2018 Credit Presentation

Capital Guidance and Distribution Policy 2018 Credit Presentation Capital Guidance • The Group expects to maintain a CET1 ratio in excess of 13% on a regulatory basis and on a fully loaded basis by the end of the O-SII phase-in period¹ Distribution Policy • This includes meeting applicable regulatory capital requirements plus an appropriate management buffer • The Group expects that dividends will increase on a prudent and progressive basis and, over time, will build towards a payout ratio of around 50% of sustainable earnings • Dividend level and rate of progression will reflect, amongst other things: Strength of the Group's capital and capital generation; - Board's assessment of growth and investment opportunities available; Any capital the Group retains to cover uncertainties; and Any impact from the evolving regulatory and accounting environments • Other means of capital distribution will be considered to the extent the Group has excess capital Proposed Dividend Proposed dividend of 16 cent per share / €173m in respect of 2018, increased from 11.5 cent per share / €124m in 2017 1 The Other Systemically Important Institution (O-SII) buffer will be introduced at 0.5% in July 2019, increasing to 1.0% in July 2020 and 1.5% in July 2021 Bank of Ireland 48

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