AIB Group plc · EURONEXT:A5G

AIB — Investor Presentation (March 2023)

15 slides from AIB's investor presentation, March 2023

  1. Slide 1: The Irish Economic Update

    The Irish Economic Update: Good start to 2023, but slower growth still likely, with capacity constraints intensifying March 2023 Oliver Mangan Chief Economist AIB 1

  2. Slide 2: Economy rebounded very strongly in 2021-22 from COVID

    Economy rebounded very strongly in 2021-22 from COVID Consumer Spending  GDP grew by 13.6% in 2021, with GNP up by 14.7% - % 15 (Volume, 3 QTR Moving Average, YoY% Change) trade flows again boosted data 10  Domestic economy picked up strongly in 2021, with 5 modified final domestic demand rising b

  3. Slide 3: Indicators point to slower economic growth in 2023

    Indicators point to slower economic growth in 2023 AIB Irish Mfg and Services PMIs Ireland Construction PMI 70 70 60 60 50 50 Manufacturing 40 40 30 30 Services 20 20 10 10 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 0 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Source: Markit via Refiniti

  4. Slide 4: Though data still strong in early 2023, with PMIs picking up

    Though data still strong in early 2023, with PMIs picking up  Mfg PMI fell sharply in H2 2022 to below 50 by Nov/Dec, but recovered to rise above 50 in Jan/Feb  Services PMI solid in 2022. Picked up appreciably in early 2023, rising to 58.2 in February  Housing commencements surged to 35k peak la

  5. Slide 5: Unemployment falls to very low level, inflation starts to ease

    Unemployment falls to very low level, inflation starts to ease % Employment (YoY, %) Unemployment Rate 15 8.0 Private 12 7.5 9 7.0 Total 6.5 6 3 6.0 0 5.5 Public -3 5.0 -6 4.5 -9 4.0 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Q4 2016 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Source: CSO

  6. Slide 6: Exports perform very strongly in 2021-22 as FDI surges

    Exports perform very strongly in 2021-22 as FDI surges Exports as % of GDP  Ireland is a very open economy – exports, driven by Finland large scale FDI, are a huge part of economy UK  Exports have risen strongly in recent years, helped Germany by very large FDI inflows France  IDA reported record

  7. Slide 7: House completions jump, but commencements fall back

    House completions jump, but commencements fall back  Completions amounted to 20,500 in 2020 & 2021, 35,000 Irish Housing Activity just 2.6% down on 2019 level despite lockdowns 30,000  Completions then jumped sharply to 30,000 in 2022, 25,000 helped by rebound from COVID lockdowns 20,000  15,000

  8. Slide 8: House price growth and rent inflation moderating

    House price growth and rent inflation moderating  House prices declined sharply, by 55% over 2007-13. % National House Price Inflation Prices have fully recovered - back above 2007 peak level 2.5 % 18.0  2.0 15.0 Strong rise in CSO house prices in 2021. Marked 12.0 1.5 moderation in price rises du

  9. Slide 9: AIB Model of Estimated Housing Demand

    AIB Model of Estimated Housing Demand  Rising headship rates added circa Calendar Year 2020 2021 2022 2023 2024 8,000 per year to housing demand in 2002-2011 period Household 26,000 29,000 28,000 25,000 24,500  Shortage of housing, high rents, Formation tighter lending rules saw average of which h

  10. Slide 10: Private sector deleverages, Gov. debt ratios fall to low levels

    Private sector deleverages, Gov. debt ratios fall to low levels Irish Household Debt Ratio % (% of Disposible Income) % Irish Private Sector Credit (Inc Securitisations) as % GNI* 220 350 205 300 190 250 175 160 200 145 150 130 100 115 100 50 85 0 Q3 2002 Q3 2006 Q3 2010 Q3 2014 Q3 2018 Q3 2022 2004

  11. Slide 11: Strong growth sees public finances return to surplus

    Strong growth sees public finances return to surplus  General Gov. budget deficits of €18bn in 2020 and 6 General Government Balance (% GNI*) €7bn in 2021 as COVID-19 hit public finances hard  4 Tax revenues rise very strongly across the board in 2 2022; up 21.5% after a 20% rise in 2021 0  Budge

  12. Slide 12: Good growth likely in 2023 despite headwinds & capacity issues

    Good growth likely in 2023 despite headwinds & capacity issues  Mounting headwinds and capacity constraints, but IMF Global GDP Forecasts (Jan 2022) solid growth expected by Irish economy in 2023-24  % Vol 2021 2022 2023 2024 FDI inflows to continue, boosting investment, exports World 6.2 3.4 2.9

  13. Slide 13: AIB Irish Economic Forecasts

    AIB Irish Economic Forecasts % change in real terms unless 2020 2021 2022 2023 (f) 2024 (f) stated GDP 6.2 13.6 12.0 4.0 3.7 GNP 2.7 14.7 6.7 3.5 3.3 Modified Final Domestic Demand -6.1 5.8 8.2 3.0 2.8 Personal Consumption -10.9 4.6 6.6 3.0 3.0 Government Spending 11.6 6.5 0.7 2.3 2.0 Fixed Investme

  14. Slide 14: Changes to Global Corporate Tax Regime

    Changes to Global Corporate Tax Regime Importance of FDI:  Some 1,600 multinational companies are based in Ireland, accounting for over 300,000 jobs in direct employment  Corporation tax receipts of €22.6bn in 2022 or 27% of total tax revenue – well over 80% comes from MNCs Changes to Corporate Ta

  15. Slide 15: Risks to the Irish economy outlook

    Risks to the Irish economy outlook  Very open Irish economy vulnerable to weaker global outlook, including FDI inflows, with concerns about downsizing in the tech sector in particular given big presence in Ireland  High inflation and rising interest rates will weigh on Irish activity in 2023, as e

AIB Group — Investor Presentation (March 2023) on 6ix