Mr. Richie Boucher:

The context which frames our meeting is one of change. As members will be aware, Bank of Ireland received an investment of €4.8 billion from the taxpayer. The bank has repaid that in full. We paid in excess of €6 billion in cash to the taxpayer and the taxpayer retains a valuable 14% discretionary shareholding in the bank. There are ongoing developments in the regulatory landscape at European level which relate to our sector, including the single supervisory mechanism for banks which officially came into being yesterday, 4 November 2014. As part of these reforms, the European Central Bank recently announced the results of its comprehensive assessment of 130 banks, including Bank of Ireland group. The overall result for Bank of Ireland confirmed that the group has passed the ECB comprehensive assessment with substantial capital buffers. With regard to the wider economy, we see a strengthening of the economic recovery. The latest Bank of Ireland economic outlook, which was published last month, projects growth of 4.2% for 2015, up from our forecast earlier this year of approximately 3.4%. The economy is, therefore, recovering more quickly than we anticipated. Our meeting is timely in that context.

We provided a comprehensive presentation to members in advance of our meeting, including an overview of the bank; a guide to our strategic objectives, an update on issues relating to the comprehensive assessment; our interim management statement, which issued on Friday and is the latest information we have provided to the market on our performance and prospects; and an overview of our main businesses as they relate to our Irish operations. We have also returned to the committee the answers to a range of questions. We have given as much detail as we can in answering these questions and we have also provided guidance on where the relevant information is listed in our annual reports. We have also supplied additional documentation in the form of various public announcements.

As a public company we make extensive disclosures on a wide range of issues through various formats and media. Given that we are 86% owned by the private sector, certain information is in our judgment commercially sensitive and due to our responsibilities to all shareholders and my duties as director, we have to signal that we strive to ensure members have the necessary and appropriate opportunity to understand our strategy. As a public company quoted in the London and New York stock exchanges, all information we have provided has been verified. As this is a public discussion and we have issued a public document on the bank's trading performance, I am obliged to say on record this is not a guide to future performance of the bank and is not a solicitation for people to buy stock in the bank.

The State's 14% discretionary shareholding in the bank is a matter for the Minister for the Finance. Under our approved EU restructuring plan, with all State aid having been repaid, the relationship between the Minister and the bank is governed by our relationship framework agreement, which recognises the bank as a separate economic entity managed on a commercial basis and engaging with the Minister in accordance with best institutional practice. Our goal for this meeting is to present to and discuss with the committee our performance and strategy based on the best institutional shareholder practice.

Slides 5 and 6 of our presentation summarises an extensive document and refers to a number of issues. Bank of Ireland has made considerable progress over the past 12 months, and certainly since we appeared before the committee 12 months ago. This has been assisted by the fact that the economic environment in our core markets of Ireland and the United Kingdom has continued to improve. We have completed the repayment of the taxpayers' investment and the taxpayers have made a profit. On today's market capitalisation of €9.7 billion, the 14% shareholding that the taxpayers have in the bank has a notional value of approximately €1.3 billion. It is a significant milestone on top of our repayment to the taxpayers that we are now profitable and generating capital. We have passed the ECB's comprehensive assessment with significant buffers. We have robust funding and capital ratios which provide both security and support for our strategic growth objectives. Our defaulted loans have decreased by €1.9 billion between June 2013 and September 2014, and our new lending is on target. Our Irish consumer, business and corporate banking target in our financial plan for 2013-17 is new lending into the economy of €33 billion.

In terms of the economy as a whole, our view is that it is going through the classic phases of an economic recovery in a restructured economy. The main feature that has emerged over the past 12 months has been that internal demand and consumption are complementing the growth in exports. Bank of Ireland is the largest lender into the Irish economy. We are the No. 1 bank for SMEs. Based on our information and verified analysis of Central Bank information, we have provided over 50% of new non-property lending to SMEs in 2014 to date. We have enjoyed particularly strong performance in our agriculture, motor finance and commercial finance businesses. We provide more than 50% of new lending to the agriculture sector. Bank of Ireland's corporate bank has a market share of more than 30% and well over 50% of foreign direct investment companies bank with us. We have a market share of approximately 25% of savings products. Our mortgage business in Ireland is providing one in every three new mortgages. Our life assurance business, New Ireland, is the No. 2 overall provider of life pensions and investments in Ireland. In Northern Ireland we have a universal bank offering. We have been through a significant cost restructuring programme to position ourselves in that market. We are determined to remain in Northern Ireland and to position ourselves to reflect the particular dynamics of that market. In Great Britain, through our partnership model with the post office we are one of the largest challenger consumer banking franchises. With 3 million customers, we have more customers in Great Britain than we do in our Irish businesses. In addition, we have a very profitable acquisition finance business which operates in the US and continental Europe and which has negotiated its way through a number of credit cycles utilising its cash flow lending expertise.

Slides 14 and 15 deal with the components of the new banking union. Members will have noted the results for Bank of Ireland, which confirm we have significant buffers. Slides 17 to 20 are directly extracted from the market announcement we made last Friday. I will not go through them other than to highlight that our revenue has continued to go up and our new lending is on target. The group has remained focused on tight cost control while we continue to invest in our people, businesses and infrastructure. We confirmed in our announcement that we are in the process of a ballot by IBOA represented staff on a comprehensive new career and reward framework which was recommended by an independent arbitrator. Our asset quality trends have continued to improve in line with our expectations. We believe this reflects the work we are doing and the overall improvement in the economy. The figure for total defaulted loans has decreased by €1.9 billion since June 2013 to €16.4 billion on 30 September 2014. We continue to generate capital at a significant pace and have seen an increase of 180 basis points in our common equity tier 1 ratio from 12.3% at the end of January to 14.1% at the end of September.

Slide 24 provides some information on our new lending in Ireland. It is not up-to-date to the end of September but in our September update we indicated that lending growth had continued at roughly the same pace. We can see where our lending growth has gone, particularly in our Irish business, in our SME business, in our corporate banking and our mortgage business.

Slide 26 shows a confirmation of the group's balance sheet at the end of September.