Bank of Ireland Global Markets Currency Risk Management

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1 Bank of Ireland Global Markets Currency Risk Management Tuesday 23rd May 2017 Seamus Creaven

2 Agenda FX Risk Treasury risk policy Risk management solutions

4 Risk Bank of Ireland Global Markets 4

5 Some of the treasury risks your company faces Country Settlement Currency Bank of Ireland Global Markets 5

6 Currency Risk EURGBP since 2015 Source: Bloomberg, 2 nd May 2017 Bank of Ireland Global Markets 6

7 Identifying FX risk Transaction risk Transactions in foreign currency (purchases or sales). Risk relates to possible exchange rate movement between contracting ( or budgeting) and completion Translation Risk Foreign currency assets or liabilities ( including fixed assets, shareholdings, group company balance sheets) on balance sheet Risk relates to fluctuating value of assets / liabilities from one reporting period to another Economic risk Risk that the underlying economic rationale of a business decision could be affected by a change in the exchange rate.

8 Treasury Policy 1. Identify and document risks 2. Define ownership, roles & responsibilities 3. Strategy agreed by board resolution 4. Execute and review

9 What influences your FX management policy? Overall Profitability (margins) Can increased FX costs be recouped? How certain are cash flows? Degree and reaction of competition How significant is FX risk for the company? Previous experiences and attitude to risk Are there netting opportunities? Will suppliers/customer use Euro? Is that desirable? Bank of Ireland Global Markets 9

10 Currency Management Tools to Use Currency Accounts Currency loans Spot FX Forward Contract Currency Options Bank of Ireland Global Markets 10

Risk Economic Research Unit Emerging Markets Team Trade Finance Team

11 The Risks We re here to help in Bank of Ireland Currency FX Relationship team Mobile Treasury Specialists FX Trader Updates Product Suite Country Risk Economic Research Unit Emerging Markets Team Trade Finance Team Settlement Locally based Trade Finance team Bank of Ireland Global Markets 11

12 Other Bank of Ireland initiatives Bank of Ireland Global Markets 12

13 Best Practices Identify risks Agree a risk management strategy and implement it Stay Informed Use the supports available - Your bank - Trade Organisations Bank of Ireland Global Markets 13

Your local treasury manager Seamus Creaven, Senior Manager, BOI Global Markets Email:

14 Your local treasury manager Seamus Creaven, Senior Manager, BOI Global Markets Mob: +353 (0) Linkedin:

15 Disclaimer This document has been prepared by Bank of Ireland Global Markets, a division of The Governor and Company of the Bank of Ireland ( BOI ) for information purposes only and BOI is not soliciting any action based upon it. BOI believes the information contained herein to be accurate but does not warrant its accuracy nor accepts or assumes any responsibility or liability for such information other than any responsibility it may owe to any party under the European Communities (Markets in Financial Instruments) Regulations 2007 as may be amended from time to time, and under the Financial Conduct Authority rules (as applicable), for any loss or damage caused by any act or omission taken as a result of the information contained in this document. Except as otherwise may be specifically agreed, BOI has not acted nor will act as a fiduciary, financial or investment adviser with respect to any transaction that it has executed or will execute. Any investment decision made by a party shall be on the basis of its own research and judgment and not be influenced or based on any view or opinion expressed by BOI either in this document or otherwise. This document does not address all risks and cannot be relied on for any investment contract or decision. A party should obtain independent professional advice before making any investment decision. Expressions of opinion contained in this document reflect current opinion as at 3rd May 2017, and is based on information available to BOI before that date. This document is the property of BOI and its contents may not be reproduced, either in whole or in part, without the express written consent of a suitably authorised member of BOI staff. The Governor and Company of the Bank of Ireland is authorised and regulated by the Central Bank of Ireland. In the UK, The Governor and Company of the Bank of Ireland is authorised by the Central Bank of Ireland and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority and regulation by the Financial Conduct Authority are available from us on request. The Governor and Company of the Bank of Ireland is incorporated in Ireland with limited liability. Registered Office - 40 Mespil Road, Dublin 4, Ireland. Bank of Ireland Global Markets 15

Don t just take the risk, understand it. 26 th September 2017

Don t just take the risk, understand it 26 th September 2017 Key contacts Barra Cryan Barra.cryan@boi.com Conor Haugh Conor.haugh@boi.com www.linkedin.com/in/barracryan www.linkedin.com/in/conorhaugh 2