Allied Irish Banks : AGM Opening Address by the Chairman of Allied Irish Banks, p.l.c., Richard Pym

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Good morning ladies and gentlemen and welcome to our Annual General Meeting. My name is Richard Pym, and I am the Chairman of AIB.

We have a quorum, so I now formally open the Meeting.

The Notice of the Meeting was posted to Shareholders on the 24th March 2017, and so I suggest, with your agreement, that we dispense with its formal reading. Thank you.

I'm joined, nearest to me, on the platform by Bernard Byrne, our Chief Executive Officer, Mark Bourke, our Chief Financial Officer, Sarah McLaughlin, our Company Secretary and Helen Dooley, our Group Legal Counsel.

The other Directors are present in the room and I'll be including them in proceedings when we come to the resolutions later. They will each provide you with a brief summary of their experience for their role on the Board.

We issued a Trading Update to the markets this morning. Bernard will give an overview of that update and of the Bank's performance in 2016 later in the meeting.

We will also have a short video highlighting some of the Bank's activities during the past year.

We are also joined today by Tom Potter who is Head of Customer Care in AIB, together with members of his team. Tom you might stand up - Tom will be pleased to help any customers with queries relating to their banking business with AIB.

As you entered the room today you may have noticed some paintings which are works drawn from the AIB art collection. This collection was accumulated over 30 years up until 2008 and we are very proud of the role it played in supporting Irish artists in that period. It is now a national collection of which we are the custodians, and it is regularly on display in venues, including hospitals and public institutions, around the country. We had some requests from shareholders last year to show you some of the collection, and that's why it's on display today. We have here a number of paintings depicting various landscapes of Ireland. We are joined by our colleague Maureen Porteous who oversees the collection and who will be happy to act as a guide at the end of the meeting. She has an encyclopaedic knowledge of Irish art.

With that I would like to turn to the first formal part of our proceedings, namely the Independent Auditors' Report to the Members.

This is set out on pages 214 to 220 of our 2016 Annual Financial Report, copies of which you will have seen available at the entrance to the meeting.

As you are aware, the Auditors' Report is very detailed.

Gerry Fitzpatrick from our Auditor, Deloitte, is present here this morning, however I propose that, with the consent of the Meeting, we take the Auditors' Report as read.

[Assuming no disagreement…] Thank you.

2016 was a successful year for AIB with a profit before tax of €1.7 billion. On the political front though, 2016 was a year of surprises. Of most relevance to Ireland and to AIB was the decision by our nearest neighbour, the United Kingdom, to leave the European Union. The long term implications of this decision are unknown but more immediately the decision led to a fall in the value of the pound. AIB's primary focus in respect of Brexit has been to work with our customers to deal with these currency fluctuations and other business uncertainties as they arise. We now have a team of Brexit advisors around the country available to help customers plan for this new challenging environment.

Notwithstanding the upcoming Brexit, the Irish economy has continued to perform strongly. As a stable and financially strong institution AIB is well positioned to play its role in supporting Irish businesses through all the economic cycles.

Our own recovery has been achieved through enormous taxpayer support and as such returning the taxpayers' investment of €20.8 billion in full, over time, remains a key ambition of the Bank. In July 2016, on the maturity of our Contingent Capital Notes, the Bank made a capital repayment to the State of €1.6 billion, together with a coupon payment of €160 million. More recently the Board has proposed a dividend on the ordinary shares of €250 million demonstrating that the financial recovery of the Bank is on a firm footing. The dividend payment will bring our total payments to the State to

€6.8 billion.

We recognise that many private shareholders have ended up with as little as just one share after the effective nationalisation of the bank in 2011, which left the existing shareholders with a purely nominal shareholding. One consequence of now paying a dividend is that we are mailing out circa 54,550 cheques for less than 50 cents of dividend which looks very silly and very wasteful. However, we do have an obligation to pay this amount. We will be making arrangements so that AIB dividend cheques presented over the counter at any AIB and EBS branch can be cashed without charge (subject to presentation of valid photo-identification).

No doubt many of the cheques which we issue will remain uncashed and over the medium term we hope to work with a charitable organisation called ShareGift which will enable the Bank to donate any uncashed dividend proceeds and facilitate shareholders should they wish to gift their shares to charity. Recognising that we will save shareholder registration charges, we will offer in addition, a

charitable financial incentive where shareholders choose to gift their small shareholdings. More details will be mailed later in the year.

Over the last number of weeks you will have seen media coverage that the Minister for Finance has appointed a syndicate of banks to prepare for the potential sale of some of the State's shareholding in AIB. Any decision is in the hands of the Minister, but the Bank will be ready when he decides and a successful conclusion would be another important step in the rehabilitation of AIB.

I will now pass over to Bernard, then we will show the short video which I referred to earlier. Thank you.

[Following Bernard's update and the video…] Thank you Bernard.

We now come to the formal part of the meeting, where we consider and vote on the resolutions. There are 21 resolutions to be proposed in total, which seems high but is due to the need to treat the proposed resolutions regarding the re-election of each Director as separate resolutions.

You will have an opportunity to ask questions in a few moments, but if for some reason you don't get the chance or would prefer to ask your question in a less public setting, the Directors will be joining you for refreshments following the meeting so you can put your questions to any of us at that stage.

I will propose the 21 resolutions in one section and then take questions in relation to all 21 resolutions when that's done. You are entitled to ask any question on any resolution in that question section. I hope this makes it easier.

Before I propose the resolutions, I'll ask the Directors to introduce themselves to you. This year, all Directors will retire from office and offer themselves for appointment or re-appointment.

[Commencing with the Chairman, Directors stand and speak in the order in which seated…] Thank you.

The Board is confident that all Directors are experienced and knowledgeable and that each Director being proposed will continue to make a valuable contribution and provide an objective perspective in discharging their duties as a Director.

Biographical information in respect of each Director seeking re-appointment is included in the Shareholders Report.

The Board believes that it is important that the intentions of all shareholders who register a vote are taken into account and therefore I am calling a poll on each of the resolutions proposed. We will be voting by poll on each of them, separately, at the end of the meeting. In that way, all the proxies received prior to the meeting will be taken into account.

We will come to the questions after I have read the resolutions.

1. The first resolution on the agenda relates to the 2016 Annual Financial Report, in relation to which I propose:

   "that the Annual Financial Report, including the Directors' Report and Auditors' Report, for the year ended 31st December 2016 be received."

2. The second resolution relates to the declaration of a final dividend. So I propose:

   "That a final dividend, of 9.21 cent per ordinary share for the year ended 31 December 2016 (subject to rounding up, per holder of ordinary shares, to the nearest whole cent), be declared".

3. The next item is the appointment and re-appointment of Directors. So I propose, as separate resolutions, that each of

   • Carolan Lennon;

   • and Brendan McDonagh be "appointed" a Director;

     and similarly that each of

   • Simon Ball

   • Mark Bourke

   • Bernard Byrne

   • Tom Foley

   • Peter Hagan

   • Helen Normoyle

   • Jim O'Hara

   • Michael Somers

   • and Catherine Woods

     be "re-appointed" a Director

     I'll ask Bernard to propose the motion for my re-appointment.

   • Bernard Byrne: I propose that Richard Pym be re-appointed a Director.

     Thank you Bernard.

4. The next item is the Auditor's Remuneration.

The work of the auditor, and the level of the audit fees, are reviewed on behalf of the Board by the Audit Committee. That Committee is satisfied with the effectiveness of the Auditor, and that the fees are appropriate.

The Auditor, Deloitte, Chartered Accountants and Registered Auditor, has signified agreement to continue in office for the 2017 statutory audit.

I am pleased, therefore, to propose:

"That the remuneration of the Auditor in respect of the year to 31st December 2017 be such sum as may be agreed by the Board".