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Donal Forde Managing Director - AIB Bank Republic of Ireland

Donal Forde Managing Director - AIB Bank Republic of Ireland. Forward Looking Statements.

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Donal Forde Managing Director - AIB Bank Republic of Ireland

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  1. Donal Forde Managing Director - AIB Bank Republic of Ireland

  2. Forward Looking Statements 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

  3. 2006 Positive environment + Our prime competitive position On course for strong full year profit performance

  4. 2007 – 2010 Our medium term view

  5. Positive economic environment to continue • Favourable demographics - inward migration driving strong population growth • Housing market supported by strong demand • Strong public finances - potential for increased government spending • Savings ratio remains high - latent investment and consumption potential • Interest rate levels still relatively accommodating • Inflation to fall below 3% by end 2007, 2-3% range thereafter GDP growth of 5 - 6% in 2007, gentle moderation thereafter

  6. Competitive threats are manageable Business Market - Threat from established Players • AIB standing as primary Business Bank • Relationship-based market • Confident of sustaining our leadership position - recent momentum reinforces that confidence Retail Market -Threat from New Players (Den Danske / HBOS / Fortis) • AIB underweight in many Retail product lines • Less “incumbent” mindset - more attacking posture • Focus on Personal Deposits, Consumer Lending, Life & Pensions, General Insurance & Mortgages Market repositioning in 2006 as early execution of this strategy

  7. Upgrading distribution and operations capability • Branch channel • More radical centralisation of support / administration / account maintenance / telephony / credit management • Heavy promotion of self-service / assisted-service banking • Targeting 25% increase in relationship management / sales capacity • Focused on business / premium-personal customers • Internet & telephone channels • Accelerated internet recruitment Centralised telephony • Channel-exclusive product and price propositions & stronger sales focus • Extending our distribution network • Hibernian relationship / AA alliance • Mortgage intermediaries • Significant technology investments • New banking platform • New data centres • New core banking system Driving sales momentum, cost efficiency and service differentiation

  8. Focus on wealth management • High growth potential • Close gap in market share v natural share of client relationships • Actions / initiatives • JV product suite targeted at base / centre of customer pyramid • Revitalised AIB wealth proposition targeted at emerging wealth / top of customer pyramid • Integrated distribution team / substantial investment in technology, training and performance oversight • Q3 performance very encouraging Targeting €100m increase in profit by 2010

  9. 2007 – 2010: what you can expect from us • Irish market loan and deposit growth to be significantly ahead of European peers • AIB targeting above market growth in both loans & deposits • Significant market share gains in investment sales, pensions & general insurance • Product margins • Improving in deposits • Stabilising in business and consumer lending • Mortgages reducing to c. 80 bps • Costs • Current core cost growth is 6 – 7% • Investment to sustain growth will add to this level • New pay structure increases variability • Over-riding discipline is positive jaws target of 3% • Asset quality • Confidence underpinned by economy, demographics and underwriting stance Superior growth / productivity in outperforming market

  10. In summary 2006 • On course for strong performance 2007 - 2010 • “Ireland Inc.” to outperform European peers • AIB - sustaining its no.1 position in business market - attacking underweight retail lines • Investing in improved distribution, upgraded operations and wealth management • Confident that we will continue to outperform Continuing double digit profit growth

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