shareholder information meeting
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Shareholder Information Meeting
Radisson Penn Harris Hotel & Convention Center,
Camp Hill, Pennsylvania,
Wednesday, May 30th, 2007
A number of statements we will be making in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward-looking” statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward looking statements. Factors that could cause actual results to differ materially from those in the forward looking statements include, but are not limited to, global, national and regional economic conditions, levels of market interest rates, credit or other risks of lending and investment activities, competitive and regulatory factors and technology change. Any ‘forward-looking statements made by or on behalf of the Group speak only as of the date they are made.
visit www.aibgroup.com/investorrelations
Forward looking statements
The results for the year ended 31 December 2006 have been restated to represent Ark Life as a discontinued operation. The following commentary is on a continuing operations basis. The growth percentages (excl. EPS) are shown on an underlying basis, adjusted for the impact of exchange rate movements on the translation of foreign locations’ profit and excluding interest rate hedge volatility under IFRS.
Introduction and welcome
Annual General Meeting video
Presentation of 2006 results
Shareholders’ questions
Agenda
Geographic profile - December 2006
PBT * 50%
Assets 69%
Shareholders 36%Ireland
UK
PBT * 25%
Assets 21%
Shareholders 21%
North America
PBT * 10%
Assets 4%
24.2% stake in M&T Bank
Shareholders 27%
PBT * 13%
Assets 6%
European Shareholders (ex Ireland & UK) 14%
Rest of World
PBT * 1%
Shareholders 2%
Poland
Institutional shareholders 70%
Retail shareholders 30%* Underlying PBT before exceptional & one-off items
2006
Earnings per ADR - basic $6.50 15
Cash dividend paid per ADR $1.91 10
Cost / income ratio 53.5% 1.7
Return on Equity 29.0%
Underlying change %
* Basic earnings per share less profit on disposal/development of properties, businesses and interest rate hedge volatility
*
Financial highlights
GDP % 2006 (e) 2007 (f)
Ireland 6.0 5.0
UK 2.7 2.8
USA 3.3 2.2
Poland 6.1 5.8
Eurozone 2.7 2.7
Strong economic backdrop
AIB – a snapshot
Single enterprise support framework
Ireland UKCapitalMarkets Poland M&T
“The 4 Pillars” “Store of Value”
+ + + +
18%19%
26%
17%18%
Loans Deposits . Net InterestIncome
Other income TotalOperating
IncomeNet Interest
Margin-12 bps
Organic growth - best use of capital
- solid capital and funding positions
Buoyant customer demand
13% 1%
25%10% 50%
Distinctive and evolving profit profile
3%14%
19%64%
ROI
USA
UK
Poland
RoW
December 2003
Pre-tax profit by geography
* Continuing operations less profit on disposal / development of properties & businesses and interest rate hedge volatility
December 2006*
Income / cost gap + 4%
Income 19%
Making competitive gains from a prime position
Business lending 38% - gaining market share
Personal lending 27% - gaining market share
Mortgage lending 26% - maintaining market share
Deposits 20% - gaining market share
Setting the improved customer proposition agenda Attacking an underweight position in the retail market
More regular savers today than at 1st SSIA maturity
Strong progress in wealth management
Costs 15%; includes significant element of one-off / non-recurring items
AIB Bank Republic of Ireland - €942m 23%operating profit
Capital Markets - €508m 29%operating profit
Trading Income
17%
Fee Income32%
Interest Income
51%
Resilient, recurring, low volatility earnings Customer income 83% 10 year PBT CAGR 20%
Rigorous pricing and return discipline Proven skills transfer capability
c. 76% of Corporate Banking profit earned internationally Outstanding credit risk management; early and conservative recognition of
impaired loans and provision requirements
Income / cost gap +3%
Treasury22%
Inv. Banking /
AIA17%
Corporate Banking
61%
2006 profit contribution
Corporate Banking 42% Treasury 2% Investment Banking 62%
AIB Bank United Kingdom - €378m 18%operating profit
Investing in people, locations and delivery channels Diversifying and developing income streams Established “bank of choice” in chosen mid market sectors driving income &
avoiding adverse selection
16
24
26
19
GB NI
LoansDeposits
Franchise quality reflected by broad volume growth
Income / cost gap + 6%
2006 profit contribution Great Britain 23% Northern Ireland 11%
GB55%
NI 45%
4844
33 39
10 10
9 7
2005 2006
Other
FX
Fees
NII
11%13%
10%
15%
25%
26%
Mutual funds
Banking fees
eBus & payments
Brokerage fees
FX
Other
Income / cost gap + 10% Strong business volume increases in a high growth
economy Business lending 25% Retail cash lending 54% Mortgages 26% Business deposits 26% Personal deposits 8%
Expanding and deepening our footprint; adding branches, business centres, channels
Investment funds 123% No. 2 market position c. 250,000 customers
Brokerage services 84% No. 1 market position
Total income % mix
Broad based fee income
Poland – €201m 52%operating profit
Objectives Rapid speed to market Volume growth cost
indifference Support business volume
growth Business acquisition
capability
RiskManagedCost
Service Quality
Operational Excellence
Reconfiguring, redeploying,
simplifying, standardising ……….
Update on work in progress 40+ change programmes impacting
every AIB business unit including new banking platforms, branch activity displacement, new data centres
4,000 people deployed 2006-2009 €400m investment;
40% now spent
Significant gains in unit cost of production / procurement
Ramp up in use of channels & technology
Investing to support growth – our single enterprise approach
M&T - €141m 4%
EPS 10%; 13th consecutive year of double digit growth
Contribution to AIB reduced by one off reclassification of provisions
Tight cost management in a lower income growth environment
Q4 cost / income ratio 50.2%
Solid asset quality; NPLs 0.52%; allowance for credit losses 1.51% of total loans
AIB shareholding 24.2%
Ireland
Great Britain
Poland
Rest of World
Over 100,000 more customers than in 2005; increases in both business and personal sectors
Targeting 25% increase in relationship management / sales capacity from 2007-2010
Continuing migration from small to mid-market customers
Consistent customer satisfaction underpins “best business bank” status
Now opening a new branch every 10 days 1.5m customers - 900,000 Internet Banking
customers; 400 branches; 600 ATMs
Leveraging competencies developed in Capital Markets
International expansion – new offices in Canada & Australia
Aggressive organic growth
1814
1915 13
1012
6
22
12
Group AIB BankRoI
CapitalMarkets
AIB BankUK
Poland
Income Costs
4%4%
6%
10%
3%
%
Positive “jaws” in all franchises
2005 2006
1.0 Impaired loans (ILs) % 0.9
0.4 Gross new ILs % 0.4
78 Total provisions / ILs % 76
15 Bad debt charge bps 12
Strong asset quality
Solid capital position
Dec Jun-06 Dec-06
7.2%
8% 8.2%
Preference share % Tier 1
Total capital ratio 11.1%
Tier 1 8.2% (target minimum c. 7%)
Core tier 1 6.0% (preference shares 27%, target range 20 – 30%)
Dec 05 Jun 06 Dec 06
23% 30% 27%
Tier 1 ratio
AIB ADR Performancefrom May 2002 to April 2007
AIB ADR 131%
Fulton Bank 5%
Sovereign Bank 78%
PNC 34%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
May
-02
Aug-0
2N
ov-0
2Fe
b-03
May
-03
Aug-0
3N
ov-0
3Fe
b-04
May
-04
Aug-0
4N
ov-0
4Fe
b-05
May
-05
Aug-0
5N
ov-0
5Fe
b-06
May
-06
Aug-0
6N
ov-0
6Fe
b-07
AIB US Equity FULT US Equity SOV US Equity PNC US Equity
Relentless execution of our clear agenda
Significant progress being made on our 3 key priorities
Existing Markets - maximising organic growth opportunities
Selected international markets / niches – transferring skills profitably
Single enterprise support framework – achieving efficiency and productivity gains
Shareholder Information Meeting
Radisson Penn Harris Hotel & Convention Center,
Camp Hill, Pennsylvania,
Wednesday, May 30th, 2007
+353-1-660 0311
+353-1-641 2075
Alan Kelly alan.j.kelly@aib.ie +353-1-6412162
Rose O’Donovan rose.m.o’donovan@aib.ie +353-1-6414191
Pat Clarke patricia.m.clarke@aib.ie +353-1-6412381
Alma Pearson alma.e.pearson@aib.ie +353-1-6413469
Our Group Investor Relations Department will be happy to
facilitate your requests for any further information
Visit our website www.aibgroup.com/investorrelations
Contacts
USA
Ann Kerman ann.l.kerman@aibny.com 1-800-458 0348
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