Slide 1: Backing Our Customers: Annual Financial Results 2021
BACKING OUR CUSTOMERS ANNUAL FINANCIAL RESULTS for the financial year ended 31 December 2021 AIB Group plc
Slide 2: Forward looking statement
Forward looking statement This document contains certain forward looking statements with respect to the financial condition, results of operations and business of AIB Group and certain of the plans and objectives of the Group. These forward looking statements can be identified by the fact that they
Slide 3: 2021 Highlights
2021 Highlights Irish economy rebounds COVID-19 restrictions lifted, economy fully re-opened and accelerating Economic growth of 7-9% expected in 2022 Return to profitability and distributions €947m pre-exceptional PBT €213m proposed distribution; 40% pay-out : (1) €122m cash dividend & €9
Slide 4: Favourable Irish economic outlook
Favourable Irish economic outlook GDP and the domestic economy projected to grow strongly Employment levels rise sharply while unemployment falls PMIs elevated as firms expect continued strong growth % PMI index 16.1 * 2,600 16 16 2,500 % 14 70 2,400 12 60 12 2,300 8.7 10 50 7.1 2,200 8 6.0 8 40 5.5
Slide 5: Strongly positioned in a changing banking landscape
Strongly positioned in a changing banking landscape #1 Payment platforms Personal bank & mortgage Leading payment providers: AIB, provider Payzone & AIB Merchant Services #1 >€300m p.a. investment AIB is Ireland’s Corporate bank with full range of capital markets solutions Modern, resilient and secu
Slide 6: Early adopter and supporter of the ESG agenda
Early adopter and supporter of the ESG agenda Growth in Energy, Climate Action & Infrastructure loan book Focus area 2021 Progress €bn €10bn €4.7bn new climate & environment lending by 2023 green lending since 2019 70% 19% E of new lending to be green by 2030 of new lending in 2021 Net Zero ambition
Slide 7: Strong track record of delivery
Strong track record of delivery 2018 2019 2020 2021 …… 2023 • NPE milestone achieved • Resilience through COVID • Return to profit • Green products launched • Conservative ECL • Distributions resumed 2019 – 2021 • Strategic review completed • Inorganic progress 2023 • Payzone acquisition • Strategy
Slide 8: Looking back to H1 2019: Controlling the controllables
Looking back to H1 2019: Controlling the controllables 1 3 QUALITY OF NPEs LENDING COSTS 2 Identify and fill product gaps so that we meet our ambition of being at the heart of our customers’ financial lives Use the strength of our balance sheet for accretive, opportunistic M&A 8
Slide 9: Track record of NPE reduction underpins c.3% target
1 Track record of NPE reduction underpins c.3% target (1) 80% reduction in NPEs in five years Total NPE Legacy NPE Non-legacy NPE 5.4% 1.5% 3.8% 14.1 17% 22% 10.2 28% 42% 6.1 18% 8% 57% 4.3 72% 3.3 3.1 8% 28% €3.1bn €0.9bn €2.2bn 2016 2017 2018 2019 2020 2021 NPEs €bn Legacy Non-legacy Mortgages Per
Slide 10: Delivering on Strategy 2023 to take out €230m cost
2 Delivering on Strategy 2023 to take out €230m cost Savings by Progress in 2021 Status 2023 AIB: 21 branch amalgamations completed, further 22 branches now Sales & Advisory Refocused branch network An Post: Deepening our 20 year relationship with a broader range of services €65m Digital: Enhanced d
Slide 11: New lending in 2021
3 New lending in 2021 13% increase in new lending; leading market shares Continuing increase in new lending New lending across asset classes Drawdowns (€bn) Personal lending (€bn) Mortgages (€bn) +29% -5% 10.4 +13% 3.1 2.4 1.0 0.9 9.2 FY 2020 FY 2021 FY 2020 FY 2021 4.1 3.1 Property (€bn) Corporate
Slide 12: Well positioned to maximise growth potential in key sectors
Well positioned to maximise growth potential in key sectors Housing and mortgages Significant market opportunity Leader in Irish housing finance Commencements jumps as construction sector re-opens Mortgage market expected to grow in the years ahead (€bn) 14.6 Full value-chain presence 15 13.5 40,0
Slide 13: Significant progress made on inorganic opportunities in 2021
Significant progress made on inorganic opportunities in 2021 AIB Group plc Positions AIB as #1 bank for corporate banking * Underpins AIB growth plans and positions us to support the business community Integration going well Enhanced capital markets and wealth offering Completed Provides r
Slide 14: 2022 priorities provide pathway to medium-term targets
2022 priorities provide pathway to medium-term targets Grow our loan book to Implement Strategy 2023 Normalise NPEs Progress inorganic support our customers & Close out legacy items cost-saving programme towards 3% target initiatives the economy Clear path to generating and returning shareholder val
Slide 15: Financial performance
BACKING OUR CUSTOMERS Financial performance AIB Group plc
Slide 16: Financial performance FY 2021
Financial performance FY 2021 Profit after tax of €645m Includes €238m ECL writeback Total income €2,384m Net interest income €1,794m (-4%) and other income €590m (+18%) Costs €1,534m(1) down 1% (excl. Goodbody) in line with guidance FTEs reduced 3% versus Dec 2020 to 8,916 at Dec 2021, 7% red
Slide 17: Income Statement
BACKING OUR CUSTOMERS Income Statement AIB Group plc
Slide 18: Income statement – profit after tax €645m
Income statement – profit after tax €645m Summary income statement (€m) FY 2021 FY 2020 Net interest income reduced 4% impacted Net interest income 1,794 1,872 by lower average loan volumes and the negative interest rate environment Other income(1) 590 499 Total operating income 2,384 2,371 Othe
Slide 19: Net interest income down 4% in line with guidance
Net interest income down 4% in line with guidance NII – material movements NII €1,794m down €78m / 4% from FY 2020 impacted by: (€78m reduction in NII / 7bps reduction in NIM) • +€141m: lower cost of liabilities including: • +€58m customer accounts Q4 Exit NIM • +€65m net TLTRO benefit 1.94% 13 bp
Slide 20: NII sensitivity - positioned for rising rates
NII sensitivity - positioned for rising rates NII sensitivity estimates are based on certain simplifying NII Sensitivity as at Dec 2021 (€m) -100bps +25bps +50bps +100bps assumptions such as; a static/constant balance sheet, parallel Euro (193) 13 33 195 rate movements. Sterling (59) 14 29 57 Tota
Slide 21: Other income +18%; fees & commission +21%
Other income +18%; fees & commission +21% Net fees and commission income (€m) FY 2021 FY 2020 Customer accounts 208 179 Other income €590m up 18% Credit related fees 50 40 Includes €24m for Goodbody for four months Card 78 69 Wealth / insurance 38 38 Customer related FX 67 54 Fee and commissio
Slide 22: Costs down 1% as guided
Costs down 1% as guided Operating expenses (1) (€m) Costs €1,534m, down 1% 1,527 1,534 279 • Includes €23m for Goodbody for four months 284 Factors impacting costs: 514 512 • lower FTEs partially offset by wage inflation • increased depreciation €5m FTEs reduced at the period end by 3% v FY 20
Slide 23: ECL writeback €238m / 40bps; coverage 3.2%
ECL writeback €238m / 40bps; coverage 3.2% ECL material stock movements (€bn) ECL writeback (€m) FY 2021 €0.6bn decrease ECL Stock Macroeconomic assumptions 132 2.5 Redemptions / repayments/ other(1) 241 4.2% 0.2 Post model adjustments (135) 0.7 0.2 0.2 1.9 Total ECL writeback 238 0.1 0.1 3.2% 0.6 L
Slide 24: Balance Sheet
BACKING OUR CUSTOMERS Balance Sheet AIB Group plc
Slide 25: Balance sheet – strong funding & liquidity to support economic recovery
Balance sheet – strong funding & liquidity to support economic recovery Balance sheet (€bn) Dec 2021 Dec 2020 Performing loans 55.3 55.1 Assets Non-performing loans 3.1 4.3 Performing loans increased by €0.2bn Gross loans to customers 58.4 59.4 New lending €10.4bn exceeded by redemptions €10.9bn
Slide 26: Gross loans of €58.4bn; New lending €10.4bn +13%
Gross loans of €58.4bn; New lending €10.4bn +13% Gross loans (€bn) Gross loans New lending c. +5% CAGR(1) Mortgages 5% 9% 13% Corporate & SME 30% 18% 59.4 -2% 58.4 €58.4bn 50% Property €10.4bn 8.6 8.2 32% Personal 43% 15.3 16.0 New Lending €5.8bn H2 +28% v H1 (€bn) 4.5 3.1 35.5 34.1 +12% +58% 1.8 +1
Slide 27: Loan book growth in all core business lines; 5% CAGR to 2024
Loan book growth in all core business lines; 5% CAGR to 2024(1) Mortgages €bn Corporate €bn Energy, Climate Action & Infrastructure (ECAI) (€bn) 33% 119% 98% 2.4% 2.9% 2.1% 29.4 10.4 3.1 Dec-21 2024e Dec-21 2024e Dec-21 2024e % Average RWA % Average yield % Average RWA % Average yield % Average RWA
Slide 28: NPEs at 5.4% declined 28%; target c. 3% by 2023
NPEs at 5.4% declined 28%; target c. 3% by 2023 NPEs (€bn) 32% 4.3 0.5 0.7 7.3% 32% 1.0 1.0 Legacy NPE Non-legacy NPE 3.1 5.4% 1.0 1.1 0.2 17% 22% 42% 0.8 18% €0.9bn 57% €2.2bn 8% 2.1 0.2 1.0 8% 28% NPEs Net flow to NPEs Redemptions Portfolio Sales NPEs 1.5% 3.8% Dec-2020 / other Dec-2021 Mortgages
Slide 29: Funding and capital
BACKING OUR CUSTOMERS Funding and capital AIB Group plc
Slide 30: Strong funding driven by increased customer deposits
Strong funding driven by increased customer deposits Total funding (€bn) Liquidity metrics (%) Dec 2021 Dec 2020 €124.4bn +16% 4.9 Loan to deposit ratio (LDR) 61 69 €107.1bn Liquidity coverage ratio (LCR) 203 193 NBFI (1) 36.0 4.2 Corporate / SME Customer accounts Net stable funding ratio (NSFR) 160
Slide 31: CET1 (FL) 16.6% up 100bps; resumption of distributions
CET1 (FL)(1) 16.6% up 100bps; resumption of distributions Capital ratios fully loaded (FL) (%) €52.6bn RWAs €52.4bn RWAs CET1 (FL) ratio 16.6% up 100bps from Dec 20 20.8% 21.9% • +120bps capital generation 3.1 • -20bps ordinary dividend 3.1 2.2 2.1 Proforma CET1 16.5% reflecting impact of propos
Slide 32: Capital: CET1 target of >13.5%
Capital: CET1 target of >13.5% Capital requirements Dec 2021 Dec 2022 Pillar 1 4.50% 4.50% Appropriate CET1 target • SREP P2R reduced by 25bps to 2.75% from 3.00%; CET1 portion reduced from Pillar 2 requirement (P2R) 1.69% 1.55% 1.69% to 1.55% Capital Conservation Buffer (CCB) 2.50% 2.50% • Optimise
Slide 33: Medium term targets by 2023; Guidance 2022
Medium term targets by 2023; Guidance 2022 Estimated impact of UB Guidance FY 2022(1) loan book acquisition Medium-term targets by 2023 NII: expected to be stable Total income: c. €120m Focused cost(2) discipline < €1.475bn Other income: c. €630m Costs: c. €35m Appropriate capital target CET1(3) > 1
Slide 34: Appendices
BACKING OUR CUSTOMERS Appendices AIB Group plc
Slide 35: Awards and Recognition
Awards and Recognition RATINGS On 19 April 2021 AIB received an ESG Risk Rating of 14.5 and was assessed by Sustainalytics to be at Low Risk of experiencing material f nancial impacts from ESG factors. Our ESG Risk Rating placed AIB in the 6th percentile of the banks assessed by Sustainalytics. (1st
Slide 36: Average balance sheet
Average balance sheet FY 2021 FY 2020 Average Volume Interest Yield Average Volume Interest Yield €m €m % €m €m % Assets Customer loans 57,697 1,846 3.20 59,586 1,965 3.29 Investment securities 17,676 65 0.37 18,389 112 0.61 Loans to banks / other 38,028 (114) (0.30) 18,062 (28) (0.15) Interest earn
Slide 37: Customer loans
Customer loans €bn Performing Loans Non-Performing Loans Customer Loans Gross loans (1 Jan 2021) 55.1 4.3 59.4 New lending 10.4 - 10.4 Redemptions of existing loans (10.2) (0.7) (10.9) Portfolio sales (0.3) (1.0) (1.3) Net flow to NPE (0.5) 0.5 - Foreign exchange / other movements 0.8 - 0.7 Gross lo
Slide 38: Loan book by staging and coverage
Loan book* by staging and coverage Dec 2021 Total Loan book by staging – €58.2bn loan exposures Stage 1 Stage 2 Stage 3** Gross loan exposures (€bn) exposure Mortgages 26.9 1.5 1.0 29.4 Personal 2.2 0.2 0.3 2.7 Stage 1 loan exposures increased by €2.7bn to Property & Construction 5.4 1.4 0.6 7.4 €
Slide 39: Stage movements
Stage movements Dec 2021 Stage movements (excluding Mortgages & Personal) Gross loan exposures (€bn) Stage 1 Stage 2 Stage 3* Total exposure (excluding Mortgages & Personal) Stage 1 loan exposures increased €2.3bn primarily due to Property & Construction 5.3 1.4 0.6 7.4 new lending and upward stag
Slide 40: Asset quality by portfolio
Asset quality by portfolio €bn Mortgages Personal Property Corporate & SME Total Dec 2021 Customer loans* 29.4 2.7 7.6 18.7 58.4 Total ECL cover (%) 1% 8% 4% 5% 3.2% of which NPEs 1.0 0.2 0.8 1.1 3.1 of which legacy NPEs 0.5 0.1 0.2 0.2 0.9 of which non legacy NPEs 0.5 0.1 0.6 0.9 2.2 ECL on NPE 0.3
Slide 41: Asset quality – total portfolio
Asset quality – total portfolio Total portfolio (€bn) Performing loans by geography 59.4 58.4 Dec-20 Dec-21 32% 7.3% 32% 4.3 3.1 5.4% 4.7 7.8% 4.5 7.8% 4% 4% 4% 4% 15% 15% 50.4 84.9% 50.7 86.9% 77% 77% Dec-20 Dec-21 ROI UK North America ROW Strong / Satisfactory Criticised NPE ECL/NPE coverage 41
Slide 42: Asset quality - mortgages
Asset quality - mortgages Credit quality (€bn) RoI mortgages Dec-20 Dec-21 30.6 29.4 34% 2.1 7% 30% 3% 1.0 25% 21% 1.5 5% 1.4 5% 30% 40% 45% 39% 88% €29.5bn €28.3bn 27.0 27.0 92% Tracker Variable Fixed Residential mortgage split Dec-20 Dec-21 Dec-20 Dec-21 7% 6% Strong / Satisfactory Criticised NPE
Slide 43: Asset quality – property & construction
Asset quality – property & construction Property & construction (€bn) Loans at amortised cost by segment 7.4 7.6 Dec-20 Dec-21 22% 22% 0.8 11% 1.0 13% 0.5 6% 0.5 6% 4% 4% 5% 6% 14% 18% 5.9 81% 6.3 83% 72% 77% Dec-20 Dec-21 Strong / Satisfactory Criticised NPE Investment Land and development Contract
Slide 44: Asset quality – Corporate & SME
Asset quality – Corporate & SME Corporate & SME (€bn) Loans by sector Dec-21 Agriculture 18.6 18.7 32% 5% 29% 1.1 6% 1.0 Energy 13% 2.5 13% 2.5 18% 9% Manufacturing 12% Hotels & Licensed premises 15.1 81% 15.1 81% Retail/wholesale & Other Distribtuion 21% 9% Transport 13% Dec-20 Dec-21 Financial & o
Slide 45: Asset quality – Personal portfolio
Asset quality – Personal portfolio Personal (€bn) Lending split Dec-20 Dec-21 2.8 2.7 61% 9% 64% 21% 23% 0.2 0.2 9% 0.2 7% 0.2 6% 79% 77% 2.4 84% 85% 2.3 Credit cards Loans/overdrafts Dec-20 Dec-21 Strong / Satisfactory Criticised NPE ECL/NPE coverage 45
Slide 46: Asset quality – internal credit grade by ECL staging
Asset quality – internal credit grade by ECL staging* Dec 2021 Dec 2020 €m Stage 1 Stage 2 Stage 3 POCI** Total Stage 1 Stage 2 Stage 3 POCI Total Strong 36,521 895 - 4 37,420 35,341 1,257 - 5 36,603 Satisfactory - 3 9,307 4,384 - 1 13,692 11,023 2,220 13,246 Total strong / - 7 44,648 5,641 - 6 50,2
Slide 47: Investment securities – debt securities €16.7bn
Investment securities – debt securities €16.7bn Key components €bn 9.2 7.3 5.3 4.0 1.4 1.5 1.6 1.7 Government Supernational banks Euro bank securities Non Euro bank securities and gov agencies securities Dec-20 Dec-21 €16.7bn down from €19.2bn mainly due to €1.8bn decrease in Irish Government secu
Slide 48: Reported capital ratios
Reported capital ratios* Transitional capital ratios Fully loaded capital ratios Dec 21 Dec 20 Dec 21 Dec 20 Total risk weighted assets (€m) 52,637 53,036 Total risk weighted assets (€m) 52,358 52,579 Capital (€m) Capital (€m) Shareholders equity excl AT1 and dividend 12,427 12,307 Shareholders equi
Slide 49: Loan book analysis and ECL sensitivities
Loan book analysis and ECL sensitivities Concentration by sector (%) FY 2021 ECL sensitivities* Agriculture 3 Customer loans Downside Downside Upside FYEnergy 2020 macroeconomic scenarios and 4 FY 2021 Base scenario 1 scenario 2 scenario Manufacturing 4 €m weightings: Reported 100% 100% 100% 100% •
Slide 50: Credit ratings
Credit ratings As at 31 Dec 2021 AIB Group plc (HoldCo) Baa1 BBB BBB- Long term issuer rating Outlook Stable Stable Negative Investment grade AIB p.l.c. (OpCo) A2 BBB+ A- Long term issuer rating Outlook Stable Stable Negative Investment grade 50
Slide 51: Contact details
Contact details Our Investor Relations Department are happy to facilitate your requests for any further information Name Email Telephone Niamh Hore niamh.a.hore@aib.ie +353 1 6411817 Head of Group IR Siobhain Walsh siobhain.m.walsh@aib.ie +353 1 6411901 Head of Debt IR Pat Clarke patricia.m.clarke@a