Mr. Richie Boucher:

Since we last met the joint committee, 2013 was a year in which there was significant progress for the group. Our strategic shape was maintained. We addressed the preference share issue, from which we incorporated a repayment of €1.8 billion to the taxpayer. We managed our exit from the eligible liabilities guarantee, ELG, scheme. We have achieved our net interest margin target and enhanced our net interest margin. We have continued to significantly reduce our costs, while investing in our businesses, our people and, in particular, our IT infrastructure. A feature of last year was our access to the funding markets right across our capital structure. Of particular relevance to the committee are the asset quality improvements we saw in the period, with a €1.2 billion reduction in defaulted loans. The Central Bank and some third parties conducted an asset quality review, AQR, balance sheet assessment, BSA, on behalf of the troika in the last quarter of the year, which we addressed in our year-end financial figures.

We had and still have a deficit in our defined pension benefit schemes, but we agreed with the various stakeholders that there would be some changes to benefit arrangements to address this. We ended the year with a strong capital ratio, a significant change in our financial performance and are now profitable and generating capital. There is ongoing improvement in the financial performance and the earnings power we are rebuilding in the company. Each of our four principal businesses is seeing improvement in financial performance, each half year, in particular our retail Ireland business. We have worked to continue to manage our cost base, including staff and other costs. The arrangements we have made with stakeholders will improve the pensions position.

We have a very significant business in Ireland but we also have roughly 46% of our assets outside the Republic of Ireland, primarily in the UK. The next slide shows the enhancements and improvements in our defaulted loans, reflecting an improvement in the economies in which we operate - the UK, the US and in Ireland. The work we have done in restructuring customer loans has begun to be reflected in our financial figures.

The next slide notes the position with regard to our SME loans, the Irish SME book. The number of defaulted loans has decreased, provision coverage has increased and we have end-state strategies agreed with nine out of ten of our challenged customers, thereby meeting the targets that the Central Bank of Ireland agreed with us.

The next slide shows what we have been able to achieve across the capital structure, while the next but one shows our business in Ireland. We have a very strong franchise position, with approximately 250 branches and more than 1,700 ATMs and self-service devices, and a very significant take-up of our online propositions and new banking propositions for our customers. We have significant market shares in consumer banking in that we did four out of ten new mortgages in 2013. We have significant life assurance business through New Ireland. We provided half of new SME property lending in the market in 2013 and that is reflected in our customer relationships.

I ask the committee to note the significance of our franchises outside of Ireland and in particular our relationship with the UK Post Office, which is a very attractive opportunity for us.

We have stated in our financial forecasts and capital plans for the period to the end of 2017 that Ireland is our core business and that to achieve our objectives and goals in our core business we need to meet lending targets for the economy that we have set for ourselves. We are receiving more than 1,000 credit applications per week from the SME sector. We approved €4 billion in new and increased funding. Bank of Ireland's case is that the only figures we count here are new and increased lending. We have supported almost 16,000 start-ups and we are on track to achieving our objectives. We receive about 1,000 applications a week in new business for home mortgages and we approved €2.2 billion in mortgage facilities in 2013. Our ambition is for gross new lending to home owners and consumers of about €12 billion in the period 2013 to 2017.

The significant improvement in our own financial performance has facilitated us in repaying taxpayers' investment in Bank of Ireland at a significant cash profit to the taxpayer, and the taxpayer continues to own a 14% share holding in Bank of Ireland, which is worth somewhere in excess of €1 billion as of today.

I will ask my colleague Stephen Mason to speak about the mortgage arrears situation.