Bank of Ireland Mortgages

Bank of Ireland Mortgages Joe Larkin Managing Director March 2004 Bank of Ireland Mortgages Introduction Who we are Bank of Ireland Mortgages (B...
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Bank of Ireland Mortgages

Joe Larkin Managing Director

March 2004

Bank of Ireland Mortgages

Introduction Who we are

Bank of Ireland Mortgages (BOIM) - A dynamic/innovative business, providing more new mortgages than anyone else in the Republic of Ireland and delivering quality earnings to the BOI Group

Our Ambitions:

Undisputed No. 1 ƒ ƒ ƒ ƒ ƒ ƒ

Mortgages:

Market leaders in 2004 Book Quality Customer Retention Customer / Staff Satisfaction Process Efficiency Return on Equity

Recognised as a Key Anchor Product for BOI Group

Bank of Ireland Mortgages

The Irish Mortgage Market €bn

€bn

16

13.5

New Advances (DOE)

10.8

12

6.5

8

7.6

7.7

75

National Mortgage Book (CBI)

60

47.5

45

4.6

30

3.6 4

59.2

32.7 17.2

20.8

38.5

26.2

15 0

0 1997

1998

1999

2000

2001

2002 2003 (est)

Dec-97

Dec-98

Dec-99

Dec-00

Dec-01 Dec-02

Dec 03



According to the Department of the Environment (DoE- Q3 2003), new house prices were up 13.1% nationally with Dublin up 10.7% yoy to September 2003 while second hand house prices grew yoy by 16.1% with Dublin up 16.6%.



New mortgage lending grew by 25% yoy in the first nine months of 2003 (per DoE). Full year market estimates are for 24% growth, giving volumes of circa. €13.5bn.



The National mortgage (CBI) book showed a yoy increase of 25.5% in the 12 months to December 2003, reflecting the highest level of annual growth since February 2000.

Bank of Ireland Mortgages

Market Dynamics •

Size of mortgage market driven by number and value of new advances to customers.



Strong housing and residential mortgage market growth underpinned by robust fundamentals; - Positive demographics (population bulge in key household group 20 – 35 years), - High employment (a growing workforce), - Low and stable unemployment, - Supply constraints (Ireland is still playing catch up for periods of under supply).



Ireland has a significant value (equity) of un-mortgaged housing stock.



Exceptional market growth in recent years: - The national mortgage book grew 184% over the last 5 years and 55% in the last 2 years (December 2003).



But housing stock per capita still continues to remain below EU average.

Bank of Ireland Mortgages

Housing Stock per 1,000 population UK Sweden Netherlands Ireland Germany Finland Denmark Belgium Austria 0



50

100

150

200

250

300

350

400

450

Ireland continues to play ‘available stock’ catch-up with our European neighbours.

Bank of Ireland Mortgages

500

Multi-Channel Multi-Brand Approach •

Unique multi-channel, multi-brand strategy leveraging off the critical foundation product.



Sourcing new advances through 3 channels: BOI branches, ICS Intermediaries and through ICS Mortgage Stores. - ICS and The Mortgage Store channels are secondary brands used by BOI to enhance distribution capability by their ability to access non-BOI and competitor customers, - A key enabler of our market leadership position.



Mortgages are a key relationship product for BOI and ICS, further supporting our customer proposition.



Years of mortgage experience has produced the right mix of expertise and product propositions to suit our many customers’ changing needs.



BOIM is well positioned and has grown market share significantly without diluting book quality.

Bank of Ireland Mortgages

Customer Segments •

BOIM maintains a good mix of customer segments.

F irs t T im e B u y e rs

T ra d e r U p B uyer

E q u ity R e le a s e

R e s id e n tia l In v e s tm e n t L e n d in g

M o rtg a g e B o o k

34%

24%

22%

20%

N ew Advances

30%

21%

23%

26%

S e g m e n t M ix

Dec ‘03



Residential investment lending saw a sharp increase following budget tax changes in 2002.



Product / Price to suit all segments – Good customer choice and after sale service in a very competitive market.



Mortgage refinancing and equity release products are likely to be more prevalent in the Bank of Ireland Mortgages Irish market going forward based on previous UK experience.

Loan Quality •

BOIM’s mortgage book is ‘A’ quality rated - €500m securitised in June 2000 L o a n to V a lu e

92% - 95%

75% - 92%