#1Bank of Ireland Fixed Income Investor Presentation December 2005#21 Forward Looking Statement This document contains certain forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995 with respect to certain of the Group's plans and its current goals and expectations relating to its future financial condition and performance and the markets in which it operates. Because such statements are inherently subject to risks and uncertainties, 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 risks and uncertainties relating to profitability targets, prevailing interest rates, the performance of the Irish economy and the international capital markets, the Group's ability to expand certain of its activities, development and implementation of the Group's strategy, including the ability to achieve estimated cost reductions, competition, the Group's ability to address information technology issues and the availability of funding sources. Any forward-looking statements speak only as of the date they were made. The Bank of Ireland Group does not undertake to release publicly any revision to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date hereof. The reader should however, consult any additional disclosures that the Group has made or may make in documents it has filed or submitted or may file or submit to the U.S. Securities and Exchange Commission. Bank of Ireland KKO#3Table of Contents 2 Section 1 Group Overview pg 3 Section 2 Recent Results and Credit History pg 10 Section 3 Funding Strategy pg 16 Section 4 The Economic Environment pg 21 Section 5 Conclusion pg 28 Bank of Ireland#4Group Overview Bank of Ireland#54 ☐ Bank of Ireland Profile Oldest Bank in Ireland, established in 1783 A Diversified Financial Services Group, principally in Ireland & the UK Largest Irish Listed Bank by Total Assets: €146 Bn @ Sept 2005 Joint Highest Rated Irish Listed Financial Institution Moody's S&P Fitch Aa3 A+ AA- (since 1998) (since 1998) (since 1995) Market Capitalisation of €13.3Bn (Dec 2005) History of sustained profit growth Asset Quality - low risk profile Clear and Compelling Strategy: - Maximise returns from our leading position in Ireland Substantially grow our businesses in the UK Grow our portfolio of niche skill-based businesses internationally Implementation of Strategic Transformation Programme to enhance our competitive position Bank of Ireland Ren KKO#65 An Excellent Track Record 10 year total shareholder return 21.8% pa ■ 11 consecutive years of loan impairment ≤ 20bps ■ 12 consecutive years of ROE ≥ 20% ■ 13 consecutive years of dividend growth ■ 14 consecutive years of profit growth Bank of Ireland KKO#7Stepping up Pace of Execution Our Vision: 6 "To be the number one bank in Ireland with dynamic businesses growing internationally" Our Strategy: Maximise returns from our leading position in Ireland Substantially grow our business in the UK Grow our portfolio of niche, skill-based businesses internationally Bank of Ireland#8Group Structure Business diversified across 5 key business areas: GROUP CHIEF EXECUTIVE Retail Republic Of Ireland Bank of Ireland Life Asset Mgmt Services Wholesale Fin. Services UK Financial Services 37% Business Banking Personal Lending Wealth Management 9% Life & Pensions 7% BIAM Iridian Asset Management 27% 23% Corporate Banking Business Banking Treasury Retail Foreign Personal BOI Securities Services Lending Exchange 7 Stockbroking Corporate Finance % PBT from each division excl central costs for half year to Sept 2005. Post Office Financial Services equates to (3%) Bank of Ireland#9Divisional Overview Retail Republic of Ireland and Bank of Ireland Life Leading position in Ireland. . Presence in all market segments incl branch banking, life and pensions and business banking through direct & indirect channels Growing market share in an increasing competitive market environment Irish Market Shares @ Sept 2005 • New Mortgages 27% • Life Assurance 25% . Credit Cards in issue 38% . Business Advances 20% • SME Current Accounts 36% Asset Management Services • Provides fund management services to institutions and pension funds in Ireland and overseas, along with custodial services BIAM is the most successful Irish-owned fund management business Assets Under Management* 8 BIAM . Iridian €44.0bn US$10.4bn * At 30 Sept 2005 Bank of Ireland KKO#10Divisional Overview Wholesale Financial Services . Leading Treasury, Stockbroking and Corporate Finance advisers in Ireland. . Corporate Banking has leading market share with internationalised Irish corporates and multinationals operating in Ireland. Strong international income flow from niche, skills-based businesses adding to Group profit diversification. Good asset quality, modest proprietary trading and sound governance, controls & risk culture. First Rate Enterprises provides foreign currency services in Ireland, the UK and North America. UK Financial Services . . A key player in the UK specialist mortgage market, with growing market share, while maintaining an excellent arrears profile. Strategy is to focus on mortgages, business banking and on consumer banking, primarily through our joint venture with the UK Post Office (PO FS). PO FS gives exposure to Europe's largest retail network with 44 million customers per year. 6 Bank of Ireland KKO#11Recent Financial Performance Bank of Ireland#12September 2005 Interim Highlights Sustained growth in profit..... Irish GAAP basis €m IFRS Basis % Sept 04 Sept 05 Change 1,398 1,500- Total Income* 1,608 1,842 15% 1,400- 1,267 1,300- 1,177 1,122 € (Mn) 1,200- 1,085 1,100- 1,000- 920 Impairment Losses Operating (28) (50) 79% * (935) (972) 4% 900- Expenses 800- 2000 2001 2002 2003 March Year End 2004 2005 Associates/JVs 19 28 47% (post tax) Profit Before Tax 664 848 28% PBT Sept 2005 Non Core Items (50) (183) 15% Underlying PBT 614 665 8% * 11 26% ☐ ROI UK Rest of World 59% Net of increase in insurance contract liabilities and claims ....that is geographically diversified Bank of Ireland KKO#1312 September 2005 Interim Highlights ....and strong volume growth across the Group 40% 35% 30% 25% 20% 15% 10% 5% 0% Mortgages Divisional volume growth Sept 05 vs Sept 04 Retail Ireland +24% +16% WFS +27% UKFS +19% Bank of Ireland KKO#14Asset Quality High quality loan book* with 51% of loan assets secured against residential properties... 45% 10% □ ROI UK International March 2005 Agriculture 2% March 2005 2% Financial Commercial Mortgages 3% Other Lending 5% 6% Manufacturing Business and Other services 8% Personal Lending 8% 15% Construction and Property 51% Residential Mortgages 0% 10% 20% 30% 40% 50% 60% End March 2005 45% * Loan book of €83.1bn at March 2005 including corporate debt securities of €3.2bn 13 and that avoids concentration in any one market Bank of Ireland KKO#15Asset Quality Impairment Losses on Loans Asset Quality H1 Sept 05 H1 Sept 04 €m €m €m 800 693 710 682 700 Impairment Losses 62 29 68 88 600 500 433 NDSP/General I (28) 400 343 319 300 Recoveries (12) (12) 200 100 Total €m 50 28 0 Sept 05 Charge on Average 11bps 8bps* Loans Impairment Provisions * After release from general loan loss provisions of €100m March 05* Sept 04 Impaired Loans * Includes 8bps benefit from NDSP release Excellent asset quality Benign economic environment Well structured & seasoned loan book Superior underwriting skills and good arrears management 14 Bank of Ireland KKO#1615 Capital Management Strong capital position maintained: IFRS Basis Sept 04 Sept 05 Total Assets (€Bn) 117.7 146.3 Risk Weighted Assets ( €Bn) 69.1 88.5 Tier 1 Ratio (%) 7.6 7.3 Total Capital Ratio (%) 10.7 10.6 Group Stated Minimum Capital Ratios* Range of 6.5% - 7% Tier 1 Total Capital Ratio of 10.5% Regulator * Not regulatory minima Irish Financial Services Regulatory Authority (IFSRA) Bank of Ireland KKO#17Funding Strategy Bank of Ireland#18• Funding Strategy Maximising 'core' customer deposits whilst developing and diversifying wholesale funding channels: Diversifying by Product, Investor type and Geography... ...whilst maintaining the most appropriate mix of short term and long term funding... The Bank's funding mix is below: 3% 4% 6% 1% 3%- 5% 6% 4% 3% 43% ...and achieving the optimal funding cost. Sept 2005 Customer Deposits Deposits by Banks Outstandings (€Bn) €15Bn EMTN Programme € 8.1* □ ECP □ USCP □ EMTN ACS € 4.0 ☐ CDs $15Bn USDCP Programme € 4.3 ☐ ACS Other Debt Securities Other Liabilities ☐ Sub Debt Stockholder Funds* New Instruments/Programmes €5Bn ECP Programme € 4.5 CD's € 7.3 22% Excludes Life funds held on behalf of Policyholders * Net of Pensions . As at Sept 2005 17 US$ Extendible Notes (Oct 2005) €2.5Bn CanDCP Programme (Nov 2005) * Excludes Sub Debt Issues of €2.9 Bn Bank of Ireland KKO#1918 Senior Issuance Strategy Strong balance sheet growth projected to continue, driven by domestic and international asset growth. Dedicated wholesale funding team enabling responsive issuance. Committed to satisfying investor requirements with respect to debt marketing, credit updates and regular issuance. Objectives - Diversification - - Outstandings - Duration Bank of Ireland KKO#2019 Short Term Funding ECP EUR 5 Billion Programme Multi Currency Issuance USCP USD 15 Billion Programme CAN$CP Can $2.5 Billion Programme CD Multi Currency Issuance MTN ΧΝ Multi Currency Issuance Callable Structured Notes - Interest Rate Linked Extendible Notes Issue Bank of Ireland KKO#2120 Long Term Funding EMTN EUR 15 Billion Programme Multi Currency Issuance Fixed and Floating rate issuance ACS EUR 10 Billion Programme Triple A rated Public & Private Placements Cornerstone of bank's senior funding - allows extension of duration of liability profile - improves funding efficiency - diversifies investors by geography and type €2bn BolMB ACS 3.5% 5 year Issue (22/09/04 - 22/09/09) winner of: IFR Euro Bond of the Year 2004 IFR Covered Bond of the Year 2004 Euroweek Covered Bond of the Year 2004 Bank of Ireland KKO#22The Economic Environment Bank of Ireland#23Economic Environment The Bank of Ireland Group is primarily exposed to the Irish market... Republic of Ireland • . 260 Branches ⚫ 1,029 ATMs Northern Ireland . 44 Branches ... which are both outperforming the EU average 22 ... along with the UK... The UK 10 Branches (plus Business Centres) Bank of Ireland KKO#24The Transformation of the Irish Economy 1.4- 1.2- Population Average Annual Growth (%) 11 1- 0.8 0.6- 0.4- 0.2- 0- 1991-96 1996-02 2002-04 15 10 LO 5 Ireland EU Unemployment Rate (%) 0 1991 1996 2002 2004 Ireland EU GDP Per Capita (vs EU Average=100) 140.0 120.0- 100.0- 80.0- ull 60.0- 40.0 20.0- 0.0- 1985 1990 1995 2000 2004 Ireland was in a position of relative weakness compared to its European peers in the 1980's. It has seen significant growth in the last 20 years with GDP per Capita growing from 69% of the EU average in 1985 to 123% in 2004. With the strength of the fundamentals, the Irish economy can support this growth going forward. Bank of Ireland Global Markets are forecasting 5.5-6.0% GDP growth over the medium term, underpinned by 2.5% labour force growth and 3.5% productivity gains (average in last 5 years and the 1990's) 23 Source: CSO & Eurostat Bank of Ireland KKO#2524 The Irish Economy Employment has surged... while mortgage interest rates have fallen to all time lows... Irish Employment(m) 2 1.89 1.67 1.8- 1.6- 1.16 1.4- 1.08 1.2- 1- 0.8- 0.6- 0.4- 0.2- nnail 1.28 0 1985 1990 1995 2000 2004 Source: Irish Central Statistics Office % 10. Mortgage Interest Rates 9 8. 6 9 65 43 4- 7- 1 2 1993 1994 1995 1996 1997 Source: BOI Global Markets Economic Research Unit 1998 1999 2000 2001 • Employment in the aggregate continues to grow strongly with 1.91M employed by the end of Q1 2005. Over the 12 months the total number employed increased by 73k (4.0% employment growth). The unemployment rate in Q1 2005 was 4.1% (CSO-Quarterly National Household Survey), representing an improvement of 0.3% on a year earlier. Economies are in full employment when unemployment is under 6% - OECD. Average mortgage interest rates remained relatively static over the last 2 years at between 3.0 and 3.5%. Bank of Ireland KKO 2002 2003 2004 2005 (f)#26The Irish Economy ... and population growth is to outstrip the EU Population Growth 2004-2015 (%) 14 12 10 8 00 CO 6 4 2 0 Source: Eurostat Ireland EU25 EU15 Millions 1.3 1.1 0.9 0.7 0.5- 0.3- 0.1 0-14 15-24 Population by Cohort 1996 Census ■2002 Census 2006 CSO Projections 25-44 45-54 55-64 Source: Central Statistics Office The population in Ireland is growing by 2.2% annually. This compares with growth of 0.2% in the EU. The population currently stands at 4m (highest level since 1871) with a disproportionate percentage in the 25-44 age cohort (key house formation cohort) and job creation is strong (in excess of 1k new jobs created per week over the last 12 months). Key house formation cohort (25-44 years) remains strong following exceptional birth rates in the 1980's and immigration is averaging 55k per annum in recent years. 25 Bank of Ireland#2726 The Irish Economy - Conclusions ■ Ireland is the fastest growing economy in the Eurozone since mid 1990's. Labour force and productivity gains support medium term GDP forecasts of 5.5-6% The economy is now at full employment with buoyant labour demand boosting. immigration. Immigration is running in excess of 60,000 per year. ☐ Population growth is 2.2% per year (against 0.2% in EU). Household debt is in line with the Euro norm despite recent growth. Business friendly environment, strongly supervised. Bank of Ireland KKO#2827 The UK Economy The UK economy is remaining buoyant... GDP Growth (yoy.%) 5 4 3 2 1 0 2000 2001 2002 2003 2004 2005(f) UK - Eurozone The mortgage market is recovering after a softening with house prices proving more resilient than predicted Housing supply remains unresponsive to demand underpinning the positive outlook GDP growth has outperformed its European peers Enjoying full employment, unemployment well below the EU norm Inflation is low and is predicted to remain so in the medium term Interest rate cycle more muted than previously UK Monthly Mortgage Approvals (000) 140 130 120 110 100 90 80 70 60 03q1 03q3 04q1 04q3 05q1 05q3(e) Bank of Ireland KKO#29Conclusion Bank of Ireland#3029 Conclusion BANK OF IRELAND - The largest Irish Listed Bank by Total Assets with a very strong presence in all its chosen markets. THE IRISH ECONOMY - The fundamentals of the Irish economy are demonstrably strong. FINANCIALS - A trend of sustained profit growth underpinned by an exceptional credit history. BANK OF IRELAND FUNDING and CAPITALISATION - Investor Focused and based around a responsible strategy Bank of Ireland KKO#31Bank of Ireland Contacts 30 Capital Management: > Brian Kealy (Head of Capital Management) [email protected] > Deirdre Hogan [email protected] Funding Desk: > Vincent Digby (Head of Funding) [email protected] > Russell Waide [email protected] > Rosalind Torney [email protected] Group Investor Relations: Tel: 00 3531 604-3537 Tel: 00 3531 799-3140 > Geraldine Deighan (Head of Group Investor Relations) [email protected] Tel: 00 3531 604-3502 Bank of Ireland#32Appendices Bank of Ireland#33Economic Outlook - Ireland Actual Forecast % Growth 2004 2005 2006 2007 GDP 4.5 5.0 6.0 6.0 GNP 4..0 6.0 6.0 6.0 Consumer Spending 3.8 5.5 7.0 9.0 Exports Inflation 7.0 3.2 6.0 6.0 2.2 2.5 2.5 2.5 Unemployment 4.5 4.3 4.2 4.3 Source: Bank of Ireland Global Markets Forecasts as at October 2005 Bank of Ireland KKO#34Economic Outlook - UK Actual Forecast % Growth 2004 2005 2006 2007 GDP 3.2 1.7 2.6 2.5 Consumer 3.7 1.8 2.3 2.5 Spending Exports 3.5 4.1 5.5 5.0 Inflation Unemployment 1.4 2.2 2.0 2.0 2.8 4.7 4.8 4.7 Source: Bank of Ireland Global Markets Forecasts as at October2005 Bank of Ireland KKO