Half-Yearly Financial Results 2018 For the six months ended 30 June - PowerPoint PPT Presentation

Half-Yearly Financial Results 2018 For the six months ended 30 June 2018 AIB Group plc

Important information and forward looking statement This presentation should be considered with AIB’s Annual Financial Report 2017, Q1 Trading Update April 2018 and all other relevant market disclosures, copies of which can be found at the following link: http://aib.ie/investorrelations Important Information and forward-looking statements This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of AIB Group plc 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 58 to 68 in the Annual Financial Report 2017. 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 58 to 68 of the Annual Financial Report 2017 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

Bernard Byrne Chief Executive Officer AIB Group plc

H1 2018 Highlights Franchise and business model delivering sustainable performance Profit before tax of €0.8bn, continuing sustainable underlying profitability, loan  book growth and significant improvement in asset quality Strong capital ratio of CET 1 FL 17.6%; continuing capital generation and capacity  for attractive returns Continued progress on NPE normalisation; €7.5bn (12% overall), down €2.7bn (-27%)  from FY 2017 Market leading franchise with customer first strategy and investment in digital and  innovation driving commercial success Well positioned and evolving for future challenges and opportunities in a growing  economy 4

Growing economy with attractive market dynamic Well positioned for growth Irish economic growthimproving; Brexit risk remains Total employment levels rising as unemployment falls % 2300 16 7.2 14 2200 5.6 12 2100 4.3 4.0 3.7 10 3.4 3.1 2000 2.7 8 1900 6 1800 4 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2017* 2018 2019 2020 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 As at July 2017 As at July 2018 LHS: Employment ('000s) RHS: Unemployment rate (%) Source: CSO, Dept. of Finance Source: CSO Irish housing activity Business sector in expansionary mode PMI index # of Completions, Commencement & Registrations (‘000s) 66 Normalised demand 30,000 120 25,000 100 61 20,000 80 56 15,000 60 10,000 40 Expansion 51 5,000 20 Contraction 0 0 46 2013 2014 2015 2016 2017 Completions Commencements Registrations HPI (RHS) Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Irish Manufacturing Irish Services Eurozone Composite Source: CSO, Department of Housing, AIB ERU , National House price index Jan 05=100 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 2017 was 3.2% 5

Delivering continued momentum Increased new lending; Leading market shares Leading market shares in key segments Continuing increase in New Lending Continuing momentum in key sectors Drawdowns (€bn) Mortgage Lending (€bn) Stock 43% 41% 36% 32% 5.5 23% 20% 4.8 1.2 1.1 0.5 (1) H1 2017 H1 2018 (3) 0.5 Personal Personal Mortgages Business Leasing Main (2) Current loans Current Business Accounts Accounts Loans Personal Lending (€bn) 2.3 Strong market share position 2.2 (Stock) 0.4 0.4 #1 Business Main #1 Mortgages Current Accounts (4) 0.8 H1 2017 H1 2018 #1 Business Main #1 Personal Main 0.9 SME and Corporate (5) Lending (€bn) Loans Current Accounts 2.0 2.6 #1 Business Main 1.9 #1 Personal Loans Leasing (4) 1.3 1.9 1.3 #2 Business Credit #1 Personal Credit Cards 0.7 0.7 Cards H1 2017 H1 2018 H1 2017 H1 2018 #1 bank for FDI WIB UK RCB Transactional SME Corporate Source: Ipsos MRBI AIB Personal Financial Tracker Q2 2018; AIB SME Financial Services Monitor 2017, BPFI – Q2 2018 (1) New lending flow to June 2018 (2) Amongst banks; excludes car finance 6 (3) Main leasing business agreement (4) Joint number 1 position (5) Corporate includes leverage finance, real estate >€10m, advisory and structured finance

Strong Irish franchise Underpinned by strong propositions and omni-channel distribution Personal Mortgages  New-to-Bank customer digital on-boarding capability;  Mortgage customer experience programme delivering. Current account opening, by customers, via AIB Mobile App; Increased digital capability, more convenience, faster and  No. 1 card issuer in the market – 35% market share simpler process – ‘My Mortgage’ web app; ‘Express’ mortgage journey; Homes Centre of Excellence  Current Accounts opened increased 7% YoY  First Time Buyer market share 36%; switcher mortgages  37% opened in 24 – 34 age bracket YoY growth 46%  57% of customers ‘New to Bank’  Lowest SVR in market providing long term value  Ongoing analysis to deliver better customer interactions and  Competitive market rates and expected broker market outcomes – c. 40% of ‘avoidable’ teller value transactions growth – volume, price and quality considerations could have been completed via IDD, ATM or online Business Other  No. 1 bank in Agri sector; No.1 bank in Ireland for FDI  56% of active customers transacting on digital channels  Maintaining market share of stock at 44% in a market  Increased new lending to support housing developments where demand is below expectations and social housing  Ability to leverage PSD2 / Open banking to use non AIB  Harvesting synergies in Irish franchise to create efficiencies data in assessing credit decisions and optionality in UK  Ongoing enhancement of end to end online Business  AIB UK was the first bank in the world to certify processes – Online account opening. Further digital end conformance to the Open Banking Security Profile – a to end capability global standard for securing API communications for FS 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 Management Risk & Capital Management Talent & Culture Talent & Culture Customer and Business Outcomes Multiple Touchpoints Greater Efficiency, Product offering & Delivery H1 2018 896K 26K 1.3m active online users Personal Sustainable Mobile Kiosk / Tablet Interactions Logins Relationship underlying profits 18K 232K Internet Contact 96% customer transactions automated >1.5m daily Centre (1) Calls Q1 18: NPS 21 €0.8bn Banking Logins interactions 94K 284K Branch ATM 63% key products purchased online Transactions Withdrawals Homes Capital accretion 148K Mobile 78% personal loans applied for online 2013 148K Interactions Q1 18: NPS 46 17.6% FL CET1 Mobile Interactions 208K Internet Banking Logins 208K 18K 83% reduction in branch paper processing Internet Contact 880k daily Centre (1) Calls Banking SME Asset Quality Logins 77K interactions Branch Transactions 18K 77k 432K Contact Branch 67% transactional customers active on digital Centre (1) Calls ATM Q1 18: NPS 47 -27% NPEs Transactions Withdrawals channels (2) (1) Includes calls to direct banking & service (2) Based on personal current account customers 8