Investor Presentaiton

Overview of Irish Mortgage Market Bank of Ireland Group Ongoing deleveraging in Irish Mortgage Market €bn 160- 140- 120- 100- 80- 60- 40- 20 0 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Jun-16 4 Volume Outstanding Source: CBI Modest pick up in mortgage drawdowns from low base €bn 451 Industry estimated normalised level - €8-10bn 5 40- 35- 30- 25- 20- 15- 10- 5- 0 2006 2012 2013 2014 3 +2 2015 BTL Mover Purchase FTB Purchase 2006 (LHS) 2012-2015 (RHS) Top-up Re-mortgage Source: BPFI Structure of Irish Mortgage Market Size of Irish mortgage market reduced c.25% from 2009 peak (c.€109bn Jun 2016) Predominantly principal and interest structured market New lending ► Total new mortgage lending of c.€4.9bn in 2015, 26% increase vs 2014 Lending by value increased by 17.9% year-on-year in Q2 2016 with market continuing to adjust to Central Bank's macro-prudential rules Average loan value increasing, both FTB and mover purchasers average loan at highest levels since 2011 Macro prudential rules Jan 2015, CBI introduced LTV and LTI limits for Principal Dwelling House (PDH) and Buy to Let (BTL) Mortgages LTV limits¹ PDH for non-first time buyer: 80% limit PDH for first time buyers: 90% up to €220k, 80% on any excess value over €220k BTL: 70% limit LTI at 3.5 times loan to gross income for PDH mortgages² Central Bank has announced a consultation process and review of these rules to be completed by November 2016 1 The total value of new lending for PDH purposes above these limits should be no more than 15 per cent of the euro value of all housing for PDH purposes (10% non-PDH) entered into by a lender in an annual period. 2 This limit should be exceeded by no more than 20% of the total aggregate monetary amount of loans for PDH purposes. BTL mortgages are exempt from the LTI limit 21

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