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Shareholder Information Meeting. Radisson Penn Harris Hotel & Convention Center, Camp Hill, Pennsylvania , Wednesday, May 30 th , 2007. Forward looking statements.

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slide1

Shareholder Information Meeting

Radisson Penn Harris Hotel & Convention Center, Camp Hill, Pennsylvania,

Wednesday, May 30th, 2007

forward looking statements
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.

The results for the year ended 31 December 2006 have been restated to represent Ark Life as a discontinued operation. The following commentary is on a continuing operations basis. The growth percentages (excl. EPS) are shown on an underlying basis, adjusted for the impact of exchange rate movements on the translation of foreign locations’ profit and excluding interest rate hedge volatility under IFRS.

visit www.aibgroup.com/investorrelations

agenda
Agenda
  • Introduction and welcome
  • Annual General Meeting video
  • Presentation of 2006 results
  • Shareholders’ questions
geographic profile december 2006

Ireland

North America

Geographic profile - December 2006

PBT * 50%

Assets 69%

Shareholders 36%

PBT * 25%

Assets 21%

Shareholders 21%

UK

Rest of World

PBT * 1%

Shareholders 2%

European Shareholders (ex Ireland & UK) 14%

PBT * 10%

Assets 4%

24.2% stake in M&T Bank

Shareholders 27%

PBT * 13%

Assets 6%

Poland

Institutional shareholders 70%

Retail shareholders 30%

* Underlying PBT before exceptional & one-off items

financial highlights
Financial highlights

Underlying change %

2006

Earnings per ADR - basic $6.50 15

Cash dividend paid per ADR $1.91 10

Cost / income ratio 53.5%  1.7

Return on Equity 29.0%

*

* Basic earnings per share less profit on disposal/development of properties, businesses and interest rate hedge volatility

slide6

Strong economic backdrop

GDP % 2006 (e) 2007 (f)

Ireland 6.0 5.0

UK 2.7 2.8

USA 3.3 2.2

Poland 6.1 5.8

Eurozone 2.72.7

aib a snapshot
AIB – a snapshot

“The 4 Pillars”

“Store of Value”

Capital

Ireland

UK

M&T

Poland

Markets

+

+

+

+

Single enterprise support framework

buoyant customer demand
Buoyant customer demand

Net Interest Margin

-12 bps

  • Organic growth - best use of capital - solid capital and funding positions
distinctive and evolving profit profile
Distinctive and evolving profit profile

Pre-tax profit by geography

December 2003

December 2006*

* Continuing operations less profit on disposal / development of properties & businesses and interest rate hedge volatility

aib bank republic of ireland 942m 23 operating profit
AIB Bank Republic of Ireland - €942m  23%operating profit

Income / cost gap + 4%

Income  19%

  • Making competitive gains from a prime position
    • Business lending  38% - gaining market share
    • Personal lending  27% - gaining market share
    • Mortgage lending  26% - maintaining market share
    • Deposits  20% - gaining market share
  • Setting the improved customer proposition agenda
    • Attacking an underweight position in the retail market
    • More regular savers today than at 1st SSIA maturity
  • Strong progress in wealth management
  • Costs  15%; includes significant element of one-off / non-recurring items
capital markets 508m 29 ope rating profit
Capital Markets - €508m  29%operating profit
  • Income / cost gap +3%
  • Resilient, recurring, low volatility earnings
    • Customer income 83%
    • 10 year PBT CAGR 20%

2006 profit contribution

  • Corporate Banking  42%
  • Treasury 2%
  • Investment Banking  62%
  • Rigorous pricing and return discipline
  • Proven skills transfer capability
    • c. 76% of Corporate Banking profit earned internationally
  • Outstanding credit risk management; early and conservative recognition of impaired loans and provision requirements
aib bank united kingdom 378m 18 operating profit
AIB Bank United Kingdom - €378m  18%operating profit
  • Income / cost gap + 6%

2006 profit contribution

  • Great Britain  23%
  • Northern Ireland 11%
  • Franchise quality reflected by broad volume growth

NI 45%

GB

55%

  • Investing in people, locations and delivery channels
  • Diversifying and developing income streams
  • Established “bank of choice” in chosen mid market sectors driving income & avoiding adverse selection
slide13

Poland – €201m  52%operating profit

Total income % mix

  • Income / cost gap + 10%
  • Strong business volume increases in a high growth economy
    • Business lending  25%
    • Retail cash lending 54%
    • Mortgages 26%
    • Business deposits 26%
    • Personal deposits 8%
  • Expanding and deepening our footprint; adding branches, business centres, channels

Broad based fee income

  • Investment funds  123%
    • No. 2 market position
    • c. 250,000 customers
  • Brokerage services  84%
    • No. 1 market position
investing to support growth our single enterprise approach
Investing to support growth – our single enterprise approach

Service Quality

Reconfiguring, redeploying,

simplifying, standardising ……….

Objectives

  • Rapid speed to market
  • Volume growth cost indifference
  • Support business volume growth
  • Business acquisition capability

Operational

Excellence

Managed

Cost

Risk

Update on work in progress

  • 40+ change programmes impacting every AIB business unit including new banking platforms, branch activity displacement, new data centres
  • 4,000 people deployed
  • 2006-2009 €400m investment; 40% now spent
  • Significant gains in unit cost of production / procurement
    • Ramp up in use of channels & technology
m t 141m 4
M&T - €141m  4%
  • EPS  10%; 13th consecutive year of double digit growth
  • Contribution to AIB reduced by one off reclassification of provisions
  • Tight cost management in a lower income growth environment
  • Q4 cost / income ratio  50.2%
  • Solid asset quality; NPLs 0.52%; allowance for credit losses 1.51% of total loans
  • AIB shareholding 24.2%
aggressive organic growth
Aggressive organic growth
  • Over 100,000 more customers than in 2005; increases in both business and personal sectors
  • Targeting 25% increase in relationship management / sales capacity from 2007-2010
  • Continuing migration from small to mid-market customers
  • Consistent customer satisfaction underpins “best business bank” status
  • Now opening a new branch every 10 days
  • 1.5m customers - 900,000 Internet Banking customers; 400 branches; 600 ATMs
  • Leveraging competencies developed in Capital Markets
  • International expansion – new offices in Canada & Australia
  • Ireland
  • Great Britain
  • Poland
  • Rest of World
strong asset quality
Strong asset quality

2005 2006

1.0 Impaired loans (ILs) % 0.9

0.4 Gross new ILs % 0.4

78 Total provisions / ILs % 76

15 Bad debt charge bps 12

solid capital position
Solid capital position

8.2%

8%

Tier 1 ratio

7.2%

Preference share % Tier 1

30%

27%

23%

Dec 05

Jun 06

Dec 06

  • Total capital ratio 11.1%
  • Tier 1 8.2% (target minimum c. 7%)
  • Core tier 1 6.0% (preference shares 27%, target range 20 – 30%)
slide20

AIB ADR Performancefrom May 2002 to April 2007

AIB ADR  131%

Fulton Bank  5%

Sovereign Bank  78%

PNC  34%

relentless execution of our clear agenda
Relentless execution of our clear agenda
  • Significant progress being made on our 3 key priorities

Existing Markets - maximising organic growth opportunities

Selected international markets / niches – transferring skills profitably

Single enterprise support framework – achieving efficiency and productivity gains

slide22

Shareholder Information Meeting

Radisson Penn Harris Hotel & Convention Center, Camp Hill, Pennsylvania,

Wednesday, May 30th, 2007

contacts

+353-1-660 0311

+353-1-641 2075

Contacts

Our Group Investor Relations Department will be happy to facilitate your requests for any further information

Alan Kelly alan.j.kelly@aib.ie +353-1-6412162

Rose O’Donovan rose.m.o’donovan@aib.ie +353-1-6414191

Pat Clarke patricia.m.clarke@aib.ie +353-1-6412381

Alma Pearsonalma.e.pearson@aib.ie+353-1-6413469

USA

Ann Kerman ann.l.kerman@aibny.com  1-800-458 0348

Visit our website www.aibgroup.com/investorrelations