Irish Life & Irish Life & PermanentPermanent

Acquisition ofAcquisition ofTSB BankTSB Bank

December 2000

www.irishlifepermanent.ie

Acquisition of TSB BankAcquisition of TSB Bank

Brand New Bank

Permanent TSB

Our Vision

No. 1 Personal Financial Services Provider in Ireland

Acquisition creates a Powerful Competitive Force

StrategyStrategy

“Ireland First” Personal Financial Services Sector Customer Focus Multi-channel access Best in class Bancassurer

High quality retail bank a key element

Acquisition CriteriaAcquisition Criteria

Build retail market position

Complete full retail product range

Shared vision

Complementary

Adds to Shareholder Value

Transaction HighlightsTransaction Highlights

Financial Consideration of €430m

– 1.9 times NAV– P.E. of 13*

EPS enhancing Revenue and Cost Synergies

*2000 estimated net operating profit

Transaction HighlightsTransaction Highlights

Business Combined customer base of 1million Leader in Mortgages - 25%+

Life & Pensions - 20% + Leading positions in Savings, New Car

Finance, Current Accounts Unrivalled Distribution Mix

Full Clearing Bank Strong positions in Savings & Personal Banking 300,000 customers 1,300 employees 82 bank branches 13 in-store TUSA outlets (JV with leading retailer) 120 own ATMs and reciprocity with over 1,500

Market leader in mortgage lending Strong positions in Savings, Bancassurance &

Car Finance Capital Markets expertise 450,000 customers 1,500 employees 70 branches and c.90 agencies/franchises Excellent credit ratings - S&P: A+, Moodys: A1

Permanent TSBPermanent TSB

Brand New Bank!

Permanent TSBPermanent TSB- Product Range- Product Range

Combined product range for combined customer base

Best of both:– Mortgages– Life, Pensions & Investments– Current Accounts– Car Finance– Savings– Money Transmission– Credit Cards

Permanent TSBPermanent TSBBranch DistributionBranch Distribution

Key to success Combined network of c. 110 Overlap of 40/45 branches Evaluate branches for best fit Re-engineering programmes in place

– “Vision 21” (IP)– “Branch Reformat” (TSB)

Permanent TSBPermanent TSBnon-Branch Distributionnon-Branch Distribution

Brokers

600 supportingMortgageBrokers &

Intermediaries

Agencies

90 agencies&

franchises

Salesforce

320 strongIrish LifeSalesforce

In-StoreOutlets

13 In-Storeoutlets,

rising to 18

Telephone

24 HourTelephoneBanking

Internet

OnlineMortgages &

PersonalBanking

Permanent TSBPermanent TSB- Customers- Customers

Improved Market Offering– Wider product range– More competitive product offerings– More access points– Improved service levels– New Services

Customer base of 1 million within enlarged Group

A Powerful Competitive A Powerful Competitive ForceForce

Mortgages 25%+ Savings 12% Current Accounts 10% New Car Finance 20% Life & Pensions 20%+ Total Assets >€30bn

Management & Management & OrganisationOrganisation

Harry Lorton & TSB Trustee (non-exec) to join main Board

Group CEODavid Went

Bank CEOHarry Lorton

Dep. CEO & COODiarmuid Bradley

Director of IntegrationBilly Kane

Integration ProcessIntegration Process

Joint Steering Committee chaired by David Went

Director with responsibility for Integration: Billy Kane

Fair, objective and transparent process “Best of Both” principle will operate Growth opportunities for merged organisation

Build on success of Irish Life andIrish Permanent merger

Bank Financials*Bank Financials*

TSB IP Total Assets €2.6bn €9.9bn Loans & Advances €1.7bn €7.6bn Mortgage Loans €1.3bn €7.0bn Customer Accounts €2.3bn €4.7bn Pre-tax profit €39.0m €80.8m

Net assets on transfer €227m

*1999 other than net assets

Financial BenefitsFinancial Benefits Earnings Enhancing

– pre-goodwill – pre-synergies

Cost Savings– Branch closures– Integration of group functions– Combined cost base €188m

Revenue Synergies– Sale of life products– Sale of banking products

Transaction StructureTransaction Structure

Transfer of TSB Bank undertaking into IL&P

Consideration of €430m:– 85.1% in cash– 14.9% in IL&P shares

14.9% in shares allocated to ESOP– Average closing price over last 10 days

Impact on CapitalImpact on Capital

€m

TSB Risk Assets 1,400

Support Capital (10%) 140

Goodwill 203

Total Capital Required 343

Capital FundingCapital Funding€m

Capital Required 343

Share Buy-back 150

493

Financed from:

Tier 2 Issue 288

Excess Capital 140

ESOP Share Issue 65

493

Completion ProcessCompletion Process

Binding contract with Trustees, subject to:

Minister for Finance approval

Enabling legislation to allow sale

Regulatory clearances

Target completion end Q1 2001

SummarySummary

Permanent TSB - a powerful personal retail bank– More customers– More products– Better access

IL&P - an important strategic step– Best in Class Bancassurer– Powerful competitive force– Increased financial strength– Growing shareholder value

Brand New BankBrand New Bank

Best in Class Bancassurer