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Shareholder Information Meeting

Shareholder Information Meeting. Radisson Penn Harris Hotel & Convention Center, Camp Hill, Pennsylvania , Monday, April 28 th , 2008. Forward looking statements.

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Shareholder Information Meeting

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  1. Shareholder Information Meeting Radisson Penn Harris Hotel & Convention Center, Camp Hill, Pennsylvania, Monday, April 28th, 2008

  2. 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 “forward-looking” 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. The following commentary is on a continuing operations basis. The growth percentages (excl. EPS) are shown on an underlying basis, adjusted for the impact of exchange rate movements on the translation of foreign locations’ profit and excluding interest rate hedge volatility. visit www.aibgroup.com/investorrelations

  3. Agenda • Introduction and welcome • AIB – overview of 2007 and performance highlights • Shareholders’ questions AIB participants • Dermot Gleeson, Chairman • Eugene Sheehy, Group Chief Executive • Alan Kelly, General Manager • Ann Kerman, AVP, Shareholder Relations

  4. Dermot Gleeson Chairman

  5. Performance highlights Basic adjusted earnings per share up 13% Increased operating profit in all divisions 57% of profit generated outside Republic of Ireland Continued investment in quality and efficiency Selective acquisitions in Central Europe

  6. +10% +10% +10% +10% +10% Progressive dividend policy • 2007 total dividend per share up 10% to 79c • Compound growth of 10% per annum over 5 years • Dividend per share up over 60% in 5 years

  7. US$ dividend performance • 2007 total cash dividend per ADR up 24% to $2.37 • Dividend per ADR up over 130% in 5 years +24% +18% +7% +20% +22%

  8. Financial markets turmoil • Origins in U.S. sub-prime mortgages • Emerged with weakening of U.S. economy and housing market • Led to higher default rates on sub-prime and other mortgages • Decline in value of assets led to large write-downs by manyfinancial institutions • Resulted in severe tightening of liquidity in wholesale funding markets • Critical source of funding for banks and their capacity to lend • Uncertainty damaged confidence in stock markets • Sharp fall in share prices

  9. AIB’s solid capital position AIB Regulatory min. AIB Regulatory min. No requirement for recourse to shareholders

  10. AIB’s strong funding diversity Stable Customer deposits –48% Capital – 9% At 31 December, 2007, the combined value of our customer accounts (c. 2m customers) and funding maturing after H1, 2008 equated to 94% of customer loans Wholesale funding – 43%

  11. AIB’s robust asset quality Dec 2006 Dec 2007 0.9 Impaired loans % 0.8 4.9 Criticised loans / total loans % 5.3 0.44 Gross new impaired loans % 0.45 76 Total provisions / impaired loans % 71 12 Bad debt charge bps 9 • Resilient and diverse property & construction portfolios • Low level exposure to assets affected by global market dislocation • 2008 guidance – bad debt charge of c. 20 bps

  12. Irish economy • Slower level of growth in 2008 • Adjustment in housing market to more sustainable levels a major contributor to slow down • seen by most economists as a necessary adjustment • most predicting return to higher and better balanced growth levels from 2009 • Adjustment has led to concerns over Irish banks exposure to mortgage / property & construction sectors

  13. AIB’s solid / resilient residential mortgage portfolio • Primary emphasis on repayment capacity • all applications stress tested at higher interest rates • policy on loan to value remains conservative • Arrears in portfolio remain low • 0.36% of portfolio in 2007

  14. AIB’s property & construction portfolio is well diversified Group ROI* Commercial Investment 41% 34% Residential Investment 9% 7% Commercial Development 18% 22% Residential Development 29% 34% Contractors 3% 3% Total 100% 100% Balances €m €46.4bn €27.8bn * AIB Bank ROI Division

  15. Northern Ireland – 9% Great Britain – 27% Republic of Ireland – 55% U.S.A. – 3% Poland – 3% Other – 3% AIB’s property & construction assets well spread geographically 45% of exposure relates to assets located outside Republic of Ireland

  16. Eugene Sheehy Group Chief Executive

  17. Ireland North America Geographic profile - December 2007 PBT 48% Assets 70% Shareholders 37% PBT 28% Assets 20% Shareholders 20% UK Rest of World PBT 1% Assets 1% Shareholders 2% European Shareholders (ex Ireland & UK) 14% PBT 7% Assets 3% 24.3% stake in M&T Bank Shareholders 28% PBT 16% Assets 7% Poland Institutional shareholders 69% Retail shareholders 31%

  18. Economic outlook GDP % 2007 (e) 2008 (f) Ireland 5.3 2.2 UK 3.1 1.8 USA 2.2 1.3 Poland 6.4 5.5 Eurozone 2.7 1.5

  19. AIB Bank Republic of Ireland  14%operating profit • Very strong and deep competitive position • Consistent growth/maintenance of market share again in 2007 Business lending  25% - gaining market share Personal lending  11%- gaining market share Home Mortgages  14% - maintaining market share Deposits  3% - gaining market share • Significant Wealth Management opportunity • On track to deliver €150M profit by 2010 (from €50m in 2006) • Strong Private Banking performance; loans & deposits both up over 25% • Investment and Protection APE  34% • Continuing to improve efficiency; cost / income ratio 48% (49.6% in 2006) • Solid asset quality, impaired loans 0.7% (0.6% in 2006) • Heavy investment in our franchise throughout period of income buoyancy • Well positioned to continue outperformance in tougher times

  20. Corporate Banking • c. 76% of division’s profits (c. 79% earned internationally) • Significant growth in business volumes – loans  30% • Continued focus on carefully chosen market and sectors • Conservative risk appetite, impaired loans 0.3% (0.6% 2006) Global Treasury • Extremely difficult market conditions • Strong performance in customer services, income  35% • Highly controlled risk environment Investment Banking • Operating profit  50% pre sale of trade investment • Asset management & stockbroking key contributors Capital Markets  6%operating profit • Performance underlines customer demand driven nature of our business • Strong, sustainable, recurring income streams • Income write downs of €131m absorbed in unprecedented market conditions • Strong focus on efficiency, cost / income ratio 47.1% (45.9% in 2006) • Tougher market conditions present opportunities Income analysis

  21. AIB Bank United Kingdom  20%operating profit • Well managed, balanced growth • Continued efficiency gains, cost / income ratio 44.1% (45.9% in 2006) • Solid asset quality, impaired loans 1.1% (0.9% in 2006) Great Britain PBT €249m  20% • Driven by success in business banking in chosen mid-market sectors • Deposits growing strongly across business markets and associated private banking • Increased investment in front line people products and service delivery Northern Ireland PBT €203m  20% • Network reconfigured to sharpen focus on market opportunity • Enhanced product suite – successful marketing initiatives

  22. Poland  29%operating profit • Strong well spread growth across sectors & product lines • Business lending  32% • Retail cash lending 47% • Mortgages 43% • Deposits 26% • Mutual funds  32% • Brokerage services income  41% • Business & personal banking momentum growing • Maintaining strong market positions in asset management and brokerage • Continued efficiency gains, cost / income ratio 60.4% (61.1% 2006); legal entity 53.2% GDANSK SZCZECIN WARSAW POZNAN LODZ WROCLAW KATOWICE KRAKOW • Further improvement in asset quality, impaired loans 2.8% (4.9% 2006) • Major investment programme; driving for 10% market share • 1,100 people added in 2007, further front line recruitment in 2008 • 34 branches added in 2007, now opening 1 per week • Further investment in corporate / SME business centres, banking and customer channels

  23. Service Quality Operational Excellence Managed Cost Risk Single enterprise update Our agenda November 2006 Status Practical first steps Datacentre Relocation One Network (VoIP) XP Desktops Infrastructure upgrades Completed Completed Completed Completed Transforming to support future growth Operating model consolidation Wholesale Core Banking Retail Core Banking Credit decision and support On target On target On target On target • Key business benefits achieved / on target • Past peak point of expenditure, costs now moderating Regulatory agenda Basel II SOX SEPA EU Savings directive Anti Money Laundering Consumer Credit Act Complaints Management Completed Completed Completed Completed Completed Completed Completed

  24. M&T  7% • Good relative performance; significantly affected by highly challenging US environment • Maintaining conservative credit philosophy • $127m write down of $131m sub-prime exposure • Prudent approach to other residential real estate exposure, including Alt-A • Allowance for credit losses increased to 1.58% of loans • Good loan growth in H2 with wider credit spread • Market positions strengthened by acquisitions • Partners Trust & First Horizon • Experienced management, resilient business model well prepared for tough times

  25. AIB ADR Performancefrom April 2003 to April 2008 Total Shareholder Return (annualised) AIB ADR 13.0% (share price  45%) Fulton Bank 1.2% (share price  16%) Sovereign Bank -7.7% (share price  40%) PNC 12.7% (share price  48%)

  26. Our key characteristics growth, resilience, efficiency & diversity • Premium positions in chosen markets • Recurring and sustainable income from strong customer franchises • Consistently exceeds 95% of total profit • Flexibility to align cost with income • Continuing to invest for growth • Prudent lending policies and practices preserve good asset quality • Credit cost trends in line with our expectations • Solid capital and funding positions • Business growth and shareholder distribution plans well supported

  27. +353-1-660 0311 +353-1-641 2075 Contacts Our Group Investor Relations Department will be happy to facilitate your requests for any further information Alan Kelly alan.j.kelly@aib.ie +353-1-6412162 Rose O’Donovan rose.m.o’donovan@aib.ie +353-1-6414191 Pat Clarke patricia.m.clarke@aib.ie +353-1-6412381 Maura Hodnettmaura.n.hodnett@aib.ie+353-1-6413469 Visit our website www.aibgroup.com/investorrelations

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