans, €0.4bn credit cards €3.2bn UK exposure; €1.8bn motor, €1.4bn consumer loans €44m decrease in impairment loss allowance related to FLI model updates Impairment coverage decreased from 4.5% at Dec 2020 to 3.7% at Jun 2021 Bank of Ireland 50#51Non-property SME and corporate & property and construction Gross loans by stage Non-property SME and corporate Property and construction Bank of Ireland 2021 Interim Results - Debt Investor Presentation €19.9bn €1.0bn €20.3bn €1.1bn €8.9bn €7.8bn €8.6bn €8.2bn €1.1bn €1.1bn €4.9bn €5.0bn €11.4bn €10.6bn Dec 20 Jun 21 ■Stage 1 Stage 2 Stage 3 €2.6bn Dec 20 ILA movement Non-property SME and corporate €2.8bn Jun 21 Stage 1 Stage 2 Stage 3 Property and construction 4.7% 4.2% 6.9% (€31m) (€42m) €931m €858m €596m (€25m) (€12m) 6.2% • • Non-property SME and corporate 26% of Group loan book, well diversified by geography and sector €0.4bn decrease in stage 2 loans since Dec 2020 reflecting improved macro-economic conditions and improved outlook on corporate lending exposures, offset by staging adjustment for SME loans following re- assessment of management adjustment assumptions Increased impairment coverage across higher impacted sectors and portfolios: Wholesale and retail trade exposure €2.4bn, impairment coverage 3.6% (Dec 20: 5.4%) Accommodation and food services exposure €1.8bn, impairment coverage 5.8% (Dec 2020: 5.3%) Acquisition finance exposure €4.7bn, impairment coverage 3.2% (Dec 2020: 4.2%) Impairment coverage decreased from 4.7% to 4.2% at Jun 2021 Property and construction • • 11% of Group loan book; €7.9bn investment property; €1.1bn development lending Investment property exposures Retail (33%), Office (34%), Residential (18%) and Other (15%); 72% of the book LTV <70% Impairment coverage decreased from 6.9% to 6.2% at Jun 2021 Bank of Ireland €559m . Dec 20 Stage 1/2 Stage 3 Jun 21 Dec 20 Stage 1/2 Stage 3 Jun 21 ILA % of gross loans 51#52Forward looking information - macro-economic scenarios 30 June 2021 Central scenario - 45% probability weighting Bank of Ireland 2021 Interim Results - Debt Investor Presentation 2021 Ireland 2022 2023-2025 2021 United Kingdom 2022 2023-2025 52 62 GDP growth¹ 4.7% 4.9% 3.0% 5.4% 5.5% 1.8% GNP growth¹ Unemployment rate 6.1% 4.7% 2.6% n/a n/a n/a 8.0% 7.4% 5.6% 5.6% 5.6% 4.6% Residential property price growth 3.0% 2.0% 1.3% 4.0% (1.0%) 1.7% Commercial property price growth (5.5%) (0.5%) 1.5% (4.0%) 0.0% 1.5% Upside scenario -20% probability weighting GDP growth¹ 6.3% 5.9% 3.2% 7.5% 6.2% 1.9% GNP growth¹ 7.7% 5.7% 2.8% n/a n/a n/a Unemployment rate² 7.2% 5.8% 4.4% 5.0% 4.7% 3.8% Residential property price growth³ 5.0% 3.0% 1.7% 6.0% 3.0% 2.3% Commercial property price growth³ (2.5%) 0.5% 2.5% (1.5%) 1.0% 2.5% Downside scenario 1 -25% probability weighting GDP growth¹ 3.0% 2.9% 4.4% 3.6% 1.6% 3.2% GNP growth¹ 2.8% 2.5% n/a n/a n/a 4.6% Unemployment rate² 8.8% 9.1% 7.7% 6.2% 7.0% 6.1% Residential property price growth³ 0.0% (2.0%) (0.3%) 1.0% (3.0%) (0.3%) Commercial property price growth³ (7.0%) (3.0%) 1.0% (6.5%) (3.0%) 0.8% Downside scenario 2-10% probability weighting GDP growth¹ 1.9% 0.8% 2.5% 2.8% 1.5% 1.2% GNP growth¹ 2.9% 0.6% 2.1% n/a n/a n/a Unemployment rate² 10.0% 11.0% 9.8% 7.3% 8.8% 8.2% Residential property price growth³ (3.0%) (5.0%) (1.7%) (4.0%) (8.0%) (3.3%) Commercial property price growth³ (10.0%) (8.5%) (1.3%) (8.5%) (8.0%) (2.2%) 1 Annual growth rate 2 Average yearly rate 3 Year-end figures Bank of Ireland#53ILA sensitivity to macro-economic scenarios Bank of Ireland 2021 Interim Results - Debt Investor Presentation The following table indicates the approximate extent to which impairment loss allowance (ILA), excluding Group management adjustments, would be higher or lower than reported were a 100% weighting applied to the central, upside and downside future macro-economic scenarios respectively 30 June 2021 Impact of applying only a central, upside or downside scenario rather than multiple probability weighted scenarios¹ Total Multiple scenarios Central scenario Change in impairment loss allowance Upside scenario Downside scenario 1 Downside scenario 2 Impairment loss allowance €m Impairment loss allowance €m Impairment Impact % loss allowance €m Impact % Impairment loss allowance €m Impairment Impact % loss allowance €m Impact % 1,906 (82) (4%) (222) (12%) 223 12% 662 35% The following table indicates the approximate extent to which impairment loss allowances for the residential mortgage portfolios, excluding post model Group management adjustments, would be higher or lower than the application of a central scenario if there was an immediate change in residential property prices. Although such changes would not be observed in isolation, as economic indicators tend to be correlated in a coherent scenario, this gives insight into the sensitivity of the Group's impairment loss allowance to a once-off change in residential property values. 30 June 2021 Impact of an immediate change in residential property prices compared to a scenario impairment loss allowance Central scenarios Total Residential property price reduction of 10% Change in impairment loss allowance Residential property price reduction of 5% Residential property price increase of 5% Residential property price increase of 10% Impairment loss allowance €m Impairment Impairment loss allowance Impact % €m loss allowance €m Impact % Impairment loss allowance €m Impact % Impairment loss allowance Impact % €m 432 44 10% 20 5% (18) (4%) 33 (8%) Bank of Ireland 1 The scenarios outlined in the table are based on the FLI weightings outlined on page 52 53#54Ireland mortgages Continued proactive arrears management Industry Average >90 days arrears¹ Industry Average 15.1% Bank of Ireland 6.1% 1.9% Owner Occupier Owner Occupier Bank of Ireland 4.2% Buy to let Buy to let Bank of Ireland 2021 Interim Results - Debt Investor Presentation >90 days arrears Bank of Ireland is significantly below the industry average for both Owner Occupier (31% 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 (25% of industry average) and Buy to Let (21% of industry average) >720 days arrears¹ Industry Average Industry Average 11.6% Bank of Ireland Bank of Ireland 4.0% 1.0% 2.4% Owner Occupier Owner Occupier Buy to let Buy to let 1 As at Mar 2021, based on number of accounts, industry average excluding BOI Bank of Ireland 54#55Ordinary shareholders' equity and TNAV Movement in ordinary shareholders' equity Ordinary shareholders' equity at beginning of period Movements: Profit/ (Loss) for the period Dividend paid to ordinary shareholders Dividends on preference equity interests Re-measurement of the net defined benefit pension liability Cash flow hedge reserve movement Distribution on other equity instruments - additional tier 1 coupon (net of tax) Debt instruments at FVOCI reserve movements Foreign exchange movements Other movements Ordinary shareholders' equity at end of period Bank of Ireland 2021 Interim Results - Debt Investor Presentation Dec 2020 (€m) Jun 2021 (€m) 9,625 8,587 (707) 341 (60) (80) 5 (12) (174) བློ། 'སྐྱེ88་་¢ (34) 285 (29) 113 (10) 8,587 (5) 9,254 Tangible net asset value Adjustments: Dec 2020 Jun 2021 (€m) (€m) Ordinary shareholders' equity at the end of period 8,587 9,254 Intangible assets and goodwill (751) (797) Own stock held for benefit of life assurance policyholders 25 21 Tangible net asset value (TNAV) 7,861 8,478 Number of ordinary shares in issue at the end of the period excluding treasury shares TNAV per share (€) 1,074 1,075 €7.32 €7.89 Bank of Ireland 55#56Capital - strong Fully Loaded and Regulatory CET1 ratios Capital ratios - Jun 2021 Total equity Less Additional Tier 1 Deferred tax² Intangible assets and goodwill Foreseeable dividend Expected loss deduction Pension fund asset IFRS 9 Regulatory Addback³ Other¹ items Common Equity Tier 1 Capital Credit RWA Operational RWA Market, Counterparty Credit Risk and Securitisations Market, Counterparty Credit Risk and Securitisations Total RWA Common Equity Tier 1 ratio Total Capital ratio Leverage ratio Phasing impacts on Regulatory ratio Bank of Ireland 2021 Interim Results - Debt Investor Presentation Regulatory ratio Fully Loaded ratio (€bn) (€bn) 10.3 10.3 (1.0) (1.0) (0.8) (1.1) (0.5) (0.5) 0.0 0.0 (0.1) 0.0 (0.3) (0.3) 0.4 0.0 (0.5) (0.5) 7.5 6.9 38.9 38.8 4.2 4.2 2.2 2.2 3.8 3.7 49.1 48.9 15.3% 14.1% 20.5% 19.6% 6.5% 6.0% Deferred tax assets - certain DTAs are deducted at a rate of 70% for 2021, increasing annually at a rate of 10% thereafter until 2024 IFRS 9 - the Group has elected to apply the transitional arrangement. The transitional arrangement allows a 100% add-back in 2021 decreasing to 75%, 50%, and 25% in subsequent years 1 Other items includes other capital deductions, principal ones being prudential valuation adjustment, 10%/15% deduction and calendar provisioning deduction ² Deferred tax assets due to temporary differences are included in other RWA with a 250% risk weighting applied 3 The IFRS 9 addback to the Regulatory CET1 was c.80bps at 30 Jun 2021, decreased from c.95bps at 31 Dec 2020 Bank of Ireland 56#57Transformation investment / operating expenses Transformation Investment: €1.4bn (2016-2021) Average of €275m p.a. • Bank of Ireland 2021 Interim Results - Debt Investor Presentation €306m €263m €195m €105m €410m 2016 2017 2018 2019 2020 2021 Transformation investment Average annual investment of €275m from 2018-2021; equates to CET1 capital of c.50-60bps Investment of €149m in H1 2021 split across the income statement (14%), balance sheet (36%) and non-core items (50%) Total transformation investment of €1.4bn 2016- 2021 unchanged to support 2021 target for operating expenses <€1.65bn Additional investment required to support 2023 cost target of €1.5bn • H1 2020 H1 2021 Operating Expenses Total staff costs - Staff costs (€m) (€m) 425 413 361 341 - Pension costs 64 72 Other costs 288 290 Depreciation 131 113 Operating Expenses 844 816 Transformation Investment charge 28 21 Operating Expenses (before levies and 872 837 regulatory charges) Levies and Regulatory charges 70 96 Impairment of intangibles and goodwill 9 Total Operating Expenses 951 933 Average staff numbers 10,383 9,643 Cost income ratio¹ 66% 61% Bank of Ireland 1 See page 58 for additional detail 57#58Cost income ratio: Jun 2021 Headline vs. Adjusted Net interest income Other income Bank of Ireland 2021 Interim Results - Debt Investor Presentation H1 2021 Headline (€m) 1,080 Pro forma adjustments (€m) H1 2021 Pro forma (€m) 1,080 - Business income 282 282 - Additional gains 2 (2) - Other valuation items 34 (34) Total Income 1,398 (36) 1,362 Costs - Operating expenses 816 - Transformation Investment 21 Costs Cost income ratio • Cost income ratio excludes: - - Levies and Regulatory charges Non-core items • 837 60% 816 21 837 61% H1 2021 Adjusted cost income ratio is adjusted for: Additional gains and valuation items €36m Bank of Ireland 58#59Return on tangible equity (ROTE) H1 2021: Headline vs. Adjusted Profit for the period - Non-core items including tax - Coupon on Additional Tier 1 securities H1 2021 Headline (€m) 341 Bank of Ireland 2021 Interim Results - Debt Investor Presentation Additional gains & valuations items, net of tax 58 (34) (4) - Preference share dividends Adjusted profit after tax 361 (32) Annualised profit after tax 735 (64) At June 2021 - Shareholders' equity 9,254 - Intangible assets (797) - Shareholders' tangible equity 8,457 Average shareholders' tangible 8,091 equity Return on tangible equity (ROTE) 9.1% • H1 2021 Adjusted return on tangible equity is adjusted for: Additional gains and valuations items, net of tax - €32m Adjusted for CET1 ratio at 13.0% H1 2021 Adjusted (€m) Average shareholders' tangible equity calculated on a CET1 ratio at 13% - €282m 329 671 (497) 8,757 (797) (497) 7,960 (282) 7,809 8.6% Bank of Ireland 59#60Defined benefit pension schemes Group IAS19 Defined Benefit Pension (Deficit) / Surplus 1.60% 2.10% 2.00% Bank of Ireland 2021 Interim Results - Debt Investor Presentation Total Group Defined Benefit Pension Scheme Assets (%) €7.1bn €7.2bn €7.2bn €8.4bn €8.9bn €8.9bn 1.30% 1.25% 58% 55% 0.80% 65% 65% 69% 65% 60 60 (€0.23bn) (€0.14bn) (€0.13bn) (€0.48bn) (€1.19bn) Jun 16 Dec 17 Dec 18 €0.21bn 17% 21% 23% 23% 21% 24% 25% 24% 12% 12% 10% 11% Jun 16 Dec 17 Dec 18 Dec 19 Dec 20 Jun 21 Dec 19 Dec 20 EUR discount rate Jun 21 IAS19 DB pension (deficit) / surplus IAS19 Pension Deficit Sensitivities (Jun 2016 / Dec 2017 / Dec 2018 / Dec 2019 / Dec 2020/Jun 2021) €313m €118m €102m €109m | €88m €103m €173m €162m Interest rates¹ €153m €181m €196m €183m Credit spreads² €71m €28m €38m €28m €22m €22m Inflation3 1 Sensitivity of Group deficit to a 0.25% decrease in interest rates €122m €128m €90m €102m €132m €121m Global equity4 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 Credit / LDI / Hedging 1 Diversified assets includes infrastructure, private equity, hedge funds and property IAS19 pension surplus of €0.21bn at Jun 2021 (€0.13bn deficit Dec 2020) Schemes in surplus €0.39bn, schemes in deficit €0.18bn Both euro and sterling discount rates increased over the half year due to increases in long term risk free interest rates, leading to a reduction in long term liabilities The interest rate hedging in the investment portfolios offset some of positive impact of the increase in risk free rates The implied credit spread component of the discount rates remained largely unchanged over the period Both long term euro and sterling inflation assumptions also increased in the period, with the resulting increase in liabilities partially offset by the increase in inflation hedging assets De-risking strategies in recent years have also reduced the schemes' exposure to global equity movements and increased exposure to non-correlated assets Listed equity asset holdings have been reduced in favour of increases in diversified assets and credit / LDI / hedging allocations Bank of Ireland#61Forward looking statement Bank of Ireland 2021 Interim Results - Debt Investor 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. Such risks and uncertainties include, but are not limited to, those as set out in the Risk Management Report in the Group's Interim Report for the six months ended 30 June 2021. Investors should also read 'Principal Risks and Uncertainties' in the Group's Interim Report for the six months ended 30 June 2021 beginning on page 27. Nothing in this document should be considered to be a forecast of future profitability, dividends or financial position of the Group and none of the information in this document is or is intended to be a profit forecast, dividend 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 61#6262 Contact Details For further information please contact: Group Chief Financial Officer Myles O'Grady Investor Relations Darach O'Leary Owen Callan Philip O'Sullivan Group Treasury Tony Morley Alan Elliott Alan McNamara Redmond O'Leary Deirdre Ceannt tel: +353 12 50 8900 ext. 43291 tel: +353 12 50 8900 ext. 44711 tel: +353 12 50 8900 ext. 45092 tel: +353 12 50 8900 ext. 35328 tel: +353 12 50 8900 ext. 41974 tel: +353 12 50 8900 ext. 44371 tel: +353 12 50 8900 ext. 48725 tel: +353 12 50 8900 ext. 44198 tel: +353 12 50 8900 ext. 44219 Investor Relations website www.bankofireland.com/investor Bank of Ireland 2021 Interim Results - Debt Investor Presentation [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Bank of Ireland#63Empty