1 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. Allied Irish Banks plc Capital & Funding May 2006
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1 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.
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Transcript
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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.
Allied Irish Banks plc
Capital & Funding
May 2006
2
Allied Irish Banks, p.l.c.
Ireland’s largest publicly quoted company
Retail & commercial bank with strong franchises in all geographies
# 1 bank in Ireland with leading market shares in core banking products
By market capitalisation €16bn (May 2006) 15.7% of Irish Stock Market Index 14th/47 DJ E Stoxx Bank Index
Customer demand creating abundance of opportunities Uncompromising on quality Net 500 people in 2005, over 300 vacancies now Competition effect in line with expectations
• Over 70,000 more customers than in 2004; increases in both business and personal sectors
• Improving trend in customer satisfaction
• Continuing migration from small to mid-market customers
• Consistent customer satisfaction underpins “best business bank” status
• Over 100,000 more customers than in 2004• Customer recruitment spread over key
sectors and products
• Leveraging competencies developed in Capital Markets
• Selective international expansion
High quality, sustainable growth
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Positive “jaws” in all franchises
-2
0
2
4
6
8
10
12
14
Group AIB BankRoI
AIB BankGB & NI
CapitalMarkets
Poland
Income Costs
5% 3%
6%
3%
15%
%
16
Income / cost gap; a healthy relationship
2
4
6
8
10
12
14
2002 2003 2004 2005
Cost growth Income growth
%
17
Well contained costs
1,136 Staff costs 1,298 13
578 Other costs 583 -1
145 Depr. & amort. 130 -13
1,859 Operating expenses 2,011 7
“run rate” increase of + 5%
Performance compensation + 1%
Regulatory / compliance costs + 1%
+ 7%
Underlying *
2004 €m 2005 change %
* excludes impact of currency movements
2006 full year forecast + 9%
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Strong asset quality
2004 2005
1.3 Impaired loans (ILs) % 1.0
5.8 Criticised loans / total loans % 5.1
0.7 Gross new ILs % 0.4
73 Total provisions / ILs % 78
20 Bad debt charge bps 15
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75%
15%
10%
Tier 1 Core
Non-Innovative
Innovative
2004
Tier 1 - Components
76%
14%
10%
2005
Requlations
Core T(1) must exceed 51% of Total T (1)
Innovative cannot be >15% of Total Tier (1)
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Funding
0
20
40
60
80
100
2004 2005
Capital
Senior Debt
CDs & CPs
Deposits by banks
Customer a/cs
55%
22%
10%
9%
52%
24%
10%
10%
%
Resource gathering is dominated by relationship sources. Wholesale sources remain under utilised, at year-end 2005 Total bond issuance was equivalent to only 9% of Balance Sheet.
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AIB Debt Distribution - April 2006
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Tier (i) Tier (ii) Snr-Benchmk Snr-Priv.Place. ACS
Euro 82%
STG 14%
US$ 4%
Step-up issues – adjustedto earliest step-up date
Moody’s S&P Fitch
Aaa AAA AAA
Aa3 A+ AA-
Aa3 A+ AA-
A1 A(Lwr)/A-(Uppr) A+
A2 A- A+
€ (m)
Asses Covered Securities 3,500
Senior Debt - Private Placements 1,903
Senior Debt - Benchmark Issues 4,750
Tier (ii) 3,537
Tier (i) 1,710
Total 15,400
Debt Distribution€ (m)
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Looking Forward
2006 Guidance:
16 May - Trading Statement, “targeting mid to high teens growth in adjusted basic earnings per share (EPS)…Loans are expected to increase by 25% (in 2006) ….and customer deposits by 15%....
Targets:
“consistent double digit EPS growth ….ROE in excess of 20%.....positioned to be in the top quartile of FTSE Eurotop Bank Index (E3Bank) on an adjusted EPS basis ………….3% Cost vs. Income Gap : JAWS
Strategies: Aggressive organic growth agenda
Disciplined capital management e.g. monetising value of balance sheet assets
Investing to manage growth centralisation of business locations single Enterprise wide systems
Implementation of Basel II , targeting Foundation Level
Diversify range of funding instruments
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Contacts
AIB Group Investor Relations www.aibgroup.com/investorrelations