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Investor Presentaiton

Defined Benefit Pension Schemes Bank of Ireland Group Group has developed a framework for pension funding and investment decision-making as part of long-term plan Management of Group's DB pension position involves a multi-year programme, categorised into 3 broad areas. Activity in these areas includes; Review Liabilities Pensions Review 2010 and 2013 - shared solutions with members - successfully executed and extended to smaller schemes in 2014 and 2015 A Defined Contribution ('DC') scheme was introduced in 2014 for new hires and existing hybrid Life Balance scheme closed An enhanced transfer value exercise is under consideration for the BSPF scheme in H2 2016 2 Increase Assets ▶ >€750m of deficit-reducing contributions made since 2010; further €400m expected to be made across Group schemes between 2016 and 2020 ►BSPF asset returns of c. 10.5% p.a. were achieved over 3 years to end Jun 16 despite market volatility 3 Improve correlation between assets and liabilities ► Group has supported trustees in diversifying asset portfolios away from listed equity into other return-seeking but less volatile asset classes e.g. allocation to private infrastructure The €150m BSPF deficit reducing contribution in December 2015 was invested in the LDI portfolio in January 2016 Group has supported the Trustees of BSPF scheme in their decision to extend the level of sterling interest rate and inflation hedging to 60% in 2016 Group has also supported the Trustees of the BOI Group UK scheme in their decision to extend the level of interest rate and inflation hedging to 60% in 2016 Continuing programme to better match asset allocation with the nature and duration of liabilities 57% 60% Mix of BSPF DB Pension Scheme Assets (%)¹ 45% 11% 19% 44% 24% Dec 12 Dec 15 20% 20% Jun 16 Listed equities Diversified 2 Credit / LDI / Hedging Group Schemes Asset & Liability Sensitivities Jun 16 Sensitivity of scheme assets is: Fall in global equity markets with allowance for other correlated diversified asset classes Sensitivity of liability-matching assets to a 10bps movement in interest rates Sensitivity of IAS19 liability is: IAS19 Liability Discount Rate Long Term Inflation Change 5.00% decrease Impact on plan assets increase (decrease) (€120m) 0.10% decrease €60m Change 25bps decrease 10bps decrease ROI Schemes €376m (€95m) UK Schemes €80m (€20m) 1Graphs shows BSPF asset allocation which is representative of the Group schemes overall 2Diversified category includes infrastructure, private equity, hedge funds and property 44
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