Bank of Ireland Group plc

Good morning, everyone. I'm Eamonn Hughes, Investor Relations Officer, and you're all very welcome to Bank of Ireland's 2025 results and strategy update. Myles will shortly take you through an overview of our business and how it performed over the last cycle. Mark will then go through the key points from our 2025 financial results. And then we'll turn to our strategy update, covering our plans for the next three years to 2028. We'll then wrap up with the investment case for the group and open to the floor for your questions. Over to you, Miles.

Good morning, everyone, for those with us in person in London and those on the call. You're very welcome to our 2025 results and strategy update. I'd like to start by giving you an overview of the unique shape and deep reach of Bank of Ireland's franchise. Put simply, we have an unrivaled position in Ireland with complementary international businesses. What you see on the first slide is that unrivaled position across mortgages, everyday banking, corporate and commercial lending, and welcome insurance. Our position is underpinned by four long-established respected brands, Bank of Ireland, Davey, New Ireland, and Bank of Ireland UK. This embeds the group into every community in Ireland, its economy, and indeed its society. This is key to our growth over the coming years, complemented by supportive businesses outside of Ireland. Being embedded in Ireland means being embedded in one of Europe's fastest-growing economies. This is a highly attractive market driving balance sheet growth. Ireland's average annual GDP growth is forecast to be 3% out to 2028, and its demographics are also highly supportive. These include a population expected to increase by 17% by 2040, the structural growth story in wealth management, sustained credit formation, and at this point, private sector credit grew 6% last year, and Ireland's national development plan. This plan aims to drive Ireland forward with a $275 billion public investment in infrastructure, unlocking economic and balance sheet growth. We're also mindful of the risks presented by the geopolitical uncertainty. Ireland is navigating these risks well, with a resilient and growing economy. Healthy public finances can help to shield against volatility, and Bank of Ireland's strong balance sheet is well positioned to manage potential future challenges, underpinning a bright future for the group. Bank of Ireland's unrivaled position in Ireland and the strength of the Irish economy come together on slide eight. This combination is driving outstanding business performance. Over the past three years, new-to-bank customers increased by 18%. We have significantly improved customer satisfaction. This is being supported by the bonitude momentum you see here. Our Irish loan and deposit book grew 6% in 2025, while wealth assets under management increased by 9% to an all-time high. Capital generation was 270 basis points last year, bringing the total over the cycle to 920 points. That's 5 billion of capital generation. On slide 9, we recap on the returns profile since 2022. In early 2023, we committed to a range of financial targets which have been delivered. That's ROTI, Cost Income Ratio, a progressive dividend and returning surplus capital. This performance has supported strong distributions, totaling 3.6 billion over the last cycle, equivalent to 37% of our starting market capitalization. And for 2025, this includes 1.2 billion of distributions, which equates to 100% total payout of earnings, comprising a progressive dividend per share of 70 cents and the 530 million approved shareback we are announcing today. We enter 2026 and our new cycle to 28 with real momentum and strong capital generation. And I'll share more on this with you shortly. For now, I'll pass over to Mark, who will take you through last year's financial performance.

Thanks, Miles, and good morning, everyone. We've had a strong financial performance in 2025. Slide 12 sets out the key highlights, including efficiency. continued momentum in Irish loans and deposits, both up 6%, growing fee income, led by our wealth and insurance franchise, ongoing cost discipline, and robust asset quality. All of these contributed to capital generation of 270 basis points and support total shareholder distributions of 1.2 billion. Subject to shareholder approval, the ordinary dividend would be 70 cents per share, up 11% compared to last year, reflecting our confidence in the bank's prospects. We've had a good NII performance in 2025, with balance sheet growth, bond purchases, and our structural hedging helping to counter the impact of lower interest rates and planned deleveraging. We expect NII to grow from 2025 levels to around 3.4 billion in 2026, above our expectation of the pi-3-3s. The key dynamics here are business momentum and hedging playing remaining interest rate and deleveraging impacts, including our recently announced intention to run down our US acquisition finance book. We expect stronger growth in 2027, where we are upgrading our prior guidance of the mid three fives with NII of greater than 3.6 billion now expected. As part of our strategy update, we've published new guidance for 2028 today, with NII of greater than 3.85 billion expected, with the potential for further upside beyond. The support of Irish macro backdrop that Miles spoke to earlier, and the breadth of our franchise, both contributed to the strong growth in Irish loans in 2025. Our Irish mortgage business had another excellent year, with a greater than 40% share of new lending for the third year running, while retaining our commercial and risk disciplines. International corporate contracted, as planned, due to the portfolios and runoff, and FX was a headwind in 2025. In 2026, we expect to see net lending growth of around 4%, once again led by our Irish books. We saw good growth in customer balances in 2025, This is led by our Irish everyday banking propositions, where flow-to-term dynamics reduced as expected. Retail UK balances were higher, with a good performance by our Northern Ireland business. For 2026, our expectation is around 3% growth in deposits, led by continued strong growth in Irish everyday banking. Slide 16 provides more detail on our structural hedge. which is one of the key drivers of our NII trajectory into 2028 and beyond. Rollovers and additions meant the average yield in the hedge rose 16 basis points to 189 in 2025, with an exit yield of 198. And there's more to come this year. Helped by our modest growth in our hedge volumes and the rollover dynamic, we see fixed-leg income increasing by 10% in 2026. The group's total fee income increased by 7% last year. Wealth and insurance, which now counts for nearly half of total fee income, had a really good performance, with fee income up 12%, reflecting the benefits of our strategic execution over the past three years. For 2026, we expect to see around 4% growth in fee income, driven by wealth and insurance. Operating expenses rose 3% last year, meeting our guidance. Staff and other costs were higher. This reflects a number of factors, including wage inflation in the competitive Irish labour market and ongoing investment in digital capabilities and customer experience. Efficiencies for our restructuring investment activity were equivalent to around 2% of the cost base. And we'll see more of this over our new strategic horizon. On slide 18, I'd also note the non-core charge of £430 million. The majority of this relates to UK Motor Finance. €1.53 million of restructuring costs support the delivery of our efficiency programme. One presentational change to call out here is that from 2026 onwards, restructuring costs will be included above the line. We expect to see total costs of around €2.2 billion in 2026. This is comprised of two parts. Firstly, underlying operating expense growth of around 2%. reflecting inflation and investment, including targeted higher investment to support strategic delivery, offset by efficiencies. And secondly, restructuring costs that are expected to be in line with the 2025 outturn. Looking further out, we expect total costs to be stable at around €2.2 billion over the strategic cycle. Moving now to slide 19. The impairment charge in 2025 was 193 million, or 23 basis points cost of risk, better than we had anticipated following a strong final quarter. Within that, net loan loss experience and portfolio activity was 65 million euros, with net writebacks in H2 reflecting the team's execution on the ground. Macroeconomic and model updates account for the balance of the charge, with a geopolitical PMA of €40 million providing protection against potential volatility. The NPE ratio finished 2025 at 2.2%, down 40 basis points in June, reflecting the H2 progress. Looking ahead, we expect the cost of risk to be in the low to mid-20 basis points. The group is a very capital-generative business model. Organic capital generation was 270 basis points last year, Around a quarter of this was consumed by investment in lending and CRT amortization. IRB model scalers consumed a further 40 basis points, with an objective to at least partially mitigate these over time. We've today announced distributions totaling 225 basis points in respect of 2025 performance. Our reported CDT1 ratio was 15.1% after 1.2 billion of distributions, with a 100% total payout ratio which compares to 80% last year. For 2026, we expect net organic capital generation of around 250 basis points. We've updated our CUT1 guidance for the new strategic cycle to around 14.5%, which we believe is an appropriate level to both protect the bank and support the ambitious growth plans we are setting out today. Our objective is to operate at this new CUT1 guidance. Slide 21 recaps the building blocks of our 2026 financial guidance that produce around 12.5% statutory ROTI expectation for 2026. On this slide, I would note the changes to the presentation of a number of our key metrics. Having taken on board market feedback and reflecting on peer approaches, from 2026 onwards, we will simplify our reporting by including restructuring costs within our operating expenses and within our cost-income ratio, and presenting ROTI on a statutory basis. To conclude, as we start 2026, we have real momentum across our franchises, which sets us up very well as we start our new strategic cycle. I'll pass you over to Myles now, who will take us through our new strategy.

Thanks, Mark. The strategy we are setting out today is centered on three priorities. The first is continued business model momentum in Ireland, driving growth. And earlier I spoke to the very strong balance sheet growth over the three-year period to 2025. That growth story continues. We expect lending growth of 4% per year, deposit growth of 3%, and AUM growth of 10%. and in turn creating more value from a highly attractive Irish economy. The second is allocating capital to optimise returns. We're allocating more capital to the island of Ireland while capturing the most attractive opportunities in our corporate and UK franchises. And the third, investing for the future, improving resilience, customer experience and efficiency. This ambition underpins the financial targets we are setting out today. We see income growing at an annual growth rate of more than 4%. This top-line momentum, supported by our investments and cost discipline, is transforming operating leverage. This is reflected in our cost-income ratio, expected to fall to mid-40s by 2028, with an ambition to go beyond. Combined, This is our return on tangible equity, that's a clean statutory ROTI, increasing by more than 500 basis points to greater than 16% by 2028. As set out on slide 25, the group has a strong portfolio with complementary capabilities across our businesses. These interlinkages between our retail, wealth and insurance, and corporate and commercial teams offer significant potential. Examples include 2.2 million retail Ireland personal customers, of whom more than 150,000 are affluent, and this offers an important opportunity to Davey Wealth. Connecting our corporate customers with New Ireland corporate pension solutions and leveraging our Davey Capital Markets business to offer more complex solutions for our corporate customers. We have the opportunity to serve more than 4 million customers at every step and stage of their financial lives. Our everyday banking franchise in Ireland, a core value driver for the group, has very attractive market positions. From a position of strength, we have a growing deposit franchise with 87 billion of customer balances equivalent to around a third of total Irish private sector deposits. and we expect continued growth in our deposit and current account franchise. Our ambition here is threefold. One, to strengthen customer loyalty through improving experience and to protect customers from the ever-increasing scourge of fraud. Two, to grow our customer and deposit base, supported by product innovation, for example, our Smart Start account for youth customers and our Coming to Ireland product for people who are returning to Ireland. and three, to drive more efficiency through technology. Delivering our strategy allows Bank of Ireland to command a leading share of new business, to deepen customer relationships, and to drive further cross-sell. We are Ireland's number one mortgage provider, and our strategic objective is to retain that position. In the last cycle, we captured a growing share of Ireland's growing mortgage market. Rising housing output underpinned by Ireland's strong demographics represents a clear structural growth opportunity for mortgages, supporting an expected 5% average annual book growth. Over the next cycle, we will maintain our right to win on this market while continuing to maintain pricing discipline. And we continue to enhance our capability, making it easier and faster for customers to secure a mortgage approval. Our overall ambition is to be the unrivaled leader in Irish home buying. We are Ireland's leading wealth provider. Our Davie and New Ireland insurance businesses have more than 650,000 customers. Total AUM was a record 60 billion at the end of last year. This has grown by more than 50% since we completed the acquisition of Davie in 2022. Supported by favorable dynamics across all segments, high net worth, affluent, and corporate pensions, we expect AUM to grow to more than $75 billion by 2028, with an objective to hit $100 billion by 2030. And I expect this business to be the largest source of capital-like fee income growth out to 28 and beyond. This is supported by the strong Irish macroeconomic fundamentals, investment in our digital platforms, and further cross-sell into our retail customer base. We have successfully repositioned our retail UK business in recent years. Our reshaped loan book and improved funding base are delivering attractive, sustainable returns. Our UK subsidiary reported an underlying growth of 16% last year, continuing the trend of strong returns from this business. And throughout the new cycle, we expect growth through selective lending and mortgage products and strengthening propositions and capabilities in Northern Ireland, complemented by our specialist lending propositions in Great Britain. Slide 30 covers our corporate and commercial banking division. With a very strong market position, including an SME lending share of more than 50%, we are well placed to benefit from increased house building and infrastructure investment in Ireland. We're also deepening our relationships with our corporate customers, growing lending and fee income, leveraging our broader business model, including treasury services and daily capital markets. This underpins our strategic objective to retain our leadership position in Ireland. To deliver those business line performances I've just spoken to requires ongoing digital investment. In 2025, we delivered important enhancements. This includes the rollout of a new SME lending platform, SEPA instant payments, and a wide range of customer service improvements in our contact centres. We also progressed our new mobile app and Zip Pay Instant Payments, both due for launch in the coming months. Over the new strategic horizon, we are making a conscious decision to invest more than previously planned, to protect and grow our core Irish franchise and capitalise on our unique position in wealth. Priority areas of investment include operation resilience, including cyber protection, a new commercial digital platform, And as referenced earlier, a scaled wealth platform and automated credit decisioning for mortgages. And a new UK savings platform to support long-term funding needs. These investments offer a better customer experience and allow the group to deepen and grow our customer base. Earlier I said the group was embedded physically and online in every community in Ireland. The combined power of this presence is a winning formula for our customers and a source of value creation for the group. We're also embracing AI. My focus is on creating tangible value and setting out an ambition that truly captures the positive and profoundly disruptive benefits of AI. We see emerging tangible value from our deployments to date. Contact center call transfers have reduced by more than 40% as AI connects with the help they need better and faster. AI is also protecting our customers, assessing over a billion card transactions last year to help prevent fraud. And we are targeting increased efficiency, reinventing our approach to KYC and customer onboarding. These are just some examples. we see real potential for AI to fundamentally improve a range of areas. These include customer sales and servicing, middle and back office functions, and changes to our technology delivery. Now, bringing this together, this strategy builds on our strong momentum, delivery and business and revenue growth, combined with a stable operating cost base, which creates significant operating leverage. We expect to see considerable top-line growth in the coming years, And I referenced earlier income growing on average by more than 4% per year. And over that period, a continued focus on cost, discipline, and efficiency. As I said earlier, we are targeting a mid-40s cost-to-income ratio by 2028 with an ambition to go beyond. And that equates to a circa 6% operating efficiency improvement over the next three years. To meet our efficiency objectives, we've identified 250 million of cost reduction. And there are three main elements to this. Firstly, our operating model, where we have redesigned and we are simplifying our organization and footprint. Two, redesigning our customer journeys and internal processes. I referenced KYC earlier. And three, rigorously ensuring our third-party providers create maximum value for Bank of Ireland. And related to this, we have radically reduced the number of third parties we work with, focusing on a much deeper, more strategic relationship with a smaller number. And Mark will provide more detail on this objective later. Slide 35 sets out how our strategy will continue to drive significant shareholder value. At its core is a more than 500 basis point increase in statutory roti. to greater than 16% by 2028. And that equates to compound earnings per share growth in the mid to high teens. All of which underpins continued attractive distributions to our shareholders. And we are achieving this by driving growth in Ireland from a structurally advanced economy, the strength of our balance sheet, making the best use of our capital, investing for the future in support of customers and shareholders, maintaining a very sharp focus on efficiency and competing hard, always with a focus on price discipline and risk management. Mark will now take you through our financial targets.

Thanks, Miles. Slide 38 sets out the macro context that underpins the balance sheet growth we expect to see over the new strategy. we expect to see CAGRs of around 3% for deposits, around 4% for loans, and around 10% for AUM. For deposits and lending, we've been pragmatic in embedding some of a growing market going to new players, an assumption which sees continued growth momentum for Bank of Ireland's balance sheet. This balance sheet growth and structural hedge dynamics will help total income grow at a CAGR of more than 4%, rising to greater than €4.75 billion in 2028. NII is expected to increase from around €3.4 billion this year to more than €3.85 billion in 2028, with the growth rate accelerating as we move through the cycle. Given the strong balance sheet drivers and the multi-year benefits from our structural hedge, which I'll come back to shortly, I see the potential for NII to reach €4 billion after 2028. We expect fee income to grow by around 4% a year over the plan, with W&I growing at a faster pace. The structure of hedge is an important part of a revenue outlook. We see it providing a gross tailwind of around half a billion euros over the next three years as the yield moves towards the 2.5% level. Hedge volumes will grow over the coming years as customer balances evolve. While other hedging, for example, on our fixed rate mortgages also needs to be factored into our NII, the key message here is that the structural hedge is a material positive driver which should mechanically flow into our NII as hedges roll over. We are guiding for total costs to be stable at around 2.2 billion euros over the strategic horizon with a CAGR of around 1% from 2025 levels. The key moving parts are Inflation and investment will invest with higher than prior plans to support our strategic delivery, offset by material efficiencies driven by our investment in restructuring activity and lower restructuring costs over the period. As part of this, given that around half our costs are staff related, we expect staff numbers to fall by around 3% each year, largely from natural attrition. As Miles said earlier, operating leverage is a key outcome of our strategic plan, with our cost-income ratio improving by around 6% from 52% last year to the mid-40s in 2028, and with an ambition to go further beyond that. Slide 42 provides details on our three areas of efficiency focus. each of which contribute broadly a third to meeting our total efficiency target of around €250 million that Miles spoke to. Key initiatives include completing our organisation redesign, the exit of non-strategic business lines, material consolidation of third-party suppliers, optimisation of KYC and onboarding journeys, and transforming our UK operations. Slide 43 summarises the key drivers in our statutory ROTI building to greater than 16% by 2028, from a starting position of 12.8% last year, excluding the motor finance impact. Franchise growth predominantly reflects the power of our brilliant Irish retail, business and wealth franchises. As I noted earlier, the structural hedge benefits are realised as hedges roll over at rates close to 2.5%. And while our TNAV increases, the growth is lower than RWA growth due to DTA utilization over the next couple of years. The momentum in our franchises gives us confidence that RoHe can increase further in 2029 and beyond. We expect organic capital generation to build to more than 270 basis points by 2028, averaging around 260 basis points over the cycle. Of this, around a quarter is required to support business and lending growth. We also guide to a progressive ordinary dividend per share supported by a payout ratio of around 50%. This will leave us with significant amounts of surplus capital, which will be returned to shareholders for less and more compelling strategic opportunities. Our objective is to operate at our 14.5% CET1 guidance, subject to customer approvals. Slide 45 recaps on our key financial targets with growth, operating leverage and returns at the heart of our updated strategy. Two items I've mentioned here are, firstly, we see net capital generation of around 3.7 billion euros over the plan, equivalent to around a quarter of our end 2025 market cap. And our expectation for mid to high teens CAGR in earnings per share growth through this new cycle. Note that the EPS guidance does not make allowance for buybacks. Thank you, and I'll pass it back to Mark.

Thanks, Mark. Bringing our presentation to a close, let me recap. Today we're saying I had a strategy to create significant shareholder value by driving growth in Ireland, optimising capital for maximum benefit and investing for the future. Strategy stands on the back of Bank of Ireland's unrivaled embedded position in one of Europe's best performing economies and is underpinned by our proven track record of strategic delivery, which has built the foundation, enabled the momentum to drive us forward to 2030. Thank you very much for your interest in Bank of Ireland. We'll now open the floor to questions and Eamon, over to you. Thanks.

Okay, as Miles said, we're now open to the floor for questions from analysts. Actually, first taken in the room before moving to those who have joined us online. And actually, for those of you in the room, you'll note that there's actually a microphone, I think, in the front, just in front of you there. So please raise your hand and we'll take them in turn. So actually, just Andy will take you first, if that's okay.

Does that work? Yeah. Just one for me, really. The increase in the C2.1 target to 14 and a half. I thought there was probably more of a chance that you might reduce that at some point rather than increasing it. So what feedback have you had from maybe your debt holders? I can't imagine that they were unhappy with anything, but what was it that made you increase that number? Because it probably looked like there was room to reduce that rather than increase.

Yeah, thanks, Andy, for that. So as we embark on a new strategic cycle, our updated capital guidance to 14.5 allows the group to protect and safely grow our business. So it supports strong trailer distributions, balance sheet growth, and indeed business model investment. And at this capital level, we see growth coming through in the strong ROTI momentum. So we're with an updated clean ROTI of more than 16% by 2028, underpinned by average capital generation of 260 basis points. So this is the very nice balance between growing our balance sheet safely with a strong capital position and generating very strong capital returns. And, of course, we can link that to distributions, the communication of a 1.2 billion distribution for 2025. That's 50 billion, 100% of profits. It's a progressive DPS of 11%. It's an increase in payout from 80% last year to 100% this year. So it's in that context that we've thought about a capital position out over the next three years.

Thanks, Andy. Okay, Jeremy, next. Next.

Yeah, thanks, Chairman, for that. And the question in the heart, the competition question, I mean, firstly, I called out three really important components to our strategy today, so driving growth in Ireland, optimising capital allocation and investing. And really that growth in Ireland is the big story here. And so we expect the lending book to grow by, on average, 4%, the deposit book by 3%, and our wealth assets on average by 10%. Of course, driving top-line growth of 4% on income, translating with Oplev into roadie improvement of 500 basis points. So with that as a backdrop, I mean, from a competitive perspective, for sure, Ireland is an attractive market. You heard me say it earlier. But it's also a competitive financial services market across a range of products. There's about 20 market players, including traditional and FinTech providers. And growing our Irish business, part of that strategy, again, very encouraged by the great momentum coming out of the last cycle, growing lending and deposits by 6%, AUM by 9%. So we entered 26 from a position of strength, a very strong franchise. Competition is picking up a little bit, for sure. We compete on three pillars. One is a footprint that offers a deep business relationship and customer service. Two is an ever-increasing digital capability. I referenced earlier a new mobile app and faster peer-to-peer payments coming out soon. And the third pillar, of course, is always going to be to offer value to our customers while maintaining pricing and risk discipline. And from a guidance perspective, Jeremy, I think we've been pragmatic in embedding the sum of a growing market going to new players. I think that's a reasonable assumption, an assumption that sees Bank of Ireland balance sheet and franchise grow. On the capital point, so certainly in setting out an updated capital target of 14.5%, two observations. One is in moving to a statutory roti with a target of greater than 16%. is a sign of our conviction to operate in line with this new guidance, meaning if we hold excess capital and clearly statutory rote would be reduced. And on a related point, looking forward, we expect to operate at 14.5 each year, and given the need to hold about 25% of cap gen for loan growth, 100% payout would not be a constraint looking forward.

I think that's That's it. Thank you. Thanks very much. Okay. We'll move to Sanjana next. Actually, just if you can press the button on the mic, I think it will help in terms of getting picked up the question.

Thank you. Good morning. Sanjana Dadawal from UPS. I'm trying to better understand the net capital generation number of 3.7 billion, which, as I understand, is the capital available for distributions after growth. So while the P&L to 28... is in line to ahead of consensus. The net cap chain prediction is below what consensus currently has in terms of total distributions of 4.2 billion or so. Potentially half of the cap can be explained by higher RWAs, but if you could help reconcile the rest. And then secondly, on fee income, So the growth number of 4% per annum, while still good, is lower than the usual 5% that we've talked about in the past. Are there any specific factors weighing on this?

Thank you. Super. Thank you for that. I'll ask Mark to take some of those. So just maybe to frame the capital gen question. So that's 3.7 billion. underpinned by average capital generation of 260 basis points per year. That's really important to make that point because that momentum continues. And again, of course, in support of a realty that is growing. And Mark, on to some of the moving parts.

Yeah, good morning, Sanjana. Yeah, so on the net cap gen, so maybe a couple of things there. So one, we need about 25% of organic cap to invest in growing the business. So that's certainly one factor there. A second factor you might just think about is our DTAs. Actually, that benefit we have in 26 and 27, we actually use our DTAs by the middle of 2028. So those are probably two things just to bear in mind as you think about that. And on the fee income, the fee income about 4% over the cycle, maybe two things that I call out there. So we've had a really, really strong performance in 2025, really pleased with that. We do call out in the detail in the report some modest one-off benefits in our life business. So I think we need just for that. And then the second thing is in our retail Ireland business, we expect a change in interchange arrangements from the beginning of 2027, which costs about 15 million euros a year. So we've allowed for that in the 4% as well.

As a final point, I spoke earlier about the ability for our wealth business to really supercharge our fee income. And against the backdrop of AUM growth of 10%, that fee income component that's coming from wealth is a hugely important part of our capitalized income model growth. Thanks, Sanjeev.

Sorry, can I just follow up on the first one? You mentioned TNAV growing less than RWAs, but would you be happy to put some numbers to that?

Yeah, for sure. So loan growth around 4%, as you say, and Ireland growing faster within that, so Gina. Then if you think about RWA growth as a second leg on that, a little bit less because the mixed factors, for example, Irish mortgages, UK mortgages will carry lower risk weights than corporate. And then Tina, because of the benefit of the VTA in particular, growing at about 1% to 2% a year over the cycle.

I think Guy just had his hand up first, sorry. We'll move to the next.

Thank you. It's Guy Stebbings at BNP Paribas. The first question was on net interest income. Thanks for all the exhaustive guidance today. Beyond 26, just two particular points I want to focus on. On the structural hedge, there's some sort of useful colour, but maybe you need to be a bit more specific in terms of maturing yields beyond 26 or where you expect the yield for the total hedge to go to. And then on competitive dynamics that you talked a little bit about, maybe some share giveaways perhaps. But in terms of any impact on product spreads, you know, captured in the guidance, that would be helpful. And then back on capital again, I guess I'm trying to understand, is the 14.5% the number because that's what's practical given the strong starting point, the strong capital generation and what you can realistically distribute? Or is that the number because that's the right number you think the business should run to even well beyond 2028? Thank you.

yeah thanks for that and mark i'll pass it to you on on on the ni related questions on capital again it's just that point that we start uh into a new strategic cycle um and uh hopefully you've got a very strong sense that this is a growth story for bank of ireland out over the next three years so we want to make sure we grow our balance sheet grow our business really safely and make sure we've got it got the right capital to ensure that we can reward shareholders that we can grow our balance sheet, that we can invest in our business model as well. It's in that context. And, again, I'd make the point that linking a 14.5% capital that we can run the business at combined with a target stash eroding of 16% I think is a good balance to think about how we think about our conviction around that level of voting performance. And Mark?

Yeah, on the NII, I mean, maybe just to stand back for a second, I mean, this is a real story of continuing real momentum here in our NII trajectory. I think we were out with you a year ago. We gave a positive outlook on our NII trajectory to 2027. We've upgraded that outlook several times since, and we're upgrading again today. So, again, specifically we're upgrading 2026 around 3.4 billion previously high 3.3s. 2027, now greater than 3.6, previously mid 3.5s. And then the new guidance today of greater than 3.85 billion. And the key drivers before that balance sheet growth largely in Ireland and the benefit of the structural hedge. And I did note in the presentation that I see the potential for the business to reach 4 billion euros, but after 2028. And specifically then on the structural hedge maturing yields, actually, we've got some details in the slide materials, but in 2027, 116, and in 2028, 106. So, again, when you think about the reinvestment yield, that is quite a delta between the reinvestment and the maturity.

Okay. Pearlie, I think we can go to you next. You can just press the button.

Sorry. Hello. Sorry about that. On NII, yes, you've mentioned that you've upgraded guidance a few times. And if I look at the building blocks to 26, based on today's rates and what happened in Q4 implied, I think one could make the case that even 3.4 looks like there's some conservative, some embedded in that. What are some of the areas that could drive it higher or lower? Competition you've mentioned, and what about deposit migration to term? It looks like it's a little bit slower than expected, so just what are you assuming over there? And then on the cost side, you've mentioned 3% reduction in headcount. Is that in relation to the 250 million AI efficiency saves that you identified earlier?

Yeah, thanks, Bernie, and good to see you this morning. So I'll ask Mark to take the dynamics on interest income and certainly any potential for upside. On the cost piece, maybe if I anchor my response to the question in terms of what we're doing with operating leverage, really important. So in the context of top-line growth of income of 4%, but also creating significant operating leverage from different efficiencies. I've spoken about a mid-40s CIO, cost-income ratio by FY28. That's a six percentage point improvement versus FY25. And certainly when we get to that upper end of the mid-40s, we want to do more and do better. The $250 million cost savings that are built into that overall outlook for that mid-40s CIO, I mean, there are three components that we called out. Much of the work has been done to get those benefits. So it's the operating model we have deployed. It is going after our customer journeys and our internal processes and also making our third parties work really hard. Within the $250, I would say of those savings, in the region of about 20% are coming from AI. When we go beyond 2028 and our objective to create more leverage and take our CAO lower again, AI will play a bigger role in supporting that further improvement in operating leverage.

Yeah, pearly morning to you. So just on the AI, maybe we think about this as just year on year and we can look at this in different ways. If I think about year on year, three moving parts relative to 2025. So firstly, rates and FX are lower relative to 2025. ECB rate by 25 bps lower on the year. BOE also lower as well, so about 110 million of a headwind there. The leveraging portfolios and I think probably the market probably hasn't fully taken into account the impact of our U.S. acquisition finance announcement, so about 70 million impact over three years and about 30 million of that this year. So together, they're almost 200 million of a headwind. But against that, we've got the balance sheet growth, the structural hedge, and the four-year impact of the bond purchases we've conducted. And they're more than offsetting that. That gets us to the circa 3.4 billion. So happy to get into that in more detail, but those are the big moving parts.

Okay, I'll move down to actually Shield here next. I'm going to just press the button Shield is.

Hello. Great. Sheil Shah, JP Morgan. I've got two questions, please. Firstly, on the capital, again, I'm struggling to understand the point around protecting the bank. You know, you've got RWAs that are growing. You've got a capital base that is also growing. But the capital ratio is now increased on the back of that in terms of the target. Are you holding anything back for maybe M&A or, you know, further growth opportunities beyond the organic that you're seeing across the plan? And then secondly, on costs, could I ask around the investments that you're making and the timing of these investments and the timings of the efficiencies? You mentioned that the bulk of the investments have already been made around the org design. Could I just press you as to the shape of these costs? I appreciate the total cost base is looking flattish, but more around the cost investments and the efficiencies.

Very happy to share. Let me take the capital and M&A related question and mark the profile. of those cost savings. So, Shield, I mean, this morning we are presenting an organic strategy for Bank of Ireland out to 28. So, everything we've set out today is organic growth in the context of our lending book growth, the deposit book growth, and, of course, our wealth business as well. So nothing included in today's material for M&A. And, of course, we do have the benefit of two transformative acquisitions in recent years, Davey Wealth and, of course, the KBC Factbook as well. And my experience is that M&A can be opportunistic and certainly if any opportunities present themselves. I spoke about the importance on driving growth in Ireland, so that will generally be my focus in that regard. We'll always think about an acquisition in the context that it must be aligned to our strategy, hence the Irish story, two, that we could integrate it to ensure we generate synergies, and thirdly, that it generates strong, attractive returns. So it's not an explicit linkage, but I think we can say that we are keeping a very strong capital position to grow our business and also, of course, be ready to avail of any opportunities should they present themselves.

Yeah, hi, Shiel. So 250 million targeted over this cycle, maybe just give a bit more colour on it. That's somewhere between around 12% and 14% of our addressable cost base. That's offsetting inflation and also the material investments we're making. And the three buckets we spoke about, op model, third party, and AI-enabled process excellence. I think with the phasing of that 250 million, somewhere around 40, 40, 20 over the three years. There are clear initiatives in place, and I'll just come back to those in a second. But just to give you a sense of momentum on that, actually in our disclosures for 2025, you can see we've got 38 million in efficiencies. That's mostly H2 weighted. So about a sort of run rate of somewhere between 2% and 3% the second half of last year. We need to get above about 4% in our cost base. So we're building towards that. And as you note, actually, members of our executive team are actually all in the room this morning. So I know they'll be really excited afterwards to tell you a bit what they're working on. But just to give you an example to bring it to life, we mentioned a bit material consolidation on our third-party providers. So one of the things we would have worked on last year and would have been incorporating the restructuring costs of last year was on our change providers, okay, reduce. the number of providers there significantly down to around five. So all the hard work, the thinking, the RFP process, et cetera, all run during the back part of last year. And now that's actually coming to life. We're getting the benefits in this year. So it's just one example, but there are many examples. Okay, sorry.

Ben Thomas from ABC. Thanks for taking my questions. The first on competition. Can you just give us some kind of about what kind of competition changes you've got baked into the plan? Have you been relatively conservative there? Irish banks have been relatively conservative historically. And does it make any difference? Do you think that one of your peers potentially might get purchased over the next six months to competition in Ireland? And then secondly, on net interest margin, can you just help us a little bit with the shape potentially of net interest margin for this year to kind of give us an idea of the exit rate? Thank you.

Super, thank you. And on competition, I won't, as you expect, I won't comment on the on the particular transaction in the Irish market. But I think it is interesting in the context of somebody willing to come into the market. From my perspective, maybe on the harder end of it, I referenced earlier on the guidance points, I think we've been pragmatic. We simply say that this is the Irish market is going to continue to grow. The loan book is going to grow. The system loans will grow. For example, mortgages as a structural positive fact. I referenced earlier private sector credit grew 6% last year. Business sentiment is quite strong. I expect that to grow as well. System deposits are also going to grow. And certainly demographically, wealth assets will also grow and we're particularly well positioned to get the benefit of that. We have been pragmatic in assuming that a growing market, some of that will go to an alternative provider, but very focused on ensuring that we continue to compete. I spoke earlier to competing based on our physical footprint plus our ever-increasing digital capabilities. I regard that as a winning formula, and we enter this period of maybe a slightly increase in competition from a very, very strong position.

Yeah, just on that interest margin. So last year, 268, broadly flat, half and half. And we expect an interest margin going forwards to track our NII guidance. Okay, Amman.

Hi, guys. Yeah, it's Amman. Back off and back, please. I had a follow-up question on capital. Yeah, I'll start with that one. So follow-up question on capital. So you're talking about the 100% payout ratio. You're talking about not being constrained going forward, but it appears to have been a constraint today. I think you've kind of – your distribution outturn for the year has come in below market expectations, right? We were all expecting a payout ratio above 100%. So why did you not – payout above 100, you've clearly got the capital to do it. And I guess I'm asking that question in the context of what feels like pretty negative signaling here around capital, right, in terms of you've increased your target C2 on ratio and you've kind of come in below market expectations for distribution. So can you tell us exactly what's gone on in terms of this sprint and what it means going forward? My second question was around AI, actually. So it's a clear market concern in the last couple of weeks. the highly disruptive potential impact of AI on actually the revenue streams of banks. And I look at yourself and Irish banks, you've got some of the richest product margins in Europe. Interested in kind of your reflections. I know it's an unfair question given this is kind of an emerging theme in real time. But just, you know, given your vantage point, interested in whether you share that view and actually to what extent you see yourself well defended. Thank you.

Thanks, and let me take both of those. On the capital question, I understand the question, and just to reiterate, today we're announcing a 1.2 billion distribution, and I call that again because it's 100% of profits and that's an increase of a payout from 80% last year to 100% this year. So that consistent objective of returning surplus capital back to shareholders through a combination of a progressive DPS That's up 11% on the year, but also surplus capital. And it's always going to be a point in time decision. And maybe to anchor back, over the past three years, we've returned 3.5 billion to shareholders, representing 37% of our opening market cap in 2023. And again, as a measure of our commitment, of course, to hold capital to invest appropriately in our business, but also to reward shareholders as well, is an absolute priority for us. It always has been, and it will continue to be so as well. And on the go-forward piece, again, I will just point... to the very strong capital gen momentum that we see. So on average, 260 basis points of capital have been generated on average for the next three years. That's capturing momentum. It's capturing growth. It's capturing operating leverage, all of which translates into that roadie target of greater than 16 and that EPS growth of – mid to high teens. So that's how I think about it, and certainly that priority on returning capital is unchanged. And I do think there is a dynamic that's worth calling out, maybe to the heart of part of your question. If I think about looking forward, We expect to operate at 14.5 each year. And I know I'm repeating myself a little bit here, but given the 25% investment in loan growth, that 100% payout would not be a constraint going forward. On AI, I think you're right, Aman. I've spoken to it as a positive disruptor, and that's what it is. But any disruption, of course, comes with risks. And not unique to Bank of Ireland, and not unique to banks, actually. I mean, for all sectors, some of those risks are sector dislocation, potential employment risks into the longer term, and maybe also deflationary pressure as well. Now, they're very much into the long term. I don't think they're a clear and present risk. So it's important that we absolutely harness the benefits of AI, but also we've got a keen eye on the risks and Again, if I link that to, it's a broader response to the question, but I think it's relevant. I think about Ireland and its position. It's very strong economic growth expected over the next three years. That's been driven by very strong sector performance in the domestic economy. The multinational sector where we export, that's holding up well. Employment is up. And really importantly, I think, to the heart of your question is that the Irish government's commitment to its national development plan, £275 billion out over the next 10 years, that's going to – drive and maintain economic growth in Ireland for some time, I think we can take that as a positive and, of course, as we appropriately manage those risks. Sorry, at the back here.

Hi, good morning. I'm Mike from Cyrus and Partners. Just coming back on capital again, you're buffering your minimum requirements now over 300 basis points. should we think about that 14 and a half should we link it to your minimum requirements so you'll run with a 300 bit buffer so if it comes down it should mechanically come down and then you just talked about the national development plan i mean your loan growth targets don't seem that ambitious given what's coming through there and i guess if if growth were to surprise on the upside on loan group on loan growth you know what gives is it the payout ratio or should we expect that 14 and a half to come down And then just maybe on NII, Mark, you said going to maybe $4 billion after 2028. Is that 2029 or 2030? And what's driving that? Is it rates staying at $2.25? Is it loan growth? Is it hedge? Is it a mix of everything? Thanks.

Thanks for that. Let me take the first question and then I'll pass to Mark. Actually, in setting our target to be at 14.5 for a CT1 ratio, we'll always check in as to where we stand against the rest of the market. And when I look across Eurozone banks, that's about 40 banks in total. The average buffer above NDAs, as you say, is about 300 basis points. So we're pretty much comfortably in the pack in that. And Certainly any mechanical change in regulatory requirements I think would have an impact on overall requirements as well. I think you can take that as a reasonable assumption. And on the loan book growth, we've got an incredibly strong Irish franchise. We've seen that in the last three years. loan book growth last year the possible growth of six percent and we have factored in very strong growth into the future for example the mortgage book to grow at five percent uh per year that's growing faster than the irish economy um and certainly if the economy performs stronger if some of that 10-year national development plan happens sooner then we're very much well placed we've got the the balance sheet capability to support that growth. And that growth, I don't believe, would come at a cost to getting the balance right with distributions as well.

Yeah. Hi, Owen. Good morning to you. And just to add on that last point, obviously, we've got $1.7 billion in leveraging portfolios. That's going to come true A lot of that, 2026, a little bit less of a drag, 2027, 2028. In terms of the NII beyond 2028, it's obviously giving guidance and the targets more into 2028, not going beyond. But, you know, my view is I don't think you have to wait for too long. And, yeah, You know, if I think about the drivers on that own, really, you were talking about a pretty stable rate environment at that point. There's still some benefit from the hedge at that point in 2029, but it's really back to the balance sheet growth of that deposit and loan growth, particularly in Ireland.

Okay. Okay, there doesn't appear to be any further questions in the room. We can come back to you. Oh, sorry. Mike? Sorry.

Hi, it's Jordan from Mediabank. On the loan growth point, I was just going to ask, it hasn't really been mentioned, but about 10% plus consumer lending growth this year. I wonder what was driving that. Obviously, that's a lot higher margin than on the mortgage or the corporate side. So it's quite an important driver if you continue at that sort of run rate. Yeah, that would be helpful to put a colour on that and where you see that piece going in the future.

Yeah, thanks, Jordan. I mean, the consumer book is a relatively small component of the overall Bank of Ireland balance sheet. But what is encouraging about it, that growth in the book, I see that as a measure of, importantly, of consumer confidence and willing to borrow. And that's important because consumer confidence – is the starting point for businesses having confidence to invest in their business. And so, yes, of course, we will support that consumer book. But the encouraging element of it is that I referenced earlier private sector credit in Ireland up 6% last year. When I look at our business on the ground, we've seen very strong performance in manufacturing, in engineering, retail, holding up really well. In fact, that book is growing, supported, I think, by consumer confidence, which, again, gives us confidence to the growth story for Ireland.

Thanks, everyone. Okay, a few hands went up there. Sorry, Mike.

Mike Everson from Autonomous. Just two questions, please. So on the fees, thanks for giving more detail there. You're obviously guiding for some very strong AUM growth and about $0.1 billion contribution to the income growth through 28. It would just be interesting to understand where you think that growth is coming from. Is it competitive market share? Is it just general new growth? In that context, how you think about any lost NIO on that growth? So obviously deposits generate strong profits in Ireland. And are you assuming in your cross-sell any movement from the deposit book across the AOM book? And then the second question on the cost guidance. We're just trying to put together some of the numbers. You've obviously given the mid-40s cost-income ratio target for 28 and then said you're aiming or would expect to do a lower than 45% by FY30. Should we be implying from that that the mid-40s in FY28 is higher mid-40s, or should we be looking mid-mid-40s there?

Okay, thanks, Mike, for that. Let me take those questions. So, I mean, on the fee income, I referenced earlier that our wealth business is a hugely important part of where we expect to grow capitalized fee income. It's been an incredibly strong success story, two amazing brands with Davie in New Ireland, Davie in particular looking after high network customers, and, of course, in New Ireland, a life and protection business supporting pensions. so we want those two businesses to continue to do what they do so well but also um growing from that there are areas that we know there are opportunities in particular um the affluent market and so i referenced earlier we've got about 2.2 million retail ireland customers Two and a half million retail customers if we include Northern Ireland, where Davie is present as well. Within that is about 150,000 affluent customers. So we want to target that. And much of our, I referenced earlier, we're spending a bit more on our investment profile. Part of that investment spend is in digital and CRM capabilities within the wealth business. So that's an area that we want to step into. And that will not only generate revenue, short to medium term benefits, but also today's affluent customers, many tomorrow are down the line become high network customers. That's a good thing to go after as well. The other area that we are focused on is in pensions. So many private workers in Ireland don't have a pension. So using the New Ireland brand to support corporate pension growth is another area. And certainly getting all our different businesses to interlink together for those cross sells. And then stepping back from it a little bit, the demographic piece, is really important as well. So we called out a 7% expected growth, wealth, household wealth growth out to 2030. That's a huge part of this story as well. Did I get, was there a second question or did I answer both? On the cost piece, sorry. Yes, sorry, yes. So again, the up-left piece around getting to mid-40s, I'd say it's about a six, think about the delta, it's a six, improvement in leverage in part from a top line revenue growth of 4% and keeping our costs about 1%, less than 1%, we call it stable cost mark, but in that we have 250 million of cost savings. So I'd say it's probably just, you know, you can take six off the current position. But I think the heart of your question is that we don't stop in 28. There's real momentum here to go beyond that and we'll push hard for that.

Thanks, Michael. Okay, any more? Sorry, a man back to you.

Thanks very much, but let me ask another question. Yeah, just about the revenue mix. So I think you're around 81% net interest income this year, and I think in terms of your forward-looking guidance, you're effectively indicating increasing shifts towards net interest income from here. Is that just a reality of the banking system that you operate in, the position that you operate in, the opportunity set that's in front of you? And are you inclined to do anything about that? Do you want to try and address that revenue mix at some point? And can you?

Yeah, I mean, so it's an interesting question because if you know the backstory to Irish banks, typically the fee income has been a smaller component amount of the total revenue. Now, we have the fantastic opportunity to grow our net interest income, which Mark has spoken to, and, of course, we want to do that. So that's a good story. But also, of course, we want to increase our wealth. fees or fee income. I mean, our wealth business accounted for just under 50% of our total fee income, and that's going to grow more. And of course, it's not happening, but had net interest income remained static, then fee income would have become a greater component. But it's great from a diversified income perspective, both are growing. And certainly, I would say, again, a reference earlier today is an organic story, but certainly if there's anything

any opportunities that were to present themselves that would offer an ability to to positively shift that mix you know we certainly have a look at that and i just committed it as well because i think if you think about one of the pieces of outlining today which is actually getting behind our wealth position we've got fantastic positions getting behind it more investing a little bit more there talked about the impact in the near term and costs actually we see benefits in 2028 But we see benefits, even more benefits into 29 and 30. We're making that conscious decision to invest now, recognising that the medium-term opportunity here is really, really attractive. So I think we'll see further benefits beyond 20 years. Thanks, Mark.

That's okay. We just might give some people online an opportunity now. We can come back to the room. So look, at this time, we invite those analysts wishing to ask a question to click on the raise hand button, which will be found at the bottom of your screen. When it's your turn, you will receive a prompt and be promoted as a panelist. So please accept. Wait a moment. And once you have been introduced, you may unmute yourself, turn your video on, and ask your question. So we'll just wait for a moment now for the queue to form. Okay, looks like our first is from Borja Ramirez in City, please. Borja, unmute your audio now, turn on your video and ask your question. Borja, if you can hear us. Okay, we'll move on to the next question. We can come back if Rob Noble is there from Deutsche. Okay, we might just try and kind of come back to the room and try and resolve that. Can you hear me? Rob, can you hear us there?

You hear me now? Okay, cool. Yeah, you got me all right?

Perfect. Go for it, yeah.

Morning. Thank you for taking my questions. Just on the capital generation point, so I don't understand how 25% of the capital gets consumed by RWA or growth, right? So you're saying 4% loan growth and RWA's grow less than that because of the mix. So if we call it 3%, I don't understand how you'll get anywhere near 25% of the capital being consumed. So is there something in there that I'm missing or doing wrong? I guess... Linked to that is you'll do 12.5% roti, your numbers, 12.5% roti this year, generate 250 bits of capital. How come 16% in 28 is only 270? It seems that it should be materially higher than that, even if you take off the DTA partially dropping off. And then last one is on the UK. So there's a lot of spread pressure in the UK. So what spreads are you writing on mortgages at the moment? And what ROE do you see the UK within the mix of the group? And are you still happy with that, that business adds value overall? Thank you.

Good morning, Rob, and thank you for that. I'll respond to the broader question on our UK business and then ask Mark to take some of your detail on capital and these spreads as well. We're very pleased with our UK business, Rob. This is a business we've worked very hard in recent years. I called it out in my script earlier to get that business performing well. It's a combination, I think, of a – a full service offering in Northern Ireland. That's particularly important because that offers efficient funding to support what I would describe broadly as a specialised lending in Great Britain. That's working, so that's specialised lending supported by by efficient funding, also an efficient operating model. We've taken costs out of that business as well. I mean, that's resulted in, for last year, if you use our UK PLC business as a proxy, it's a return on equity of 16%, and that trend has continued. Earlier I spoke about three components to our strategy, driving growth in Ireland, optimising capital allocation and three, investing for the future. The UK business sits comfortably in that second bucket where we are optimising our capital allocation. I'm very comfortable with that business and how we have repositioned it in recent years.

Yeah, on the RWA point, Rob, so again, we're guided this morning, loan growth of around 4% over the cycle. RWA is around 3%. I think the other factors probably you need to think about are opera score RWA, and obviously given our outlook, we'll have a... a higher offer score to be weighed based on earnings and also crt movements which can move in individual periods as well so when you bring all that together around 25 percent and we think is appropriate guidance at this point obviously in individual periods we could we could do better than that but i think about 25 overall um on the stat roadie and the organic cap generation So, yes, there's a DTA point. I think the guidance maybe, though, is greater than 270. So just to note the greater than. And also, obviously, we'll think about the average higher risk weights as our balance sheet grows as well in terms of the denominator.

Thanks, Rob.

Okay, Rob. Okay, our next question comes from Dennis in Goodbuddy. So, Dennis, if you can turn on your video and mute your line, go ahead. And I'd love to see you wait a couple of seconds for your tip here.

Hello, can you hear me?

Yeah, Dennis, all good.

Great, thanks. Good morning, Miles and Mark, and thank you for taking my questions. Just two, please, if I may. So one is the statement this morning referred to a 40 bps impact from IRB model scalers. Just if you could give us a little bit more detail on that, please, and what areas of the loan book it's referring to. And then secondly, maybe just more broadly on the Irish loan growth guidance and the national development plan that you mentioned, Miles, I guess, how do you think about development finance lending in that context? Is it an area you expect to move into more? And is it considered within the guidance or are there any constraints which might stop you from leaning in a bit more into that space? Thanks.

Thank you very much, Dennis, and good morning. The strategy to grow our Irish business within the lending piece of that, absolutely, there are two very, very large significant structural opportunities. One we know very well, which is in relation to housing and the supply of homes. Our mortgage book has performed very well. It grew 9% last year as a book, expected to grow further out over the next three years. But, of course, in support of that, infrastructural lending is hugely important to us and we are an active player in that market. There are different components to it. For example, on the house building side, we hit a target last year to support the development of 25,000 homes. That's really important because we typically support the building of affordable and efficient homes. And that's the right thing to do from a societal perspective, but also plays in very nicely to our mortgage business. And beyond that, the infrastructure has been at $275 billion by 2035. About $105 million, I think, over the next five years or thereabouts. So we're very well poised to support that. And so that spend is going to focus on roads, infrastructure, energy. And I should say we've built up capability in that regard on that team over the last 18 months. And so we're well positioned to support that growing part of the market as well. And IRB, Mark?

Yeah, morning, Dennis. Yeah, so that relates to scalers applied pending the approval of certain IRB models, about 2.7 million of ORWA, 40 basis points, CT1 net of some capital buffers that we held. Primarily UK mortgages expect to at least partially recoup that over time. That is not built into our guidance, so that's actually up to us.

Okay, thank you. Thanks, Elvis. That's great. Thank you. We're going to see if we can get Borja in city. Let's give it a few seconds.

Hello, good morning. Can you hear me now? There you go. Thank you. So thank you very much for your time and for taking my questions. Apologies, my video is not on, but I'm currently traveling. So I would like to ask two questions, please. Firstly, the capital generation target of over 3.75 billion, it seems... conservative in my view. So I did a back of the envelope estimate and I get to like 600 million of higher net profit cumulative over the three years. If I use the P&L targets compared to the capital generation, so I think in my view there's maybe 600 million of upside cumulatively. And then a link to this, I think that, I mean, there's also upside to your distribution compared to consensus, right? I think if we assume like a payout of around 100%, there's still around, I think, 10% upside to consensus distributions for the next three years. And I think that's interesting because with your EPS target growth, which does not include the share buybacks, you're already going to be towards the better, the higher end of the European banks in terms of EPS growth. So I think that's very, very interesting. And then my second question would be on cost of risk. I understand that you are deleveraging in those portfolios that have a higher cost of risk, like US ETH Finance, CRE, and UK Corporate Book. And also, I guess macro is very supportive with the stimulus. So I understand there's maybe also some potential to surprise positively in the cost of risk in the medium term. That would be my second question. Thank you.

Thanks, Borja. I'm glad that we were able to patch you in. I'll ask Mark to take those questions. I mean, other than to offer an overarching comment, which is that the dissent that there is and ability to outperform any of the targets that we set out today. We'll always push ourselves hard to outperform, and certainly if we do, that offers opportunities to reward shareholders more to invest in our business model and indeed to grow our business. Mark, over to you.

Yeah, thanks. Morning, Borja. So maybe a couple of thoughts on the capital generation question or observation, I would say. So one is I agree we're upgrading our guidance today over the cycle, particularly for 2028. From the emerging consensus, I can see for 2028, I think we're upgrading by around 3% or 4% relative to that. And then if I think about the cap gen specifically, so we do have higher net profit, you're right, over the period. You also have to think about other moving parts and getting from profit. to cap gen. So, for example, the changes in the expected loss allowance would be one that would be within that as well. And as I mentioned earlier, about 25% of that strong organic capital generation we need to invest in growing our business. So we've factored all that in. We factored in the delta between the 15.1 and the 14.5 and arriving at the 3.7 billion. But as Miles said, Absolutely, if we can outperform that, we will absolutely do it. And we think we've, I think, made realistic assumptions overall, but we'll obviously look to outperform those. And then the cost of risk, actually a really good example. uh performance the second half of last year um so um you know mpu ratio down to 2.2 percent uh that's it's that's that's the lowest uh level um over the last 15 years so we're in really good shape uh that reflects a lot of hard work i'd say on the ground in the second half of the year particularly strong last quarter to the year um so we're really pleased with that And if you think about the low to mid-20s guidance for 2026 then, and I think it's a similar level beyond, actually, by the way. You know, I think that's an appropriate level, Borja. One of the things we've done actually looking back over the last sort of five or six years is testing the cost or risk over that cycle. And you're right, we have made decisions during that time in terms of strategic reallocation of capital most recently on U.S. LAF. That does support a lower cost or risk.

but i'd say that at this point uh uh loads in between jesus is an appropriate level to think about thanks thank you okay boris was the the last online so we'll just come back to analysts in the room attachment scan press the button if your memory

Hi, thank you for taking my question. So your forward-looking guidance that you have for 2028 NII was a lot better than what people were expecting. And a big part of that is you growing the size of your structural hedge. And for that, you assume a swap rate of 2.5%. Is there any risk of the long end of the yield curve coming down, what would the risk be on that NII guidance? I think swap rates today are 10 basis points lower than what you'd guided to. Would that maybe incentivize you to change your hedging behavior, so perhaps ramp it up a bit more slowly or think about increasing your duration at all?

Thanks, Fennah. And then, Mark, do you want to take that?

Yeah, absolutely, Fennah. You're right. I mean, the structure and edge is a key part of our revenue outlook. And if I think about, given the details in the presentation, a lot of the benefit is locked in, certainly for 2026, more than 90%, more than 70% next year. But I think the other piece that came up on the question earlier is you think about the maturing yields. So the maturing yields here are closer to 1% over the period. So, yeah, of course, there's an impact. And you can think about about $9 billion a year rolling off. So you can sort of do the maths in terms of if there's any delta in terms of the reinvestment rate. But we think getting to 2.5%, even on today's curves, is absolutely reasonable and realistic.

Any more questions from analysts in the room? We've one at the back.

It looks like the Irish government are going to introduce sort of tax-free investment wrappers like there are in the UK with the ISA type structure. I was just wondering if you've embedded anything in your targets in outer years for that.

Yeah, thanks, Alan. In the backdrop, that, of course, is If I understand the question correctly, it's the European Initiative on Savings and Investment Union, which is about empowering customers with better tools for wealth growth and retirement. And so I would say that it's entirely aligned with Bank of Ireland's strategic objective to grow our wealth business. As Ireland's national champion bank, our job is to offer choice, whether that's a simple deposit account, whether that's a passive wealth account or whether it's a more discretionary approach to it. And certainly, I would be very supportive of the introduction of an isotype product that would be a progressive step, and we would be very happy to support that. And in many ways, the products that we're developing are, in essence, that for affluent and mass affluent markets. So it's aligned with our strategy, and we would support it.

Any more questions in the room? Okay. Okay, folks, look, thanks, everybody, for your participation this morning. For those of you here who are in the room, you're welcome to stay for refreshments and to meet the members of the group executive who are here in the front rows. We look forward to also meeting as many of you as possible on our roadshow. And if you have any follow-up questions, obviously, please reach out to us in investor relations as well. So thanks again. Have a great day.

It's a busy day in the market, guys, so thank you for being here today.

Thank you so much.