Investor Presentaiton

Strong capital generation and position Fully loaded CET1 ratio movement 0.9% (0.2%) (0.3%) 0.2% (0.2%) 0.3% 13.6% 14.1% 1 Jan 18 Organic CET1 (post capital Loan growth Transformation Potential (RWA) investment dividend Other (incl. pension) Jun 18 CET1 IFRS 9 impact) generation¹ Capital position • CET1 ratio IFRS 9 impact CET1 movements Strong organic capital generation of 90bps in H1 2018: . • Fully loaded CET1 ratio of 14.1% Regulatory CET1 ratio of 15.8% Regulatory Total Capital ratio of 19.8% • Strong asset performance in H1 2018 and positive impact • • of changes in long term assumptions reduced the regulatory capital impact of pension deficit by €160m (c.35bps) Irish Countercyclical Buffer (CCyB) of 1% from 5 July 2019 (Group requirement of c.60bps²) Capital guidance remains unchanged: the Group expects to maintain a CET1 ratio in excess of 13% on a regulatory basis and on a fully loaded basis by the end of the O-SII phase in period³ Bank of Ireland Group Investment/ allocation of capital in H1 2018 1 Growth in loan book Investment of c.20bps • Net loan book growth of €0.5bn 2 Transformation ⚫ Transformation investment of €141m (c.30bps) 3 Regulatory capital demand • • . As previously announced, CRT executed in Nov 2017 in anticipation of TRIM (c.50bps benefit included in Jun 18 CET1 ratio) TRIM update: now largely complete for Irish mortgages - changes to credit risk models will be made in H2 2018; pro forma impact at Jun 2018: a reduction of c.70bps in fully loaded CET1 ratio A range of potential options are available for consideration to offset this capital impact Expect to increase prudently and progressively from 11.5c per share - over time will build towards a payout ratio of around 50% of 4 Dividend / distributions sustainable earnings • Deduction for potential full year dividend as per regulatory requirements of €75m, equivalent to an annualised dividend of 14c per share (c.20bps) • Other means of capital distribution will be considered to the extent the Group has excess capital 1Organic capital generation primarily consists of attributable profit and movements in regulatory deductions 2The CCyB will be applied in proportion to the Group's credit risk weighted assets in Ireland, resulting in a c.60bps Irish CCyB requirement for the Group from July 2019 (c. 60% of the Group's credit risk weighted assets are located in Ireland) 3The Other Systemically Important Institution (O-SII) buffer will be introduced at 0.5% in July 2019, increasing to 1.0% in July 2020 and 1.5% in July 2021 17

View entire presentation