Management Briefing. Group Strategy & Overview. London, May Denis Casey, Group CEO. Presentation by

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1 Management Briefing London, May 2007 Group Strategy & Overview Presentation by Denis Casey, Group CEO 1 Management Briefing - May

2 Where we are today Powerfully positioned in Irish Retail Financial Services Market Life & Pensions Market leader [28% of new business in 2006] Broadest distribution reach and product offering Retail Banking Market leader in residential mortgage lending [22% of new lending in 2006] Fastest growing customer base - 180,000+ customers added since 2004 Investment Management No. 2 asset manager in Ireland [25% of funds under management in 2006] No. 1 for inflows 2005 to Management Briefing - May 2007

3 Ireland - land of opportunity Population growth & demographics Projected Population A combination of natural demographics and migration will see the population continue to grow rapidly over the next 10 years Population forecast to reach 5 million in 2015 and exceed 5.3 million in 2020 Labour force projected to grow at an annual average rate of 2.2% out to ,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000, The Economically Active Age Groups 3,750,000 3,500,000 Labour force growth combined with rising productivity point to potential GDP growth of circa 5% per annum out to ,250,000 3,000,000 2,750,000 2,500,000 2,250,000 2,000, Source : NCB 3 Management Briefing - May 2007

4 Ireland - land of opportunity Growing population implies a growing domestic customer base Growth in incomes will add momentum to the rate of growth in domestic demand Given the age profile of the population, growth in demand for financial products should be particularly strong Underlying demand for housing estimated at circa 65,000 per annum until 2015 As personal wealth increases the propensity to save and to spend on retirement savings rises sharply Spending by Income Decile (% of State Average) 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Pension Fund Pension Fund Domestic Services Hotels & Expenditure Abroad Private Health Insurance Meals Away from Home Clothing & Footwear Entertainment Mortgage Repayments & Home Insurance Personal Services Food Rent & Other Charges Fuel & Light Tobacco Source : NCB 4 Management Briefing - May 2007

5 Ireland - land of opportunity Irish Household Assets and Net Worth Forecast Billions Middle Ireland (our traditional heartland) beginning to accumulate real wealth creating a significant opportunity to develop new wealth management products and services Residential Property Deposits Pension Funds An ageing population combined with the extraordinary property price inflation of the last decade will accelerate the incidence of inherited wealth Business Equity Investment Funds Direct Equity Commercial Property Employment growth and rising incomes will drive rapid growth in the retirement savings market Gross Assets Household Debt Net Assets Source : BoI Private Banking 5 Management Briefing - May 2007

6 Ireland - an opportunity rich environment Retail financial services market in Ireland continues to offer significant growth opportunities for Irish Life & Permanent Building our position in the retail / personal financial services market will remain our strategic priority 6 Management Briefing - May 2007

7 Banking 7 Management Briefing - May 2007

8 Ireland s largest Retail Bank We have the opportunity and the capability to build the largest Retail bank in Ireland We define largest simply as the bank with the most personal customers This is our burning ambition, our singular focus and driver of growth 8 Management Briefing - May 2007

9 Ireland s largest Retail Bank 4 Building blocks make this possible Brand strength Customer acquisition capability Sales management capability Exploit growth opportunities 9 Management Briefing - May 2007

10 Brand Strength Summary of Fair Share Personality Dimensions 4. Hugely successful merger created powerful bank platform We have built a modern, innovative brand that stands out from the crowd Permanent TSB Over Index Modern Youtful Dynamic Factors players over/under perform within Bank AIBX Bank BOI Y Over Index Unhelpful Impersonal Traditional Bureaucratic Over Index Safe Reliable Dependable Traditional Untainted by traditional bank baggage Most trusted bank brand Under Index Impersonal Traditional Bureaucratic Under Index Dynamic Youthful Modern Under Index Modern Youthful 10 Management Briefing - May 2007

11 Brand Strength Customer Service: There is a measurable difference in the quality of the service we provide to our customers Overall Satisfaction with Main Financial Institution July June 2006 % very satisfied Jan-Dec 2003 Jan-Dec 2004 Jan-Dec 2005 Overall 40% Bank Bank of Ireland X 36% permanent permanent tsb tsb 45% Bank Ulster Bank Y 39% Bank Z AIB 33% Ipsos-MORI All rights reserved. Contains Ipsos Confidential, Trade Secret and Proprietary Information Management Briefing - May 2007

12 Brand Strength What our customers say Customers genuinely feel, enjoy and acknowledge the difference in the experience and the quality of service provided by our front line staff Powerful differentiator We will vigorously protect and leverage this unique strength This is the foundation on which we will build our success I feel that when I walk into a branch I am walking into a friends house for a chat ptsb staff are great - they are personal the counter staff are brilliant they have a very personal touch with their customers they are very welcoming very understanding and helpful, down to earth people the personality of the frontline staff ptsb never forget that we are the customers they have great customer care they offer simple products with a simple service they treat customers well friendliness, I feel at home with them, they call me by my first name ptsb has a customer service that no other bank can touch they put customers first the staff are lovely, they always make time for you they are nice and friendly very professional, made us feel at ease you are treated like an individual staff are very easy to talk to they do employ nice staff the lady who dealt with me was wonderfully helpful more user friendly bank they are 100% better, better communication, better staff, better service they remember me they don t complicate things, they talk to me in my language the personal attention the customer service is brilliant in my particular bank I feel they are very honest ptsb are more understanding and more approachable I have no idea what they do really well - their staff are very helpful though Source : extracts from customer research 12 Management Briefing - May 2007

Customer Acquisition Capability To become the largest Retail Bank in Ireland requires a relentless focus on new customer acquisition We must attract an additional 500,000 customers We have already

13 Customer Acquisition Capability To become the largest Retail Bank in Ireland requires a relentless focus on new customer acquisition We must attract an additional 500,000 customers We have already created the products, marketing campaigns and sales processes to achieve this We are currently recruiting over 250 new customers to permanent tsb every day Superior service experience and state of the art sales processes will create real value from these new customer relationships 13 Management Briefing - May 2007

14 Sales Management Capability Creating a state of the art sales infrastructure in the bank Making selling a repeatable, high quality process with predictable outcomes 14 Management Briefing - May 2007

15 Power of Process Irish Life 1990 s Sales process adviser driven Not customer friendly Random outcomes Poorly managed Low productivity Irish Life today Technology led sales process Engaging customer experience Consistent high quality advice Disciplined rigorous management Fivefold increase in productivity permanent tsb Unleash the power of process A core competence of IL&P Successful execution for bancassurance New enabling branch remuneration structures in place Next phase - extension to mainstream bank products - mortgages, current a/c etc 15 Management Briefing - May 2007

16 Exploit Growth Opportunities Current Account Residential Mortgages Commercial Lending permanent tsb Finance Springboard Bancassurance General Insurance Capital Home Loans Fuel for future growth Vigorously protect our market leadership position Pursuing an opportunity to build a significant business Leading provider of new car finance Bluecube Loans - exploit competencies and capacity Targeting emerging specialist mortgage market Investing to expand bancassurance capacity New products and technology to better serve mass affluent and HNW segments Under exploited opportunity Mandate to pursue aggressive growth strategy 16 Management Briefing - May 2007

17 Life & Pensions 17 Management Briefing - May 2007

18 Market Leader 30 New Business % Undisputed No. 1 in Life and Pensions Market % 19% 21% 21% 22% 23% 25% 26% Market Share 28% 15 Perfectly positioned to exploit the opportunities presented by growth markets Three business divisions firing on all cylinders APE Sales CAGR : 20% Retail Corp Business ILIM Source: Irish Insurance Federation 18 Management Briefing - May 2007

19 Market Leader Divisions Capabilities Markets Irish Life Retail Irish Life Corporate Irish Life Investment Managers Powerful distribution Highly effective sales processes Diversified product offerings Excellent investment performance Middle / Mass packaged investment, savings & pensions products 19 Management Briefing - May 2007

20 Growth Drivers 2 big drivers of growth: Pensions Wealth management 20 Management Briefing - May 2007

21 Pensions Opportunity Under-penetration of pensions in workforce and self-employed Under-funding of existing DC pension schemes Strong public policy and fiscal support Vehicle for wealth management and post retirement planning 21 Management Briefing - May 2007

Wealth Management Opportunity Wealth creation and accumulation an emerging theme in Irish market Household wealth to double by 2015 Enormous opportunity for Irish Life & Permanent Priority to expand

22 Wealth Management Opportunity Wealth creation and accumulation an emerging theme in Irish market Household wealth to double by 2015 Enormous opportunity for Irish Life & Permanent Priority to expand structures, capability and products to exploit this opportunity: Creation of new business unit in Retail Life Build capability in direct sales and bancassurance Develop supporting technology and processes Broaden product offering 22 Management Briefing - May 2007

23 Life Ambition No company has succeeded in positioning itself in Irish consumers minds as the Investment Solutions Company Given the rapid rate of wealth creation and accumulation and the new phenomenon of inherited wealth there is an enormous prize for the company that succeeds in doing this This is the space Irish Life intends to grab We aim to become the Investment Solutions Company of Ireland NCB 23 Management Briefing - May 2007

24 Irish Life Vision & Strategy Brand : No single company has succeeded in establishing itself in consumers minds as the outstanding investment expert in the Irish market Irish Life Brand Research Total Spontaneous Brand Awareness 9. Irish Life brand awareness outside top tier group - but gap is very bridgeable Shifts (+/- 7%) % BOI/BOI Life, 83 AIB/Ark Life, 77 (+12% pts) Permanent TSB, 69 Primary Some very positive brand personality characteristics: Caring Problem Solvers Successful Not bureaucratic Credit Union, 53 Hibernian, 25 Irish Life, 53 First Active, 45 (+12% pts) An Post, 44 (+11% pts) EBS, 35 Ulster Bank, 32 (+11% pts) Eagle Canada Star, Life, New Ireland, 22 (+9% pts) Secondary Irish Life Target 45% Strong foundations from which to build Standard Life, 15 Anglo Irish Bank, 14 Bank of Scotland, 15 Friends First, 14 National Irish Bank, 13 Scottish Provident, 9 Tertiary 24 Management Briefing - May 2007

25 Irish Life Vision & Strategy Brand : No single company has succeeded in establishing itself in consumers minds as the outstanding investment expert in the Irish market Irish Life Brand Research Summary of Fair Share Personality Dimensions 4. Irish Life brand awareness outside top tier group - but gap is very bridgeable Some very positive brand personality characteristics: Caring Problem Solvers Successful Not bureaucratic Irish Life Over Index Caring Traditional Problem Solvers Successful Under Index Modern Youthful Bureaucratic Permanent TSB Over Index Modern Youtful Dynamic Under Index Impersonal Traditional Bureaucratic Factors players over/under perform within Bank AIB X Bank BOI Y Eagle Bank Star Z Over Index Unhelpful Impersonal Traditional Bureaucratic Under Index Dynamic Youthful Modern Over Index Safe Reliable Dependable Traditional Under Index Modern Youthful Over Index Amicable Impersonal Modern Youthful Bureaucratic Under Index Safe Reliable Traditional Strong foundations from which to build 25 Management Briefing - May 2007

26 Brand - work to be done Opportunity to develop and promote Irish Life as the investment solutions company for an increasingly wealthy Ireland Significant project already underway to map out future brand strategy Major investment planned in Irish Life brand 26 Management Briefing - May 2007

27 Creating the Investment Solutions Company Divisions Capabilities Markets Irish Life Retail Irish Life Corporate Irish Life Investment Managers Powerful distribution Highly effective sales processes Diversified product offerings Excellent investment performance Revitalised Brand Middle / Mass packaged investment, savings & pensions products Mass affluent / HNW flexible / tailored wealth management and pension products & services Strong Platform for Growth 27 Management Briefing - May 2007

28 Driving Growth Clear and focused strategy Strong market positions Ambitious but achievable targets Create high performance culture TARGETS Sales 15-20% Earnings 12-14% Dividend 10% + ROC (blended) 16% Protect strong risk management and cost disciplines 28 Management Briefing - May 2007

Davy Irish Equity Conference

Davy Irish Equity Conference www.irishlifepermanent.ie Presentation by: Denis Casey, Group Chief Executive Paris, 13 May 2008 1 Davy Irish Equity Conference Paris, 13 May 2008 Ireland A Growth Market Population