Backing our customers Annual Financial Results 2018 for the financial year ended 31 December 2018 AIB Group plc
Forward Looking Statement This document contains certain forward looking statements with respect to the financial condition, results of operations and business of AIB Group and certain of the plans and objectives of the Group. These forward looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward looking statements sometimes use words such as ‘aim’, ‘anticipate’, ‘target’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘may’, ‘could’, ‘will’, ‘seek’, ‘continue’, ‘should’, ‘assume’, or other words of similar meaning. Examples of forward looking statements include, among others, statements regarding the Group’s future financial position, capital structure, Government shareholding in the Group, income growth, loan losses, business strategy, projected costs, capital ratios, estimates of capital expenditures, and plans and objectives for future operations. Because such statements are inherently subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking information. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward looking statements. These are set out in the Principal risks and uncertainties on pages 62 to 68 in the 2018 Annual Financial Report. In addition to matters relating to the Group’s business, future performance will be impacted by Irish, UK and wider European and global economic and financial market considerations. Any forward looking statements made by or on behalf of the Group speak only as of the date they are made. The Group cautions that the list of important factors on pages 62 to 68 of the 2018 Annual Financial Report is not exhaustive. Investors and others should carefully consider the foregoing factors and other uncertainties and events when making an investment decision based on any forward looking statement. 2
Backing our customers Bernard Byrne Chief Executive Officer AIB Group plc
2018 highlights Customer First strategy delivering sustainable performance Profit before tax €1.25bn, loan book growth and significant improvement in asset quality Reaching more normalised annual dividend level with +42% increase to €461m / 17c per share Business generating capital +210bps pre-dividend; fully loaded CET1 of 17.5% Strong progress on NPE normalisation; €6.1bn (9.6% overall), down €4.1bn (-41%) from Dec 2017 ROTE (1) 12.4% allowing continued investment in evolving our market leading franchise (1) ROTE based on (PAT – AT1 coupon + DTA utilization ) / (CET1 @ 13% plus DTA) 4
Growing Irish economy Continuing attractive market dynamic Irish economic growth*improving; Brexit risk remains Total employment levels rising as unemployment falls % 7.5 16 2300 14 2200 12 2100 4.2 3.7 3.6 10 3.1 2000 2.7 8 1900 6 4 1800 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2018* 2019 2020 LHS: Employment (’000s) RHS: Unemployment rate (%) As at Jul 2017 As at Oct 2018 Source: CSO, Dept. of Finance Source: CSO Irish housing activity Business sector in expansionary mode; cautious amid uncertainty # of completions, commencement & registrations (‘000s) PMI index 35,000 120 65 Normalised demand 30,000 100 60 25,000 80 20,000 60 55 15,000 40 10,000 50 20 5,000 0 0 45 2013 2014 2015 2016 2017 2018 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Completions Commencements Registrations RHS: HPI Irish Services Irish Manufacturing Eurozone Composite Source: CSO, Department of Housing, AIB ERU, National House price index Jan 05=100; 2018 Source: Markit via Thomson Datastream * GDP forecasts used, however note that GDP can be distorted due to the impact of multi-national sector in Ireland. Modified final domestic demand in 2018 estimated at c.5% 5
Delivering continued momentum Increased new lending; leading market shares Continuing momentum in key sectors (1) Continuing increase in new lending Leading market shares in key segments Mortgage lending (€bn) Drawdowns (€bn) Stock 44% 42% 12.1 37% 32% 2.8 2.4 22% 21% 1.4 10.5 1.1 2017 2018 (2) Main Personal Mortgages Business Main Main current loan main current leasing business Personal lending (€bn) account (excl car) account loan 4.0 Source: Ipsos MRBI AIB Personal Financial Tracker Q4 2018; Ipsos MRBI AIB SME 3.2 Financial Monitor March 2018 0.8 0.8 Growing the performing loan book 1.8 2017 2018 €bn 1.6 56.8 SME and Corporate lending (€bn) 53.1 5.3 4.6 1.3 1.4 4.9 4.6 4.0 3.2 2017 2018 Dec-17 Dec-18 2017 2018 RCB UK WIB RCFs Performing loans Corporate SME (1) Excludes UK and revolving credit facilities (RCF) 6 (2) New lending flow based on BPFI industry drawdown data to end December 2018
Consistency of strategy and delivery Continued strategic, financial and operational performance through 2018 AIB Purpose AIB Purpose “To back our customers to achieve their dreams and ambitions” “We put our customers first; we are better together; we keep it simple; we are empowering, we are AIB Values AIB Values building trust and appreciation” Talent & Culture Simple & Efficient Risk & Capital Customer First 72 nd percentile Gallup 64% of key +210bps organic Personal Relationship 4 Pillars products sold online capital generation iConnect score Q4 2018 NPS +35 (17:1 engaged) or mobile NIM 2.40% + NIM 2.40% + Operating model Operating model Delivering for Delivering for CET1 CET1 ROTE ROTE Enabling Enabling Evolving Customer Evolving Customer Property Property Shareholder Value Shareholder Value customers and customers and 13% 13% 10% + 10% + technology technology Delivery Delivery portfolio portfolio shareholders shareholders CIR <50% CIR <50% Sustainability Sustainability 7
Purpose & four pillar strategy driving performance Backing our customers to achieve their dreams and ambitions and delivering for stakeholders Customer First Customer First Simple & Efficient Simple & Efficient Risk &Capital Risk &Capital Talent & Culture Talent & Culture Customer and business outcomes Multiple touchpoints Greater efficiency, product offering & delivery (m) Number of active online & mobile users 12K 2018 1.2m (active @ year end) Personal Performing loan Kiosk / Tablet Mobile Logins relationship book growth Interactions 1.38 1.26 1.14 1.04 251K 18K 0.96 Q4 18: NPS +35 +€3.7bn Internet Contact >1.8m daily Banking Centre (1) interactions Logins Calls 101K 298K Homes Organic capital Branch ATM 2014 2015 2016 2017 2018 generation Transactions Interactions Q4 18: NPS +50 +210bps (m) Number of customer transactions completed via online & mobile channels 2013 208K 148K Internet 44.5 Mobile Banking Logins Interactions 36.3 SME micro New lending 30.6 26.9 18K 24.7 208K 77K Contact Internet Branch 880k daily Centre (1) Banking Transactions Q4 18: NPS +57 98% at 18K Calls Logins Contact interactions strong/satisfactory Centre (1) Calls grades 432K 77k ATM Branch 2014 2015 2016 2017 2018 Withdrawals Transactions (1) Includes calls to direct banking & service 8
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