Anglo Irish Bank Dublin One Year Deposit Account by kju46014

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									      Shareholder Information Meeting



Radisson Penn Harris Hotel & Convention Center,
                       Camp Hill, Pennsylvania,
                   Tuesday, December 1st, 2009



                                                  1
                                                                                     Forward looking statements
This document contains certain “forward-looking statements” within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section
21E of the US Exchange Act of 1934, as amended, regarding the belief or current expectations of the Group, AIB‟s Directors and other members of its senior
management about the Group‟s financial condition, results of operations and business of the Group and certain of the plans an d objectives of the Group,
including statements relating to possible future write-downs or impairments. In particular, certain statements with regard to management objectives, trends in
results of operations, margins, risk management, competition and the impact of changes in Financial Reporting Standards are forward-looking in nature. 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 „may‟, „could‟, „would, „will, „aim‟, „anticipate‟, „target‟, „expect‟, „estimate‟, „intend‟, „plan‟, „goal‟, „believe‟, or other words of similar meaning.
Examples of forward-looking statements include, among others, statements regarding the Group‟s future financial position, income growth, business strategy,
projected costs, capital position, 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.

These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and
unknown risks, uncertainties and other factors, many of which are outside the control of AIB and are difficult to predict, that may cause actual results to differ
materially from any future results of developments expressed or implied from the forward-looking statements. Factors that could cause actual results to differ
materially from those expressed or implied include, but are not limited to, changes in economic conditions globally and in the regions in which the Group
conducts its business, changes in fiscal or other policies adopted by various governments and regulatory authorities, the effects of competition in the
geographic and business areas in which the Group conducts its operations, the ability to increase market share and control expenses, the effects of changes in
taxation or accounting standards and practices, acquisitions, future exchange and interest rates, the risk that the Group may not participate in NAMA or that the
NAMA Scheme may turn out to be unsuccessful in achieving its goals, the lack of control over the nature, number and valuation of the assets to be transferred
to NAMA and the success of the Group in managing these events.

The Group cautions that the foregoing list of important factors 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. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this Report may not occur.
The forward-looking statements speak only as of the date of this document. Except as required by the Irish Financial Regulator, the Irish Stock Exchange, the
UK Financial Services Authority, the London Stock Exchange or applicable law, AIB does not have any obligation to update or revise publicly any forward-
looking statement, whether as a result of new information, further events or otherwise. AIB expressly disclaims any obligation or undertaking to publicly release
any updates or revisions to any forward-looking statement contained in this document or incorporated by reference to reflect any change in AIB‟s expectations
with regard thereto or any change in events, conditions or circumstances on which any such statement is based.



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.



                                      visit www.aibgroup.com/investorrelations                                                                                              2
         Alan Kelly
General Manager Group Finance
                                            Agenda



 Introduction and welcome


 Key developments and performance review


 Shareholders‟ questions




                                                     4
          Major events for AIB; September 2008 – December 2009
2008
September      Introduction of Irish Government Guarantee

December       Irish Government initial announcement on recapitalisation of Irish banks

2009
January        Nationalisation of Anglo Irish Bank;
               Market concerns re Irish sovereign
February       AIB & Irish Government announce a €3.5bn recapitalisation by way of Core Tier 1
                preference shares
March          Nil final dividend for 2008 recommended

April          Irish Government announces National Asset Management Agency (NAMA)
               AIB announces retirement of CEO, CFO and appointment of new Chairman
June           Successful capital exchange offer, boosting equity capital by c. €1.1bn

September      Minister for Finance outlines NAMA terms
               AIB announces intention to raise additional capital over 12-18 months timeframe
November       Restructuring plan submitted to European Commission
               Enactment of NAMA legislation
               Senior management changes at AIB                                                  5
                                    Tough economic conditions
                            GDP
    % volume               2009 f              2010 f
    Ireland                 -7.7                -2.5
    UK                      -4.4                 1.0
    Poland                   0.5                 1.5
    Eurozone                -4.0                 1.0
    US                      -2.6                 1.9
    World                   -1.1                 3.1
                                                Source: AIB ERU Forecasts

Ireland
 Good initial progress in improving competitiveness, exports outperforming
 Difficult budget decisions must continue to be made
 Overdependence on construction rapidly diminishing
 Unemployment continues to increase; expected to average c.13.6% in 2010
                                                                              6
                   Major changes have materially affected AIB
   Lower demand for loans

   Increased cost of deposits / funding

   Liquidity severely curtailed

   Significant increase in forecast 2009 bad debts charge
        Mar 09     €2.9bn
        May 09     €4.3bn
        Aug 09     €4.3bn+
        Nov 09     €5.3bn
   NAMA transfer - €24bn identified by Minister for Finance; discount yet to be
    finalised
   Potential impact of European Commission restructuring plan, not yet known
   Adjusted basic EPS H1 2009 (164.4c)
   ADR US$5.20 (on Nov 26th 2009)                                                 7
                                                               Operating performance
   €1.1bn* underlying pre-provision profit in H1 2009; €2bn* forecast for full year 2009
   Performance driven by
           Diverse multi-national sources of income underlining importance of international diversification
           Continued downward trend in costs
   Loan and deposit volumes
           Weak loan demand, 2009 gross customer loans to be broadly in line with 2008
           Deposit stability continues; full year balance expected to increase over half year level in 2009
           Credit current account volumes stabilised since Q1
   Net interest margin
           NIM attrition of c. 25bps expected in 2009 from 221bps in 2008
           Driven by cost of customer deposits, partly offset by improving returns on loans and higher
            treasury margins
   Other income
           Non- interest income expected to reduce by over 10% in 2009, mainly attributed to lower fees
            from banking activity, investment banking, asset management and cost of the government
            guarantee partly offset by some bond disposals
   Costs
           Cost reductions to continue, targeting further decrease of 5% for 2009
           Staff numbers reduced by 1,500 in 9 months to September
                                                                                                               8
     * excludes capital exchange offer
                                             Criticised loans - definitions
Watch
   Credit exhibiting weakness but with the expectation that existing debt can be fully
    repaid from normal cashflow


Vulnerable
   Credit where repayment is in jeopardy from normal cash flow and may be
    dependent on other sources


Impaired
   A loan is impaired if there is objective evidence of impairment as a result of one or
    more events that occurred after the initial recognition of the assets (a “loss event”)
    and that loss event (or events) has an impact such that the present value of future
    cash flows is less than the current carrying value of the financial asset or group of
    assets i.e. requires a provision to be raised through the profit and loss


                                                                                             9
                                                                Credit deterioration
                              Total criticised by value €m
    35000
    30000
                                                                 7128    10804
    25000                                              4756
                                            4203
    20000                                                        10233
                                                      10565              8503
    15000                                   8873
                                 2991
                       1720      4302
    10000    1440      2816
             2250                                                14023   14087
                                            11190     12269
     5000              7394      8172
             6531
        0
             Jun       Sep       Dec         Mar       Apr       May     Jun
             2008                           2009
                              Watch     Vulnerable   Impaired


    Criticised loans increased by €17.9bn to June 09. AIB Bank RoI accounts for c. 75%
     of this increase, with AIB Bank UK 15%, Capital Markets 5% and CEE 5%.          H2
     increase to be significantly less
    Weakening trends evident across portfolios / sectors
    Property & construction sector 72% of H1 increase                                    10
                                       Credit charges – H1 2009


                  Specific    % of     IBNR      % of     Total     % of
                  Provision   Avg    Provision   Avg    Provision   Avg
                    P&L       Advs      P&L      Advs    (P&L)      Advs
                     €m        %        €m        %        €m        %

AIB Bank RoI       1,794      4.65     117       0.30   1,911       4.95

Capital Markets      171      1.31      30       0.23     201       1.54

AIB Bank UK          188      1.79        0      0.00     188       1.79

CEE                   58      1.38      15       0.36      73       1.74

Group Total        2,211      3.33     162       0.25   2,373       3.58




                                                                           11
                           Balance sheet provisions – June 2009


                                  Specific            IBNR       % of       Total     % of
                  Impaired % of   Provision         Provision   Earning   Provision Impaired
                   Loans Advs       (B/S)   Cover     (B/S)      Advs       (B/S)    Loans
                    €m      %        €m      %         €m         %          €m        %

AIB Bank RoI       8,516   10.9    2,439    29       1,018       1.46      3,457      41

Capital Markets     667     2.6      282    42          50       0.20        332      50

AIB Bank UK        1,220    5.6      342    28         166       0.81        508      42

CEE                 401     4.7      167    42          84       1.05        251      63

Group Total       10,804    8.1    3,230    30       1,318       1.07      4,548      42




                                                                                               12
                  Property & construction – sub sector profile June 2009 *

 €m                                                  ROI               UK **         CM     Poland   Group
 Commercial Investment                          10,889             3,562            5,199    1,245   20,895
 Residential Investment                           2,407            1,317             483       36     4,243


 Commercial Development                           6,182               685            375      704     7,946
 Residential Development                        10,877             3,154             413      599    15,043


 Contractors                                         674              334             41      140     1,189

 Balances                                       31,029             9,052            6,511    2,724   49,316




* an element of management estimation has been applied in this sub-categorisation
** excludes €0.6bn in Housing Associations
                                                                                                              13
                                                           Asset quality update*

      Deterioration continues; pace slowing

      Bad debt charge heavily weighted to loans identified for potential transfer
       to NAMA and predominantly in the Republic of Ireland
               Some stabilisation in RoI “non-NAMA” loans; no material increase in
                provision requirement since H1 2009

      International portfolios - impaired loans & bad debt charges higher than
       previous years reflecting more difficult conditions in all markets
               Prudent balance sheet provisions
               Provision charges expected to be lower in Capital Markets & CEE and
                broadly similar in UK in H2 2009 relative to H1 2009




* per Interim Management Statement                                                    14
    National Asset Management Agency (NAMA) – an overview

   Asset exchange programme, primarily RoI and UK property portfolios

   Quantum of loans to be transferred and asset values not yet finalised
        c. €17bn land & development and c. €7bn “associated” loans may transfer
        Transfers to be phased over 2010
        Valuation on a bottom up, case by case basis
   Capital position and pre-provision operating profit will both be significantly
    influenced by NAMA outcome
   To be considered by shareholders at EGM on 23rd December




                                                                                     15
                               Loans that may transfer to NAMA
                         Landbank & Development     Associated     Total
                                  €bn                  €bn         €bn
Republic of Ireland                14.2                   6.4      20.6
United Kingdom                      2.6                   0.7       3.3
Rest of world                       0.2                     -       0.2
                                   17.0               17.1         24.1
Performing at 30th June 2009                                     c. 17.4
Impaired at 30th June 2009                                        c. 6.7
Forecast performing at 31st December 2009                        c.13.6
Forecast impaired at 31st December 2009                          c.10.5
Balance sheet provisions at 30th June 2009                        c. 2.3
Forecast balance sheet provisions at 31st December 2009           c. 4.2
                                                                           16
                                                Capital position H1 2009


                      AIB                                    7.8%
       Tier 1 ratio
                      Regulatory min.        4.25%



                       AIB                                                 10.7%
Total capital ratio
                      Regulatory min.                            8.5%


  Capital ratios strengthened by €3.5bn Government investment and €1.1bn
     gain from the capital exchange offer
  Capital ratios above regulatory requirements
  NAMA effect to emerge over coming months

  Continuing to actively consider a range of potential sources of additional
     capital; firm resolve to strengthen capital position
                                                                                   17
                               Potential sources of capital


 Equity markets

 Strategic investment

 Asset sales / business disposals

 Government commitment to assist and support




                                                          18
               AIB‟s funding diversity - September 2009

Stable customer deposits –
           50%


                                          Capital – 10%




                                   Wholesale market liquidity has
                                    significantly improved
                                   Some pricing improvement;
                                    conditions remain more challenging
                                    than historic norms
Wholesale funding –                NAMA bonds will be a further
      40%                           significant boost to liquidity
                                   Recent raising of €1.75bn
                                    unsecured unguaranteed term
                                    funding                          19
                       Extraordinary General Meeting (EGM)
   EGM to be held on December 23rd at 11:00 GMT in Dublin

   Proposals:

        To approve AIB‟s participation in the NAMA Programme

        To permit AIB to convene certain shareholder meetings on 14 days notice

   Timetable:
        Dec 9th     Mailing of proxy material to ADR holders begins
        Dec 18th    Voting cut off date




                                                                                   20
                                          AIB Bank Republic of Ireland

   Loss before tax (€1,522m) in H1 2009 driven by steep increase in bad debts
   Income pressure, particularly cost of deposits are key drivers of reduced
    operating profits

   Developing our franchise by supporting customers and the economy

        c. 42,000 credit facilities, €1.85bn extended to SMEs Jan – Oct 2009

        8 out of 10 SME credit enquiries are approved (independent customer research)

        Opening 15 dedicated SME business centres nationwide

        Providing 1 in 3 of all mortgages, up from 1 in 6 a year ago

        Zero forced repossessions of owner occupied homes



                                                                                         21
                                                                        Capital Markets

   Profit before tax  13% to €252m in H1 2009 due to increased bad debts (lower bad
    debt charge expected in H2 2009 vs H1 2009)
   High income growth combined with aggressive cost management
   Global Treasury; delivering strong profit growth
         Well chosen market positions, delivering continuing profits
         Improving margins in customer business; well placed to benefit in higher demand
          environment

   Corporate Banking; strong risk management
         Focus on de-leveraging balance sheet, margins improving
         Impaired loans spread across geographies / sectors
         Franchises well placed for recovery in corporate demand

   Investment Banking; lower customer activity
         Lower income from asset management and investment banking activities
         Costs reduced in low revenue environment


                                                                                            22
                                                AIB Bank United Kingdom
 Loss before tax (£28m) in H1 2009 due to increased bad debts charge driven
   by property market downturn
 Strong management action in low income environment
       Intense focus on cost control
     Better loan prices; improving margins
     Higher deposit and funding costs

 Great Britain
       Profitable business banking franchise despite severe economic conditions
       Weak demand for credit; deposits stabilised (Q1 deposit outflow now stemmed)
       Increased provisions due to deterioration in property & construction with some
        contagion to other business sectors
 First Trust Bank (Northern Ireland)
       Increased provisions largely driven by property & construction sector and
        landbank lending in particular

                                                                                         23
                     Central & Eastern European (CEE) Division
Poland
 Franchise investment coincided with significant economic downturn; 514
  branches include 145 added since H2 2007
 Targeting small increase in loans in 2009
     Higher margins in personal market

 Deposits stabilised
 Improving trends in asset management & brokerage
 Increased provisions across all sectors, particularly property and cash loans
 Strong liquidity, loan / deposit ratio 85%,
 Larger, well developed franchise set to outperform in next Polish growth phase

Remainder of CEE Division
 BACB: value impairment of €45m in H1 2009
 AmCredit: continued deterioration in Baltic mortgage market

                                                                                  24
                                                                                          M&T
      Strong outperformance continuing – M&T is one of only 3 peer banks to
       report a profit in every quarter of 2007, 2008 and 2009
                Underlying EPS $.98c in Q3,  24% on Q2

                Q3 core deposits  18% annualised (ex 2009 acquisitions)

                Net interest margin  to 3.61% in Q3

                Improved fee income and strong residential mortgage banking revenues

      Provident Bankshares Corporation acquisition completed – accretive in Q2

      Careful and conservative risk management
                Second highest coverage ratio among peers, while maintaining the lowest ratio
                 of net charge-offs to average loans

      €200m impairment charge to AIB investment in H1 2009

    * diluted net operating earnings per share                                                   25
                                                                    Summary

   Material deterioration in AIB‟s condition over past 18 months

   Our decisions accentuated a very challenging banking environment

   Irish State an important source of support

   NAMA and European Commission restructuring plan will alter the shape
    of AIB

   Further cost reductions required in low income environment

   Firm resolve to rebuild AIB‟s business and shareholder value




                                                                           26
Questions
                                                                        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
Maura Hodnett         maura.n.hodnett@aib.ie                 +353-1-6413469



                                  +353-1-660 0311
                                  +353-1-641 2075

             Visit our website www.aibgroup.com/investorrelations                  28

								
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