Annual ReportFor the year ended 31 December 2015

Annual Reportfor the year ended 31 December 2015

BOI Annual Report 2015 FRONT_Layout 1 24/02/2016 12:02 Page 1

This document contains certain forward-looking statements withinthe meaning of Section 21E of the US Securities Exchange Act of1934 and Section 27A of the US Securities Act of 1933 with respectto certain of the Bank of Ireland Groups (the Group) plans and itscurrent goals and expectations relating to its future financialcondition and performance, the markets in which it operates, andits future capital requirements. These forward-looking statementsoften can be identified by the fact that they do not relate only tohistorical or current facts. Generally, but not always, words such asmay, could, should, will, expect, intend, estimate,anticipate, assume, believe, plan, seek, continue, target,goal, would, or their negative variations or similar expressionsidentify forward-looking statements, but their absence does notmean that a statement is not forward-looking.

Examples of forward-looking statements include among others,statements regarding the Groups near term and longer term futurecapital requirements and ratios, level of ownership by the IrishGovernment, loan to deposit ratios, expected impairment charges,the level of the Groups assets, the Groups financial position, futureincome, business strategy, projected costs, margins, futurepayment of dividends, the implementation of changes in respect ofcertain of the Groups pension schemes, estimates of capitalexpenditures, discussions with Irish, United Kingdom, Europeanand other regulators and plans and objectives for future operations.

Such forward-looking statements are inherently subject to risks anduncertainties, and hence actual results may differ materially fromthose expressed or implied by such forward-looking statements.

Such risks and uncertainties include, but are not limited to, thefollowing: geopolitical risks which could potentially adversely impact the

markets in which the Group operates; concerns on sovereign debt and financial uncertainties in the

EU and the potential effects of those uncertainties on thefinancial services industry and on the Group;

general and sector specific economic conditions in Ireland, theUnited Kingdom and the other markets in which the Groupoperates;

the ability of the Group to generate additional liquidity andcapital as required;

property market conditions in Ireland and the United Kingdom; the potential exposure of the Group to credit risk and to various

types of market risks, such as interest rate risk and foreignexchange rate risk;

the impact on lending and other activity arising from theemerging macro prudential policies;

the performance and volatility of international capital markets; the effects of the Irish Governments stockholding in the Group

(through the Ireland Strategic Investment Fund) and possiblechanges in the level of such stockholding;

changes in applicable laws, regulations and taxes injurisdictions in which the Group operates particularly bankingregulation by the Irish and United Kingdom Governmentstogether with the operation of the Single SupervisoryMechanism and the establishment of the Single ResolutionMechanism;

the impact of the continuing implementation of significantregulatory developments such as Basel III, CapitalRequirements Directive (CRD) IV, Solvency II and the Recoveryand Resolution Directive;

the exercise by regulators of powers of regulation andoversight in Ireland and the United Kingdom;

the introduction of new government policies or the amendmentof existing policies in Ireland or the United Kingdom;

uncertainty relating to the forthcoming UK European Union In /Out referendum;

the outcome of any legal claims brought against the Group bythird parties or legal or regulatory proceedings more generally,that may have implications for the Group;

the development and implementation of the Groups strategy,including the Groups ability to achieve net interest marginincreases and cost reductions;

the inherent risk within the Groups life assurance businessinvolving claims, as well as market conditions generally;

potential further contributions to the Group sponsored pensionschemes if the value of pension fund assets is not sufficient tocover potential obligations;

the Groups ability to address weaknesses or failures in itsinternal processes and procedures including informationtechnology issues and equipment failures and other operationalrisk;

the Groups ability to meet customers expectations in mobile,social, analytics and cloud technologies which have enabled anew breed of digital first propositions, business models andcompetitors;

failure to establish availability of future taxable profits, or alegislative change in quantum of deferred tax assets currentlyrecognised; and

difficulties in recruiting and retaining appropriate numbers andcalibre of staff.

Analyses of asset quality and impairment in addition to liquidity andfunding are set out in the Risk Management Report. Investorsshould read Principal Risks and Uncertainties in this documentbeginning on page 61.

Nothing in this document should be considered to be a forecast offuture profitability or financial position and none of the informationin this document is or is intended to be a profit forecast or profitestimate. Any forward-looking statement speaks only as at the dateit is made. The Group does not undertake to release publicly anyrevision to these forward-looking statements to reflect events,circumstances or unanticipated events occurring after the datehereof. The reader should however, consult any additionaldisclosures that the Group has made or may make in documentsfiled or submitted or may file or submit to the US Securities andExchange Commission.

For further information please contact:

Andrew Keating Mark Spain Pat Farrell Group Chief Financial Officer Director of Group Investor Relations Head of Group CommunicationsTel: +353 76 623 5141 Tel: +353 76 623 4850 Tel: +353 76 623 4770

Forward-looking statement

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Annual Report - year ended 31 December 2015 1

Contents

Business review

Key highlights 3

Chairmans review 4

Group Chief Executives review 6

Operating and financial review 14

Risk Management Report 60

Governance

Corporate Governance Statement 122

Report of the Directors 135

Schedule to the Report of the Directors 137

Court of Directors 141

Remuneration report 148

Financial statements

Statement of Directors Responsibilities 157

Independent Auditors Report 158

Consolidated financial statements 167

Bank financial statements 295

Other Information

Group exposures to selected countries 348

Supplementary asset quality and forbearance disclosures