Transcript Career Framework Outline

AIB Investor Day
London, 8th November 2006
Meet the Management
Donal Forde
Managing Director - AIB Bank Republic of Ireland
Forward Looking Statements
A number of statements we will be making in our presentation and in the
accompanying slides will not be based on historical fact, but will be “forwardlooking” statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected in the forward looking statements. Factors that could cause actual
results to differ materially from those in the forward looking statements include,
but are not limited to, global, national and regional economic conditions, levels of
market interest rates, credit or other risks of lending and investment activities,
competitive and regulatory factors and technology change. Any ‘forward-looking
statements made by or on behalf of the Group speak only as of the date they are
made.
visit www.aibgroup.com/investorrelations
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2006
Positive environment
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Our prime competitive position
On course for strong full year profit performance
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2007 – 2010
Our medium term view
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Positive economic environment to continue
 Favourable demographics - inward migration driving strong
population growth
 Housing market supported by strong demand
 Strong public finances - potential for increased government
spending
 Savings ratio remains high - latent investment and consumption
potential
 Interest rate levels still relatively accommodating
 Inflation to fall below 3% by end 2007, 2-3% range thereafter
GDP growth of 5 - 6% in 2007, gentle moderation thereafter
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Competitive threats are manageable
Business Market - Threat from established Players
 AIB standing as primary Business Bank
 Relationship-based market
 Confident of sustaining our leadership position - recent momentum
reinforces that confidence
Retail Market - Threat from New Players (Den Danske / HBOS / Fortis)
 AIB underweight in many Retail product lines
 Less “incumbent” mindset - more attacking posture
 Focus on Personal Deposits, Consumer Lending, Life & Pensions,
General Insurance & Mortgages
Market repositioning in 2006 as early execution of this strategy
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Upgrading distribution and operations capability
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Branch channel
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Internet & telephone channels
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Accelerated internet recruitment
Centralised telephony
Channel-exclusive product and price propositions & stronger sales focus
Extending our distribution network
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More radical centralisation of support / administration / account maintenance / telephony /
credit management
Heavy promotion of self-service / assisted-service banking
Targeting 25% increase in relationship management / sales capacity
Focused on business / premium-personal customers
Hibernian relationship / AA alliance
Mortgage intermediaries
Significant technology investments
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New banking platform
New data centres
New core banking system
Driving sales momentum, cost efficiency and service differentiation
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Focus on wealth management
 High growth potential
 Close gap in market share v natural share of client
relationships
 Actions / initiatives
 JV product suite targeted at base / centre of customer
pyramid
 Revitalised AIB wealth proposition targeted at emerging
wealth / top of customer pyramid
 Integrated distribution team / substantial investment in
technology, training and performance oversight
 Q3 performance very encouraging
Targeting €100m increase in profit by 2010
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2007 – 2010: what you can expect from us
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Irish market loan and deposit growth to be significantly ahead of European peers
 AIB targeting above market growth in both loans & deposits
 Significant market share gains in investment sales, pensions & general insurance
 Product margins
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Improving in deposits
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Stabilising in business and consumer lending
Mortgages reducing to c. 80 bps
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Costs
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Current core cost growth is 6 – 7%
Investment to sustain growth will add to this level
New pay structure increases variability
Over-riding discipline is positive jaws target of 3%
Asset quality
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Confidence underpinned by economy, demographics and underwriting stance
Superior growth / productivity in outperforming market
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In summary
2006
 On course for strong performance
2007 - 2010
 “Ireland Inc.” to outperform European peers
 AIB - sustaining its no.1 position in business market
- attacking underweight retail lines
 Investing in improved distribution, upgraded operations and
wealth management
 Confident that we will continue to outperform
Continuing double digit profit growth
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