STRICTLY CONFIDENTIAL - COMMERCIALLY SENSITIVE MATERIAL Investor Presentation May 2015 Allied Irish Banks p.l.c.
Important information and forward looking statement Import rtant Inform rmation on AIB has 523,438,445,437 (excluding 35,680,114 treasury shares) ordinary shares in issue, c. 99.8% of which are held by the Ireland Strategic Investment Fund (ISIF), mainly following the issue of 500 billion ordinary shares to the National Pensions Reserve Fund Commission (the predecessor to the ISIF) at € 0.01 per share in July 2011. Based on the number of ordinary shares currently in issue and the closing share price of 27 May 2015, AIB trades on a valuation multiple of c. 6x (excluding the 2009 preference shares) the net asset value (NAV) of the Group as at 31 December 2014. The Group continues to note that the median for comparable European banks is c. 1x NAV. This presentation should be considered with AIB’s Annual Financial Report for 2014, Interim Management Statement May 2015,and all other relevant market disclosures, copies of which can be found at the following link: investorrelations.aib.ie Forward rd-look lookin ing statem emen ent 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 Risk and Uncertainties on pages 51 to 56 in the 2014 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 51 to 56 of the 2014 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 Allied Irish Banks p.l.c.
Table of contents Group Progress & Performance 4 2014 Full Year Financials 10 Asset Quality 25 Delivering our Strategy 28 Interim Management Statement – Q1 2015 32 Overall Summary 34 Appendix 36 3 Allied Irish Banks p.l.c.
Group Progress & Performance 4
3 Year strategic plan has successfully delivered 2012 2013 2014 Restructuring Focus on commercial agenda Growth & Profitability Post provision profits during Pre-provision operating profit Restructured balance sheet ₋ ₋ 2014 Initiated cost reduction ₋ Reduced credit provisions ₋ programmes Reduction in impaired loans Further cost savings Revised strategy and changed ₋ ₋ Approval of EU Restructuring leadership team members Plan NIM / operational metrics ₋ Repositioned bank for future ₋ Supporting business, progression growth communities and economic recovery Built capability for dealing with ₋ Funding and balance sheet ₋ customers in difficulty Continued funding market stabilisation progressed access Meeting lending objectives ₋ Comfortably passed Comprehensive Assessment Met and Exceeded Targets 5 Allied Irish Banks p.l.c.
AIB is now profitable and generating capital Key Finan ancial cial Highligh ghts ts Summ mmar ary y of Perf rform rman ance ce € 1,111m 2014 Profit Before • Customer service metrics improving Tax + € 2.8bn Year on Year • Momentum towards meeting medium term targets Q1 2015 Net 187bps (3) Interest • Growth in new lending approvals and drawdowns Margin (1) • Impaired loans significantly lower € 20.5bn (3) Q1 2015 Impaired ↓ 29% since Dec Loans Balance • Mortgage arrears levels declining 2013 • Approval of EU Restructuring Plan c.12.2% (2)(3) Q1 2015 Fully Loaded ↑ 0.4% since Dec CET1Capital Ratio 2014 • Comfortably passed Comprehensive Assessment test (1) Excluding Eligible Liabilities Guarantee (ELG) costs (2) Based on full implementation of Basel III / CRD IV and includes 2009 Preference Shares. 5.9% excluding the 2009 Preference Shares. Includes approved payment of May 2015 Preference Share dividend (3) Quarter 1 2015 to end March STRICTLY CONFIDENTIAL - COMMERCIALLY SENSITIVE MATERIAL 6 Allied Irish Banks p.l.c.
Supporting our customers and economic recovery € m 2014 Lending Statistics Lending Lending Approvals Drawdowns 15,000 c. € 5.9bn 13,186 Overall Lending Drawdowns +50% Year on Year 1,886 12,000 9,595 c. € 0.4bn 9,000 1,017 ROI Personal Lending Drawdowns +29% Year on Year 5,853 6,000 11,300 1,645 c. € 1.3bn 3,890 8,578 ROI Mortgage Drawdowns 940 3,000 +34% Year on Year 4,208 2,950 c. € 1.7bn 0 (2) UK Drawdowns 2013 2014 2013 2014 +75% Year on Year (1) ROI UK c. € 2.5bn Corporate / Business Lending (Ex UK) € bn Net Loans by Operating Segment + 51% Year on Year Summary • Leading market shares in core Irish target markets 8.9 10.2 - Targeting € 7 – 10bn in lending per annum 10.4 11.2 44.3 • Lending approvals and drawdowns increased during 2014 44.1 - Approvals include significant restructuring activity in FSG as impaired loans are reduced and migrated back to performing grades Dec 2013 Dec 2014 • Group asset yield increased to 2.94% in H2 2014 (2.83% in H2 2013) in part due to the margin on new lending volumes Domestic Core Bank AIB UK FSG (1) Lending figures in the Republic of Ireland includes Corporate Banking North America (2) Lending figures include refinancing in the UK 7 Allied Irish Banks p.l.c.
Delivering solutions for customers in financial difficulty Summary Impaired loans € bn • Significant momentum in implementing sustainable solutions with customers in difficulty 55% 49% • Overall impaired loans down 23% in 2014 as restructuring activity 28.9 30.0 accelerates - € 1.7bn further reduction in Q1 2015 25.0 - Impaired loans lower across all major loan categories 20.5 • Arrears levels in ROI mortgage portfolio have decreased significantly 20.0 • 27% increase in the number of mortgage accounts in some form of forbearance 15.0 Dec 13 Mar 15 • Continued reduction in impaired volumes a key priority for 2015 % Specific Provisions / Impaired Loan Coverage Ratio Arrears in RoI Mortgage Portfolio (1) Non Mortgage Restructure Progress • Non mortgage customers typically have exposures across a -23% since Dec Overall Arrears Levels (2) number of asset classes including SME debt, associated property 2013 exposures and buy-to-let mortgages Met or exceeded our restructuring targets for non mortgage • customers during 2014 -27% since Dec Owner Occupier Arrears (2) 2013 - Majority of offered restructures are expected to complete during 2015 • € 4.7bn of non mortgage loans subject to forbearance measures at -13% since Dec December 2014 BTL Arrears (2) 2013 (1) By number of accounts (2) Quarter 1 2015 to end March 8 Allied Irish Banks p.l.c.
Further progress towards medium term targets Original Medium 2013 2014 Status Update Term Target 11.8% (1) Fully Loaded CET 1 Capital Ratio >10% 10.5% (1) On track 12.2% (1)(3) 1.69% Net Interest Margin >2% 1.37% On track 1.87% (3) (Ex Eligible Liabilities Guarantee) Cost / Income Ratio <50% 76% (2) 55% (2) On track (22)bps Credit Impairment Charge <65bps 224bps On track 46bps excl. FSG 99% Loan /Deposit Ratio 100% - 120% 100% On track 100% (3) (1) Based on full implementation of Basel III / CRD IV and includes 2009 Preference Shares. 5.9% excluding Preference Shares at 31 December 2014. 2014 ratio includes the approved payment of the May 2015 Preference Share dividend. Discussions are ongoing with Department of Finance in respect of capital structure considerations (2) Excludes exceptional cost items. 2014 income includes income from balance sheet actions and realisations in the period. (3) Quarter 1 to March 2015 9 Allied Irish Banks p.l.c.
2014 Full Year Financials 10
Recommend
More recommend
