Credit Presentation 31 December 2018

Transcription

1 Credit Presentation 3 December 208

2

3 2 Bank of Ireland Overview

4 3 208 Highlights Profitability 935m Underlying profit before tax NIM of 2.20% Net impairment gains of 42m NPEs reduced by 24% to 5.0bn; NPE ratio now at 6.3% Growth.3bn Net lending growth New lending 5.9bn, increase of 3% vs. 207 New Irish mortgages; Growth of 7%, stable market share of 27% Wealth & Insurance; 2% income growth vs. 207 Transformation 3% / 48m Reduction in costs Taking the lead in building a great culture in the Bank Foundations of new Core Banking Platforms in place Business model initiatives to drive efficiencies progressing at pace Capital 3.4% CET ratio Organic capital generation of 80bps Dividend increased to 6c per share ( 73m) from.5c per share ( 24m) in 207

5 4 Economic backdrop Annual % Change 4 Irish credit growth emerging Stock of lending to households Stock of lending to businesses (nonfinancial corporations) Solid growth in Ireland; UK growth also positive notwithstanding Brexit uncertainties 7.2%.8% 6.8% e 209f n ROI GDP n UK GDP (annual real growth) 4.5%.4%.4% House price growth continuing in Ireland, softening in UK 9.0% 4.5% 2.% 2.6% 6.5% % n ROI residential property prices national (change, Dec on Dec) n UK residential property prices national (change, Dec on Dec) Unemployment rate trending down in Ireland, remains historically low in UK 6.7% 5.7% 5.0% 4.4% 4.% 4.% f ROI unemployment rate UK unemployment rate (annual average) Sources: Bank of Ireland Economic Research Unit, CSO, Office for National Statistics, Nationwide, Central Bank of Ireland Forecasts assume current UKEU trading arrangements continue to apply Banks balance sheet basis, excludes loan sales and securitisations

6 5 Focused on execution of our strategy to 202 Our ambition is clear 208 has been transformational While there are challenges ahead we are committed to delivering our strategy Investor Day June 208 National Champion Bank in Ireland with selective UK and international diversification Cultural change Technology transformation Strengthened leadership capabilities Brexit and the global economy Evolving regulatory requirements UK competitive environment Growing and transforming our business Improving returns in the UK Repositioned brand strategy

7 6 Strategic Priorities: Transform the Bank Culture Systems Business model 208 Progress Target Outcomes Defined the culture we want ambition, purpose and values being embedded across organisation Technology transformation continues to progress Foundations of new Core Banking Platforms in place, single customer record for over 2m customers Testing of loan and deposit origination on new Temenos platform Modernised payments infrastructure in place with greater capacity, improved stability and higher speed processing New mobile banking app will launch in 209, first full scale customer deliverable using new Temenos technology Creating a leaner, agile organisation, over half of end state Organisational Design now complete, 8% reduction in Senior Management roles Strengthened culture Cost base to reduce to c..7bn in 202 Absolute cost level declining yearonyear to 202 Income growth

8 7 Strategic Priorities: Serve Customers Brilliantly Embedding voice of customer in our businesses Investing in digital and physical channels New brand strategy 208 Progress Target Outcomes Listening to our customers and taking action 200+ front line staff driving improved service levels 00+ branches converted to full service Robotics delivering equivalent to >300 FTEs, resulting in significant enhancement of customer journeys Customers increasingly choosing digital channels 0m+ monthly engagements on our mobile app, up >25% on 207 Direct and digital wealth sales increased to 35% (from 0% 2 years ago) Repositioning of brand underway, supported by multiyear customer strategies Significant improvement in customer satisfaction and advocacy Straight through processing; digital journeys API foundation for Open Banking # for customer experience and brand in Ireland

9 8 Strategic Priorities: Grow Sustainable Profits 208 Progress 202 Target Improved profitability Headline RoTE of 8.5% Adjusted RoTE of 7.2% RoTE in excess of 0% Efficient business Cost reduction of 3% / 48m vs. 207 Cost base of c..7bn Costs reduce every year: Cost income ratio of c.50% Robust capital position Fully loaded CET ratio of 3.4% CET ratio in excess of 3% Sustainable dividends Dividend increased to 6c per share ( 73m) Increase prudently and progressively; over time will build towards a payout ratio of around 50% of sustainable earnings See Slide 52 for calculation

10 9 Operating Performance

11 0 Underlying profit before tax of 935m FY 207 FY 208 Total income 3,049 2,805 Operating expenses (before levies and regulatory charges) (,900) (,852) Levies and Regulatory charges (99) (0) Net Impairment (losses) / gains (5) 42 Share of associates / JVs 43 4 Underlying profit before tax, Noncore items (226) (00) Profit before tax Net interest margin (NIM) 2.29% 2.20% Adjusted RoTE 6.9% 7.2% Dec 7 Dec 8 Customer loans (net) 76.bn 77.0bn Customer deposits 75.9bn 78.9bn Nonperforming exposures (NPEs) 6.5bn 5.0bn CET Ratios: Fully Loaded 3.8% 3.4% Liquidity Metrics: Regulatory 5.8% 5.0% Total Capital Ratio: Regulatory 20.2% 8.8% Liquidity Metrics: LCR 36% 36% Liquidity Metrics: NSFR 27% 30% Liquidity Metrics: LDR 00% 97% Leverage Ratios: Fully Loaded 6.2% 6.3% Liquidity Metrics: Regulatory 7.0% 7.0% Income Statement Net interest income of 2,46m Other income of 659m includes sustainable and diversified business income of 672m Operating expenses (before levies and regulatory charges) of,852m; reduction of 48m (3%) vs. 207 Total transformation investment in 208 of 306m Net impairment gains of 42m, reflecting positive economic environment in Ireland and effectiveness of our NPE resolution strategies Noncore charge of 00m primarily related to costs associated with the Group s restructuring programme Balance Sheet Group loan book of 77.0bn at Dec 208 reflecting; New lending of 5.9bn; an increase of 3% vs. 207 Redemptions of 4.6bn; 3% reduction vs. 207 Customer deposits of 78.9bn predominantly sourced through retail distribution channels NPEs of 5.0bn, 24% reduction during 208 Strong organic capital generation continues; capital and liquidity available to support growth HoldCo senior investment grade ratings of Baa3, BBB and BBB from Moody s, S&P and Fitch. Positive Outlook for Moody s and S&P (see Slide 20 for full ratings) See Slide 52 for calculation

12 Net lending growth of.3bn Group loan book movement Total.3bn 76.bn 77.0bn Dec 7 Loan Book 5.9bn ( 4.6bn) ( 0.4bn) New Lending Redemptions IFRS 9 Day / Other Dec 8 Loan Book Net lending growth of.3bn New lending of 5.9bn; an increase of 3% vs. 207 Redemptions of 4.6bn; 3% reduction vs. 207 Expect further net lending growth in 209, while maintaining strong commercial pricing and risk discipline Ireland: 0.6bn net lending growth Mortgages: loan book flat in 208, albeit new lending of 2.3bn, up 7% on 207, with stable market share of 27% Consumer: loan book growth of 0.bn SME: loan book decrease of 0.2bn, albeit new lending of 2.9bn Corporate Banking: loan book growth of 0.8bn Net lending growth.3bn 0.6bn 0.7bn n Ireland n UK / International UK / International: 0.7bn net lending growth Mortgages: loan book decrease of 0.7bn; new lending of 3.7bn, up 3% on 207 Consumer: loan book growth of 0.7bn; new lending of.8bn (207:.3bn), reflecting strong performance of Northridge car finance and consumer lending SME / Other: loan book decrease of 0.5bn; largely due to wind down of legacy lending portfolios Corporate Banking: loan book growth of 0.9bn; disciplined approach with strong Brexit focus Acquisition Finance: loan book growth of 0.3bn Includes UK Credit Card portfolio 0.6bn classified as held for sale as at Dec 208

13 2 NIM Strong commercial discipline on pricing 208 Q4 NIM Movement NIM 2.20% in 208 (3bps) (0bps) Maintaining strong commercial discipline on pricing e.g. recent price adjustments on Irish mortgages 2.23% 2.20% 2.0% Competitive pressures in UK mortgage market driving lower front book pricing and shorter customer revert periods Adjustment to UK mortgage revert period (0bps) in Q4 208 reflects faster refinancing activity Average Q Q3 208 NIM UK competitive pressures Underlying Q4 208 Exit NIM UK Mortgage revert period (Nonrecurring) Q4 208 Reported NIM 209 Outlook Expect 209 NIM to be c.2.6%: Outlook for 209 NIM Strategic repositioning of the UK cards portfolio adversely impacts NIM by c.3bps 2.20% (3bps) (bps) c.2.6% MREL issuance (c.bps) UK competitive pressures expected to be offset by positive impact from new lending margins and strong commercial discipline on pricing Underlying Q4 208 Exit NIM UK Credit Cards MREL issuance Expected 209 NIM

14 3 Costs have reduced by 3% / 48m,796m Operating expenses to reduce further,739m 04m 3m n Operating expenses n Transformation Investment charge FY 207 FY 208 Total staff costs Staff costs Pension costs Other costs Depreciation Operating Expenses,796,739 Transformation Investment charge 04 3 Operating Expenses (before levies and regulatory charges),900,852 Levies and Regulatory charges 99 0 Total Operating Expenses,999,953 Average staff numbers,96 0,595 Costincome ratio 2 65% 65% Transformation of cost base Operating expenses (before levies and regulatory charges) of,852m reduced by 48m (3%) vs. 207 Expect operating expenses, including transformation investment charge, to reduce every year to.7bn in 202 Operating expenses:,739m Total staff costs decreased by 32m vs. 207 primarily reflecting lower average staff numbers partly offset by impact of wage inflation of c.2.5% under the Group Career and Reward framework; wage inflation of c.2.6% agreed for 209 Other costs have decreased by 68m vs. 207 reflecting strategic sourcing and other efficiencies from business model initiatives across the businesses Expected increase in depreciation charge of 43m reflects investment in technology Transformation Investment charge: 3m Total transformation investment in 208 of 306m: 3m charged as Transformation Investment to the income statement (37%) 00m capitalised as intangible asset (33%) 93m charged as noncore restructuring costs (30%) Levies and Regulatory charges: 0m Expect levies and regulatory charges to total 5m 20m for 209 Transformation Investment charge was previously disclosed as Core Banking Platform Investment charge, it has been updated to include the broader scope of Transformation covering Culture, Systems and Business Model for See Slide 5 for calculation

15 4 24% improvement in NPE levels Nonperforming exposures.4% 8.3% 6.3% 4.4bn reduction 9.4bn 6.5bn 5.0bn Dec 206 Dec 207 Dec 208 n NPEs as a % of gross customer loans n Nonperforming exposures Net impairment gains / (losses) 36m ( 5m) ( 76m) Asset quality continues to improve Nonperforming exposures (NPEs) of 5.0bn, a reduction of.5bn (24%) during 208 NPE ratio reduced by 200bps to 6.3% Reductions reflect successful resolution strategies and the positive economic environment. Expect further reductions in 209 and beyond SREP guidance received on coverage levels for NPEs coverage levels will increase on unsecured NPEs (older than 2 years) and secured NPEs (older than 7 years) from end of 2020 NPE reduction strategies will be kept under review to respond to the associated and evolving regulatory framework Net impairment gains of 36m in 208 Net impairment gains on loans and advances to customers of 36m for 208, primarily reflecting: Strong performance of the Group s loan portfolios Positive outcomes from ongoing resolution of NPEs Continued positive economic environment and an outlook of continued economic growth in key markets Absent a change in the economic environment or outlook, expect net impairment charge to be in the range of up to 20bps 30bps p.a. during n Net impairment (losses) / gains

16 5 ROI Mortgages Continued proactive arrears management >90 days arrears Industry Average >90 days arrears Bank of Ireland is significantly below the industry average for both Owner Occupier (28% of industry average) and Buy to Let (28% of industry average) Industry Average 7.4% >720 days arrears 7.4% Owner Occupier 2.% Owner Occupier Buy to let 4.9% Buy to let Bank of Ireland is significantly below the industry average for both Owner Occupier (24% of industry average) and Buy to Let (20% of industry average) >720 days arrears Industry Average NPE resolution strategies Continued progress on reduction in ROI mortgage NPEs, c. 0.4bn reduction in 208 Industry Average 3.0% Portfolio of Buy to Let mortgage NPEs prioritised for alternative resolution strategies e.g. potential securitisation and/or sale 4.6% Owner Occupier.% Owner Occupier Buy to let 2.6% Buy to let Loans of c. 0.6bn 0.8bn; Net Interest Income of c. 0m 4m CET Capital Intensity of c.30bps 50bps As at September 208, based on number of accounts, industry average excluding BOI

17 6 Capital and liquidity available to support growth Dec 207 ( bn) Dec 208 ( bn) Customer loans Liquid assets Wealth and Insurance assets 7 7 Other assets 6 5 Total assets Customer deposits Wholesale funding 3 Wealth and Insurance liabilities 7 7 Other liabilities 7 7 Shareholders equity 9 9 Additional Tier security & other Total liabilities TNAV per share Closing EUR / GBP FX rates Strong liquidity ratios Liquidity Coverage Ratio: 36% Net Stable Funding Ratio: 30% Loan to Deposit Ratio: 97% Robust Leverage Ratio Fully Loaded Leverage Ratio: 6.3% Regulatory Leverage Ratio: 7.0% Customer deposits: 78.9bn Customer deposits predominantly sourced through retail distribution channels Wholesale funding:.4bn Monetary Authority borrowings of 2.7bn have reduced by 2.3bn since Dec 207 primarily due to repayment of funding drawn under the ECB s TLTRO MREL target of 3.3bn (representing 26.4% of RWA at Dec 206) to be met by Jan 202: MREL ratio of 23.% at Dec 208 (based on RWA at Dec 208) Modest MREL eligible issuance c. bn 2bn p.a. anticipated Monetary Authority borrowings of 2.7bn at Dec 8 includes:.0bn of ECB TLTRO funding and.7bn of BOE funding through TFS (c..5bn) and ILTR (c. 0.2bn)

18 7 Outlook Growth Efficiency Returns Net lending growth while maintaining commercial discipline on risk and pricing Continued growth in Wealth and Insurance business NIM in 209 expected to be c.2.6% Costs to reduce further in 209 Expect further reduction in NPEs Expect net impairment charge to be in the range of up to 20bps 30bps p.a. during Continue to generate strong organic capital Dividend to increase prudently and progressively; over time will build towards a payout ratio of around 50% of sustainable earnings RoTE target: in excess of 0% by 202 Absent a change in the economic environment or outlook

19 8 Capital & MREL

20 9 Corporate Structure BOIG established in 207 New HoldCo Bank of Ireland Group plc (BOIG) 00% AT Tier 2 Senior unsecured Capital / MREL Unchanged Corporate Structure New Ireland Assurance Company plc The Governor and Company of the Bank of Ireland (GovCo) 00% 00% Bank of Ireland Mortgage Bank (BOIMB) Irish Covered Bonds (ACS) Senior unsecured 00% Bank of Ireland (UK) plc Funding Preferred resolution strategy for the Group consists of a Single Point of Entry (SPE) bailin strategy through the Group holding company (BOIG) Transparent and welldefined resolution strategy in comparison to other jurisdictions BOIG introduced on top of the existing group structure supporting an SPE preferred resolution strategy No change to any of the Group s existing operating companies Bailin at BOIG is the primary resolution tool. MREL requirements are expected to be met through junior and senior issuance from BOIG Losses are passed to BOIG by the writedown of intragroup assets. BOIG investors bear losses in accordance with the resolution 2 hierarchy. Resolution authorities required to apply the No Creditor worse off principle in application of the bailin tool Funding requirements may also continue to be met, as required, through the issue of Irish Covered Bonds (ACS) by Bank of Ireland Mortgage Bank and senior unsecured issuance by GovCo 00% shareholding via intermediate holding company 2 Per Regulations 87 and 96 of the European Union (Bank Recovery and Resolution) Regulations 205

21 20 BOI Credit Ratings Investment grade ratings for BOIG and GovCo BOIG Issuer Ratings BBB (Positive) Baa3 (Positive) BBB (Stable) GovCo Issuer Ratings BBB+ (Positive) A3 (Positive) BBB (Positive) Progress on BOI Credit Ratings Oct 208: GovCo rating upgraded one notch from BBB to BBB+ and BOIG rating BBB affirmed (outlook remains Positive) Dec 208: Affirmed the BBB and BBB+ ratings on BOIG and GovCo respectively (outlook remains Positive) Jul 207: Assigned Baa3 (Positive) rating to newly established holding company Dec 208: GovCo rating upgraded one notch from Baa to A3 and BOIG rating Baa3 affirmed (outlook remains Positive) Nov 207: notch upgrade for both BOIG and GovCo issuer ratings to BBB, Stable outlook Dec 208: Affirmed the BBB ratings on BOIG and GovCo; GovCo outlook revised to Positive from Stable (BOIG outlook remains Stable) Key Rating Drivers Upside could develop from: Further reductions in nonperforming loans Additional lossabsorbing capacity (ALAC) uplift Improvements in capitalisation and risk absorption capacity; while maintaining stable profitability, funding and liquidity metrics Further reductions in nonperforming loans Further reductions in nonperforming loans; while reducing capital encumbrance Successful execution of strategy to improve cost efficient and profitable Irish Covered Bonds (ACS) Aaa

22 2 Strong capital generation and position Fully loaded CET ratio.8% (0.4%) (0.6%) (0.7%) (0.4%) 0.% 3.6% 3.4% Jan 8 CET (post IFRS 9 impact 20bps) Organic capital generation Loan growth / RWA Transformation investment n CET ratio n CET movements Regulatory Capital Demand Dividend Other Dec 8 CET Capital position Strong capital position fully loaded CET ratio of 3.4% at Dec 208 Continued organic capital generation 80bps of capital generated in 208 No change to capital guidance; the Group expects to maintain a CET ratio in excess of 3% on a regulatory basis and on a fully loaded basis by the end of OSII phase in period 3 Organic capital generation primarily consists of attributable profit and movements in regulatory deductions 2 Regulatory capital demand primarily reflects the impact of TRIM on Irish mortgages 3 The Other Systemically Important Institution (OSII) buffer will be introduced at 0.5% in July 209, increasing to.0% in July 2020 and.5% in July 202

23 22 Strategic investment and rigorous allocation of capital Investment / allocation of capital in 208 Growth in loan book bps CET of c bps to accommodate c.20% loan book growth over 4 years ( ) Net lending growth of.3bn in 208 (c.40bps) Organic capital generation (80bps) 2 3 Transformation 5060bps p.a. Regulatory capital demand Transformation Programme: investment of 5060bps p.a. Transformation investment of 306m (c.60bps) in 208 On track to reduce costs every year to.7bn in 202 IFRS 6 impact of 20 bps on Jan 209 Capital resilience demonstrated in 208 EBA Stress Test Evolving regulatory framework including EBA and ECB guidelines (definition of default, IRB models, NPE requirements, etc.) could consume c.80bps of CET by end 2020 Will pursue opportunities to unlock capital in balance sheet as appropriate 4 Dividend / distributions Dividend increased to 6c per share ( 73m / 40bps) from.5c per share ( 24m / 25bps) in 207 No change to dividend policy or guidance Other means of capital distribution will be considered to the extent the Group has excess capital

24 23 Robust capital ratios Dec 207 Dec 208 CET ratios: Fully Loaded Regulatory 3.8% 5.8% 3.4% 5.0% Tier ratios: Fully Loaded Regulatory 4.9% 7.0% 4.4% 6.0% Total Capital ratios: Fully Loaded Regulatory 7.9% 20.2% 7.2% 8.8% MREL: MREL ratio 23.% Tier & Total Capital Tier and Total Capital ratios reflect growth in the CET ratio in the period and movement in the haircuts associated with subordinated debt issued by BOIG subsidiaries Total Capital ratios also include the partial amortisation of Tier 2 instruments MREL MREL target of 3.3bn (representing 26.4% of RWA at Dec 206) to be met by Jan 202: MREL issuance of c..2bn completed in 208 Improved MREL ratio of 23.% at Dec 208 up from 2.6% at Jun 208 (based on RWA at Dec 208 and Jun 208 respectively) Modest MREL eligible issuance expected of c. bn 2bn p.a. Leverage ratios: Fully Loaded Regulatory Risk Weighted Assets: Fully Loaded Regulatory 6.2% 7.0% 44.8bn 45.0bn 6.3% 7.0% 47.6bn 47.8bn Risk Weighted Assets RWA has increased from 45.0bn at Dec 207 to 47.8bn at Dec 208 primarily driven by loan book growth, RWA mix and the impact of ROI Mortgage TRIM exercise Further to EBA Q&A 207_3329 the calculation of Tier and Total Capital ratios is stated after a prudent application of the requirements of Articles 85/ 87 of CRR. The application of the requirements of Articles 85 /87 by SSM banks is under review by the ECB

25 24 MREL Requirement Loss absorption amount + Recapitalisation amount + Market Confidence Charge 2.25% P2R % 4.5% 2.5% OSII 2.25% CCB % 8% Own Funds Pillar Requirement 9.39% 26.39% MREL Target.5% 2.5% OSII 2 CCB % P2R 2 8% Own Funds Pillar Requirement 4.25% The Group has been advised of the decision by the SRB and the Bank of England of its binding MREL requirement to be met by January 202. This has been set at a level of 2.86% of total liabilities and own funds as at December 206 (equivalent to 26.39% of risk weighted assets) Based on current MREL ratio 3, modest new MREL issuance expected to meet this requirement Minimum Requirement for Own Funds and Eligible Liabilities as at 3 December Other Systemically Important Institution (OSII), Capital Conservation Buffer (CCB) and Pillar 2 Requirement (P2R) 3 MREL ratio of 23.% as at 3 December 208 (based on RWA at Deember 208) 4 Bank Specific Adjustment of 0.86%

26 25 Regulatory Capital Requirements Pro forma CET Regulatory Capital Requirements Set by Range Pillar CET Pillar 2 Requirement (P2R) Capital Conservation Buffer (CCB) Countercyclical buffer (CCyB) Ireland (c.60% of RWA) (from 5 July 209) UK (c.30% of RWA) US and other (c.0% of RWA) OSII buffer (from July 209) Systemic Risk Buffer Ireland CRR SSM CRD CBI FPC (UK) Fed/Various CBI Minister for Finance 4.50% % 2.25% % 0% 2.50% 0% 2.50% 0% 2.50% 0% 2.00% 0% 3.00% 4.50% 2.25%.25% 4.50% 2.25%.88% 0.3% 4.50% 2.25% 2.50% 0.60% 0.30% 4.50% 2.25% 2.50% 0.60% 0.30% 4.50% 2.25% 2.50% 0.60% 0.30% Pro forma Minimum CET Regulatory Requirements 8.00% 8.93% 0.65%.5%.65% N/A N/A 0.50% N/A.00% N/A.50% N/A Pillar 2 Guidance (P2G) Not disclosed in line with regulatory preference Regulatory Capital Requirements A minimum CET ratio of 9.55% on a regulatory basis from Jan 209, increasing to 0.65% from July 209. This includes A Pillar requirement of 4.5%, a Pillar 2 requirement (P2R) of 2.25%, a capital conservation buffer of 2.50%, a UK CCyB of 0.3%, an Other Systemically Important (OSII) Buffer of 0.5% (from July 209) and an ROI CCyB of 0.6% (from 5 July 209) The FPC (UK) has set the UK CCyB at % from Nov 208 The CBI (ROI) announced its intention to increase the CCyB in Ireland from 0% to.0%, effective from 5 Jul 209 The Systemic Risk Buffer under Article 33 CRD IV is currently not implemented in Irish law but may be introduced at the discretion of the Minister for Finance Pillar 2 Guidance (P2G) is not disclosed in accordance with regulatory preference, increase of 62bps in Capital Conservation Buffer (CCB) in 209 was offset by a like for like reduction in P2G. In addition the P2G for 209 reduced following the outcome of the 208 EBA Stress Test CCyB could be set in excess of 2.50% in exceptional circumstances. A change in the CCyB could also be implemented in less than 2 months in exceptional circumstances 2 Expected range for Pillar 2 Requirement

27 26 Risk Weighted Assets (RWAs) Customer lending average credit risk weights Dec 208 /2 (Based on regulatory exposure class) ROI Mortgages UK Mortgages SME Corporate Other Retail IRB approach accounts for: EAD 3 ( bn) % of credit exposure at default (Dec 207: 70%) 74% of credit RWA (Dec 207: 73%) RWA ( bn) Avg. Risk Weight 34% 22% 75% 88% 68% Customer lending credit risk % RWA has increased from 45.0bn at Dec 207 to 47.8bn at Dec 208 primarily driven by changes in book size and mix and the impact of TRIM The Group s ROI mortgages average risk weight increased from 29% at June 208 to 34% at Dec 208, driven primarily by the impact of the TRIM exercise EBA Transparency Exercise 208 Country by Country Average IRB risk weights Residential Mortgages June 208 Sweden Belgium UK Finland France Netherlands Austria Spain Denmark Germany Norway Portugal Italy Ireland 4.2% 9.7% 0.3% 0.7%.3%.6%.9% 2.8% 4.% 4.3% Corporates June 208 Sweden Denmark Germany Norway Netherlands Belgium Austria Finland UK Italy France Spain Ireland Portugal 7.9% 26.9% 9.5% 9.9% 32.2% 40.4% 4.0% 43.3% 44.9% 46.3% 47.6% 48.3% 50.2% 54.% 55.2% 38.0% 6.7% 63.8% EAD and RWA include both IRB and Standardised approaches and comprises both nondefaulted and defaulted loans 2 Securitised exposures are excluded from the table (i.e. excludes exposures included in CRT executed in Nov 207 and Dec 206) 3 Exposure at default (EAD) is a regulatory estimate of credit risk exposure consisting of both on balance exposures and off balance sheet commitments

28 27 Capital / MREL Summary Highlights Ratings BOIG (HoldCo) investment grade ratings with positive outlook from Moody s and S&P Upgrades to the Bank s senior ratings by Moody s and S&P reflect the issuance of bailinable debt by BOIG leading to greater protection for the Bank s senior creditors Economy Continued economic growth in core markets; supporting strong organic capital generation of 80bps in 208 Regulatory Ratios The Group expects to maintain a CET ratio in excess of 3% on a regulatory basis and on a fully loaded basis by the end of the OSII phasein period Robust regulatory ratios provide significant buffer to credit investors (c.500bps buffer to MDA) MREL MREL issuance of c..2bn completed in 208 Based on current MREL ratio and SRB MREL Policy, modest new MREL issuance expected c. bn 2bn p.a. The Other Systemically Important Institution (OSII) buffer will be introduced at 0.5% in July 209, increasing to.0% in July 2020 and.5% in July 202

29 28 Appendix

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31 30 Appendix Slide No. BOI Overview Business profile 3 Historic financial results 33 Profile of customer loans 35 Gross new lending volumes 36 ROI mortgage loan book 37 UK mortgage loan book 38 Income Statement Divisional performance 39 Interest Rate Sensitivity 40 Net interest income analysis 4 Noncore Items 42 Transformation Investment 43 Asset Quality Nonperforming exposures by portfolio 44 Debt Securities at fair value through other comprehensive income (FVOCI) 45 UK Customer Loans 46 Capital CET ratios 47 Capital Guidance and Distribution Policy 48 Defined Benefit Pension Schemes 49 Ordinary shareholders equity and TNAV 50 Cost income ratio: Dec Return on tangible equity (RoTE) 52 ForwardLooking statement 53 Contact Details 54

32 3 BOI Overview: Ireland Ireland s leading retail and commercial bank Retail Ireland Corporate Ireland Consumer Business Wealth Corporate Banking Ireland Property Finance Unique customer franchise Supporting local communities & enterprises Growing preference for digital channels.7m active consumer customers 225k SME customers and 500k Wealth and Insurance customers 267 branches, >2,800 front line staff Reinventing branches with workbenches and event spaces driving local community, enterprise and business development activity Over 550 Bank of Ireland led events including National Enterprise week and National Enterprise Town Awards 79% digitally active current account base >250% increase in mobile users Average of > 6m interactions in our digital channels every month # Corporate Bank in Ireland # Bank for FDI into Ireland Countrywide coverage via regional hubs Banking relationship with 60% of Ireland s top companies >500 corporate customers: average 5 products held per customer Disciplined approach to risk management 60 Specialist staff; >75 customers Leading funder of investment property and construction Markets & Treasury Leading treasury service provider Track record of innovation

33 32 BOI Overview: UK / International Attractive UK and International businesses provide diversification and further opportunities for growth Retail UK Corporate UK / International Partnerships Northern Ireland Niche Businesses Corporate Banking UK Acquisition Finance Over 40 years in Great Britain.5k branches through Post Office partnership # travel money business in the UK (FRES) Access to 3.3m AA members Full service retail and commercial bank A distribution network of 28 branches, including six business centres Over 90 years since first branch opened Motor asset finance and motor lease finance business Proven track record of strong growth and disciplined risk appetite Leasing company of the year 208 (up to 20,000 vehicles).8bn loan book with >75k customers Sector focused business in UK with 5 specialist industry sectors, industrials & manufacturing, technology, consumer & hospitality, media and business services >70 Customers Scalable platform with highly disciplined approach and growth Mid market US / European Acquisition Finance business; strong 20 year+ record Well recognised lead arranger 5 international offices >200 customers, c.85% business from repeat sponsors

34 33 BOI Overview Income Statement FY 204 FY 205 FY FY FY 208 Total income 2,974 3,272 3,26 3,049 2,805 Net interest income 2,358 2,454 2,298 2,248 2,46 Other income (net) before additional gains Additional gains Operating expenses (,60) (,746) (,74) (,796) (,739) Transformation Investment charge (4) (04) (3) Levies and Regulatory charges (72) (75) (09) (99) (0) Operating profit preimpairment,30,45,235, Net impairment (losses) / gains (472) (296) (78) (5) 42 Share of associates / JVs Underlying profit before tax 92,20,098, Non core items () 3 (63) (226) (00) Profit before tax 920,232, Net interest margin 2.% 2.9% 2.20% 2.29% 2.20% Cost / income ratio 2 54% 53% 57% 62% 66% Dividend per share.5c 6.0c Transformation Investment charge was previously disclosed as Core Banking Platform Investment charge, it has been updated to include the broader scope of Transformation covering Culture, Systems and Business Model 2 Cost / income ratio is calculated as operating expenses (excluding levies and regulatory charges) divided by total income 3 Comparative figures for 206 have been restated to reflect the impact of the reclassification of the charges relating to the Central Bank of Ireland s Tracker Mortgage Examination Review as noncore and the impact of the voluntary change in the Group s accounting policy for Life assurance operations 4 Comparative figures have been restated to reflect the impact of the reclassification of 7 million of costs from the Transformation Investment charge (formerly the Core Banking Platform Investment charge) to Operating expenses (before Transformation Investment and levies and regulatory charges) for 207

35 34 BOI Overview Summary Balance Sheet Dec 4 Dec 5 Dec 6 Dec 7 Dec 8 ( bn) ( bn) ( bn) ( bn) ( bn) Customer loans Liquid assets Wealth and Insurance assets Other assets Total assets Customer deposits Wholesale funding Wealth and Insurance liabilities Other liabilities Subordinated liabilities and AT Shareholders equity Total liabilities & Shareholders equity Fully loaded CET ratio 9.3%.3% 2.3% 3.8% 3.4% Net stable funding ratio 4% 20% 22% 27% 30% Loan to deposit ratio 0% 06% 04% 00% 97% TNAV per share Loans and advances to customers is stated after impairment loss allowance

36 35 BOI Overview Profile of customer loans at Dec 8 (Gross) Composition (Dec 208) ROI ( bn) UK ( bn) RoW ( bn) Total ( bn) Total (%) Mortgages % Nonproperty SME and corporate % SME % Corporate % Property and construction % Investment property % Land and development % Consumer % Customer loans (gross) % Geographic (%) 54% 40% 6% 00% Based on geographic location of customer 2 Includes GB business and corporate loan books, which BOI was required to run down under its EU approved Restructuring Plan (207: 0.7bn; 208: 0.4bn)

37 36 Gross new lending volumes Retail Ireland Retail UK Corporate Banking 5.7bn 5.3bn 5.2bn 2.0bn 2.3bn 4.6bn 4.4bn 0.4bn 0.5bn 3.2bn 3.3bn 3.6bn.bn.bn.bn 0.7bn 2.9bn 2.9bn.bn 0.2bn bn 0.2bn.bn 0.6bn.2bn 0.9bn n Mortgages n Consumer n Business Banking n Property n Corporate Ireland n Acquisition Finance n Corporate UK

38 37 ROI Mortgages: 23.7bn New Lending volumes and Market Share ROI Mortgages (gross) 25%.4bn 27% 2.0bn 27% 2.3bn 24.3bn 24.bn 23.7bn 5.3bn 7.3bn 9.5bn 7.2bn 5.8bn 4.4bn.8bn 0.9bn 9.8bn Dec 6 Dec 7 Dec 8 n New Lending Volumes Market Share n Tracker n Variable Rates n Fixed Rates Pricing strategy Fixed rate led mortgage pricing strategy which provides value, certainty and stability to our customers and to the Group Fixed rate products accounted for c.92% of our new lending in 208, up from c.30% in 204 Distribution strategy Market share of 27% in 208 consistent with 207 Reentered the Irish mortgage broker market in late 208 Wider proposition 7 in 0 ROI customers who take out a new mortgage take out a life assurance policy through BOI Group 3 in 0 ROI customers who take out a new mortgage take out a general insurance policy through BOI Group with insurance partners LTV profile Average LTV of 6% on existing mortgage stock at Dec 208 (Dec 7: 63%, Dec 6: 72%) Average LTV of 7% on new mortgages in 208 (Dec 7: 69% 2, Dec 6: 67% 2 ) Tracker mortgages 9.3bn or 95% of trackers at Dec 208 are on a capital and interest repayment basis 79% of trackers are Owner Occupier mortgages; 2% of trackers are Buy to Let mortgages Loan asset spread on ECB tracker mortgages was c.65bps 3 in 208 Excluding portfolio acquisitions ( bn; bn; 208 Nil) 2 LTV on new business includes the impact of the portfolio acquisitions 3 Average customer pay rate of 09bps less Group average cost of funds of 44bps

39 38 UK Mortgages: 9.4bn/ 2.7bn UK Mortgages (gross) UK Mortgages (gross) 20.4bn 20.0bn 9.4bn 20.4bn 20.0bn 9.4bn 2.2bn 2.0bn.7bn 8.5bn 9.6bn 0.4bn 7.4bn 7.5bn 7.5bn 4.0bn 3.3bn 2.7bn 7.9bn 7.bn 6.3bn 0.8bn 0.6bn 0.2bn Dec 6 Dec 7 Dec 8 Dec 6 Dec 7 Dec 8 n Tracker n Variable Rates n Fixed Rates n Standard n Buy to let n Self certified UK Mortgages new lending volumes 3.2bn 3.3bn 2.8bn LTV profile Average LTV of 62% on existing stock at Dec 208 (Dec 7: 62%, Dec 6: 62%) Average LTV of 72% on new UK mortgages in 208 (207: 72%, 206: 7%)

40 39 Income Statement Divisional performance Year ended Dec 8 Retail Ireland Wealth and Insurance (formerly Bank of Ireland Life) Retail UK Retail UK Corporate and Treasury Group Centre & other Transformation Investment charge Underlying profit / (loss) before tax and additional gains / (losses) (346) (3) Additional gains / (losses) (6) Underlying profit / (loss) before tax Group Year ended Dec 7 Retail Ireland Wealth and Insurance (formerly Bank of Ireland Life) Retail UK Retail UK Corporate & Treasury Group Centre & Other Core Banking Platforms investment Underlying profit / (loss) before tax and additional gains (326) (04) Additional gains (336) (3) Underlying profit / (loss) before tax Group,004 74, (284) (04) Comparative figures have been restated to reflect the impact of: (i) the reclassification of 7 million of costs from the Transformation Investment charge (formerly the Core Banking Platform Investment charge) to Operating expenses (before Transformation Investment and levies and regulatory charges) for 207. The Transformation Investment charge has been booked in Group Centre for the current and comparative year; (ii) the Group s decision to reorganise the Wealth and Insurance operating segment (formerly Bank of Ireland Life) to incorporate the Private Banking and Insurance Services business units which were previously reported within Retail Ireland. This has resulted in an increase of million in the underlying profit before tax of Wealth and Insurance and a corresponding decrease in the underlying profit before tax of Retail Ireland for 207; and (iii) the Group s decision to reorganise the Corporate and Treasury segment to incorporate Group Treasury s costs which were previously reported within Group Centre. This has resulted in a decrease of 8million in the underlying profit before tax of Corporate and Treasury and a corresponding increase in Group Centre for 207

41 40 Interest Rate Sensitivity The table below shows the estimated sensitivity of the Group s income (before tax) to an instantaneous and sustained % parallel movement in interest rates Estimated sensitivity on Group income ( year horizon) 00bps higher 00bps lower Dec 7 c.70 (c.200) Dec 8 c.80 (c.20) The estimates are based on management assumptions primarily related to: the repricing of customer transactions; the relationship between key official interest rates set by Monetary Authorities and market determined interest rates; and the assumption of a static balance sheet by size and composition In addition, changes in market interest rates could impact a range of other items including the valuation of the Group s IAS9 defined benefit pension schemes

42 4 Income Statement Net interest income analysis Ireland Loans UK Loans C&T Loans Total Loans & Advances to Customers Liquid Assets NAMA Sub Debt Average Volumes ( bn) H 207 H2 207 H 208 H2 208 Gross Interest , Gross Rate (%) 3.% 3.5% 4.03% 3.27% 0.46%.97% Average Volumes ( bn) Gross Interest , Gross Rate (%) 3.07% 3.05% 3.92% 3.20% 0.4%.97% Average Volumes ( bn) Gross Interest , Gross Rate (%) 3.09% 3.6% 3.85% 3.25% 0.32% 3.50% Average Volumes ( bn) Gross Interest Total Interest Earning Assets 99.3, % 97.2, % 98.6, % 99.4, % Ireland Deposits Credit Balances 2 UK Deposits C&T Deposits Total Deposits Wholesale Funding 3 Subordinated Liabilities (2) 0 (83) (0) (05) (43) (35) (0.2%) (0.00%) (0.86%) (0.35%) (0.29%) (0.60%) (5.7%) Total Interest Bearing Liabilities 88.7 (83) (0.42%) 87.2 (66) (0.38%) 89.0 (90) (0.43%) 90. (205) (0.45%) IFRS Income Classification Other 4 (8) 7 Net Interest Margin 99.3, % 97.2, % 98.6, % 99.4, % Average ECB Base rate Average 3 month Euribor Average BOE Base rate Average 3 month LIBOR 0.00% (0.33%) 0.25% 0.33% (9) 4 (74) (9) (88) (36) (42) 5 (25) (0.08%) 0.03% (0.80%) (0.35%) (0.24%) (0.58%) (4.80%) 0.00% (0.33%) 0.32% 0.38% (8) 2 (8) (9) (96) (45) (49) 7 9 (0.08%) 0.0% (0.86%) (0.39%) (0.26%) (0.73%) (4.77%) 0.00% (0.33%) 0.50% 0.62% , (8) 3 (88) (9) (02) (52) (5) 7 (22) Gross Rate (%) 3.06% 3.2% 3.89% 3.28% 0.33% 5.24% (0.08%) 0.02% (0.94%) (0.37%) (0.26%) (0.94%) (4.86%) 0.00% (0.32%) 0.70% 0.82% Includes average interest earning assets of c. 0.3bn in 208 carried at Fair Value through Profit or Loss with associated FY8 interest income of c. 5m 2 Credit balances in H2 208: ROI 25.4bn, UK 3.3bn, C&T 4.bn 3 Includes impact of credit risk transfer transactions executed in Dec 206 and Nov Includes customer termination fees, EIR adjustments and other adjustments that are expected to be of a nonrecurring nature

43 42 Noncore items Cost of restructuring programme Transformation investment costs Other restructuring charges 2 Gain on disposal of Property Grossup for policyholder tax in the Wealth and Insurance business Investment return on treasury stock held for policyholders (Loss) / gain on disposal / liquidation of business activities Tracker Mortgage Examination Review charges (Charge) / gain arising on the movement in the Group s credit spreads Cost of corporate reorganisation and establishment of a new holding company FY 207 (48) (48) 0 () (5) (70) (5) (7) FY 208 () (93) (8) 7 (7) 6 5 Total noncore items (226) (00) Transformation Investment costs of 93 million primarily relate to a reduction in employee numbers ( 74 million), programme management costs ( 8 million) and costs related to the implementation of the Group s property strategy ( million) 2 Other restructuring charges of 8 million primarily relate to impairment of property, plant and equipment and intangible assets

44 43 Transformation Investment 2062 investment:.4bn Average of 275m p.a. 306m Costs will decrease every year in absolute terms c.65% c.65% c.50% c..9bn c..7bn,796m,739m Increasing our investment to support growth and drive efficiencies Scope: Culture, Systems, Business Model Average annual investment of 275m from ; equates to CET capital of c.5060bps p.a. Expected accounting treatment of investment (average 275m p.a.): 40% capitalised as intangible asset 40% charged as Transformation Investment charge in the Income statement 20% charged as noncore restructuring costs in the Income statement Efficiency targets Cost target of c..7bn in 202 Costs reduce every year: Cost income ratio improves from 65% to c.50% in m 3m n Operating expenses n Transformation Investment charge Cost income ratio See Slide 5 for calculation

45 44 Nonperforming exposures by portfolio Composition (Dec 8) Residential Mortgages Republic of Ireland UK Nonproperty SME and Corporate Republic of Ireland SME UK SME Corporate Property and construction Investment property Land and development Consumer Advances ( bn) Nonperforming exposures ( bn) Nonperforming exposures as % of advances 6.0% 9.5% 2.3% 6.2%.2% 6.% 2.6%.0% 0.7% 4.0% 2.% Impairment loss allowance ( bn) Impairment loss allowance as % of nonperforming exposures Total loans and advances to customers %.7 35% 20% 2% 5% 52% 49% 53% 60% 45% 44% 54% 40% Composition (Dec 7) Residential Mortgages Republic of Ireland UK Nonproperty SME and Corporate Republic of Ireland SME UK SME Corporate Property and construction Investment property Land and development Consumer Advances ( bn) Nonperforming exposures ( bn) Nonperforming exposures as % of advances 6.6%.0%.9% 8.9% 5.4% 8.6% 3.0% 9.% 7.9% 39.4% 2.% Impairment loss allowance ( bn) Impairment loss allowance as % of nonperforming exposures Total loans and advances to customers % % 23% 24% 4% 49% 46% 42% 69% 44% 43% 55% 98%

46 45 Debt Securities at fair value through other comprehensive income (FVOCI) Sovereign bonds Senior debt Covered bonds Subordinated debt Asset backed securities ROI ( bn) UK ( bn) 0.4 France ( bn) Portfolio On Jan 208, debt securities classified as AFS financial assets under IAS39 were reclassified in accordance with IFRS 9 The Group held 2.0bn of FVOCI debt securities at Dec 208. Weighted average instrument level credit rating of the FVOCI portfolio is A+ Other exposures of 6.8bn include supranational entities (.7bn), Spain ( 0.9bn), Belgium ( 0.9bn), Sweden ( 0.8bn), and Other ( 2.5bn all exposures less than 0.5bn) NAMA On Jan 208, on transition to IFRS 9, the previous unamortised discount 2 which was amortising to the income statement under IAS39, was transferred in full to retained earnings (NIM impact c.2bps) In April 208, the Group sold 0.2bn of NAMA subordinated bonds in a buyback auction generating an additional gain in the income statement of c. 9m The Group holds NAMA subordinated bonds 70m nominal value, valued at 04% at Dec 208 (Dec 7 04%) Other ( bn) Dec 8 ( bn) Total FVOCI Reserve Dec 7 ( bn) The Group held 3.2bn of AFS financial assets at Dec 7 which were reclassified under IFRS 9 to FVOCI ( 0.bn), Amortised Cost ( 2.8bn) and FVTPL ( 0.3bn) 2 An initial discount was recognised on the NAMA subordinated bonds with subsequent changes in fair value being recognised in the AFS Reserve

47 46 UK Customer Loans 27.9bn ( 3.2bn) Northern Ireland,.0bn Rest of England, 8.9bn UK Mortgages 9.4bn Scotland,.bn Wales, 0.7bn Greater London, 3.6bn Outer Metropolitan, 2.2bn South East,.9bn UK Mortgages Analysis 9.4bn Total UK mortgages of 9.4bn; (NPEs: 2%) Average LTV of 62% on total book (207: 62%) Average LTV of 72% on new mortgages (207: 72%) 70% of mortgages originated since January 200 are standard owner occupier mortgages BTL book is well seasoned with 7% of these mortgages originating prior to January 200 Average balance of Greater London mortgages is c. 90k, with 93% of Greater London mortgages having an indexed LTV <70% 0.bn.3bn SME Other UK Customer Loans 8.5bn 0.bn 2.5bn Corporate 0.2bn.5bn Investment Property 0.0bn 0.5bn Land & Development n Performing loans n Nonperforming exposures 0.04bn 2.6bn Consumer Other UK Customer Loans Analysis 8.5bn Nonperforming exposures of 0.4bn with strong coverage ratios Performing loans of 8.bn; SME: broad sectoral diversification with low concentration risk Corporate: specialist lending teams in Acquisition Finance, Project Finance, and Corporate lending through a focused sector strategy Investment Property: primarily Retail, Office and Residential sectors Consumer ( 2.7bn): Northridge (.4bn): Asset backed motor finance business; net loan book increase of 0.3bn in 208; midmarket pricing targeting prime business only; below industry arrears and loan losses Personal loan volumes ( 0.7bn): net loan book increase of 0.3bn in 208; improved credit risk process has driven increase in customer applications and drawdowns Credit cards ( 0.6bn): classified as held for sale as at Dec 208

48 47 Capital CET ratios Dec 208 Total equity Less Additional Tier Deferred tax Intangible assets and goodwill Foreseeable dividend 2 Expected loss deduction Other items 3 Regulatory ratio ( bn) Fully loaded ratio ( bn) Common Equity Tier Capital Credit RWA Operational RWA Market, CCR and Securitisations Total RWA Common Equity Tier ratio 5.0% 3.4% Total Capital Ratio 8.8% 7.2% Leverage Ratio 7.0% 6.3% Phasing impacts on Regulatory ratio Deferred tax assets certain DTAs are deducted at a rate of 40% for 208, increasing annually at a rate of 0% thereafter until 2024 IFRS 9 the Group has elected to apply the transitional arrangement which on a Regulatory CET basis resulted in minimal impact from initial adoption and will partially mitigate future impacts in the period to The transitional arrangement allows a 95% addback in 208, decreasing to 85%, 70%, 50% and 25% in subsequent years 0. (0.8) (0.4) (0.7) (0.2) (0.6) (0.2) (0.8) (.) (0.7) (0.2) (0.6) (0.3) Deferred tax assets due to temporary differences are included in other RWA with a 250% risk weighting applied ² Dividend deduction of 73m 3 Other items the principal items being the cash flow hedge reserve, securitisation deduction and 0%/5% threshold deduction

49 48 Capital Guidance and Distribution Policy Capital Guidance The Group expects to maintain a CET ratio in excess of 3% on a regulatory basis and on a fully loaded basis by the end of the OSII phasein period This includes meeting applicable regulatory capital requirements plus an appropriate management buffer Distribution Policy The Group expects that dividends will increase on a prudent and progressive basis and, over time, will build towards a payout ratio of around 50% of sustainable earnings Dividend level and rate of progression will reflect, amongst other things: Strength of the Group s capital and capital generation; Board s assessment of growth and investment opportunities available; Any capital the Group retains to cover uncertainties; and Any impact from the evolving regulatory and accounting environments Other means of capital distribution will be considered to the extent the Group has excess capital Proposed Dividend Proposed dividend of 6 cent per share / 73m in respect of 208, increased from.5 cent per share / 24m in 207 The Other Systemically Important Institution (OSII) buffer will be introduced at 0.5% in July 209, increasing to.0% in July 2020 and.5% in July 202

50 49 Defined Benefit Pension Schemes Group IAS9 Defined Benefit Pension Deficit 2.20% 2.0% 2.00%.60%.9bn 0.45bn 0.48bn 0.23bn Jun 6 Dec 6 Dec 7 Dec 8 n IAS9 DB Pension Deficit EUR Discount Rate Mix of BSPF* Defined Benefit Pension Scheme Assets (%) 4.0bn 45% % 44% 5.5bn 6% 2% 8% 5.6bn 72% 23% 5% Dec 2 Dec 7 Dec 8 n Listed equities n Diversified assets 2 n Credit / LDI / Hedging * BSPF = Bank of Ireland Staff Pensions Fund Graphs shows BSPF asset allocation. BSPF represents approx. 77% of DB Pension assets 2 Diversified assets includes infrastructure, private equity, hedge funds and property 33m IAS9 Pension Deficit Sensitivities (Jun 206 / Dec 206 / Dec 207 / Dec 208) 76m 73m 62m 62m 53m 8m 02m 22m 24m 28m 90m 7m 55m 28m 28m Interest Rates Credit Spreads 2 Inflation 3 Global Equity 4 IAS9 Pension deficit of 0.23bn at Dec 208: schemes in deficit 0.27bn, schemes in surplus 0.04bn The primary drivers of the movement were: Deficit reducing contribution of c. 82m to BSPF and c. 34m to other schemes Net positive impact of changes in long term assumptions and experience in 208 The Group has continued to support Trustees in diversifying asset portfolios away from listed equity into other returnseeking but potentially less volatile asset classes. In Q4 208 the BSPF investment in listed equities was reduced from 5% to 5% BSPF asset returns of +.5% and +2.6%.p.a. were achieved over year and 3 years respectively to end Dec 208 Sensitivity of Group deficit to a 0.25% decrease in interest rates 2 Sensitivity of IAS9 liabilities to a 0.0% decrease in credit spread over risk free rates 3 Sensitivity of Group deficit to a 0.0% increase in long term inflation 4 Sensitivity of deficit to a 5% decrease in global equity markets with allowance for other correlated diversified asset classes