Aib Group Plc · EURONEXT:A5G

Aib — H1 2024 Earnings Presentation

45 slides from Aib's earnings presentation, July 2024

1. Slide 1: AIB Group plc Half-Year Financial Results

   For the life you’re after AIB Group plc Half-Year Financial Results For the six months ended 30 June 2024

2. Slide 2: Forward looking statement

   AIB Group plc | Half-Year Financial Results | 2024 2 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 lookin

3. Slide 3: H1 2024 Key highlights

   AIB Group plc | Half-Year Financial Results | 2024 3 H1 2024 Key highlights Strong capital position Profit after tax €1,108m 15.5% CET1 Progressing payments to RoTE 25.5% €505m proposed share the State buyback(1) NII up 18% Climate Capital segment State ownership <30% at 2024 guidance upgraded estab

4. Slide 4: H1 2024 ESG highlights

   AIB Group plc | Half-Year Financial Results | 2024 4 H1 2024 ESG highlights €30bn climate action fund(1) Launched Transition €13.7bn since 2019 34% of new lending was Finance Guidance for our €2.1bn in H1 2024 green and transition corporate and business customers Leader in ESG bond Sustainability Ac

5. Slide 5: Open and resilient Irish economy

   AIB Group plc | Half-Year Financial Results | 2024 5 Open and resilient Irish economy Solid Irish economic growth expected despite headwinds Solid growth forecasts for 2024-26 Irish employment rises sharply post the pandemic Irish inflation rate falls sharply, in-line with elsewhere % % 115 12 5 4.4

6. Slide 6: State shareholding reducing; shareholder distributions increasing

   AIB Group plc | Half-Year Financial Results | 2024 6 State shareholding reducing; shareholder distributions increasing Significant reduction in State ownership Significant increase in distributions State shareholding <30% Strong organic capital generation  Use of all mechanisms: trading plan, 71% 2

7. Slide 7: New lending up 13% to €6.3bn

   AIB Group plc | Half-Year Financial Results | 2024 7 New lending up 13% to €6.3bn New lending across asset classes Mortgages (€bn) Personal lending (€bn) Property (€bn) Corporate & SME (€bn) +11% -39% +10% +38% 1.9 3.1 1.7 0.6 0.7 1.0 2.2 0.6 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 H

8. Slide 8: AIB is Ireland’s #1 Bank

   AIB Group plc | Half-Yearly Financial Results | 2024 8 AIB is Ireland’s #1 Bank Market-leading franchise underpinned by strategic priorities #1 Irish Retail Bank Leading mortgage provider 36.4% mortgage market share(1) No. 1 credit card provider #1 Green Bank #1 Business Bank Sustainability leader R

9. Slide 9: Customer First – centre of excellence servicing the full enterprise

   AIB Group plc | Half-Year Financial Results | 2024 9 Customer First – centre of excellence servicing the full enterprise Strategic initiatives to deliver strong customer and financial outcomes Maximising the opportunity to serve our >3.3 million customers Customer Testimonial Customer focused cultur

10. Slide 10: Greening our Business: Climate Capital segment launched

    AIB Group plc | Half-Year Financial Results | 2024 10 Greening our Business: Climate Capital segment launched Strong track record of lending to sustainable infrastructure projects both nationally and internationally Strong momentum underpinned by high demand and the significant sustainable finance o

11. Slide 11: Operational Efficiency: focus on digitalisation and simplification

    AIB Group plc | Half-Year Financial Results | 2024 11 Operational Efficiency: focus on digitalisation and simplification Transforming business credit process and mobile banking app while removing complexity Enhanced efficiency and customer experience as we simplify and digitise our data, processes &

12. Slide 12: Progressive modernisation of technology

    AIB Group plc | Half-Yearly Financial Results | 2024 12 Progressive modernisation of technology c.€300m investment on average p.a. 2024-2026 ensuring a ‘future fit’ platform to deliver strategic priorities Customer channel experience Resilient & secure foundations  Business credit transformation un

13. Slide 13: Our purpose is to empower people to build a sustainable future

    AIB Group plc | Half-Year Financial Results | 2024 13 Our purpose is to empower people to build a sustainable future Strategy 2024-2026 is putting our purpose into action with three strategic priorities for H2 2024 and beyond… Customer First: Greening our Business: Operational Efficiency: Developing

14. Slide 14: Financial Performance

    AIB Group plc | Half-Year Financial Results | 2024 14 Financial Performance

15. Slide 15: Financial performance H1 2024

    AIB Group plc | Half-Year Financial Results | 2024 15 Financial performance H1 2024 Profit after tax €1,108m up 30% versus H1 2023  RoTE 25.5% versus 21.5% H1 2023 Total income €2,470m up 12%  Net interest income €2,075m (+18%); net fees and commissions €336m (+10%) Costs €947m(1) up 6%  Cost inc

16. Slide 16: Income statement – profit after tax €1.1bn

    AIB Group plc | Half-Year Financial Results | 2024 16 Income statement – profit after tax €1.1bn Summary income statement (€m) H1 2024 H1 2023 Net interest income(1) 2,075 1,753  Total operating income €2,470m up 12% Other income(1) 395 456 Total operating income 2,470 2,209  Operating expenses €9

17. Slide 17: Net interest income €2,075m; up 18%

    AIB Group plc | Half-Year Financial Results | 2024 17 Net interest income €2,075m; up 18% NII / NIM movements (€m) / (bps) NII €2,075m (+18%) from H1 2023 impacted by:  -€275m higher cost of liabilities including: €322m increase in NII; 34bps increase in NIM • -€145m customer accounts reflecting hi

18. Slide 18: NII outlook: continued momentum in 2024

    AIB Group plc | Half-Year Financial Results | 2024 18 NII outlook: continued momentum in 2024 NII resilience (€bn) NII 2024 guidance upgraded to c. €4.0bn from >€3.65bn NII c. 4.0  Assuming period end ECB deposit rate of 3.25% previously 2.75% 3.8  Low deposit beta(1) to date; to evolve throughout

19. Slide 19: Strong fee and commission growth driving other income

    AIB Group plc | Half-Year Financial Results | 2024 19 Strong fee and commission growth driving other income Net fee and commission income (€m) H1 2024 H1 2023  Other income €395m down 14% Customer accounts 127 119 Lending related fees 28 26 • Due to income from forward contracts included in H1 2023

20. Slide 20: Costs €947m; 6% increase due to inflation and enlarged Group

    AIB Group plc | Half-Year Financial Results | 2024 20 Costs €947m; 6% increase due to inflation and enlarged Group Operating expenses(1) (€m)  Costs €947m, up 6% mainly due to: 897 947 • Staff costs up 10%: Inflation, higher FTEs and introduction of health insurance along with increase in variable

21. Slide 21: ECL charge €61m (18bps CoR); 2.3% ECL cover

    AIB Group plc | Half-Year Financial Results | 2024 21 ECL charge €61m (18bps CoR); 2.3% ECL cover Loan book(1) by Staging & Coverage (€bn) 2.3% 2.3% ECL writeback / (charge) (€m) H1 2024 H1 2023(1) 67.0 68.9 Macroeconomic assumptions 35 16 3% 31% 3% 31% 11% 12% 8% 7% Credit performance (144) (45) PM

22. Slide 22: Balance Sheet

    AIB Group plc | Half-Year Financial Results | 2024 22 Balance Sheet

23. Slide 23: Balanced growth in customer loans and customer accounts

    AIB Group plc | Half-Year Financial Results | 2024 23 Balanced growth in customer loans and customer accounts Balance sheet (€bn) Jun 2024 Dec 2023 Assets Performing loans 66.7 65.0  Gross loans €68.9bn increased 3% Non-performing loans 2.2 2.0 Gross loans to customers 68.9 67.0 Expected credit los

24. Slide 24: Strong momentum in loan book growth

    AIB Group plc | Half-Year Financial Results | 2024 24 Strong momentum in loan book growth Net loans €67.4bn increased €1.9bn Gross loans (€bn) (€bn) CAGR + 4% (4.5) 68.9 + 4% +6.3 +0.3 (0.2) 67.0 4.7 67.4 4.1 5.6 5.9 65.5 17.5 17.9 Dec 23 New lending Redemptions NPE repayments FX/Other Movements Jun

25. Slide 25: Funding and capital

    AIB Group plc | Half-Year Financial Results | 2024 25 Funding and capital

26. Slide 26: Strong funding and liquidity reserves

    AIB Group plc | Half-Year Financial Results | 2024 26 Strong funding and liquidity reserves Total funding composition Customer accounts profile €bn €bn 131.6 131.7 53% of deposits 107.0 insured Corporate 104.8 + €3.6bn net 3.0 inflows into time 3.1 31.5 31.7 6.8 with stable 10.4 monthly run rate Per

27. Slide 27: Strong organic capital generation; CET1 15.5%

    (0.8 AIB Group plc | Half-Year Financial Results | 2024 27 ) Strong organic capital generation; CET1 15.5% CET1 material movements % RWAs (1.2) 1.9 (0.8) €59.5bn ((0.4) 0.2 €61.0bn 15.8 15.5 CET1 Dec 23 Capital generation Distribution accrual Proposed share RWA Other CET1 CET1 Jun 24 buyback CET1 mo

28. Slide 28: Capital Management: Pathway to >14% CET1 target

    AIB Group plc | Half-Year Financial Results | 2024 28 Capital Management: Pathway to >14% CET1 target CET1 outlook with pathway to >14.0% target For illustration 15.5% + + + - +/- - - >14.0% 2024-2026 CET1 Jun 24 Organic capital Basel IV SRT programme RWA growth Regulatory Ordinary Additional CET1 t

29. Slide 29: Guidance and Medium-term targets

    AIB Group plc | Half-Year Financial Results | 2024 29 Guidance and Medium-term targets 2024 Guidance 2026 Medium-term targets  Net interest income c. €4.0bn Cost(1) < €2.0bn  Other income >€700m with CIR <50%  Cost increase 6-7% plus once-off c. €25m  Cost of risk at the lower end of 20-30bps ra

30. Slide 30: Appendices

    Appendices AIB Group plc Half-Year Financial Results For the six months ended 30 June 2024

31. Slide 31: Market leading ESG customer propositions to support transition

    AIB Group plc | Half-Year Financial Results | 2024 31 Market leading ESG customer propositions to support transition Propositions ESG Ratings Green Mortgage for Sustainable project energy efficient homes finance across AIB, Haven, EBS for Clean Energy and brands & AIB UK Sustainable Infrastructure 1

32. Slide 32: Average balance sheet

    AIB Group plc | Half-Year Financial Results | 2024 32 Average balance sheet H1 2024 H1 2023 Average Average Volume Interest Yield Volume Interest Yield €m €m % €m €m % Assets Customer loans 67,034 1,344 4.02 61,219 1,116 3.68 Investment securities 17,636 433 4.93 16,255 303 3.77 Loans to banks / oth

33. Slide 33: Customer loans - cashflow

    AIB Group plc | Half-Year Financial Results | 2024 33 Customer loans - cashflow Non-performing €bn Performing Loans Customer Loans Loans Gross loans (1 Jan 2024) 65.0 2.0 67.0 New lending 6.3 - 6.3 Redemptions of existing loans (4.5) (0.2) (4.7) Net flow to NPE (0.4) 0.4 - Foreign exchange / other m

34. Slide 34: Loan book by staging and coverage

    AIB Group plc | Half-Year Financial Results | 2024 34 Loan book* by staging and coverage Jun 2024 Gross loan exposures & ECL (€bn) Stage 1 Stage 2 Stage 3** Total Exposure Mortgages 32.0 2.3 0.8 35.1 Loan book by staging – €68.9bn loan exposures Personal 2.3 0.7 0.1 3.1 Property & Construction 6.2 2

35. Slide 35: Loan book by sector

    AIB Group plc | Half-Year Financial Results | 2024 35 Loan book by sector Concentration by sector (%) Jun 2024 Jun 2024 Gross loans (€bn) Natural Resources 6 At amortised cost (excluding mortgages & personal) Stage 1 Stage 2 Stage 3* Total exposures Leisure 4 Property & Construction 6.2 2.6 0.7 9.5

36. Slide 36: Asset quality by asset class

    AIB Group plc | Half-Year Financial Results | 2024 36 Asset quality by asset class At amortised cost At FVTPL €bn Mortgages Personal Property Corporate & SME Total Total Total Jun 2024 Customer loans 35.1 3.1 9.5 21.2 68.9 0.1 68.9 Total ECL cover (%) 0.9% 4.4% 5.7% 2.8% 2.3% of which NPEs 0.8 0.1 0

37. Slide 37: Mortgages and personal lending

    AIB Group plc | Half-Year Financial Results | 2024 37 Mortgages and personal lending Total Mortgages Total Mortgages Dec 23 Jun 24 Dec 23 Jun 24 7% 2% 2% 7% 4% 4% 96% 96% 91% 91% €34.8bn €35.1bn €34.8bn €35.1bn Stage 1 Stage 2 Stage 3 Owner-occupier Buy-to-let ROI Mortgages* Personal lending Dec 23

38. Slide 38: Property and Corporate/SME

    AIB Group plc | Half-Year Financial Results | 2024 38 Property and Corporate/SME Property €9.5bn/ ECL cover 5.7% Corporate/SME €21.2bn Natural resources 2% Leisure Residential investment Manufacturing Student accomodation 44% 6% 14% 20% Health, education & social work 13% 27% Housing associations 4%

39. Slide 39: NPEs 3.2% of gross loans

    AIB Group plc | Half-Year Financial Results | 2024 39 NPEs 3.2% of gross loans Non-performing exposures (NPEs) Non-performing exposures €bn  NPEs €2.2bn; NPE ratio 3.2% at Jun 24 made up of: 21.6% • €0.7bn Property (32%) includes retail shopping centres Asset class NPE ratio • €0.8bn Mortgages (35%

40. Slide 40: Debt securities €17.8bn; primarily held for liquidity purposes

    AIB Group plc | Half-Year Financial Results | 2024 40 Debt securities €17.8bn; primarily held for liquidity purposes Debt Securities €bn 6.6 0.1 78% Irish 5.0 22% European 2.1 3.0 6.5 2.3 0.2 2.9 2.0 2.8 0.8 0.1 0.3 0.7 Bank securities Govt securities Asset backed securities Supranational banks and

41. Slide 41: Reported capital ratios

    AIB Group plc | Half-Year Financial Results | 2024 41 Reported capital ratios RWA Fully loaded Transitional Fully loaded Jun 24(1) Dec 23 Dec 23 Risk weighted assets (€m) Jun 24 Dec 23 Movement Total risk weighted assets (€m) 60,951 59,643 59,463 Credit risk 54,585 53,229 1,356 Capital (€m) Market r

42. Slide 42: Regulatory capital requirements

    AIB Group plc | Half-Year Financial Results | 2024 42 Regulatory capital requirements Regulatory capital requirements Jun 24 Dec 24* Dec 25* Pillar 1 4.50% 4.50% 4.50% Pillar 2 requirement (P2R) 1.46% 1.46% 1.46% Capital Conservation Buffer (CCB) 2.50% 2.50% 2.50% O-SII Buffer 1.50% 1.50% 1.50% Coun

43. Slide 43: Macroeconomic scenarios and sensitivities

    AIB Group plc | Half-Year Financial Results | 2024 43 Macroeconomic scenarios and sensitivities Macroeconomic scenario - Base 2024 2025 2026 2027 2028 Composition of balance sheet by interest rate type at Jun 2024* (%) Republic of Ireland 53% GDP growth 2.4 2.6 2.4 2.4 2.5 Interest Residential prope

44. Slide 44: Credit ratings

    AIB Group plc | Half-Year Financial Results | 2024 44 Credit ratings 30 Jun 2024 AIB Group plc (HoldCo) A3 BBB Long term issuer rating Outlook Positive Stable Investment grade   AIB p.l.c. (OpCo) A1 A Long term issuer rating Outlook Positive Stable Investment grade  

45. Slide 45: Contact details

    AIB Group plc | Half-Year Financial Results | 2024 45 Contact details Name Email Telephone Niamh Hore niamh.a.hore@aib.ie +353 86 3135647 Head of Group IR Siobhain Walsh siobhain.m.walsh@aib.ie +353 87 3956864 Head of Debt IR Bernie Glynn bernie.a.glynn@aib.ie +353 87 9195707 John McEvoy john.a.mcev

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