Harry Lorton, CEO

Complementarity of TSB & Irish Permanent

Distribution reach & product breadth

Exclusively Ireland & retail focus

Opportunity to offer alternative to BOI/AIB duopoly

Creation of 3rd Banking Force

Mortgages 23%+

Savings 12%

Current Accounts 10%

New Car Finance 20%

Life & Pensions 20%+

Customer Base of over 1 million

A Powerful Competitive Force

Multi-Channel Mortgage Distribution

Branches 43%

Agents 7%

Brokers 45%

Life Salesforce

5%

Integration of I.T. platform

Pace & extent of HR change agenda

Compatibility of cultures

Customer retention & service

Creating a New Bank - Challenges

Business as usual

Implementation Plan - Timeline

IPIP TSBTSB

Self-service banking

Single view of customer

PTSBPTSB

PTSBPTSB

Deg

ree

of

Ch

ang

eD

egre

e o

f C

han

ge

20012001 June 2002June 2002

Organisation changes

Infrastructure to support integration project

Organisation changes

Infrastructure to support integration project

2003 and beyond2003 and beyond

To LaunchTo Launch

Rebranding

Branch Amalgamations

Steady StateSteady State

PTSBPTSB

End GameEnd Game

Dec 2002Dec 2002

Centralisation of broker business

Centralisation of mortgage processing

Piloting self-service banking

Back book conversion to Unibanks

Single product set

New Business conversion to Unibanks system

IT Integration - Timeline2001 2002

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Q2 Q3 Q4TASKS

Branch Technicalinfrastructure

Financial ‘Bridge’

Branch Rollout

Lending consolidationpre launch

Lending consolidation& conversion

Non lendingconsolidation

Training support

Head Office systemsconsolidated

Premises transition

Technical Infrastructure

Self Service Banking

CommentsDuration(mths)

5

5

6

10

6

9

2

8

7

6

18

Branch TI & Financial ’bridge’ nowlive

Branch rollout complete

Gap closure more complex thanoriginally envisaged, TABScontingency invoked

Delayed start as a result ofadditional gap closure issues

June conversion completed

Complete

GL, payroll and internet completed

Phase 1 and 2 completed

Complete

Pilot scheduled this year

Integration Programme - GovernanceIntegration Steering Group

Integration Executive

Programme Management

(Incl. Benefits Tracking & Communications)

Branding

Premises Transition

IT Infrastructure

IT Applications

HR Transition

Products

Sales & Distribution

Customer Services

Risk

Head Office Functions

I.T. Agenda

Single base platform - “Unibanks” real time customer centric single customer view

“Layered” applications architecture independent of platform add applications / functionality

CRM strategy single customer databases work to be done on ‘cleansing’ data incrementally add cross-channel CRM capability

H.R. Transition Population of new management structures

Comprehensive training programme products systems

Reduction of over 500 staff

Harmonisation of T&Cs

Buoyancy of business offsetting “change fatigue”

Bancassurance - Structures

CEO BankCEO Bank

Regional ManagersRegional Managers

CEO LifeCEO Life

Branch ManagersBranch Managers

Branch StaffBranch Staff

Head of BancassuranceHead of Bancassurance

BancassuranceConsultants

BancassuranceConsultants

Bancassurance - Implementation

Building branch consultant salesforce currently 65

target 80

Training of 800 branch staff competency testing

licensing co-ordinators

Bancassurance - Implementation

Integrated technology support Siebel - consultants now

- branch staff to follow

open diary system for consultants

ePoS to follow

database (IL/ptsb) for marketing campaigns

Bancassurance Performance

Excellent 2001 outcome sales up 95% in combined / network despite major disruption & uncertainty

2002 SSIA campaign - life product 36% of bank sales (versus 15-20% for market)

Target to double (2001) volumes by 2004

Mortgage Lending - Market

Strong fundamentals

Rebound from slowdown in H2 2001

Increased competition between domestic players

Margins stabilised

No deterioration in credit quality

Mortgage Lending Key product segment

profitable low risk cross-selling opportunity

Multi-channel distribution branches - leverage off Irish Permanent brand intermediaries - centralised/dedicated channel

Targets business as usual during integration all branches up to I.P. level of productivity

Other Lending

Consumer Finance new car sales biggest component

registrations down

adding to distribution

Business / commercial targeting smaller end of SME sector

selective on commercial lending

increasing capability

Resources / Deposits

Building on strong TSB franchise

Benefit of inertia in low interest rate environment

Targeting increased share of customer accounts

Packaged offering to attract account transfers

Cost Agenda

Deliver merger synergies of €27m by 2003

Target further cost reductions in 2004 additional €10m in savings keep costs at 2002 level

Continue to drive down costs towards target 50% ratio

Merger Cost Savings

2002 2003 2004€m €m €m

Staff 9 18 23

Overheads 5 9 9

Depreciation on capital (4) (5) (5)

10 22 27

Banking Cost Ratios

Actual EstimatedTarget

2001 2002 2004% % %

Cost*/Income

• Reported 65 65 55

• Incl. bancassurance VNB 60 58 49

Costs*/assets 1.3 1.2 1.0

* operating costs

Banking Margins

Residential mortgages - competitive

Retail deposits - will benefit from increase in rates

Consumer finance - steady

Treasury - lower contribution going forward

Summary

Tremendous progress on merger of two banks

On target to deliver synergies

Challenging cost agenda

Opportunities in banking and bancassurance

A LOT DONE, MORE TO DO