Last checked at 31 May 2007 07:02
Bank of Ireland(Governor&Co)31 May 2007 Bank of Ireland Group Preliminary Announcement of Results For the year to 31 March 2007 Thursday 31 May 2007 Performance Highlights Year ended Year ended % Change 31 March 2007 31 March 2006 Restated*Group Profitability (• Million)Profit before tax (PBT) 1,958 1,524 28Non-core items:Deduct:• Gain on disposal of business activities/property (358) (176)• Gross-up for policyholder tax in the Life business (19) (69)Add:• Hedge ineffectiveness on transition to IFRS 2 7• Investment return on treasury shares held for policyholders 68 75• Cost of restructuring programme 49 32 Underlying profit before tax 1,700 1,393 22 Per Unit of €0.64 Ordinary Stock (• cent)Basic earnings per share 172.2 128.5 34Underlying earnings per share 144.6 118.5 22Dividend 60.4 52.5 15 Divisional Pre-tax Profit Performance (• Million)**Retail Republic of Ireland 698 550 27Bank of Ireland Life 148 134 10Capital Markets 572 471 21UK Financial Services 441 349 26Group Centre (159) (111) 43Underlying profit before tax 1,700 1,393 22 Group Performance**Net interest margin (%) 1.77 1.79Cost/income ratio (%) 54 57Cost/income jaws (%) 7 5Impaired loan loss charge 9bps 11bpsReturn on equity (%) 23 24 Balance SheetTotal stockholders' equity (• Million) 6,724 5,186 30Total assets (• Billion) 189 162 17Total lending (• Billion) 130 107 21Total customer accounts (• Billion) 72 62 16 CapitalTier 1 ratio (%)*** 8.2 7.5Total capital ratio (%) *** 11.8 11.4Risk-weighted assets (• Billion) 112.9 97.5 16 * Restated for change in accounting policy - see page 23 ** Based on underlying performance, which excludes the impact of non-core itemsabove. *** The Financial Regulator has issued a requirement that a Prudential Filter beapplied to proposed final dividends with effect from July 2007. If the proposedfinal dividend was deducted the tier 1 ratio and total capital ratio for theyear ended 31 March 2007 would have been 7.9% and 11.5% respectively. Thisrequirement is already in force for Interim Dividends. Preliminary Statement for the year to 31 March 2007 "We have delivered an excellent performance driven by the continuing successfulimplementation of our clear and focussed strategy. We are driving growth acrossall Divisions and delivering cost savings significantly ahead of schedule in ourefficiency programme. Bank of Ireland is a revitalised organisation." Brian Goggin, Bank of Ireland Group Chief Executive, commented Group Performance Highlights* • Excellent underlying Group profit before tax (PBT) growth of 22%• Growth & investment strategies delivering strong performance across all Divisions• Strategic Transformation Programme significantly ahead of schedule• Strong volume growth across the Group: loans +21% and resources +16%• Group income increased by 13% benefiting from strong volume growth and a slowing rate of margin attrition• Cost growth well contained at 6%: o Significant improvement in our efficiency ratio - cost/income ratio down 3% to 54% o Excellent cost / income jaws performance of 7%• Asset quality remains excellent - impairment charge of 9bps• Strong Capital ratios: o Total capital ratio 11.8% o Tier 1 capital ratio 8.2% o Equity tier 1 ratio 5.2% Divisional Highlights* • In Retail Republic of Ireland: PBT +27% o Excellent business momentum with strong growth in resources and lending o Mortgages, Business Banking and Private Banking all delivering strong performances o Significant efficiency gains resulting in improved cost / income performance• In Life: Operating profit +29% o Exellent sales growth and effective cost-control driving performance o PBT growth of 10% reflecting impact of significant positive investment variance in prior year• In Capital Markets: PBT +21% o A particularly strong performance from Corporate Banking PBT +56% o Investment in expanding our international franchise driving strong and sustainable growth o Arrangement fees and some loan loss provision write-backs during the period contributing to this performance o Strong performance delivered by Global Markets against a backdrop of challenging markets PBT +7% o Asset Management performed in line with expectations PBT -22%• In UKFS: PBT +26% o Return from investment strategies continuing to deliver excellent performance o Business Banking a key driver of performance PBT +37% - with excellent growth in loans and resources o Mortgage Business PBT +8% - driven by strong growth in specialist lending o UK Post Office relationship progressing well - Post Office Financial Services (POFS) reached break-even in the second half of the financial year - First Rate Exchange Services (FRES) performed well in challenging market conditions. *Note: based on underlying performance which excludes the impact of non-coreitems Forward-looking statement This statement contains certain forward-looking statements within the meaning ofSection 21E of the US Securities Exchange Act of 1934 and Section 27A of the USSecurities Act of 1933 with respect to certain of the Bank of Ireland Group's ("the Group") plans and its current goals and expectations relating to its futurefinancial condition and performance and the markets in which it operates. Theseforward looking statements can be identified by the fact that they do not relateonly to historical or current facts. Forward-looking statements sometimes usewords such as 'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', or other words of similar meaning. Examples offorward-looking statements include among others, statements regarding theGroup's future financial position, income growth, business strategy, projectedcosts, estimates of capital expenditures, and plans and objectives for futureoperations. Because such statements are inherently subject to risks anduncertainties, actual results may differ materially from those expressed orimplied by such forward-looking statements. Such risks and uncertaintiesinclude but are not limited to risks and uncertainties relating to profitabilitytargets, prevailing interest rates, the performance of the Irish and UKeconomies and the international capital markets, the Group's ability to expandcertain of its activities, competition, the Group's ability to addressinformation technology issues and the availability of funding sources. The Bankof Ireland Group does not undertake to release publicly any revision to theseforward-looking statements to reflect events, circumstances or unanticipatedevents occurring after the date hereof. For further information please contact: John O'Donovan Geraldine Deighan Dan LoughreyChief Financial Officer Head of Group Investor Relations Head of Group Corporate CommunicationsTel: 353 1 632 2054 Tel: 353 1 604 3501 Tel: 353 1 604 3833 Bank of Ireland will host a results presentation at 9.00am today, 31 May 2007 atthe following venues: Bank of Ireland Head Office, Lower Baggot Street, Dublin 2UBS Investment Bank, 1 Finsbury Avenue, London EC2M 2PP This presentation will be simultaneously webcast on our website:www.bankofireland.ie/investor Overview Bank of Ireland Group has delivered an excellent performance in the year to 31March 2007. Group profit before tax (PBT) is up 28% to €1,958m and basicearnings per share up 34% to 172.2c. Excluding non-core items, Group underlyingPBT and EPS are both up 22% to €1,700m and 144.6c respectively. This performancehas been achieved by the excellent execution of our clear and focussed strategyof driving growth from our leading Irish franchise, growing our businesses inthe UK and building our international niche, skill-based businesses. Ireland's positive macroeconomic and demographic backdrop continues to supportthe very strong performance in our Retail and Life businesses with profit growthof 27% (PBT) and 29% (Operating profit) respectively. The economic outlookremains positive and we expect GDP growth to outpace that of the eurozoneaverage over the medium term. We compete from a position of real strength in ourcore market: we have the leading distribution platform; the broadest productoffering; a relentless focus on customer service; and highly committedemployees. Collectively, these translate into a sustainable competitiveadvantage and provide us with the capability to drive further growth in acompetitive marketplace. In the UK we have successfully restructured our businesses and now have a clearfocus on three areas with significant growth potential: business banking,mortgages and consumer financial services. This clear focus, combined with ourcontinued investment in the Division, has resulted in an excellent performancewith UK Financial Services PBT growth of 26% to £299m. Business Banking hasbeen a key contributor to this performance delivering very strong loan andresource growth. In Mortgages, we continue to build our specialist lendingportfolios. In Consumer Financial Services, we continue to build on oursuccessful relationship with the UK Post Office. POFS reached breakeven in thesecond half of the financial year and by May 2007 had in excess of 1 millioncustomers - through First Rate Exchange Services (FRES), we remain the leadingprovider of personal foreign exchange services with a market share of 30%. Capital Markets delivered an excellent performance with PBT growth of 21% to€572 million. Corporate Banking delivered particularly strong results as wecontinued our geographic expansion in the UK, the US and Continental Europe.Strong growth in customer income was a particular feature in Global Markets. Ourasset management business made progress in its turnaround phase with performancein the business in line with expectations. In October 2006, the Group completedthe sale of its 90.444% shareholding in J&E Davy Holdings Limited (Davy, theGroup's stockbroking business) with a profit on disposal of €229m. A priority for the Group during the year was to strengthen our capital position.We achieved this through the successful execution of mortgage securitisationsand the sale and leaseback of 36 of our retail branches in Ireland. Activecapital management remains a core focus and continues to support the growth inour business. As we invest to deliver on our strategic growth agenda, our focus on costcontrol remains strong. The Strategic Transformation Programme, launched inMarch 2005, was designed not only to remove significant costs from the business,but also to embed a culture within the organisation where operational efficiencyin the middle and back office would support our ambitious growth objectives.This is based on achieving economies of scale and building capability bycentralising certain activities and outsourcing others. On the launch of the Strategic Transformation Programme in March 2005 we set acumulative annualised savings target of €120 million to be achieved by March2009. In the year to 31 March 2007, we have delivered cost savings of €95million against a target of €75 million. Our Group cost / income ratio wasreduced by 3 percentage points to 54%. We expect to achieve annualised savingsof €140 million by March 2008 and thus complete the Strategic TransformationProgramme at that date, one year ahead of schedule. This programme hasfundamentally changed and strengthened our business providing us with anefficient platform to drive sustainable profitable growth. The central elementsof this programme - efficiency, capability and scalability are being embedded inthe culture of Bank of Ireland and will enable the Group to achieve a cost /income ratio of mid 40s percentage points in the medium term. A significant contributor to our efficiency gains has been the introduction ofour new business model under which we have: • Consolidated and standardised similar activities into a singlemanufacturing function now employing in excess of 4,500 staff. Activitiesinclude credit operations, contact centres, payments, IT and banking services;and • Consolidated support functions into single Group-wide centres ofexcellence. Activities include human resource management, finance, legalservices and corporate communications. A key enabler in this process has been the outsourcing of a number of activitiesincluding facilities management, procurement, and learning. Bank of Ireland Group has made considerable progress in recent years in theimplementation of a clear and focussed strategy. We have launched our newoperating model, we have further strengthened our domestic franchise in Ireland,we have revitalised our UK Financial Services Division, and we are successfullydeveloping our international growth platforms. As we stand today, Bank ofIreland Group is a much strengthened, re-focused and re-energised organisation.Based on the progress we have made and positive economic indicators in our mainmarkets we see significant potential for further enhanced growth, in particularthe opportunity for accelerated growth from our international businesses as aresult of our ongoing investment. To maximise this potential we have set out a number of strategic priorities forthe Group: • To drive further growth from our leading Irish franchise• To significantly reposition the geographic earnings profile of the Group increasing the profit contribution from our international businesses to over 50% o Grow the United Kingdom as our second core market o Drive significant international expansion in our niche skill based businesses with a particular US focus• Maximise efficiency from our new business model Based on the successful implementation of these strategic priorities we areconfident that we will deliver a strong and sustained earnings performance overthe medium term. Outlook to March 2008 Looking to the year ahead, the economic conditions in our major markets remainpositive and supportive of business growth. We remain confident that our strongfranchise in Ireland will enable us to continue to meet the challenges of acompetitive marketplace. We expect to see continued growth in both ourrevitalised UK business and our other international operations. During the yearwe will continue to invest in our business to support continuing growth into thefuture. We will maintain our relentless focus on costs and expect furtherefficiencies to be achieved in our drive to further reduce our cost / incomeratio. We remain vigilant to any indications of a change in the creditenvironment which remains exceptionally benign. We are guiding a low doubledigit percentage growth in underlying EPS for the year to 31 March 2008 (from abase of 144.6 cent for the year to 31 March 2007). Divisional Performance Divisional Profit Before Tax 31 March 2007 31 March 2006 % Change Restated* •m •m Retail Republic of Ireland 698 550 27Bank of Ireland Life 148 134 10Capital Markets 572 471 21UK Financial Services 441 349 26Group Centre (159) (111) 43Underlying profit before tax 1,700 1,393 22Non-core items 258 131Profit before tax 1,958 1,524 28 *Restated for change in accounting policy - see page 23 Retail Republic of Ireland Retail Republic of Ireland incorporates our Mortgage, Consumer Banking, BusinessBanking and Private Banking activities in the Republic of Ireland. Retail Republic of Ireland delivered an excellent performance for the year toMarch 2007 with PBT growth of 27%. Our unrivalled distribution, the scope of ourproduct range and our commitment to service excellence continue to underpin ourleading franchise. In a competitive marketplace we have retained our leadingposition as the number one provider of mortgages in Ireland. In Business Bankingwe successfully targeted the fast growing SME and start-up segments with acompetitive offering that has driven growth and enabled us to strengthen ourcompetitive position in this market. We continue to drive very significantgrowth from our Private Banking business. Retail Republic of Ireland: Income Statement 31 March 2007 31 March 2006 % Change •m •m Net interest income 1,311 1,119 17Other income 377 356 6Total operating income 1,688 1,475 14Total operating expenses 927 871 6Operating Profit before impairment losses 761 604 26Impairment losses on loans and advances 63 54 17Profit before tax 698 550 27 Net interest income increased by 17% driven by strong volume growth and afurther reduction in the rate of margin attrition. The rate of margin attritionwas considerably less than in recent years as the returns achieved on customerresources improve in a rising interest rate environment. Loan growth year onyear was an excellent 25%. Loan book growth in Business Banking was particularlystrong at 33% reflecting our continuing focus on increasing our share of thishigh growth sector. Through our advice-led products, distribution capability andservice focus we maintained our leading position in mortgages with book growthof 22%, in line with the market. Rising interest rates have contributed toslowing of new business volumes in the residential property market. Personallending has shown strong growth of 19%. Resources growth was 11% having slowedtowards the year-end in line with the market. Other income is up 6%. Substantial growth in credit card income and PrivateBanking fees offset a reduction in current account fee income associated withour personal current account free banking offer. The continuing successful implementation of the Strategic TransformationProgramme and new business model has enabled us to control costs. Our GroupManufacturing function is driving consolidation and standardisation in order todeliver productivity improvements. In particular, the consolidation of ourcustomer contact, credit operations and back-office processing has improved theoperating leverage in the business, resulting in restrained cost growth of 6%and a favourable cost / income jaws of 8%. The cost / income ratio declinedsignificantly by 4% to 55%. Asset quality remains excellent across our retail business. The impairmentlosses on loans and advances were €63 million or 14bps as a percentage ofaverage advances. This compares to €54 million or 15bps for March 2006. Bank of Ireland Life Bank of Ireland Life, the Group's life and pensions business, performed verystrongly during the year with buoyant new business sales across all distributionchannels contributing to further market share gains. Operating profit grew by29% to €146 million. Bank of Ireland Life achieved excellent growth in sales with a 27% increase onan annual premium equivalent basis. Growth in single premium business wasparticularly impressive with a 46% increase. Market share increased by onepercentage point to 26%. The favourable economic and demographic backdropensures the outlook remains positive. IFRS Performance 31 March 2007 31 March 2006 % Change •m •m Operating Income 250 208 20Operating Costs 104 95 9Operating profit 146 113 29Investment variance 2 17Discount rate change - 4Profit before tax 148 134 10 Operating profit grew by an impressive 29% on the back of strong sales and goodcost control. Against this backdrop the operating cost / income ratio fell from46% to 42%. Growth in profit before tax at 10% primarily reflects the impact ofthe significant positive investment variance in the prior year. Embedded Value Performance The alternative method of presenting the performance of our Life business is onan Embedded Value basis. Under this approach, Bank of Ireland Life also shows astrong performance with operating profit up 21% to €175 million. The value ofnew business has grown particularly strongly with improved margins, reflectingthe economies of scale from higher volumes and good cost control. Profit beforetax is lower due to the impact of the significant positive investment variancein the prior year. 31 March 2007 31 March 2006 % Change •m •m New business profits 114 78 46Existing business profits - Expected return 83 71 17 - Experience variance 14 20 (30) - Assumption changes - 8Inter-company payments (36) (32)Operating profit 175 145 21Investment variance 2 51Discount rate change - 8Profit before tax 177 204 (13) Note: Embedded Value at March 2007 was €1.26 billion The key assumptions used in the Embedded Value calculation are a discount rateof 7.5% (2006: 7.5%), growth rate on unit-linked assets of 5.5% (2006: 5.5%) andthe rate of tax to be levied on shareholder profits of 12.5% (2006: 12.5%).Actuarial assumptions are also required in relation to mortality, morbidity andpersistency rates and these have been derived from the company's experience. Capital Markets Capital Markets comprises Corporate Banking, Global Markets, Asset Managementand IBI Corporate Finance. Profit before tax in Capital Markets increased by 21%to €572 million for the year to March 2007. Capital Markets: Income Statement % Change excluding impact of IAS 39 & 31 March 2007 31 March 2006 % Change acquisitions/ •m •m disposals Net interest income 671 461 46 35Other income 378 458 (17) 2 Total operating income 1,049 919 14 20Total operating expenses 456 425 7 13 Operating profit before impairment 593 494 20 25losses Impairment losses on loans and advances 21 23 (9) (9) Profit before tax 572 471 21 27 The Divisional performance during the period is not directly comparable with theprior period as the disposal of Davy in October 2006, the acquisition ofGuggenheim Advisors in January 2006, and the establishment of our joint venturewith private equity firm Paul Capital in June 2006 impacts on the year on yearanalysis of income and cost growth. Total operating income rose by 14% to €1,049 million for the year to 31 March2007. Excluding the trading impact of acquisitions and disposals, totaloperating income increased by 20% driven by strong lending volumes, highermargins and significant loan arrangement fee income in Corporate Banking. The growth in net interest income and other income is distorted by the tradingimpact of acquisitions and disposals as outlined above together with theclassification of certain interest expense under IAS 39 which relates to thedesignation of certain financial instruments under the fair value option.Excluding both of these factors, net interest income grew by 35% and otherincome grew by 2%. The 35% growth in net interest income was driven by a 22% increase in averageloans and improved margins in Corporate Banking reflecting changes in the mix ofthe loan book. Strong growth in arrangement fees in Corporate Banking was offsetby the reduced revenues from Asset Management resulting in other income growthof 2%. Total operating expenses increased by 7% to €456m. Excluding the trading impactof acquisitions and disposals, total operating expenses increased by 13%. Therewere three main drivers of operating expenses within the Division; investmentcosts, staff related costs and compliance costs. Investment costs in CorporateBanking and Global Markets added 3% to total cost growth with the continuedexpansion of our activities in the UK, the US, and Continental Europe. Increasedstaff costs across the Division arising from salary inflation and performancerelated pay added 6% to total operating expenses. Compliance costs arising fromrequirements under Basel II, Sarbanes-Oxley and the new Liquidity regime added afurther 1% to the operating costs of the Division. The remaining 3% was drivenby volume related growth and inflation. Credit quality remains excellent with impairment losses on loans and advances of€21million or 9bps when expressed as a percentage of the average loans. Thiscompares to €23 million or 12bps in the prior year. Corporate Banking continuesto benefit from the benign credit environment and in addition a number of loanloss provision write-backs during the year. Capital Markets: Business Unit Profit Before Tax 31 March 2007 31 March 2006 % Change •m •m Corporate Banking 332 213 56Global Markets 144 134 7Asset Management 66 85 (22)Other 30 39 (23)Profit before tax 572 471 21 Corporate Banking delivered particularly strong profit growth of 56% for theyear. This excellent performance was driven by strong lending growth, improvednet interest margin arising from a change in lending mix, an exceptionallybenign credit environment and the write-back of loan loss provisions of €26million. While we continued to invest in our Corporate Banking activities duringthe year, income increased significantly more than costs resulting in a strongcost / income jaws performance. The geographic focus of our Corporate Banking activities extends from Ireland toour growing presence in the UK, Continental Europe and the US. During the yearwe continued to build on this geographic platform. We have retained our leadingposition in Ireland and delivered significant international growth across ourlending portfolios in our chosen segments: project finance, acquisition finance,specialist finance including media, property finance and comprehensive assetbased lending. Increasingly we are taking lead roles in arranging andstructuring transactions thereby generating significant fee earningopportunities across our portfolios. We actively manage the risk in theseportfolios through diversification by geography and segment, and through modestholds in each of our transactions. Our results demonstrate clearly that we are delivering on our strategy inCorporate Banking: to drive growth from our leading domestic franchise and tobroaden our international business by focusing on niche skills based activities. Our Global Markets business delivers a comprehensive range of risk managementproducts to the Group's customer base and acts as Treasurer for the Group.Profit for the year increased by 7% reflecting a strong performance in ourcustomer businesses globally and a very satisfactory performance overall giventhe challenging trading conditions that existed with interest rates increasingin the three major economies in which we operate. Our focus continues to be ondeveloping the geographic expansion of our activities with the opening of acustomer treasury and funding unit in Stamford, Connecticut in October 2006. Wecontinue to build on our technical skills and capability and are working veryclosely with other Group businesses to help deliver an extensive and fullyintegrated service to our customers. Our Asset Management businesses comprises Bank of Ireland Asset Management(BIAM), Bank of Ireland Securities Services (BoISS), Iridian Asset Management,Guggenheim Advisors (71.5%) and the 50% joint venture we established withprivate equity firm Paul Capital in June 2006, Paul Capital Investments. Profitbefore tax for the year to 31 March 2007 was €66m, a decrease of 22% over theprior year. Fund outflows from BIAM have slowed with funds under management atthe year end of €43.7bn compared to €45.1bn at 31 March 2006. The focus withinthe business over the last year has been on product diversification, turningaround the investment performance in BIAM and the integration of newly acquiredbusinesses. In the year to 31 March 2007 IBI Corporate Finance had a satisfactoryperformance. In October 2006, the Group completed the sale of its 90.444%shareholding in Davy. UK Financial Services (Sterling) UK Financial Services (UKFS), which incorporates Business Banking, our Mortgagebusiness and our Consumer Financial Services joint ventures with the UK PostOffice, delivered an excellent performance during the year demonstrating thesuccess of our restructuring and investment programmes over the past number ofyears. Profit before tax increased by 26% to £299 million. UKFS: Income Statement % Change excluding impact of IAS 39 & 31 March 2007 31 March 2006 disposals £m £m % Change Net interest income 531 493 8 16Other income 118 91 30 16Total operating income 649 584 11 16Total operating expenses 337 329 2 12Operating Profit before impairment losses 312 255 22 21Impairment losses on loans and advances 13 17 (24) (24)Profit before tax 299 238 26 27 The Divisional performance during the year is not directly comparable with theprior period as the disposal of the Bristol & West branch network in September2005 impacts the year on year analysis of income and cost growth. Total operating income, excluding the trading impact of the Bristol & Westbranch network, rose by 16% to £649 million. The growth in net interest incomeand other income is distorted by the trading impact of disposals as outlinedabove together with the classification of certain interest expense under IAS 39which relates to the designation of certain financial instruments under the fairvalue option. Excluding both of these factors, net interest income grew by 16%and other income grew by 16%. Net interest income growth is due to strong volumegrowth for both lending up 18%, and resources up 47%. Competitive dynamics andincreases in UK interest rates resulted in margin attrition during the year,especially in the standard mortgage market. Within the mortgage book there hasbeen stronger growth in the specialist sectors and this has helped overallmargins. In addition, lending margins in business banking have been stableespecially in the second half of the year. Other income growth was primarilydriven by strong customer acquisition and industry leading renewal levels inPOFS in both car and home insurance. Operating expenses, excluding the trading impact of the Bristol & West branchnetwork increased by 12% to £337 million resulting in a favourable operatingleverage with positive cost/income jaws of 4%. The drivers of cost growth werethe continued investment in Business Banking which is driving growth, highervariable operating and marketing costs in POFS to support sales and servicingactivities of this rapidly growing business together with increased regulatorycosts. Impairment losses on loans and advances are lower than the prior year due tocontinued excellent asset quality. The loan loss charge for the year expressedas a percentage of average loans was 4bps compared to 5bps in the prior year. UKFS: Business Unit Profit Before Tax 31 March 2007 31 March 2006 % Change £m £m Mortgages 145 134 8Business Banking 156 114 37Consumer Financial Services: 24 8 200• POFS (8) (22) 64• FRES (post tax) 30 28 7• ATM & Other Post Office related activities 2 2 -Bristol & West branch network - (3) -Other* (26) (15) (73)Profit before tax 299 238 26 * Note: includes the amortisation of intangible assets associated with the UKPost Office Financial Services (March 2007: £8 million, March 2006: £8 million). The Mortgage business delivered profit before tax of £145 million, an increaseof 8% for the year. Profit growth was negatively impacted by three base rateincreases during the year together with a change in regulation relating tomortgage exit fees. The residential mortgage book increased by 10% to £24billion with particularly strong growth in both the self-certified andbuy-to-let specialist portfolios, which increased 18% and 16% respectively.Total operating income growth was 6% as margin attrition impacted net interestincome whilst cost growth was contained to 3% over the prior year. Creditperformance remains excellent with our arrears levels significantly below theindustry average. The performance of Business Banking was exceptionally strong with profit beforetax increasing by 37% to £156 million on the back of 34% increase in the loanbook year on year. This excellent momentum in the business has resulted from ourcontinuing investment in people and capability. This has delivered significantoperational leverage with total operating income and costs growing by 22% and13% respectively. Asset quality remains strong. Bank of Ireland has an extensive relationship with the UK Post Office providinga variety of consumer financial services products - First Rate Exchange Services(FRES) provides personal foreign exchange services and Post Office FinancialServices (POFS) provides a range of retail products including savings,insurance, and credit cards. This latter contract has been extended to 2020. Inaddition, the Group is now rolling out an extensive ATM infrastructure acrossthe Post Office network. Profit before tax for FRES grew by 8% to £86 million whilst the Group's share ofFRES after tax profit increased by 7% to £30 million which was a satisfactoryperformance in very challenging trading conditions within the travel marketthroughout the year. FRES continues to grow and with a 30% market share, is theleading provider of personal foreign exchange services in the UK market. Thepace of growth in POFS increased in the year, sales almost doubling from 347,000products in the prior year to 668,000 in the year to March 2007 with thestrongest growth in insurance and savings products. In May 2007, the businesshas over 1 million customers. The start-up losses in this venture continue todecline, down to £8 million in the year to March 2007 compared to a loss of £22million in the prior year and encouragingly the business delivered a break-evenresult for the second half of 2006/07 and is positioned for profitable growth. Group Centre Group Centre, which comprises earnings on surplus capital, unallocated supportcosts and some smaller business units, had a net cost of €159 million in theyear to 31 March 2007, compared to €111 million in the year to 31 March 2006. The key drivers behind the increase in net cost are increased complianceexpenditure €25m, higher funding cost on debt raised €15m and a one-offGovernment led social finance contribution €6m. Review of Group Performance 31 March 2007 31 March 2006 Restated* % Change •m •m Net interest income 2,757 2,307 20Other income 1,112 1,132 (2)Total operating income (net of insurance claims) 3,869 3,439 13Operating expenses 2,110 1,988 6Impairment losses on loans and advances 103 103 -Share of associates and joint ventures (post-tax) 44 45 (2)Underlying profit before tax 1,700 1,393 22Non-core items:Add:• Gain on disposal of business activities/property 358 176• Gross-up for policyholder tax in the Life business 19 69Deduct:• Hedge ineffectiveness on transition to IFRS (2) (7)• Investment return on treasury shares held for policyholders (68) (75)• Cost of restructuring programme (49) (32) Profit before tax 1,958 1,524 28 Taxation 306 303 1Minority interest 1 (9)Dividends on other equity interests 15 13Profit attributable to ordinary stockholders 1,636 1,217 34 Basic EPS cents per share 172.2c 128.5c 34 Underlying EPS cents per share** 144.6c 118.5c 22 *Restated for change in accounting policy - see page 23** Excludes the impact of non-core items after tax of €225m (2006: €66m) The following commentary is based on the Group's performance excluding theimpact of non-core items. A reconciliation of the impact of these non-core itemson the income statement line items is shown on pages 16 and 17 of this document. Analysis of the Group's financial performance is distorted by the trading impactof acquisitions and disposals in the current and prior period. In the year toMarch 2006, we disposed of the Bristol and West branch network (September 2005)and we acquired Guggenheim Advisors (January 2006). In the year to 31 March2007, we disposed of Davy (October 2006) and we established our joint venturewith the private equity business, Paul Capital (June 2006). Income Total income increased by 13% to €3,869 million driven by strong volumeincreases in both lending and resources across the Group, together with theexcellent performance from our fee-earning activities in our Life business,Retail Republic of Ireland, UK Financial Services and Capital Markets. Totalincome after adjusting for the trading impact of acquisitions and disposalsincreased 15% year on year. Total Income 31 March 2007 31 March 2006 % Change •m •m Total operating income 3,869 3,439 13Trading impact of acquisitions/disposals (122) (179)Total income excluding trading impact ofacquisitions and disposals 3,747 3,260 15 The growth in net interest income and other income is distorted by the tradingimpact of acquisitions and disposals as outlined above during the current andprior periods together with the classification of certain interest expense underIAS 39. Excluding both these factors, net interest income grew by 19% to €2,635million and other income grew by 6% to €1,112 million. Net Interest Income 31 March 2007 31 March 2006 % Change •m •m Net interest income 2,757 2,307 20Trading impact of acquisitions/disposals - (20)IAS 39 impact (122) (78)Net interest income excluding trading impact ofacquisitions and disposals, IAS 39 impact 2,635 2,209 19 The excellent performance in net interest income was driven by the continuedstrong growth in loans and resources across the Group. Customer lendingincreased by 21% and resources grew by 16%. A number of drivers contributed tothis volume growth: the continuing favourable economic backdrop to ouractivities in Ireland and the UK; the strength of our franchise in Ireland,supported by the scale of our multi-channel distribution; together with thebenefits from our investment in business banking in Ireland and the UK, andCorporate Banking. Other Income 31 March 2007 31 March 2006 % Change •m •m Other income 1,112 1,132 (2)Trading impact of acquisitions/disposals (122) (159)IAS 39 impact 122 78Other income excluding trading impact of acquisitionsand disposals, IAS 39 impact 1,112 1,051 6 The drivers of other income growth include: new business sales in our Lifebusiness, Private Banking and POFS; growth in the level of arrangement feesearned in Corporate Banking as we increase our role as arranger of debtstructures; and increased activity in our credit card businesses. This growth inother income was partially offset by reduced income from BIAM and a significantpositive investment variance and change in the discount rate in the prior periodin the Life business. Group Net Interest Margin 31 March 2007 31 March 2006 Change Average interest earning assets (•billion) 156 129 21% Group net interest margin (%) 1.77 1.79 (2bps) IAS impact on Group Net Interest Margin (%)Net interest margin excluding impact of IAS 39 1.69 1.73 (4bps)IAS impact 0.08 0.06 2bpsGroup Net Interest Margin 1.77 1.79 (2bps) The Group net interest margin decreased by 2bps to 1.77% for the year to 31March 2007 from 1.79% for the year to 31 March 2006. Group net interest marginis increased by the classification of certain interest expense under IAS 39which relates to the designation of certain financial instruments under the fairvalue option. Excluding the impact of IAS 39 in the current and prior period,margin attrition was 4 basis points. The pace of margin attrition has slowed significantly as rising interest ratesand changing product mix continue to impact positively. The drivers of attritionover the year are primarily balance sheet structure where the rate of loangrowth outpaces resources, and product margins where competition has impacted onmortgage pricing. Operating Expenses Total Operating Expenses increased by 6%, or by 9% excluding the trading impactof acquisitions and disposals. Efficiency improvements remain a core focus and we continue to make significantprogress in this regard. Our cost/income ratio continues to improve with afurther reduction of 3 percentage points from 57% in March 2006 to 54% in March2007. Total Operating Expenses 31 March 2007 31 March 2006 % Change •m •m Operating expenses 2,110 1,988 6Trading impact of acquisitions/disposals (91) (138)Operating expenses excluding the trading impact ofacquisitions and disposals 2,019 1,850 9 The main drivers of total operating expenses (excluding the trading impact ofacquisitions and disposals) were: • Investment costs of 2% relating to the development of our Global Marketsand Corporate Banking activities in Europe and the United States together withthe costs associated with the continuing development of POFS. • Compliance costs of 2% associated with the Sarbanes-Oxley and Basel IIprogrammes. • Business as usual cost growth of 8% where 3% is due to volume growth andperformance related compensation. The remaining 5% is due to inflation. • Cost savings of (3%) arising from the continued successful implementationof the Strategic Transformation Programme. We are significantly ahead of schedule in the implementation of the StrategicTransformation Programme. In the current year to 31 March 2007 we have achievedsavings of €95 million against our stated target of €75 million. During the year, we have continued the implementation of our streamlinedoperating model which is consolidating middle and back office and supportactivities to drive productivity improvements. These include, the consolidationof contact centres and credit operations in our Group Manufacturing function,and the consolidation of credit underwriting in our UK mortgage business, all ofwhich are well advanced and provide scale efficient operations to the Group.Our Group Manufacturing function is consolidating a further range of back officeactivities in our operating divisions in order to drive further productivityimprovements. We also successfully completed the outsourcing of procurement,learning, and facilities management during the year, and are furtherstreamlining group support functions. Impairment of Loans and Advances The credit environment remains exceptionally benign and the economic backdrop toour activities, in particular in our main markets in Ireland and the UnitedKingdom remains positive. The impairment charge for the year amounts to €103m or 9bps when expressed as apercentage of average loans (March 2006: €103m and 11bps). Impairment losses onloans and advances are at historically low levels. Loan losses have benefitedfrom some provision write-backs during the year, in particular write-backs inCorporate Banking amounting to €26m. Total balance sheet provisions were €428m at 31 March 2007 compared with €360mat 31 March 2006 representing a coverage ratio of 44%. Asset Quality 31 March 2007 31 March 2006 % Change Impairment losses on loans and advances €103m €103m -Impairment charge on loans and advances 9bps 11bps -Total average customer advances €116bn €93bn 25Impaired loans €968m €796m 22Impairment provision • 428m €360m 19Coverage ratio 44% 45% - Share of Associates and Joint Ventures Profit after tax from associated undertakings and joint ventures decreasedmarginally by 2% to €44 million. Balance Sheet - Capital and Funding Total assets increased by 17% from €162 billion to €189 billion in the year to31 March 2007. Customer lending increased by 21% and total resources increasedby 16%. Pre-securitisation, risk-weighted assets grew by 21%.Post-securitisation, risk weighted assets grew by 16% from €98 billion to €113billion. % Growth March 2007 over March 2006 Risk Weighted Customer Lending Resources Assets Retail Republic of Ireland 26 25 11Capital Markets 21 17 9UK Financial Services 21 18 47Group 21 21 16 Capital Our capital position has been enhanced during the year by the successfulimplementation of a range of capital management initiatives including the saleand leaseback of 36 retail branches in Ireland together with the securitisationof a portion of the Irish and UK mortgage books. In addition, the profit on thedisposal on Davy also made a positive contribution. Our total capital ratio andtier 1 ratio increased from 11.4% and 7.5% at 31 March 2006 to 11.8% and 8.2%respectively at 31 March 2007. The equity tier 1 ratio increased from 4.8% to5.2% over the same period. During the year the Group raised £500 million (€736 million) of non-equity tier1 capital and €750m of lower tier 2 capital. The Group completed two mortgage securitisations during the year that had theimpact of reducing risk-weighted assets by €5.5 billion as at 31 March 2007.Kildare Securities is a €2.95bn securitisation from the ICS mortgage book inIreland and Brunel Securities is a £5.5bn (€8bn) securitisation from the Bristol& West mortgage book in the UK. The Group's capital position remains strong and our active approach to capitalmanagement provides us with adequate capital to support our business plans goingforward. We are well advanced in our preparations to submit our application to theFinancial Regulator for qualification under the Basel II Foundation InternalRatings Based approach in mid 2007 under Pillar 1 along with our assessment ofcapital adequacy under Pillar 2. In common with many other diversified financialservices organisations, we anticipate a modest reduction in our minimum capitalrequirements under Basel II. Funding The level of wholesale funding during the year increased from €69bn at 31 March2006 to €80bn at 31 March 2007. As a percentage of total balance sheet assets(excluding Bank of Ireland Life assets held on behalf of policyholders) thelevel of wholesale funding remained unchanged at 46%. Our funding strategyremains to maximise the diversification of our funding across maturity, investortype, and geography. Investor demand remains strong for Bank of Ireland paper. Dividend The Court has recommended a final dividend of 39.4 cent per unit of stock inrespect of the year ending 31 March 2007. The recommended final dividendtogether with the interim dividend of 21 cent results in a total dividend of60.4 cent per unit of stock for the year ended 31 March 2007, an increase of 15%on the prior year. Return on Equity Return on equity, excluding the impact of non-core items (set out on pages 16and 17) was 23% for the year to 31 March 2007 compared to 24% in the year to 31March 2006. Effective Tax Rate The Group taxation charge was €306m for the year ended 31 March 2007, comparedto €303m for the prior year. The effective tax rate was 15.6% compared to 19.9%(restated for change in accounting policy) for year ending 31 March 2006. Thechange in the tax rate was affected by the disposal of Davy, the abolition ofthe Bank Levy in December 2005 and the reduced gross-up for policyholder tax inthe Life business. Income Statement March 31, 2007 - Business SegmentsYear ended March 31, 2007 Net Insurance Other Total Insurance Total Operating Impairment Share of Profit Interest net Income Income Claims income, expenses losses on income before Income premium net of loans & from taxation income insurance advances associates claims •m •m •m •m •m •m •m •m •m •mRetail Republic of Ireland 1,311 - 377 1,688 - 1,688 (927) (63) - 698BOI Life (5) 2,155 307 2,457 (2,205) 252 (104) - - 148Capital Markets 671 - 379 1,050 - 1,050 (456) (21) (1) 572UK Financial Services 784 - 129 913 - 913 (497) (20) 45 441Group Centre (4) 33 (55) (26) (8) (34) (126) 1 - (159) Group - underlying 2,757 2,188 1,137 6,082 (2,213) 3,869 (2,110) (103) 44 1,700 Sale of business activities/property - - 358 358 - 358 - - - 358Gross up of policyholder taxin the Life business - - 19 19 - 19 - - - 19Investment return ontreasury shares forpolicyholders - - (68) (68) - (68) - - - (68)Hedge ineffectiveness on transition to IFRS - - (2) (2) - (2) - - - (2)Restructuring programme - - - - - - (49) - - (49) Group - total 2,757 2,188 1,444 6,389 (2,213) 4,176 (2,159) (103) 44 1,958 This reconciliation shows the Group and Divisional underlying income statementswith a reconciliation of the impact of the non-core items in arriving at theGroup Total Income Statement. Income Statement March 31, 2006 (Restated*) - Business SegmentsYear ended March 31, 2006 Net Insurance Other Total Insurance Total Operating Impairment Share of Profit Interest net Income Income Claims income, expenses losses on income before Income premium net of loans & from taxation income insurance advances associates claims •m •m •m •m •m •m •m •m •m •mRetail Republic of Ireland 1,119 - 351 1,470 - 1,470 (871) (54) 5 550BOI Life 8 1,264 612 1,884 (1,655) 229 (95) - - 134Capital Markets 461 - 458 919 - 919 (425) (23) - 471UK Financial Services 722 - 94 816 - 816 (481) (26) 40 349Group Centre (3) 34 (15) 16 (11) 5 (116) - - (111) Group - underlying 2,307 1,298 1,500 5,105 (1,666) 3,439 (1,988) (103) 45 1,393 Sale of business activities/property - - 176 176 - 176 - - - 176 Gross up of policyholder taxin the Life business - - 69 69 - 69 - - - 69Investment return ontreasury shares forpolicyholders - - (75) (75) - (75) - - - (75)Hedge ineffectiveness on transition to IFRS - - (7) (7) - (7) - - - (7)Restructuring programme - - - - - - (32) - - (32)Group - total 2,307 1,298 1,663 5,268 (1,666) 3,602 (2,020) (103) 45 1,524 *Restated for change in accounting policy - see page 23 This reconciliation shows the Group and Divisional underlying income statementswith a reconciliation of the impact of the non-core items in arriving at theGroup Total Income Statement. Consolidated Income Statementfor the year ended 31 March 2007 Notes 2007 2006 Restated* •m •m Interest Income 2 8,137 5,954Interest Expense 2 (5,380) (3,647) Net Interest Income 2,757 2,307Insurance net premium income 2,188 1,298Fees and commissions income 898 912Fees and commissions expense (160) (170)Net trading income (70) 30Life assurance investment income and gains 3 247 599Other operating income 4 199 116Profit on disposal of business activity 5 243 176Profit on sale of property 87 - Total Operating Income 6,389 5,268Increase in insurance contract liabilities and claims paid (2,213) (1,666) Total Operating Income, net of Insurance Claims 4,176 3,602Total Operating Expenses 6 (2,159) (2,020) Operating Profit before Impairment Losses 2,017 1,582Impairment losses (103) (103) Operating Profit 1,914 1,479Share of profit of associated undertakings and joint ventures 44 45 Profit before Taxation 1,958 1,524Taxation 8 (306) (303) Profit for the Period 1,652 1,221 Attributable to minority interests 1 (9)Attributable to stockholders 1,651 1,230 Profit for the Period 1,652 1,221 Earnings per unit of €0.64 ordinary stock 9 172.2c 128.5c Diluted earnings per unit of €0.64 ordinary stock 9 171.0c 127.6c * Restated for change in accounting policy - see page 23 Richard Burrows George Magan Brian J Goggin John B CliffordGovernor Deputy Governor Group Chief Executive Secretary Consolidated Balance Sheet as at 31 March 2007 Notes 2007 2006 Restated*ASSETS •m •m Cash and balances at central banks 362 287Items in the course of collection from other banks 811 930Central government and other eligible bills 11 8Trading securities 520 620Derivative financial instruments 2,849 2,085Other financial assets at fair value through P/L 12,707 10,438Loans and advances to banks 7,210 12,188Available-for-sale financial assets 33,449 28,205Loans and advances to customers 10 125,048 101,246Interest in associated undertakings 26 21Interest in joint ventures 73 75Assets classified as held for sale 83 -Intangible assets - Goodwill 347 375Intangible assets - Other 596 590Investment property 1,142 807Property, plant and equipment 665 860Deferred tax assets 12 25 30Other assets 2,889 3,447 Total assets 188,813 162,212 EQUITY AND LIABILITIESDeposits by banks 20,405 32,312Customer accounts 11 72,277 61,710Items in the course of transmission to other banks 243 284Derivative financial instruments 2,935 1,647Liabilities to customers under investment contracts 6,736 6,650Debt securities in issue 59,523 36,814Insurance contract liabilities 7,190 5,192Other liabilities 3,983 4,711Deferred tax liabilities 12 278 207Provisions 87 153Retirement benefit obligations 13 590 808Subordinated liabilities 7,808 6,493 Total liabilities 182,055 156,981 EquityShare capital 15 663 663Share premium account 16 771 767Retained profit 16 4,672 3,188Other reserves 16 905 803Own shares held for the benefit of life assurance policyholders (287) (235) Stockholders' equity 6,724 5,186Minority interests 34 45 Total equity 6,758 5,231 Total equity and liabilities 188,813 162,212 * Restated for change in accounting policy - see page 23 Richard Burrows George Magan Brian J Goggin John B CliffordGovernor Deputy Governor Group Chief Executive Secretary Statement of Recognised Income and Expensefor the year ended 31 March 2007 The Group 2007 2006 Restated* •m •m Net gain on property revaluation/reclassification 18 187Net change in cash flow hedge reserve 135 (7)Net change in Available-for-Sale reserve (49) (104)Net actuarial gains/losses in defined benefit pension schemes 190 113Foreign exchange translations 49 (17) Income/expense recognised in equity 343 172Profit for the period 1,652 1,221 Total recognised income/expense for the year 1,995 1,393 Attributable to:Equity holders of the parent 1,994 1,402Minority interests 1 (9) 1,995 1,393 Effect of change in accounting policy adjusted against retained earnings 2007 2006 •m •m Equity holders of the parent - (90)Minority interests - - - (90) * Restated for change in accounting policy - see page 23 Richard Burrows George Magan Brian J Goggin John B CliffordGovernor Deputy Governor Group Chief Executive Secretary Cash Flow StatementFor the year ended 31 March 2007 The GroupCash flows from operating activities 2007 2006 Restated* •m •m Profit before taxation 1,958 1,524Share of profit of associated undertakings and joint ventures (44) (45)Profit on disposal of business activity (243) (176)Profit on disposal of property (87) (4)Depreciation and amortisation 151 166(Increase)/decrease in prepayments and accrued income (292) 61Increase in accruals and deferred income 323 132Provisions for impairment of loans and advances 103 103Loans and advances written off net of recoveries (34) (64)Revaluation of investment property (96) (53)Profit on disposal of investment property (6) (49)Interest expense on subordinated liabilities and other capital 381 256instrumentsProfit on disposal of available-for-sale financial instruments (10) (4)Charge for share based payments 12 11Amortisation of premiums and discounts (52) (98)Amortisation of debt issue expenses 5 2 Cash flows from operating activities before changes in operatingassets and liabilities 2,069 1,762 Net (decrease)/increase in deposits by banks (11,810) 11,484Net increase in customer accounts 9,988 1,852Net increase in loans and advances to customers (22,736) (21,925)Net decrease/(increase) in loans and advances to banks 3,035 (1,574)Net (increase)/decrease in non investment debt & equity (68) 499securitiesNet increase/(decrease) in derivative financial instruments 621 (340)Net (increase)/decrease in assets at fair value through P/L (2,317) (2,390)Net increase/(decrease) in items in course of collection 83 (319)Net increase in debt securities in issue 22,624 15,604Net decrease/(increase) in other assets 191 (571)Net increase/(decrease) in other liabilities 1,771 2,763Effect of exchange translation and other adjustments 1 (20) Net cash inflow from operating assets and liabilities 1,383 5,063 Net cash inflow from operating activities before taxation 3,452 6,825Taxation paid (272) (230) Net cash inflow from operating activities 3,180 6,595Investing activities (note a) (5,792) (7,391)Financing activities (note b) 709 1,762 (Decrease)/increase in cash and cash equivalents (1,903) 966Opening cash and cash equivalents 6,162 5,217Effect of exchange translation adjustments 38 (21) Closing cash and cash equivalents 4,297 6,162 * Restated for change in accounting policy - see page 23 Cash Flow Statement (continued) The Group 2007 2006 Restated*(a) Investing activities •m •m Net increase in financial investments (5,865) (7,217)Additions to tangible fixed assets (57) (50)Disposal of tangible fixed assets 257 60Additions to intangible fixed assets (109) (106)Disposal of intangible fixed assets - 8Purchase of investment property (263) (353)Disposal of investment property 30 151Purchase of assets held for sale (10) -Disposal of business activities 323 227Cash balances of subsidiary disposed of (122) -Acquisition of Group undertaking - (120)Dividends received from joint ventures 68 25(Increase)/decrease in investments in associated (4) 1undertakingsDeferred consideration paid (19) (18)Net cash balances of Group undertakings - 1acquiredAcquisition of Joint Venture (21) - Cash flows from investing activities (5,792) (7,391) (b) Financing activities Re issue of Treasury stock and issue of 133 48ordinary stockIssue of new subordinated liabilities 1,479 2,414Interest paid on subordinated liabilities (361) (233)Equity dividends paid (524) (448)Dividends on other equity interests (15) (13)Dividends paid to minority interests (3) (6) Cash flows from financing activities 709 1,762 * Restated for change in accounting policy - see page 23 Richard Burrows George Magan Brian J Goggin John B CliffordGovernor Deputy Governor Group Chief Executive Secretary Accounting Policies The Group accounting policies have not changed in the preparation of theseaccounts with the exception of: Change in method of Assessing Materiality During the year, the Group changed its method of assessing materiality. TheGroup previously considered the materiality of misstatements based on the amountof the misstatement originating in the current year income statement. The Grouphas now decided to consider the effect of any misstatements based on both; (1) the amount of the misstatement originating in the current year incomestatement, and; (2) the effects of correcting the misstatement existing in the balance sheetat the end of the current year irrespective of the year in which themisstatement originated. The Group considers that this change of policy provides more relevant financialinformation as it prevents the accumulation of misstatements in the balancesheet. As a result of this change, the Group has revised its prior yearfinancial statements for the adjustments set out below, which under the previousmethod of quantifying misstatements, would have been considered immaterial. IFRS requires that Bank of Ireland shares held by the Group, including thoseheld by BOI Life are classified as treasury shares and accounted for as adeduction from equity. Any changes in the value of treasury shares held arerecognised in equity at the time of disposal and dividends are not recognised asincome or distributions. In prior years, the Group did not apply this treatmentto the investment return on shares in Bank of Ireland held by BOI Life. Ratherit recognised investment return on Bank of Ireland shares held in BOI Life onthe grounds that such investment return legally accrues to the unit-linkedpolicyholders and accordingly is matched by an increase in liabilities in theincome statement. The Group believes that application of the requirements ofIFRS for treasury shares held by BOI Life for the benefit of policyholderscreates an artificial loss and does not present fairly the legal and economicconsequences of such transactions. However the Group accepts that thisaccounting is the basis which is currently required under IFRS and consistentwith the adoption of a materiality policy that considers the effect ofcorrecting a cumulative balance sheet misstatement on the current year incomestatement, that it is now appropriate to adjust for this requirement under IFRS. The adjustments below relate to the holding of Bank of Ireland shares by BOILife for the benefit of unit-linked policyholders that must be accounted for astreasury shares under IAS 32. In the income statement there are two adjustments to the prior year, 31 March2006, income statement. Life assurance investment income and gains has beenreduced by €26m from €625m, as previously reported to 31 March 06, to €599m.Other operating income has been reduced by €49m from €165m to €116m. As a resultProfit before tax was €75m lower, down from €1,599m to €1,524m. Basic earnings per share were reduced by 7.9c from 136.4c to 128.5c whilediluted earnings per share were similarly reduced from 135.4c to 127.6c. In thebalance sheet as at 31 March 2006, Assets at fair value through profit & losswere reduced by €142m from €10,580m to €10,438m and retained earnings reduced bythe same amount from €3,330m to €3,188m. The impact of the changes describedabove on retained profit as at 31 March 2005 was €90m. Notes to the Financial Statements The accounts in this preliminary announcement are not the statutory accounts ofthe Bank and a copy of which is required to be annexed to the Bank's annualreturn to the Companies Registration Office in Ireland. A copy of the statutoryaccounts required to be annexed to the Bank's annual return in respect of theyear ended 31 March 2006 has in fact been so annexed. A copy of the statutoryaccounts in respect of the year ended 31 March 2007 will be annexed to thecompany's annual return for 2007. The auditors of the company have made areport, without any qualification on their audit of the statutory accounts ofthe company in respect of the year ended 31 March 2006. The directors approvedthe Bank's statutory accounts for the year ended 31 March 2007 on 30 May 2007and the auditors have made a report without any qualification on their audit ofthose statutory accounts. 1 Segmental Reporting The segmental analysis of the Group's results and financial position is set outbelow by business class and by geographic segment. For the geographic analysisIreland (excluding Northern Ireland) includes profits generated in theInternational Financial Services Centre. Revenue is defined as gross interestincome, non interest income, insurance net premium income, net of insuranceclaims and income from associates and joint ventures. The Group has fivebusiness classes detailed in the table below. During the year WholesaleFinancial Services and Asset Management Services divisions were combined to formthe Capital Markets Division. Prior year results have been adjusted to reflectthis change. The analysis of results by business class is based on management accountsinformation. Transactions between the business segments are on normalcommercial terms and conditions. Internal charges and transfer pricingadjustments have been reflected in the performance of each business. Revenuesharing agreements are used to allocate external customer revenues to a businesssegment on a reasonable basis. 1 Segmental Reporting (continued) Business Segments Year ended Retail BOI Life Capital UK Group Eliminations Group31 March 2007 Republic Markets Financial Centre of Ireland Services •m •m •m •m •m •m •m Net interest income/expense 1,311 (5) 671 784 (4) - 2,757Insurance net premium income - 2,155 - - 33 - 2,188Other income 377 326 379 129 (93) - 1,118Profit on disposal of business activities/ 87 - - 6 233 - 326property Total income 1,775 2,476 1,050 919 169 - 6,389Insurance claims - (2,205) - - (8) - (2,213) Total income, net of insurance claims 1,775 271 1,050 919 161 - 4,176Operating expenses (852) (100) (439) (458) (159) - (2,008)Depreciation and amortisation (75) (4) (17) (39) (16) - (151)Impairment losses (63) - (21) (20) 1 - (103)Income from associates and joint ventures - - (1) 45 - - 44 Profit before taxation 785 167 572 447 (13) - 1,958Profit on disposal of business activities - - - (6) (233) - (239)Profit on disposal of property (87) - - - - - (87)Gross up of policyholder tax in the Life - (19) - - - - (19)businessInvestment return on treasury shares held - - - - 68 - 68for policyholdersHedge ineffectiveness on transition to IFRS - - - - 2 - 2Sale of Head Office - - - - (32) - (32)Restructuring programme - - - - 49 - 49 Group profit before tax excluding the 698 148 572 441 (159) - 1,700impact of above items Total assets 98,599 14,908 167,336 73,503 30,801 (196,334) 188,813 Total liabilities 96,758 14,769 165,841 71,143 29,878 (196,334) 182,055 Capital expenditure 54 7 18 58 29 - 166 The profit to the Group on disposal of Davy's was €229m. Attributed to the gainon disposal was €4m relating to cost incurred for internal work completed andcharged against the sale by other Divisions. This charge out is priced on anarms length basis and has been eliminated on consolidation. See note 5. 1 Segmental Reporting (continued) Business Segments Year ended Retail 31 March 2006 Republic UKRestated* of BOI Capital Financial Group Ireland Life Markets Services Centre Eliminations Group •m •m •m •m •m •m •m Net interest income 1,119 8 461 722 (3) - 2,307Insurance net premium income - 1,264 - - 34 - 1,298Other income 351 681 458 94 (97) - 1,487Profit on disposal of business activities - - - 176 - - 176Total income 1,470 1,953 919 992 (66) - 5,268Insurance claims - (1,655) - - (11) - (1,666)Total income, net of insurance claims 1,470 298 919 992 (77) - 3,602Operating expenses (790) (92) (404) (448) (120) - (1,854)Depreciation and amortisation (81) (3) (21) (33) (28) - (166)Impairment losses (54) - (23) (26) - - (103)Income from associates and joint ventures 5 - - 40 - - 45Profit before taxation 550 203 471 525 (225) - 1,524 Sale of business activities - - - (176) - - (176)Gross up of policyholder tax in the Life - (69) - - - - (69)businessInvestment return on treasury shares held - - - - 75 75for policyholdersHedge ineffectiveness on transition to - - - - 7 - 7IFRSRestructuring programme - - - - 32 - 32Group profit before tax excluding the 550 134 471 349 (111) - 1,393impact of above items Total assets 77,935 12,326 139,680 54,580 19,391 (141,700) 162,212Total liabilities 76,320 12,210 138,402 52,501 19,248 (141,700) 156,981Capital expenditure 55 - 36 58 30 - 179 * Restated for change in accounting policy - see page 23 Capital expenditure comprises additions to property and equipment and intangibleassets including additions resulting from acquisitions through businesscombinations. 1 Segmental Reporting (continued) Geographical Segments 31 March 2007 United Rest of Inter-segment Ireland Kingdom World Revenue Total •m •m •m •m •m Revenue 7,398 4,646 327 (2,611) 9,760 Profit before taxation 1,603 314 41 - 1,958 United Rest of Ireland Kingdom World Eliminations Total •m •m •m •m •m Total assets 168,843 84,268 5,002 (69,300) 188,813 Capital expenditure 99 58 9 - 166 31 March 2006 (Restated*) United Rest of Inter-segment Ireland Kingdom World Revenue Total •m •m •m •m •m Revenue 5,252 3,861 234 (1,883) 7,464 Profit before taxation 1,003 478 43 - 1,524 United Rest of Ireland Kingdom World Eliminations Total •m •m •m •m •m Total assets 143,342 63,680 3,885 (48,695) 162,212 Capital expenditure 95 58 26 - 179 * Restated for change in accounting policy - see page 23 2 Net Interest Income The Group 2007 2006 •m •m Interest and similar income Loans and advances to banks 292 238 Loans and advances to customers 6,272 4,576 Financial assets - available for sale 1,342 934 Finance leasing 222 197 Other 9 9 Total interest income 8,137 5,954 Interest expense and similar charges Interest on subordinated liabilities 370 250 Other interest payable 5,010 3,397 Total interest expense 5,380 3,647 3 Life Assurance Investment Income and Gains The Group 2007 2006 •m •m Life assurance investment income and gains 275 625Elimination of investment return of treasury shares held for the benefit of (28) (26)policyholders 247 599 4 Other Operating Income The Group 2007 2006 Restated* •m •m Profit on disposal of financial assets - available for sale 10 4 Other insurance income 176 151 Elimination of the investment return on treasury shares held on (40) (49) behalf of policyholders Gain on sale of Head Office premises 32 - Other income 21 10 199 116 * Restated for change in accounting policy - see page 23 5 Profit on Disposal of Business Activities To 31 March 2007: On 21 April 2006 the Group completed the sale of Enterprise Finance Europe GmbHfor a consideration of €10m giving rise to a profit on disposal of €8m. Costsincurred on disposal were €1m. On 31 October 2006 the Group completed the sale of its 90.444% equity stake inDavy Stockbrokers to the management and staff of Davy. •m Carrying value of net assets at date of disposal 84Cost of disposal 3Gain on disposal 229 Cash consideration received 316 5 Profit on Disposal of Business Activities (continued) In addition, €6m was written back to the Group profit and loss account in relation to costs provided at 31 March 2006 against anticipated expenses in exiting certain contracts relating to the disposal of the Bristol & West branch network. To 31 March 2006: On 21 September 2005 the Group disposed of the Bristol & West branch network. •m Carrying value of net tangible assets 8 Cost of disposal 43 Gain on disposal of branch operations 176 Cash consideration received 227 6 Total Operating Expenses The Group 2007 2006 •m •m Administrative expenses - Staff costs 1,244 1,167 - Other administrative expenses 764 687 Depreciation - Intangibles 97 106 - Property, plant and equipment 54 60 2,159 2,020 7 Staff Numbers In the year ended 31 March 2007 the average full time equivalents was 15,952(2006:16,190), categorised as follows in line with the business classes asstated in Note 2. 2007 2006 Retail Republic of Ireland 8,451 7,987BOI Life 1,100 1,063Capital Markets 1,986 2,091UK Financial Services 3,415 3,930 Group Centre 1,000 1,119 15,952 16,190 8 Taxation The Group 2007 2006 •m •m Current Tax Irish Corporation Tax Current Year 244 191 Prior Year 12 8 Double Taxation Relief (30) (20) Foreign Tax Current Year 98 86 Prior Year 3 (3) 327 262 Deferred Tax Origination & reversal of temporary differences (21) 41 Charge for the year 306 303 9 Earnings per Share The calculation of basic earnings per unit of €0.64 Ordinary Stock is based on the profit attributable to Ordinary Stockholders divided by the weighted average Ordinary Stock in issue excluding Treasury stock and own shares held for the benefit of life assurance policyholders. The Group 2007 2006 Restated* Basic •m •m Profit attributable to stockholders 1,651 1,230 Dividends on other equity interests (15) (13) Profit attributable to Ordinary Stockholders 1,636 1,217 Weighted average number of shares in issue excluding Treasury stock and own shares held for the benefit of life assurance policyholders 950m 947m Basic earnings per share 172.2c 128.5c The diluted earnings per share is based on the profit attributable to Ordinary Stockholders divided by the weighted average Ordinary Stock in issue excluding Treasury stock and own shares held for the benefit of life assurance policyholders adjusted for the effect of all dilutive potential Ordinary Stock. 2007 2006 Restated* Diluted •m •m Profit attributable to stockholders 1,651 1,230 Dividends on other equity interests (15) (13) Profit attributable to Ordinary Stockholders 1,636 1,217 Weighted average number of shares in issue excluding Treasury stock and own shares held for the benefit of life assurance policyholders 950m 947m Effect of all dilutive potential Ordinary Stock 7m 7m 957m 954m Diluted earnings per share 171.0c 127.6c * Restated for change in accounting policy - see page 23 10 Loans and Advances to Customers The Group 2007 2006 •m •m Loans and advances to customers 121,933 98,497 Loans and advances to customers - finance leases and hire purchase receivables 3,543 3,108 Gross loans and advances 125,476 101,605 Less allowance for losses on loans and advances (428) (359) 125,048 101,246 10 Loans and Advances to Customers (continued) The Group Allowance for losses on loans and advances to customers and 2007 2006 banks •m •m Movement in allowance for losses on loans and advances as follows: Opening balance 360 319 Exchange adjustments 1 (1) Charge against profits 104 100 Amounts written off (53) (85) Recoveries 19 21 Other movements (3) 6 Closing balance 428 360 Of which relates to: Loans and advances to customers 428 359 Loans and advances to banks - 1 428 360 11 Customer Accounts The Group 2007 2006 •m •m Current accounts 16,932 15,876 Demand deposits 25,393 18,344 Term deposits and other products 27,333 25,877 Other short term borrowings 2,619 1,373 Securities sold under agreement to repurchase - 240 72,277 61,710 12 Deferred Tax The Group 2007 2006 •m •m The movement on the deferred tax account is as follows Opening balance 177 143 Income Statement Charge for Year (21) 41 Available for Sale Securities - Transferred to reserves (8) (15) Cash Flow Hedges - Transferred to reserves 53 (1) Revaluation/reclassification of Property during year 16 25 Pension 21 18 Other Movements 15 (34) Closing balance 253 177 13 Retirement Benefit Obligations The Group operates a number of defined benefit and defined contribution schemesin Ireland and overseas. The defined benefit schemes are funded and the assetsof the schemes are held in separate trustee administered funds. The mostsignificant defined benefit scheme is the "Bank of Ireland Staff Pension Fund"which accounts for approximately 80% of the pension liability on the Groupbalance sheet. In determining the level of contributions required to be made to each scheme andthe relevant charge to the income statement the Group has been advised byindependent actuaries, Watson Wyatt(Ireland) Limited. The last formal valuationusing the projected unit method was carried out on 31 March 2007. The projectedunit method measures liabilities taking account of the projected future levelsof pensionable earnings at the time of commencement of benefits i.e. at normalretirement date. The valuation disclosed that the assets after allowing forexpected future increases in earnings and pensions represented 108% of thebenefits that have accrued to members. The actuary has recommended that theexisting funding programme be maintained until the results of the next formalvaluation of the fund, which will be made as at 31 March 2007, are available. The financial assumptions used in deriving the valuation are set out in thetable below. Financial assumptions 2007 2006 % pa % pa Irish SchemesInflation rate 2.25 2.10Discount rate 4.95 4.60Rate of general increase in salaries 3.38* 3.26*Rate of increase in pensions in payment 3.08* 2.93*Rate of increase to deferred pensions 2.25 2.10 UK SchemesInflation rate 3.00 2.75Discount rate 5.30 4.95Rate of general increase in salaries 4.22* 3.97*Rate of increase in pensions in payment 3.58* 3.33*Rate of increase to deferred pensions 3.00 2.75 * Allows for additional 0.5% for 5 years beginning 1 April 2005 for Staff Pension Fund Mortality assumptions The Mortality assumptions used in estimating the actuarial value of theliabilities for the Bank of Ireland Staff Pension Fund are the same as thoseadopted in the formal actuarial valuation at 31 March 2004. A complete actuarialreview of mortality experience will be carried out between 1 April 2007 and 30September 2007. Post-retirement mortality assumptions (Main Scheme) 2007 2006Longevity at age 60 for current pensioners (years)Males 22.3 22.3Females 25.3 25.3 Longevity at age 60 for future pensioners (years)Males 24.5 24.5Females 27.5 27.5 13 Retirement Benefit Obligations (continued) The expected long term rates of return and market value of assets of thematerial defined benefit plans on a combined basis as at 31 March 2007 and 31March 2006 were as follows: 2007 2006 Expected long Market Value Expected Market Value term rate of long term return rate of return % •m % •m Equities 7.4 3,014 7.5 2,687Bonds 4.35 953 4.2 860Property 5.7 457 6.5 487Cash 4.1 81 3.3 36 Total market value of schemes assets 6.5 4,505 6.6 4,070 Actuarial value of liabilities offunded schemes (5,082) (4,866) Aggregate deficit in schemes (577) (796)Unfunded schemes (10) (12) Net pension deficit (587) (808) The liability to defined contribution schemes at 31 March 2007 was €3m. Thepension scheme assets within equities included Bank of Ireland shares amountingto €69m (31 March 2006: €58m) and property occupied by Group companies to thevalue of €50m (31 March 2006: €150m). Analysis of the amount recognised in Statement of Recognised Income and Expense (SORIE) 2007 2006 •m •mActuarial gain/(loss) on scheme assets 144 401Experience gain/(loss) on liabilities (126) (46)Gain/(loss) on change of assumptions (financial and demographic) 211 (224)Currency (loss) (16) - Total gains/(losses) recognised in the SORIE during the year before 213 131adjustment of tax Cumulative amount of gains/(losses) recognised in SORIE to end of year (118) (331) Defined benefit pension plans 2007 2006 2005 •m •m •m Present value of obligations 5,092 4,878 4,341Scheme assets 4,505 4,070 3,417 Deficit within schemes 587 808 924 Sensitivity analysis for each of the assumptions used to measure the schemeliabilities, showing the increase in defined benefit obligations at 31 March2007. Factor Change in assumption BOI Staff Pension Fund Impact in scheme liabilities Discount rate Decrease 0.1% Increase 2.2%Rate of Inflation Increase 0.1% Increase 2.2%Rate of salary growth Increase 0.1% Increase 0.8%Life expectancy Increase by 1 year Increase 2.9% While the table above shows the impact of an individual assumption change, achange in one assumption could impact on other assumptions due to therelationship between assumptions. 14 Contingent Liabilities and Commitments The tables below give, for the Group, the contract amounts and riskweighted amounts of contingent liabilities and commitments. The maximumexposure to credit loss under contingent liabilities and commitments is thecontract amount of the instrument in the event of non-performance by the otherparty where all counter claims, collateral or security proved worthless. Therisk weighted amounts have been calculated in accordance with the IrishFinancial Services Regulatory Authority guidelines implementing the Baselagreement on capital adequacy (i). The Group 2007 2006 Risk Risk Contract Weighted Contract Weighted Amount Amount Amount AmountThe Group - Contingent Liabilities •m •m •m •mAcceptances and endorsements 39 24 37 21Guarantees and assets pledged as collateral security- Assets pledged - - - -- Guarantees and irrevocable letters of credit 1,719 1,540 1,354 1,321 Other contingent liabilities 745 302 675 327 2,503 1,866 2,066 1,669 The Group - CommitmentsSale and option to resell transactions - - - -Other commitments- Documentary credits and short-term trade-related 176 34 160 36transactions- Forward asset purchases, forward deposits placed and forwardsale and repurchase agreements - - - -- Undrawn note issuance and revolving underwriting facilities 758 163 409 -- Undrawn formal standby facilities, credit lines and othercommitments to lend - irrevocable with original maturity of over 1 year 10,847 5,208 8,006 3,790 - revocable or irrevocable with original maturity of 1 year 24,232 - 22,362 -or less (ii) 36,013 5,405 30,937 3,826 (i) Under the Basel agreement, a credit conversion factor is applied to thecontract amount to obtain the credit equivalent amount, which is then risk weighted according to counterparty. (ii) Undrawn loan commitments which are unconditionally cancellable at any timeor which have a maturity of less than one year have a risk weighting of zero. 15 Share Capital, Share Premium and Treasury Stock Capital Stock The Bank Authorised 2007 2006 •m •m 1,500m units of €0.64 of Ordinary Stock 960 960 8m units of Non-Cumulative Preference Stock of US$25 each 150 165 100m units of Non-Cumulative Preference Stock of Stg£1 each 147 144 100m units of Non-Cumulative Preference Stock of €1.27 each 127 127 100m units of Undesignated Preference Stock of US$0.25 each 19 21 100m units of Undesignated Preference Stock of Stg£0.25 each 37 36 100m units of Undesignated Preference Stock of €0.25 each 25 25 1,465 1,478 2007 2006 Allotted and fully paid •m •m 611 607 955.4m units of €0.64 of Ordinary Stock 45 49 70.2m units of €0.64 of Treasury Stock 3 3 1.9m units of Non-Cumulative Preference Stock of Stg£1 each 4 4 3.0m units of Non-Cumulative Preference Stock of €1.27 each 663 663 The weighted average Ordinary Stock in issue at 31 March 2007, used in theearnings per unit of Ordinary Stock calculation, excludes the Treasury Stockwhich does not represent Ordinary Stock in issue. Treasury shares do not rankfor dividend and while own shares held for the benefit of life assurancepolicyholders legally rank for dividend they do not accrue in the Groupfinancial statements. 16 Reserves and Retained Earnings The Group 2007 2006 Restated* •m •mStock premium accountOpening balance 767 767Premium on issue of stock 4 -Closing balance 771 767 Capital reserveOpening balance 359 311 Transfer from retained profit 70 48 Closing balance 429 359 Retained profitOpening balance previously reported 3,188 2,392Impact of change in accounting policy* - (90)Revised opening balance 3,188 2,302 Profit for period attributable to stockholders 1,651 1,230Equity dividends (524) (448)Dividends on other equity interests (15) (13)Transfer to capital reserves (70) (48)Profit retained 1,042 721 Reissue of treasury stock 129 48Transfer from revaluation reserve 108 4Transfer from share based payments reserve 15 -Actuarial gains/(losses) on pension funds 190 113 Closing balance 4,672 3,188 Share based payments reserveOpening balance 27 16Charge to the income statement 12 11Transfer to retained profit (15) -Closing balance 24 27 Foreign exchange reserveOpening balance (125) (108)Exchange adjustments during year 49 (17) Closing balance (76) (125) * Restated for change in accounting policy - see page 23 16 Reserves and Retained Earnings (continued) The Group 2007 2006 •m •m Revaluation reserve Opening balance 342 159 Transfer to revenue reserve on sale of property (108) (4) Revaluation of property 34 212 Deferred tax on revaluation/reclassification of (16) (25) property Closing balance 252 342 Available for sale reserve Opening balance 26 130 Net changes in fair value (57) (115) Deferred tax on fair value changes 8 15 Profit/loss on disposal (10) (4) Closing balance (33) 26 Cash flow hedge reserve Opening balance 60 67 Net changes in fair value 188 (8) Deferred tax of fair value changes (53) 1 Closing balance 195 60 Other equity reserve Opening balance 114 114 Movement during period - - Closing balance 114 114 17 Acquisitions Paul Capital Investments: On 20 June 2006 the Bank entered into a joint venture partnership with PaulCapital Partners, a leading US private equity specialist, establishing PaulCapital Investments LLC which provides private equity fund of funds products andadvisory services to institutional and other investors worldwide. Theconsideration at the time of acquisition was US$25m. The acquisition iscurrently being accounted for as a joint venture using the equity method ofaccounting. Guggenheim Advisors: On 20 January 2006 the Bank acquired a 71.5% interest in Guggenheim Advisors.The final cash consideration for the transaction was US$148m, which was reportedlast year as being dependent on the performance of the business to 1 April 2006and 1 August 2006. This is $3m higher than the anticipated consideration of$145m as reported last year. Goodwill has been adjusted accordingly. Guggenheim Advisors management and Guggenheim partners both retain holdings inthe company and these holdings are subject to put and call arrangements in themedium term on an agreed basis. These options if exercised are required to besettled in stock in the Governor and Company. In accordance with the Group'saccounting policy in respect of transactions of this nature with minorities noliability has been recognised for these options. 18 Rates of Exchange The principal rates of exchange used in the preparation of the accounts are asfollows: 31 March 2007 31 March 2006 Average Closing Average Closing•/US$ 1.2912 1.3318 1.2126 1.2104•/Stg£ 0.6783 0.6798 0.6826 0.6964 Average Balance Sheet and Interest Rates The following tables show the average balances and interest rates of interestearning assets and interest bearing liabilities for each of the years ended 31March 2007 and 2006. The calculations of average balances are based on daily,weekly or monthly averages, depending on the reporting unit. The averagebalances used are considered to be representative of the operations of theGroup. Year Ended Year Ended 31 March 2007 31 March 2006 Average Average Balance Interest Rate Balance Interest Rate •m •m % •m •m % ASSETSLoans to banksDomestic offices 7,625 259 3.4 9,268 226 2.4Foreign offices 726 33 4.5 238 12 5.0Loans to customers(1)Domestic offices 62,584 3,354 5.4 49,969 2,309 4.6Foreign offices 53,133 3,140 5.9 43,106 2,464 5.7Central government and other eligiblebillsDomestic offices - - - 126 1 0.8Foreign offices - - - - - -Debt SecuritiesDomestic offices 30,368 1,283 4.2 24,380 869 3.6Foreign offices 1,414 59 4.2 1,518 64 4.2Other financial assets at fair valuethrough P/LDomestic offices 29 - - 152 1 0.7Foreign offices 276 13 4.7 232 10 4.3Total interest-earning assetsDomestic offices 100,606 4,896 4.9 83,895 3,406 4.1Foreign offices 55,549 3,245 5.8 45,094 2,550 5.7Net swap interest - 7 - - 34 - 156,155 8,148 5.2 128,989 5,990 4.6Allowance for impairment losses (391) - - (341) - -Non interest earning assets(2) 22,146 - - 18,615 - - Total Assets 177,910 8,148 4.6 147,263 5,990 4.1 Percentage of assets applicable to foreignactivities 32.5% 31.8% Average Balance Sheet and Interest Rates (continued) Year Ended Year Ended 31 March 2007 31 March 2006 Average Average Balance Interest Rate Balance Interest Rate •m •m % •m •m %LIABILITIES AND STOCKHOLDERS' EQUITYDeposits by banksDomestic offices 12,526 294 2.3 8,201 178 2.2Foreign offices 15,318 772 5.0 10,878 534 4.9Customer accountsDomestic offices 31,389 880 2.8 35,817 746 2.1Foreign offices 25,331 1,129 4.5 20,579 839 4.1Debt securities in issueDomestic offices 36,214 1,609 4.4 23,800 827 3.5Foreign offices 6,914 326 4.7 6,393 301 4.7Subordinated liabilitiesDomestic offices 3,722 167 4.5 2,955 120 4.1Foreign offices 3,357 214 6.4 2,284 137 6.0Total interest bearing liabilitiesDomestic offices 83,851 2,950 3.5 70,773 1,871 2.6Foreign offices 50,920 2,441 4.8 40,134 1,811 4.5 134,771 5,391 4.0 110,907 3,682 3.3 Non interest bearing liabilitiesCurrent accounts 11,958 - - 10,578 - - Other non interest bearing liabilities 25,069 - - 20,987 - -(2) Stockholders equity 6,112 - - 4,791 - - Total liabilities and stockholders' 177,910 5,391 3.0 147,263 3,682 2.5equity Percentage of liabilities applicableto foreign activities 32.5% 31.8% (1) Loans to customers include non-accrual loans and loans classified asproblem loans. (2) The balance sheets of the life assurance companies have beenconsolidated and are reflected under "Non interest earning assets" and "Othernon interest bearing liabilities". Capital Adequacy Data The following table shows the components and basis of calculation of the Group'sTier 1 and Total Capital ratios . 31 March 31 March 2007 2006 Capital Base •m •mOrdinary Share capital 656 656Eligible reserves 5,539 3,941Equity minority interests in subsidiaries 34 45Preference stock and preference shares 65 65Bristol & West preference shares 74 72Perpetual preferred securities 3,319 2,516Regulatory adjustments (net) (379) 39Total Tier 1 capital 9,308 7,334Revaluation reserves - property and other 647 690IBNR provisions 134 127Subordinated perpetual debt capital 294 431Subordinated dated debt capital 3,995 3,405Less supervisory deductions (32)Total Tier 2 capital 5,038 4,653Tier 1 and Tier 2 capital 14,346 11,987Supervisory deductions (1,019) (870)Total Capital 13,327 11,117Risk weighted assetsBanking book On balance sheet 103,982 87,424 Off balance sheet 5,986 5,974 109,968 93,398Trading book Market risks 2,570 3,708 Counterparty and settlement risks 402 404 2,972 4,112Total risk weighted assets 112,940 97,510Capital ratiosTier 1 8.2% 7.5%Equity Tier 1 5.2% 4.8%Total 11.8% 11.4% Consolidated Income Statementfor the year ended 31 March 2007(Euro, US$ & STG£) •m US$m(1) Stg£m(1) Interest Income 8,137 10,837 5,532 Interest Expense (5,380) (7,165) (3,658)Net Interest Income 2,757 3,672 1,874 Insurance net premium income 2,188 2,914 1,487Fees and commissions income 898 1,196 610Fees and commissions expense (160) (213) (108)Net trading income (70) (93) (47)Life assurance investment income and gains 247 329 168Other operating income 199 265 135Profit on disposal of business activity 243 324 165Profit on sale of property 87 115 59 Total Operating Income 6,389 8,509 4,343 Increase in insurance contract liabilities and claims paid (2,213) (2,947) (1,504)Total Operating Income, net of Insurance Claims 4,176 5,562 2,839Total Operating Expenses (2,159) (2,876) (1,468)Operating Profit before Impairment Losses 2,017 2,686 1,371Impairment losses (103) (137) (70)Operating Profit 1,914 2,549 1,301Share of profit of associated undertakings and joint ventures 44 59 30Profit before Taxation 1,958 2,608 1,331Taxation (306) (408) (208)Profit for the Period 1,652 2,200 1,123 Attributable to minority interests 1 1 1Attributable to stockholders 1,651 2,199 1,122 Profit for the Period 1,652 2,200 1,123 (1) Converted at closing exchange rates. Consolidated Balance Sheet as at 31 March 2007 (Euro, US$ & STG£) •m US$m(1) Stg£m(1) ASSETS Cash and balances at central banks 362 482 246 Items in the course of collection from other banks 811 1,080 551 Central government and other eligible bills 11 15 7 Trading securities 520 693 353 Derivative financial instruments 2,849 3,794 1,937 Other financial assets at fair value through P/L 12,707 16,923 8,638 Loans and advances to banks 7,210 9,602 4,901 Available-for-sale financial assets 33,449 44,547 22,739 Loans and advances to customers 125,048 166,539 85,008 Interest in associated undertakings 26 35 18 Interest in joint ventures 73 97 50 Assets classified as held for sale 83 111 56 Intangible assets - Goodwill 347 462 236 Intangible assets - Other 596 794 405 Investment property 1,142 1,521 776 Property, plant & equipment 665 886 452 Deferred tax asset 25 33 17 Other assets 2,889 3,847 1,965 Total assets 188,813 251,461 128,355 EQUITY AND LIABILITIES Deposits by banks 20,405 27,175 13,871 Customer accounts 72,277 96,259 49,134 Items in the course of transmission to other banks 243 324 165 Derivative financial instruments 2,935 3,909 1,995 Liabilities to customers under investment contracts 6,736 8,971 4,579 Debt securities in issue 59,523 79,273 40,464 Insurance contract liabilities 7,190 9,576 4,888 Other liabilities 3,983 5,305 2,708 Deferred tax liabilities 278 370 189 Provisions 87 116 59 Retirement benefit obligations 590 785 401 Subordinated liabilities 7,808 10,398 5,308 Total liabilities 182,055 242,461 123,761 Equity Share capital 663 883 451 Share premium account 771 1,027 524 Retained profit 4,672 6,222 3,176 Other reserves 905 1,205 615 Own shares held for the benefit of life assurance (287) (382) (195) policyholders Stockholders' equity 6,724 8,955 4,571 Minority interests 34 45 23 Total equity 6,758 9,000 4,594 Total equity and liabilities 188,813 251,461 128,355 This information is provided by RNS The company news service from the London Stock Exchange
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Bank Irel13.375 Information
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| Date | Source | Headline | |
|---|---|---|---|
| 18th Sep 2007 | 4:46 pm | RNS | Transfer of Business Approved |
| 18th Sep 2007 | 4:37 pm | RNS | Transfer of Business Approved |
| 31st Aug 2007 | 9:00 am | RNS | Cancellation of Lstng of Bnds |
| 8th Aug 2007 | 3:30 pm | RNS | Result of Meeting |
| 3rd Jul 2007 | 12:52 pm | RNS | Total Voting Rights |
| 29th Jun 2007 | 11:41 am | RNS | Issue of Debt |
| 28th Jun 2007 | 10:27 am | RNS | Issue of Debt |
| 20th Jun 2007 | 7:02 am | RNS | Annual Report and Accounts |
| 20th Jun 2007 | 7:00 am | RNS | Directorate Change |
| 19th Jun 2007 | 10:15 am | RNS | Director/PDMR Shareholding |
| 19th Jun 2007 | 10:11 am | RNS | Director/PDMR Shareholding |
| 14th Jun 2007 | 3:01 pm | RNS | Transfer of Business |
| 14th Jun 2007 | 3:00 pm | RNS | Transfer of Business |
| 6th Jun 2007 | 3:01 pm | RNS | Statement re Trnsfer of Busin |
| 6th Jun 2007 | 3:01 pm | RNS | Transfer of B&W plc business |
| 31st May 2007 | 6:05 pm | RNS | Final Results |
| 31st May 2007 | 7:02 am | RNS | Preliminary Results |
| 14th May 2007 | 7:00 am | RNS | Directorate Change |
| 30th Mar 2007 | 5:31 pm | RNS | Treasury Stock |
| 21st Mar 2007 | 7:01 am | RNS | Pre-Close Trading Statement |
| 20th Feb 2007 | 12:33 pm | RNS | Mortgage Securitisation |
| 19th Feb 2007 | 10:01 am | RNS | Transfer of businesses to BOI |
| 19th Feb 2007 | 10:00 am | RNS | UK Business Corporate Strctr |
| 9th Feb 2007 | 12:55 pm | RNS | Cancellation of Listing |
| 20th Dec 2006 | 3:10 pm | RNS | Merger Update |
| 19th Dec 2006 | 3:49 pm | RNS | Holding(s) in Company |
| 27th Nov 2006 | 3:28 pm | BUS | Rule 8.3 - Biotrace cfd |
| 27th Nov 2006 | 3:00 pm | RNS | Merger Update |
| 24th Nov 2006 | 7:00 am | RNS | Offer Update |
| 23rd Nov 2006 | 10:25 am | RNS | Holding(s) in Company |
| 20th Nov 2006 | 7:02 am | RNS | Offer Update |
| 16th Nov 2006 | 7:03 am | RNS | Interim Results |
| 6th Nov 2006 | 3:00 pm | RNS | Merger Update |
| 6th Nov 2006 | 7:01 am | RNS | Offer Update |
| 31st Oct 2006 | 2:47 pm | BUS | Rule 8.3 - Biotrace Int'l Plc CFD |
| 31st Oct 2006 | 10:18 am | RNS | EPT Disclosure |
| 26th Oct 2006 | 10:50 am | RNS | EPT Disclosure-Amendment |
| 25th Oct 2006 | 10:26 am | RNS | EPT Disclosure |
| 24th Oct 2006 | 4:59 pm | BUS | Rule 8.3 - Biotrace CFD - Amendment |
| 23rd Oct 2006 | 5:01 pm | BUS | Rule 8.3 - Biotrace CFD |
| 23rd Oct 2006 | 4:11 pm | RNS | Holding(s) in Company |
| 20th Oct 2006 | 5:33 pm | BUS | Rule 8.3 - Biotrace CFD |
| 19th Oct 2006 | 10:46 am | RNS | EPT Disclosure |
| 18th Oct 2006 | 10:33 am | RNS | EPT Disclosure |
| 17th Oct 2006 | 3:00 pm | RNS | Prior Notice of Merger |
| 17th Oct 2006 | 11:03 am | RNS | EPT Disclosure |
| 16th Oct 2006 | 5:14 pm | RNS | Holding(s) in Company |
| 16th Oct 2006 | 11:02 am | RNS | EPT Disclosure |
| 16th Oct 2006 | 7:00 am | RNS | Offer Document Posted |
| 13th Oct 2006 | 10:16 am | RNS | EPT Disclosure |
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