##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549


FORM 20-F




|              |                                                                                                           
|------------- | ----------------------------------------------------------------------------------------------------------
|(Mark One)  o | REGISTRATION STATEMENT PURSUANT TO
    SECTION 12(b) OR 12(g) OF 
     THE SECURITIES EXCHANGE ACT OF 1934

OR



|  |                                                                                               
|- | ----------------------------------------------------------------------------------------------
|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2003


OR



|  |                                                                                                   
|- | --------------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-14452

THE GOVERNOR AND COMPANY OF

THE BANK OF IRELAND


(Exact name of registrant as specified in its
charter)


IRELAND

(Jurisdiction of incorporation or
organization)


LOWER BAGGOT STREET, DUBLIN 2, IRELAND

(Address of principal executive
offices)


+353 1 6615933

(Telephone number of principal executive
offices)


Securities registered or to be registered
pursuant to Section 12(b) of the Act:

|                                                                                                                   |  |                                          
|------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------
|Title of each class                                                                                                |  | Name of each exchange on which registered
|                                                                                                                   |  |                                          
| Ordinary Stock (nominal value of
    0.64 each)                                                                 |  | The New York Stock Exchange*             
| American Depositary Shares, each
    representing four units of Ordinary Stock (nominal value of
    0.64 each) |  | The New York Stock Exchange              



|  |                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Not for trading, but only in connection with the
    registration of American Depositary Shares representing such
    Ordinary Stock, pursuant to the requirements of the Securities
    and Exchange Commission.

Securities
registered or to be registered pursuant to Section 12(g) of
the Act: None

Securities
for which there is a reporting obligation pursuant to
Section 15(d) of the Act: None

Indicate the number of outstanding shares of each
of the Issuers classes of capital or common stock as of
March 31, 2003:

Ordinary Stock (nominal value of
0.64 per unit):
996,170,626

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.

YES [X]     NO [     ]

Indicate by check mark which financial statement
item the registrant has elected to follow.

Item 17 [     ]     Item 18 [X]



---








---



##### Table of Contents





[THIS PAGE INTENTIONALLY LEFT BLANK]



2



---

TABLE OF CONTENTS



|                    |                                                                                    |                                                                    |  |  |  |  |  | 
|------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------------------------------ |  |  |  |  |  | 
|                    | PRESENTATION OF INFORMATION                                                       
|                    | FORWARD LOOKING INFORMATION                                                       
|                    | DEFINITIONS                                                                       
|                    | REPORTING CURRENCY                                                                
|                    | EXCHANGE RATES                                                                    
|SUMMARY INFORMATION
|PART 1             
|                    | Item 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT & ADVISORS                        
|                    | Item 2 OFFER STATISTICS & EXPECTED TIMETABLE                                      
|                    | Item 3 KEY INFORMATION                                                            
|                    |                                                                                    | SELECTED FINANCIAL DATA                                           
|                    |                                                                                    | RISK FACTORS                                                      
|                    | Item 4 INFORMATION ON THE COMPANY                                                 
|                    |                                                                                    | GENERAL                                                           
|                    |                                                                                    | RECENT DEVELOPMENTS                                               
|                    |                                                                                    | BUSINESS OVERVIEW                                                 
|                    |                                                                                    | STRATEGY                                                          
|                    |                                                                                    | CORPORATE STRUCTURE                                               
|                    |                                                                                    | DESCRIPTION OF PROPERTY                                           
|                    |                                                                                    | COMPETITION                                                       
|                    |                                                                                    | SUPERVISION AND REGULATION                                        
|                    |                                                                                    | THE IRISH ECONOMY                                                 
|                    | Item 5 OPERATING & FINANCIAL REVIEW AND PROSPECTS                                 
|                    |                                                                                    | CRITICAL ACCOUNTING POLICIES                                      
|                    |                                                                                    | ANALYSIS OF RESULTS OF OPERATIONS                                 
|                    |                                                                                    | AVERAGE BALANCE SHEET AND INTEREST RATES                          
|                    |                                                                                    | DESCRIPTION OF ASSETS AND LIABILITIES                             
|                    | Item 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                 
|                    |                                                                                    | DIRECTORS AND SENIOR MANAGEMENT                                   
|                    |                                                                                    | REMUNERATION OF DIRECTORS AND OFFICERS                            
|                    |                                                                                    | CORPORATE GOVERNANCE STATEMENT                                    
|                    |                                                                                    | COURT OF DIRECTORS                                                
|                    |                                                                                    | COURT COMMITTEES                                                  
|                    |                                                                                    | EMPLOYEES                                                         
|                    |                                                                                    | STOCK OPTIONS                                                     
|                    | Item 7 MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS                          
|                    |                                                                                    | CONTROL OF REGISTRANT                                             
|                    |                                                                                    | RELATED PARTY TRANSACTIONS                                        
|                    |                                                                                    | DESCRIPTION OF US STOCKHOLDERS                                    
|                    |                                                                                    | RELATIONS WITH STOCKHOLDERS                                       
|                    | Item 8 FINANCIAL INFORMATION                                                      
|                    |                                                                                    | DIVIDEND POLICY                                                   
|                    |                                                                                    | LEGAL PROCEEDINGS                                                 
|                    |                                                                                    | PROSPECTIVE ACCOUNTING CHANGES                                    
|                    | Item 9 THE OFFER AND LISTING                                                      
|                    |                                                                                    | NATURE OF TRADING MARKET                                          
|                    | Item 10 ADDITIONAL INFORMATION                                                    
|                    |                                                                                    | CHARTER AND BYE-LAWS                                              
|                    |                                                                                    | EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
|                    |                                                                                    | TAXATION                                                          
|                    |                                                                                    | DOCUMENTS AVAILABLE THROUGH THE SEC                               
|                    | Item 11 MARKET RISK                                                               
|                    |                                                                                    | ANALYSIS OF FINANCIAL CONDITION                                   
|                    |                                                                                    | RISK MANAGEMENT AND CONTROL                                       
|                    |                                                                                    | CREDIT RISK                                                       
|                    | Item 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                    
|PART II            
|                    | Item 13 DEFAULTS, DIVIDEND ARREARAGES & DELINQUENCIES                             
|                    | Item 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS & USE OF PROCEEDS
|                    | Item 15 CONTROLS AND PROCEDURES                                                   
|                    | Item 16 RESERVED                                                                  
|PART III           
|                    | Item 17 FINANCIAL STATEMENTS                                                      
|                    | Item 18 FINANCIAL STATEMENTS                                                      
|                    | Item 19 EXHIBITS                                                                  
|Exhibit 1.2        
|Exhibit 12.1       
|Exhibit 12.2       
|Exhibit 13.1       
|Exhibit 13.2       



---



##### Table of Contents



The Governor and Company of The Bank of
Ireland

ANNUAL REPORT ON FORM 20-F

Table of Contents

|     |  |                                                                          |  |      |    | 
|---- |  | ------------------------------------------------------------------------ |  | ---- | -- | 
|     |  |                                                                          |  | Page
|     |  |                                                                          |  |     
|Item |  | Caption                                                                  |  |      |    | 
|     |  | Presentation of Information                                              |  |      | 5  | 
|     |  | Forward Looking Information                                              |  |      | 5  | 
|     |  | Definitions                                                              |  |      | 5  | 
|     |  | Reporting Currency                                                       |  |      | 5  | 
|     |  | Exchange Rates                                                           |  |      | 5  | 
|     |  | Summary Information                                                      |  |      | 7  | 
|     |  | Part I                                                                   |  |      |    | 
|1    |  | Identity of Directors, Senior
    Management & Advisors (not applicable) |  |      | 9  | 
|2    |  | Offer Statistics & Expected Timetable (not
    applicable)               |  |      | 9  | 
|3    |  | Key Information                                                          |  |      | 9  | 
|     |  | Selected financial data                                                  |  |      | 9  | 
|     |  | Risk factors                                                             |  |      | 13 | 
|4    |  | Information on the Company                                               |  |      | 14 | 
|     |  | General                                                                  |  |      | 14 | 
|     |  | Recent developments                                                      |  |      | 14 | 
|     |  | Business Overview                                                        |  |      | 14 | 
|     |  | Strategy                                                                 |  |      | 15 | 
|     |  | Corporate structure                                                      |  |      | 15 | 
|     |  | Description of property                                                  |  |      | 19 | 
|     |  | Competition                                                              |  |      | 20 | 
|     |  | Supervision and Regulation                                               |  |      | 20 | 
|     |  | The Irish Economy                                                        |  |      | 24 | 
|5    |  | Operating & Financial Review and
    Prospects                           |  |      | 24 | 
|     |  | Critical accounting policies                                             |  |      | 24 | 
|     |  | Analysis of results of operations                                        |  |      | 29 | 
|     |  | Average Balance Sheet and Interest Rates                                 |  |      | 43 | 
|     |  | Description of Assets & Liabilities                                      |  |      | 46 | 
|6    |  | Directors, Senior Management and
    Employees                           |  |      | 64 | 
|     |  | Directors and senior management                                          |  |      | 64 | 
|     |  | Remuneration of Directors and Officers                                   |  |      | 67 | 
|     |  | Corporate Governance Statement                                           |  |      | 68 | 
|     |  | Court of Directors                                                       |  |      | 68 | 
|     |  | Court Committees                                                         |  |      | 69 | 
|     |  | Employees                                                                |  |      | 70 | 
|     |  | Stock options                                                            |  |      | 70 | 
|7    |  | Major Stockholders and Related Party
    Transactions                    |  |      | 72 | 
|     |  | Control of registrant                                                    |  |      | 72 | 
|     |  | Related party transactions                                               |  |      | 72 | 
|     |  | Description of US stockholders                                           |  |      | 72 | 
|     |  | Relations with stockholders                                              |  |      | 73 | 
|8    |  | Financial Information                                                    |  |      | 73 | 
|     |  | Dividend policy                                                          |  |      | 73 | 
|     |  | Legal proceedings                                                        |  |      | 74 | 
|     |  | Prospective accounting changes                                           |  |      | 74 | 

3



---



##### Table of Contents



|   |  |                                                                                                     |  |      |    | 
|-- |  | --------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|   |  |                                                                                                     |  | Page
|   |  |                                                                                                     |  |     
|9  |  | The Offer and Listing                                                                               |  |      | 76 | 
|   |  | Nature of trading market                                                                            |  |      | 76 | 
|10 |  | Additional Information                                                                              |  |      | 77 | 
|   |  | Charter and Bye-Laws                                                                                |  |      | 77 | 
|   |  | Exchange controls and other limitations affecting
    Security Holders                              |  |      | 80 | 
|   |  | Taxation                                                                                            |  |      | 80 | 
|   |  | Documents available through the SEC                                                                 |  |      | 83 | 
|11 |  | Market Risk                                                                                         |  |      | 83 | 
|   |  | Analysis of financial condition                                                                     |  |      | 83 | 
|   |  | Risk management and control                                                                         |  |      | 85 | 
|12 |  | Description of Securities other than Equity
    Securities (not applicable)                         |  |      | 92 | 
|   |  | Part II                                                                                             |  |      |    | 
|13 |  | Defaults, Dividend Arrearages &
    Delinquencies (not applicable)                                  |  |      | 93 | 
|14 |  | Material Modifications to the Rights of
    Security Holders & Use of Proceeds
    (not applicable) |  |      | 93 | 
|15 |  | Controls and Procedures                                                                             |  |      | 93 | 
|16 |  | Reserved                                                                                            |  |      | 93 | 
|   |  | Part III                                                                                            |  |      |    | 
|17 |  | Financial Statements                                                                                |  |      | 94 | 
|18 |  | Financial Statements                                                                                |  |      | 94 | 
|19 |  | Exhibits                                                                                            |  |      | 94 | 

4



---



##### Table of Contents






PRESENTATION OF INFORMATION

In this Annual Report on Form 20-F, the term
Ordinary Stock refers to units of Ordinary Stock of
nominal value
0.64 per unit of
the Bank and the term ADSs refers to American
Depositary Shares each representing the right to receive four
units of Ordinary Stock and evidenced by American Depositary
Receipts (ADRs).

The ADSs are listed on the New York Stock
Exchange and are evidenced by ADRs issued by The Bank of New
York as Depositary under a Deposit Agreement.




FORWARD LOOKING INFORMATION

Certain statements contained in this Annual
Report, including any targets, forecasts, projections,
descriptions of anticipated cost savings, statements regarding
the possible development or possible assumed future results of
operations, any statement preceded by, followed by or that
includes the words believes, expects,
aims, intends, will,
may, anticipates or similar expressions
or the negatives thereof, and other restatements that are not
historical facts, are or may constitute forward-looking
statements (as such term is defined in the US Private Securities
Litigation Reform Act of 1995). Because such statements are
inherently subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include
but are not limited to (i) risks and uncertainties relating
to profitability targets, prevailing interest rates, the
performance of the Irish and UK economies and the international
capital markets, the Groups ability to expand certain of
its activities, competition, the Groups ability to address
information technology issues and the availability of funding
sources; and (ii) other risks and uncertainties detailed in
this Annual Report, including under Item 3 
Key Information  Risk Factors. The Bank
does not undertake to release publicly any revision to these
forward-looking statements to reflect events, circumstances or
unanticipated events occurring after the date hereof.




DEFINITIONS

For the purposes of this Annual Report, the term
Bank means The Governor and Company of the Bank of
Ireland and the terms Group and Bank of
Ireland Group mean the Bank and its consolidated
subsidiaries and, where the context permits, its interests in
associated companies and joint ventures.

Certain financial and statistical information in
this Annual Report is presented separately for domestic and
foreign activities. Domestic activities include transactions
recorded on the books of the Group branches and offices located
in Ireland. Foreign activities include transactions recorded on
the books of the Group branches and offices in the United
Kingdom, the United States of America (U.S.) and
elsewhere outside of Ireland.

Unless otherwise stated, for the purposes of this
Annual Report, references to Ireland exclude
Northern Ireland.




REPORTING CURRENCY

The Group publishes consolidated financial
statements in euro
( or
EUR). Each euro is made up of one hundred cent, each
of which is represented by the symbol c in this
Annual Report.

References to dollars,
U.S.$ or $ or ¢ are to
United States (U.S.) currency, and references to
STG£, GBP£ and pounds
sterling are to United Kingdom currency. Amounts in
dollars, unless otherwise stated, for the current financial
(fiscal) year have been translated from euro at the rate
prevailing on March 31, 2003 as shown below under
Exchange Rates. This rate should not be construed as
a representation that the euro amounts actually denote such
dollar amounts or have been, could have been, or could be
converted into dollars at the rate indicated.




EXCHANGE RATES

As a significant portion of the assets,
liabilities, income and expenses of the Group is denominated in
currencies other than euro, fluctuations in the value of the
euro relative to other currencies have had an effect on

5



---



##### Table of Contents



the euro value of assets and liabilities
denominated in such currencies as well as on the Groups
results of operations. The principal foreign currencies
affecting the Groups financial statements are sterling and
the dollar. At July 18, 2003, the Noon Buying Rate (as
defined below) was U.S.$1.1239 =
1.00.


The following table sets forth, for the dates or
periods indicated, the Noon Buying Rate in New York for cable
transfers as certified for customs purposes by the Federal
Reserve Bank of New York (the Noon Buying Rate) and
the rates used by the Group in the preparation of its
consolidated financial statements:

|                                   |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|---------------------------------- |  | -------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                   |  |                     
|                                   |  | Year ended March 31,
|                                   |  |                     
|                                   |  | 2003                 |        | 2002 |  | 2001 |        | 2000 |  | 1999
|                                   |  |                      |        |      |  |      |        |      |  |     
|                                   |  |                     
|                                   |  | (dollars per )     
|Euro/dollar rates:                 |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|March 31                           |  |                      | 1.0900 |      |  |      | 0.8717 |      |  |      | 0.8794 |  |  |  | 0.9574 |  |  |  | 1.0808 | 
|Average(1)                         |  |                      | 1.0033 |      |  |      | 0.8803 |      |  |      | 0.9069 |  |  |  | 1.0217 |  |  |  | 1.1295 | 
|High                               |  |                      | 1.1062 |      |  |      | 0.9535 |      |  |      | 0.9648 |  |  |  | 1.0842 |  |  |  | 1.2223 | 
|Low                                |  |                      | 0.8750 |      |  |      | 0.8370 |      |  |      | 0.8270 |  |  |  | 0.9328 |  |  |  | 1.0679 | 
|March 31 rate used by the Group(2) |  |                      | 1.0895 |      |  |      | 0.8724 |      |  |      | 0.8832 |  |  |  | 0.9553 |  |  |  | 1.0742 | 
|Average rate used by the Group(2)  |  |                      | 1.0051 |      |  |      | 0.8804 |      |  |      | 0.9053 |  |  |  | 1.0247 |  |  |  | 1.1283 | 

The highest noon buying rate for each of the last
six months was: June 2003: 1.1870, May 2003: 1.1853, April 2003:
1.1180, March 2003:1.1062, February 2003: 1.0875, January 2003:
1.0861.

The lowest noon buying rate for each of the last
six months was June 2003: 1.1423, May 2003:1.1200, April 2003:
1.0621, March 2003: 1.0545, February 2003: 1.0708, January 2003:
1.0361.

|                                   |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|---------------------------------- |  | -------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                   |  |                     
|                                   |  | Year ended March 31,
|                                   |  |                     
|                                   |  | 2003                 |        | 2002 |  | 2001 |        | 2000 |  | 1999
|                                   |  |                      |        |      |  |      |        |      |  |     
|                                   |  |                     
|                                   |  | (STG£ per )        
|Euro/sterling rates:               |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|March 31 rate used by the Group(2) |  |                      | 0.6896 |      |  |      | 0.6130 |      |  |      | 0.6192 |  |  |  | 0.5985 |  |  |  | 0.6663 | 
|Average rate used by the Group(2)  |  |                      | 0.6460 |      |  |      | 0.6145 |      |  |      | 0.6145 |  |  |  | 0.6368 |  |  |  | 0.6834 | 






|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average of the Noon Buying Rates on the last
    day of each month during the financial year.                                      
|   
|(2) | The rates used by the Group in the preparation of
    its consolidated financial statements.                                           
|   
|(3) | In the three years to March 31, 2003,
    certain sterling and US dollar profits were hedged and
    translated at the following rates;

|                          |  |        |        |       |  |  |        | 
|------------------------- |  | ------ | ------ | ----- |  |  | ------ | 
|                          |  | /Stg£ |        | /US$
|                          |  |        |        |      
|Year ended March 31, 2003 |  |        |       |       |  |  |       | 
|Year ended March 31, 2002 |  |        | 0.6487 |       |  |  |       | 
|Year ended March 31, 2001 |  |        | 0.6145 |       |  |  | 0.9962 | 

6



---



##### Table of Contents






SUMMARY INFORMATION

Bank of Ireland Group

The Bank of Ireland Group is one of the largest
Irish financial services groups, with total assets of
89.5 billion
(US$97.6 billion) at March 31, 2003. Headquartered in
Dublin, the Group operates throughout Ireland and in the United
Kingdom. Its market capitalization at March 31, 2003 was
 9.7
billion (US$10.6 billion) and at June 30, 2003 was
10.4 billion
(US$12.0 billion).

The Group provides a broad range of financial
services in Ireland to all major sectors of the Irish economy.
These include checking and deposit services, overdrafts, term
loans, mortgages, international asset financing, leasing,
instalment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor,
trustee, stockbroking, life assurance and pension and investment
fund management, fund administration and custodial services and
financial advisory services, including mergers and acquisitions
and underwriting. The Group provides services in euro and other
currencies.

The Group markets and sells its products on a
domestic basis through its extensive nationwide distribution
network in Ireland, which consisted of 262 full-time branches
and 634 ATMs at March 31, 2003, its direct telephone
banking service, direct sales forces and its on-line services.
The Groups market share among credit institutions in
Ireland was over 20% of resources and loans outstanding as of
March 31, 2003.

In the United Kingdom the Group operates mainly
through a grouping of businesses whose functional currency is
sterling (UK Financial Services) incorporating
Bristol & West plc (Bristol &
West), the branch networks in Northern Ireland and Britain
as well as Chase de Vere Financial Solutions. UK Financial
Services provides lending, savings and investment products to
customers and operates advice based businesses.

Operations in the rest of the world are primarily
undertaken by Bank of Ireland Asset Management which provides
fund management services to institutions and pension funds in
the U.S., Europe, Australia, Canada and Japan.

The Groups financial highlights for the
preceding three years are set out below:

|                                            |  |                                      |        |      |  |      |        |  |  |  |        | 
|------------------------------------------- |  | ------------------------------------ | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                            |  |                                     
|                                            |  | At and for the Year Ended           
|                                            |  | March 31,                           
|                                            |  |                                     
|                                            |  | 2003                                 |        | 2002 |  | 2001
|                                            |  |                                      |        |      |  |     
|                                            |  |                                     
|                                            |  | ( millions, except per unit amounts
|                                            |  | and percentages)                    
|Income before taxation:                     |  |                                      |        |      |  |      |        |  |  |  |        | 
|Before exceptional items(1)                 |  |                                      | 1,177  |      |  |      | 1,122  |  |  |  | 1,085  | 
|After exceptional items(1)                  |  |                                      | 1,013  |      |  |      | 1,085  |  |  |  | 992    | 
|Income after taxation(2)                    |  |                                      | 850    |      |  |      | 920    |  |  |  | 802    | 
|Balance Sheet:                              |  |                                      |        |      |  |      |        |  |  |  |        | 
|Total stockholders funds                   |  |                                      | 4,195  |      |  |      | 4,200  |  |  |  | 3,830  | 
|Total assets                                |  |                                      | 89,505 |      |  |      | 87,325 |  |  |  | 78,875 | 
|Per unit of
    0.64 Ordinary
    Stock:   |  |                                      |        |      |  |      |        |  |  |  |        | 
|Earnings                                    |  |                                      | 82.0c  |      |  |      | 89.0c  |  |  |  | 73.4c  | 
|Diluted earnings                            |  |                                      | 81.2c  |      |  |      | 88.1c  |  |  |  | 72.7c  | 
|Alternative earnings(3)                     |  |                                      | 99.2c  |      |  |      | 93.4c  |  |  |  | 84.5c  | 
|Dividends                                   |  |                                      | 37.0c  |      |  |      | 33.0c  |  |  |  | 29.0c  | 
|Ratios (excluding exceptional items)        |  |                                      |        |      |  |      |        |  |  |  |        | 
|Return on average total assets(1)(4)        |  |                                      | 1.1%   |      |  |      | 1.1%   |  |  |  | 1.1%   | 
|Return on average stockholders funds(1)(5) |  |                                      | 22.2%  |      |  |      | 23.5%  |  |  |  | 24.5%  | 
|Capital Ratios:                             |  |                                      |        |      |  |      |        |  |  |  |        | 
|Tier 1 Capital ratio                        |  |                                      | 8.0%   |      |  |      | 7.6%   |  |  |  | 7.8%   | 
|Total Capital ratio                         |  |                                      | 11.1%  |      |  |      | 11.5%  |  |  |  | 12.4%  | 




7



---



##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The exceptional items in the year to
    March 31, 2003 represents the losses relating to the exit
    from two businesses, Active Business Services and PS Information
    Resource (IRL) Ltd and the costs associated with the
    rationalisation of the UK advice-based businesses. In the year
    to March 31, 2002 the exceptional item represents the
    charge for the Group Transformation Programme. The exceptional
    items in the year to March 31, 2001 represent the charge
    for the Group Transformation Programme and the Deposit Interest
    Retention Tax (DIRT). (See Note 9 on page F-26).                                                                         
|   
|(2) | Excluding the effect of the DIRT settlement in
    the year to March 31, 2001, (see Note 9 on
    page F-26).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(3) | Alternative earnings are included herein as in
    the opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group and is in
    accordance with generally accepted accounting principles in
    Ireland. The alternative earnings per share is calculated based
    on the profit attributable to the ordinary stockholders before
    exceptional items (2003:
    153 million,
    2002:
    30 million,
    2001:
    104 million)
    and goodwill amortisation (2003:
    20 million,
    2002:
    14 million,
    2001:
    7 million)
    and is not adjusted for the effect of all dilutive potential
    Ordinary Stock.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The calculation of basic earnings per unit is
    included in Note 12 to our Consolidated Financial
    Statements. Basic earnings per unit is calculated by dividing
    Profit Attributable to Ordinary Stockholders
    (825.9m) by the
    weighted average number of shares in issue (1,007.5m). The
    following table shows a reconciliation of the alternative
    earnings to Profit Attributable to Ordinary Stockholders and
    shows the calculation of alternative earnings per unit.

|                                             |  |      |         |      |  |      |         |  |  |  |       | 
|-------------------------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ----- | 
|                                             |  | 2003 |         | 2002 |  | 2001
|                                             |  |      |         |      |  |     
|Profit attributable to ordinary stockholders |  |      | 826     |      |  |      | 895     |  |  |  | 731   | 
|Exceptional items                            |  |      | 153     |      |  |      | 30      |  |  |  | 104   | 
|Goodwill amortisation                        |  |      | 20      |      |  |      | 14      |  |  |  | 7     | 
|                                             |  |      |         |      |  |      |         |  |  |  |       | 
|Alternative earnings                         |  |      | 999     |      |  |      | 939     |  |  |  | 842   | 
|Weighted average number of shares in issue   |  |      | 1,007.5 |      |  |      | 1,005.6 |  |  |  | 996.8 | 
|Alternative earnings per unit                |  |      | 99.2c   |      |  |      | 93.4c   |  |  |  | 84.5c | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Return on Average Total Assets represents the
    profit attributable to the Ordinary Stockholders, before
    exceptional items in the financial years ended March 31,
    2003, 2002 and 2001, as a percentage of Average Total Assets.
    Return on Average Total Assets is included herein as in the
    opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group and is in
    accordance with generally accepted accounting principles in
    Ireland.

|                                             |  |      |        |      |  |      |        |  |  |  |        | 
|-------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                             |  | 2003 |        | 2002 |  | 2001
|                                             |  |      |        |      |  |     
|Profit attributable to ordinary stockholders |  |      | 826    |      |  |      | 895    |  |  |  | 731    | 
|Exceptional items                            |  |      | 153    |      |  |      | 30     |  |  |  | 104    | 
|Goodwill amortisation                        |  |      | 20     |      |  |      | 14     |  |  |  | 7      | 
|                                             |  |      |        |      |  |      |        |  |  |  |        | 
|                                             |  |      | 999    |      |  |      | 939    |  |  |  | 842    | 
|Average total Assets                         |  |      | 89,271 |      |  |      | 83,145 |  |  |  | 73,916 | 
|                                             |  |      |        |      |  |      |        |  |  |  |        | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Return on average stockholders funds
    represents profit attributable to the ordinary stockholders,
    before exceptional items as outlined in Note 3 above, in
    the financial year ended March 31, 2003, 2002, 2001 and
    1999, as a percentage of average stockholders funds,
    excluding non-equity interests (2003:
    66.8 million,
    2002:
    136.5 million,
    2001:
    212.8 million,
    2000:
    206.1 million
    and 1999:
    204.6 million).
    Return on average stockholders funds is included herein as
    in the opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group and is in
    accordance with generally accepted accounting principles in
    Ireland.

8



---



##### Table of Contents






PART 1




Item 1     IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT & ADVISORS

Not applicable.




Item 2     OFFER
STATISTICS & EXPECTED TIMETABLE

Not applicable.




Item 3     KEY
INFORMATION






SELECTED FINANCIAL DATA


The following table presents selected
consolidated financial data for the Group for each of the five
fiscal years in the five-year period ended March 31, 2003,
which have been derived from audited Consolidated Financial
Statements of the Group.

The selected consolidated financial data should
be read in conjunction with, and are qualified in their entirety
by reference to, the Consolidated Financial Statements of the
Group and the notes thereto, which are included in this Annual
Report. The financial results should not be construed as
indicative of financial results for subsequent periods. See
Item 5  Operating & Financial Review
and Prospects.

As now permitted by a recent change in the
legislation governing the preparation of financial statements
for credit institutions in Ireland, the European Communities
(Credit Institutions Accounts) Regulations, 1992 and in order to
present trading revenues in accordance with common practice in
treasury and trading book operations, dealing profits now
include all profits and losses relating to treasury activities,
including interest and dividends arising from long and short
positions and funding costs and associated fees receivable and
payable. The comparative balances and ratios have also been
restated where practical. There is no impact on total operating
income, costs, profit before tax or stockholders funds.

9



---



##### Table of Contents



SELECTED CONSOLIDATED FINANCIAL DATA

|                                                                    |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|------------------------------------------------------------------- |  | --------------------------------------------- | ------- | -------------------------------------------------------- |  | ---------- | ------- | ---------- |  | ---- | ------- | ---- |  |  | ------ | - |  |  | ------- |  |  |  | ------- | 
|                                                                    |  |                                              
|                                                                    |  | At and for the Financial Year Ended March 31,
|                                                                    |  |                                              
|                                                                    |  | 2003(1)                                       |         | 2003                                                     |  | 2002       |         | 2001       |  | 2000 |         | 1999
|                                                                    |  |                                               |         |                                                          |  |            |         |            |  |      |         |     
|                                                                    |  |                                               |         |                                                          |  | (restated) |         | (restated) |  |      |         |     
|                                                                    |  |                                               |         |                                                         
|                                                                    |  | $m                                            |         | (in  millions, except per unit amounts and percentages)
|Income Statement Data                                               |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Amounts in accordance with Irish
    GAAP:                          |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Interest receivable and similar income                              |  |                                               | 4,023   |                                                          |  |            | 3,691   |            |  |      | 3,980   |      |  |  | 4,055  |   |  |  | 3,002   |  |  |  | 3,125   | 
|Interest payable and similar charges                                |  |                                               | 2,138   |                                                          |  |            | 1,962   |            |  |      | 2,402   |      |  |  | 2,633  |   |  |  | 1,760   |  |  |  | 2,009   | 
|Net interest income                                                 |  |                                               | 1,885   |                                                          |  |            | 1,729   |            |  |      | 1,578   |      |  |  | 1,422  |   |  |  | 1,242   |  |  |  | 1,116   | 
|Provision for bad and doubtful debts                                |  |                                               | 109     |                                                          |  |            | 100     |            |  |      | 102     |      |  |  | 72     |   |  |  | 56      |  |  |  | 56      | 
|Other income                                                        |  |                                               | 1,295   |                                                          |  |            | 1,188   |            |  |      | 1,227   |      |  |  | 1,115  |   |  |  | 900     |  |  |  | 802     | 
|Operating expenses                                                  |  |                                               | 1,812   |                                                          |  |            | 1,662   |            |  |      | 1,582   |      |  |  | 1,387  |   |  |  | 1,167   |  |  |  | 1,060   | 
|Income from associated undertakings and
    joint ventures          |  |                                               | 24      |                                                          |  |            | 22      |            |  |      | 1       |      |  |  | 7      |   |  |  | 1       |  |  |  | 34      | 
|Income from ordinary activities before
    exceptional items        |  |                                               | 1,283   |                                                          |  |            | 1,177   |            |  |      | 1,122   |      |  |  | 1,085  |   |  |  | 920     |  |  |  | 836     | 
|Exceptional items(3)                                                |  |                                               | (179    | )                                                        |  |            | (164    | )          |  |      | (37     | )    |  |  | (93    | ) |  |  |        |  |  |  | 218     | 
|Income before taxation                                              |  |                                               | 1,104   |                                                          |  |            | 1,013   |            |  |      | 1,085   |      |  |  | 992    |   |  |  | 920     |  |  |  | 1,054   | 
|Taxation on income from ordinary activities                         |  |                                               | 178     |                                                          |  |            | 163     |            |  |      | 165     |      |  |  | 190    |   |  |  | 193     |  |  |  | 248     | 
|Deposit Interest Retention Tax(3)                                   |  |                                               |        |                                                          |  |            |        |            |  |      |        |      |  |  | 35     |   |  |  |        |  |  |  |        | 
|Minority interests  equity                                         |  |                                               | 10      |                                                          |  |            | 9       |            |  |      | 2       |      |  |  | 3      |   |  |  | 3       |  |  |  | 1       | 
| non equity                                                        |  |                                               | 6       |                                                          |  |            | 6       |            |  |      | 6       |      |  |  | 7      |   |  |  | 6       |  |  |  | 6       | 
|Non-cumulative preference stock dividend                            |  |                                               | 10      |                                                          |  |            | 9       |            |  |      | 17      |      |  |  | 26     |   |  |  | 25      |  |  |  | 23      | 
|Income attributable to holders of ordinary stock                    |  |                                               | 900     |                                                          |  |            | 826     |            |  |      | 895     |      |  |  | 731    |   |  |  | 693     |  |  |  | 776     | 
|Per unit of Ordinary Stock                                          |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Income attributable to holders of
    ordinary stock                |  |                                               | 89.4c   |                                                          |  |            | 82.0c   |            |  |      | 89.0c   |      |  |  | 73.4c  |   |  |  | 68.3c   |  |  |  | 75.0c   | 
|Alternative income attributable to holders of
    ordinary stock(4) |  |                                               | 108.1c  |                                                          |  |            | 99.2c   |            |  |      | 93.4c   |      |  |  | 84.5c  |   |  |  |         |  |  |  | 54.8c   | 
|Dividends(2)                                                        |  |                                               | 40.3c   |                                                          |  |            | 37.0c   |            |  |      | 33.0c   |      |  |  | 29.0c  |   |  |  | 23.5c   |  |  |  | 18.41c  | 
|Amounts in accordance with
    U.S. GAAP:                           |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Net income attributable to holders of
    ordinary stock:           |  |                                               | 836     |                                                          |  |            | 767     |            |  |      | 667     |      |  |  | 689    |   |  |  | 628     |  |  |  | 777     | 
|Net income per unit of ordinary stock                               |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Basic                                                               |  |                                               | 82.9c   |                                                          |  |            | 76.1c   |            |  |      | 66.3c   |      |  |  | 69.1c  |   |  |  | 62.0c   |  |  |  | 75.1c   | 
|Diluted                                                             |  |                                               | 82.2c   |                                                          |  |            | 75.4c   |            |  |      | 65.7c   |      |  |  | 68.5c  |   |  |  | 61.6c   |  |  |  | 74.5c   | 
|Number of shares used in EPS calculation                            |  |                                               | 1,007.5 |                                                          |  |            | 1,007.5 |            |  |      | 1,005.6 |      |  |  | 996.8  |   |  |  | 1,013.6 |  |  |  | 1,034.8 | 
|Balance Sheet Data                                                  |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Amounts in accordance with Irish
    GAAP:                          |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Total assets                                                        |  |                                               | 97,560  |                                                          |  |            | 89,505  |            |  |      | 87,325  |      |  |  | 78,875 |   |  |  | 68,017  |  |  |  | 54,314  | 
|Loans and advances to customers                                     |  |                                               | 62,007  |                                                          |  |            | 56,887  |            |  |      | 56,577  |      |  |  | 51,147 |   |  |  | 44,844  |  |  |  | 36,183  | 
|Loans and advances to banks                                         |  |                                               | 8,153   |                                                          |  |            | 7,480   |            |  |      | 8,385   |      |  |  | 8,115  |   |  |  | 6,972   |  |  |  | 3,457   | 
|Allowance for loan losses                                           |  |                                               | 523     |                                                          |  |            | 480     |            |  |      | 500     |      |  |  | 430    |   |  |  | 398     |  |  |  | 359     | 
|Deposits, short-term borrowings and
    other accounts              |  |                                               | 77,134  |                                                          |  |            | 70,765  |            |  |      | 70,068  |      |  |  | 62,310 |   |  |  | 54,121  |  |  |  | 41,877  | 
|Dated capital notes                                                 |  |                                               | 1,406   |                                                          |  |            | 1,290   |            |  |      | 1,559   |      |  |  | 1,549  |   |  |  | 1,504   |  |  |  | 814     | 
|Undated capital notes                                               |  |                                               | 1,540   |                                                          |  |            | 1,413   |            |  |      | 965     |      |  |  | 961    |   |  |  | 362     |  |  |  | 575     | 
|Minority interests  equity                                         |  |                                               | 59      |                                                          |  |            | 54      |            |  |      | 91      |      |  |  | 5      |   |  |  | 5       |  |  |  | 3       | 
| non equity                                                        |  |                                               | 80      |                                                          |  |            | 73      |            |  |      | 82      |      |  |  | 81     |   |  |  | 87      |  |  |  | 79      | 
|Called up capital stock                                             |  |                                               | 740     |                                                          |  |            | 679     |            |  |      | 679     |      |  |  | 691    |   |  |  | 690     |  |  |  | 681     | 
|Reserves                                                            |  |                                               | 3,832   |                                                          |  |            | 3,516   |            |  |      | 3,521   |      |  |  | 3,139  |   |  |  | 2,615   |  |  |  | 2,196   | 
|Total stockholders funds including
    non-equity interests        |  |                                               | 4,572   |                                                          |  |            | 4,195   |            |  |      | 4,200   |      |  |  | 3,830  |   |  |  | 3,305   |  |  |  | 2,877   | 
|Amounts in accordance with
    U.S. GAAP:                           |  |                                               |         |                                                          |  |            |         |            |  |      |         |      |  |  |        |   |  |  |         |  |  |  |         | 
|Stockholders equity                                                |  |                                               | 4,566   |                                                          |  |            | 4,189   |            |  |      | 4,253   |      |  |  | 4,141  |   |  |  | 3,727   |  |  |  | 3,453   | 
|Total assets                                                        |  |                                               | 99,793  |                                                          |  |            | 91,553  |            |  |      | 88,748  |      |  |  | 80,083 |   |  |  | 68,666  |  |  |  | 55,281  | 

10



---



##### Table of Contents



|                                                                 |  |                                               |      |            |  |            |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|---------------------------------------------------------------- |  | --------------------------------------------- | ---- | ---------- |  | ---------- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                                                 |  |                                              
|                                                                 |  | At and For the Financial Year Ended March 31,
|                                                                 |  |                                              
|                                                                 |  | 2003                                          |      | 2002       |  | 2001       |      | 2000 |  | 1999
|                                                                 |  |                                               |      |            |  |            |      |      |  |     
|                                                                 |  |                                               |      | (restated) |  | (restated) |      |      |  |     
|                                                                 |  |                                              
|                                                                 |  | (in percentages)                             
|Other Financial Data                                             |  |                                               |      |            |  |            |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Return on average total assets(5)                                |  |                                               | 1.1  |            |  |            | 1.1  |      |  |      | 1.1  |  |  |  | 1.2  |  |  |  | 1.1  | 
|Return on average stockholders funds(6)                         |  |                                               | 22.2 |            |  |            | 23.5 |      |  |      | 24.5 |  |  |  | 24.4 |  |  |  | 23.8 | 
|Net interest margin(7)                                           |  |                                               | 2.3  |            |  |            | 2.3  |      |  |      | 2.3  |  |  |  | 2.5  |  |  |  | 2.5  | 
|Net interest margin, tax equivalent basis(8)                     |  |                                               | 2.4  |            |  |            | 2.3  |      |  |      | 2.4  |  |  |  | 2.6  |  |  |  | 2.6  | 
|Cost/income ratio(9)                                             |  |                                               | 56   |            |  |            | 56   |      |  |      | 54   |  |  |  | 54   |  |  |  | 55   | 
|Allowance for loan losses to total loans                         |  |                                               | 0.8  |            |  |            | 0.9  |      |  |      | 0.8  |  |  |  | 0.9  |  |  |  | 1.0  | 
|Provisions for bad and doubtful debts to average
    total loans |  |                                               | 0.2  |            |  |            | 0.2  |      |  |      | 0.2  |  |  |  | 0.1  |  |  |  | 0.2  | 
|Tier 1 capital ratio(10)                                         |  |                                               | 8.0  |            |  |            | 7.6  |      |  |      | 7.8  |  |  |  | 7.4  |  |  |  | 9.0  | 
|Total capital ratio(10)                                          |  |                                               | 11.1 |            |  |            | 11.5 |      |  |      | 12.4 |  |  |  | 11.8 |  |  |  | 13.0 | 
|Average stockholders equity to average
    total assets(11)     |  |                                               | 5.0  |            |  |            | 4.9  |      |  |      | 4.9  |  |  |  | 5.2  |  |  |  | 5.1  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Translated solely for convenience into dollars at
    1.00 =
    U.S.$1.0900, the Noon Buying Rate on March 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | See Item 8 Financial
    Information  Dividend Policy for details of
    dividends per unit of Ordinary Stock in US Dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(3) | The exceptional item in the year to
    March 31, 2003 represents the losses relating to the exit
    from two businesses, Active Business Services and PS Information
    Resource (IRL) Ltd and the costs associated with the
    rationalisation of the UK advice-based businesses. In the year
    to March 31, 2002 the exceptional item represents the
    charge for the Group Transformation Programme. The exceptional
    items in the year to March 31, 2001 represent the charge
    for the Group Transformation Programme and the DIRT settlement.
    The exceptional item in the year to March 31, 1999
    represents the profit on the sale of the Groups interest
    in Citizens.                                                                                                                                                                      
|   
|(4) | Alternative earnings is included herein as in the
    opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group and is in
    accordance with generally accepted accounting principles in
    Ireland. The alternative earnings per share is calculated based
    on the profit attributable to the ordinary stockholders before
    exceptional items (2003:
    153 million,
    2002:
    30 million,
    2001:
    104 million,
    2000: nil, 1999:
    209 million)
    and goodwill amortisation (2003:
    20 million,
    2002:
    14 million,
    2001:
    7 million,
    2000: nil, 1999: nil) and is not adjusted for the effect of all
    dilutive potential Ordinary Stock  See page 8
    Note (3) for a reconciliation of alternative earnings per
    share to basic earnings per share.
|   
|(5) | Return on average total assets represents profit
    attributable to the ordinary stockholders, before exceptional
    items in the financial years ended March 31, 2003, 2002,
    2001 and 1999, as a percentage of average total assets. The
    calculation of the average balances for all years includes
    daily, weekly or monthly averages for certain reporting units.
    See Item 5 Operating & Financial Review and
    Prospects  Average Balance Sheet and Interest
    Rates. The Bank considers these average balances to be
    representative of the operations of the Group.                                                                                                                                                                                                                                                                        
|   
|(6) | Return on average stockholders funds
    represents profit attributable to the ordinary stockholders,
    before exceptional items as outlined in Note 3 above, in
    the financial year ended March 31, 2003, 2002, 2001 and
    1999, as a percentage of average stockholders funds,
    excluding non-equity interests (2003:
    66.8 million,
    2002:
    136.5 million,
    2001:
    212.8 million,
    2000:
    206.1 million
    and 1999:
    204.6 million).                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(7) | Net interest margin represents net interest
    income as a percentage of average interest earning assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(8) | Net interest margin on a tax equivalent basis
    includes an adjustment to reflect tax benefits received by the
    Group in return for undertaking certain lending (tax-based
    lending) at rates below market rates to provide incentives
    for industrial development. The net interest margin is reduced
    as a result of such lending activity and this tax-equivalent
    adjustment reflects the tax savings associated with such
    activity.                                                                                                                                                                                                                                                                                                                                                                                                             

11



---



##### Table of Contents



|                       |  |      |        |      |  |      |        |  |  |  |        | 
|---------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                       |  | 2003 |        | 2002 |  | 2001
|                       |  |      |        |      |  |     
|Net Interest Income    |  |      | 1,729  |      |  |      | 1,578  |  |  |  | 1,422  | 
|Grossing up            |  |      | 27     |      |  |      | 36     |  |  |  | 36     | 
|                       |  |      |        |      |  |      |        |  |  |  |        | 
|                       |  |      | 1,756  |      |  |      | 1,614  |  |  |  | 1,458  | 
|Average Earning Assets |  |      | 73,810 |      |  |      | 69,904 |  |  |  | 61,279 | 



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The net interest margin is included here as in
    the opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group.



|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(9) | The cost/income ratio is determined by dividing
    the total expenses before goodwill amortization of the Group by
    the total income of the Group.

|                      |  |      |       |      |  |      |       |  |  |  |       | 
|--------------------- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                      |  | 2003 |       | 2002 |  | 2001
|                      |  |      |       |      |  |     
|Total costs           |  |      | 1,662 |      |  |      | 1,582 |  |  |  | 1,387 | 
|Goodwill amortisation |  |      | 20    |      |  |      | 14    |  |  |  | 7     | 
|                      |  |      |       |      |  |      |       |  |  |  |       | 
|                      |  |      | 1,642 |      |  |      | 1,568 |  |  |  | 1,380 | 
|                      |  |      |       |      |  |      |       |  |  |  |       | 
|Total Income          |  |      | 2,917 |      |  |      | 2,805 |  |  |  | 2,537 | 
|                      |  |      |       |      |  |      |       |  |  |  |       | 



| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The cost/income ratio is included here as in the
    opinion of the Directors it provides a more meaningful
    representation of the ongoing performance of the Group.



|     |                                                                                                                                                                                                                                                                              
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | The target standard risk-asset ratio set by the
    Basel Committee is 8%, of which the Tier 1 element must be at
    least 4%. The minimum risk-asset ratio is set by the Central
    Bank of Ireland and satisfies capital adequacy requirements of
    the European Union.
|    
|(11) | Average stockholders equity includes
    non-equity interests as noted above. (See page 8
    note 5 for further details)                                                                                                                                                   

12



---



##### Table of Contents






RISK FACTORS

Set out below are certain risk factors which
could negatively affect the Group future results and financial
position. The factors discussed below should not be regarded as
a complete and comprehensive statement of all potential risks
and uncertainties.

Risks concerning borrower credit quality and
general economic conditions are inherent in the Groups
business.

Risks arising from changes in credit quality and
the recoverability of loans and amounts due from counterparties
are inherent in a wide range of the Groups businesses.
Adverse changes in the credit quality of the Groups
borrowers and counterparties or a general deterioration in
Irish, UK or global economic conditions, or arising from
systemic risks in the financial systems, could reduce the
recoverability and value of the Groups assets and require
an increase in Groups level of provisions for bad and
doubtful debts.

Market risks associated with fluctuations in
interest rates, foreign exchange rates, bond and equity prices
and other market factors are inherent in the Groups
business.

The most significant market risks the Group faces
are interest rate, foreign exchange and bond and equity price
risks. Changes in interest rate levels, yield curves and spreads
may affect the interest rate margin realised between lending and
borrowing costs. Changes in currency rates, particularly in the
euro-sterling and euro-dollar, affect the value of assets and
liabilities denominated in foreign currencies and affect
earnings reported by the Groups non-euro denominated
businesses.

The Group has implemented risk management methods
to mitigate and control these and other market risks to which
the Group is exposed. However, it is difficult to predict
changes in economic or market conditions and to anticipate the
effects that such changes could have on the Groups
financial performance and business operations. See
Item 11  Market Risk  Risk
Management and Control for a discussion on these risks.

Operational risks are inherent in the
Groups business.

The Groups business depend on the ability
to process a large number of transactions efficiently and
accurately. Losses can result from inadequate or failed internal
control processes, and systems, human error, fraud or from
external events that interrupt normal business operations.
Although the Group has implemented risk controls and loss
mitigation actions and substantial resources are dedicated to
developing efficient procedures and training to staff, it is
only possible to be reasonably, but not absolutely certain that
such procedures will be effective. See Item 11
Market Risk  Risk Management and
Control  Operational risk.

The Groups businesses are subject to
substantial legal, regulatory and governmental requirements and
oversight.

The Group is subject to financial services laws,
regulations, administrative actions and policies in each
location in which the Group operates. Changes in supervision and
regulation, in particular in Ireland and the UK, could
materially affect the Groups business, the products and
services offered or the value of assets.

Risks associated with strategic decisions
regarding organic growth, the competitive environment and
potential acquisitions.

The Group devotes substantial management and
planning resources developing strategic plans for organic growth
and identifying possible acquisitions. If the outcome of these
plans do not match expectations, the Groups earnings may
not develop as forecasted. In addition, the market for financial
services within which the Group operates is highly competitive;
the Groups ability to generate an appropriate return for
its shareholders depends significantly upon managements
response to the competitive environment. See
Item 4  Business Overview for
additional information.

13



---



##### Table of Contents



The Groups insurance businesses are
subject to inherent risk regarding claims provisions.

Claims in the Groups life assurance
businesses may be higher than expected as a result of changing
trends in claims experience arising from changes in demographic
developments, mortality and morbidity rates and other factors
outside the Groups control. Such changes could affect the
profitability of current and future insurance products and
services.




Item 4     INFORMATION
ON THE COMPANY






GENERAL


The Governor and Company of Bank of Ireland was
established as a chartered corporation by an Act of the Irish
Parliament of 1781/2 and by a Royal Charter of King
George III in 1783. The Bank of Ireland Group is one of the
largest financial services groups in Ireland with total assets
of
89.5 billion
at March 31, 2003. The address of the principal executive
offices is Lower Baggot Street, Dublin 2
(phone 353-1-6615933).

The Group provides an extensive range of banking
and other financial services. All of these services are provided
by the Group in Ireland, with a less comprehensive range offered
in the United Kingdom.

The Group has a network of retail branches in
Ireland and the United Kingdom. Its international business has
centres in Dublin and London. In addition, the Group has a
representative office in Frankfurt and wholly owned subsidiaries
in Jersey and the Isle of Man.

The Group provides fund management services
through Bank of Ireland Asset Management and in addition to its
commercial banking business, the Bank has an instalment finance
business, operated through its business unit, Bank of Ireland
Finance and an international asset financing subsidiary, Bank of
Ireland International Finance Limited; the latter is located in
the International Financial Services Center (IFSC) in Dublin.
Other subsidiaries include Bank of Ireland Life Holdings plc, a
life assurance and pensions company in Ireland (formerly
Lifetime and New Ireland), ICS Building Society our home
mortgage businesses in Ireland and Bank of Ireland Home
Mortgages Limited (BIM) and Bristol & West in
Britain.

The Group also holds 90.44% of the equity shares
and 49% of the voting shares of J&E Davy Holdings Limited,
the holding company for J&E Davy Stockbrokers (Davy
Stockbrokers), a leading Irish stockbroker. The remaining
equity and voting interests in J&E Davy Holdings
Limited are held by J&E Davy management.




RECENT DEVELOPMENTS



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) | Since March 31, 2003 Bank of Ireland
    Securities Services reached agreement on the sale of its share
    in the alliance jointly operated with State Street in the IFSC.
    This followed the acquisition by State Street of the global
    securities services business of Deutsche Bank in 2002.                                                                                                                                                                                                                                                                                                                                                                           
|  
|b) | In line with our current Group strategy to
    outsource or divest non-core activity we recently appointed
    Hewlett Packard (HP) as our preferred supplier in the area of IT
    infrastructure support services. We further appointed EsatBT as
    preferred provider of network services (voice and WAN), with
    this service to be managed by HP as part of an overall managed
    service proposition. We are currently undertaking mutual due
    diligence with Hewlett Packard and EsatBT, and simultaneously
    working with employee consultative groups to finalise the
    employee proposition. We anticipate that contracts will be
    signed later in 2003.
|  
|c) | David Dilger, Chief Executive Officer of
    Greencore Group plc, Dublin and George Magan, Chairman of Morgan
    Shipley, Dubai and a Partner in Rhône Group, New York were
    appointed to the Court as non-executive Directors on
    July 10, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                         




BUSINESS OVERVIEW

The Group provides a broad range of financial
services in Ireland to all major sectors of the Irish economy.
These include checking and deposit services, overdrafts, term
loans, mortgages, international asset financing, leasing,
instalment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor,
trustee, stockbroking, life assurance and pension and investment
fund management, fund

14



---



##### Table of Contents



administration and custodial services and
financial advisory services, including mergers and acquisitions
and underwriting. The Group provides services in euro and other
currencies.


The Group markets and sells its products on a
domestic basis through its extensive nationwide distribution
network in Ireland, which consisted of 262 full-time
branches and 634 ATMs at March 31, 2003, its direct
telephone banking service, direct sales forces and its on-line
services. The Groups market share among credit
institutions in Ireland was over 20% of resources and loans
outstanding as of March 31, 2003.

In the United Kingdom the Group operates mainly
through a grouping of businesses UK Financial Services, whose
functional currency is sterling. The grouping consists of
Bristol & West plc, the branch networks in Northern Ireland
and Britain as well as Chase de Vere Financial Solutions. UK
Financial Services provides lending, savings and investment
products to customers and operates advice based businesses.

Operations in the rest of the world are primarily
undertaken by Bank of Ireland Asset Management which provides
fund management services to institutions and pension funds in
the U.S., Europe, Australia, Canada and Japan.




STRATEGY

Strategic Focus

The Group has a clear four part strategy. While
the emphasis on each of the four components may vary depending
on opportunity and market circumstances, the Groups
general strategic focus has not changed radically and remains
fundamentally that which has delivered 10 years of
uninterrupted growth and stockholder returns at levels achieved
by few among our peers. The Group believes the strategy is
simple and well proven and will continue to deliver growth.

The four principal components are:



| |   |                          
| | - | -------------------------
| |  | Organic Growth           
|
| |  | Mergers & Acquisitions   
|
| |  | Capital Management       
|
| |  | Strategic Cost Management

The first two of these are the engines for growth
while the latter two are about running the Group in the most
efficient way possible, both from a balance sheet and operating
perspective.

Underpinning the group strategy are the five
Group goals which are:



| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an undiminished focus on Ireland and the UK as a
    source of continued organic growth, especially in market
    segments in which we have not reached our full potential
|
| |  | the achievement of an increasing proportion of
    profits from our international businesses                                                                              
|
| |  | a continued drive to increase the proportion of
    revenues from non-interest income                                                                                     
|
| |  | the achievement of an industry-leading cost
    performance in every Group business                                                                                       
|
| |  | optimisation of the mix of our capital structure
    and capital allocations to deliver enhanced stockholder returns.                                                     

The Group believes the achievement of its
strategic goals is also supported by an excellent credit
culture, a commitment to the highest standards of corporate
governance and behaviour, and a focus on the development of the
management and people skills that are essential to progress in
the modern financial services environment.




CORPORATE STRUCTURE

The Group organises its businesses into Retail
Republic of Ireland, Bank of Ireland Life, Wholesale Financial
Services, UK Financial Services, Asset Management Services and
Group and Central. The Groups

15



---



##### Table of Contents



operations extend geographically throughout
Ireland and the United Kingdom. The Segmental Analysis note is
shown in Note 2, on pages F-15 to F-19 and outlines a
detailed analysis of profit contributions by both geographic
segments and by business classes.


The following table shows the profit contribution
by business for the three years ended March 31, 2003 and
the total assets at March 31, 2003, 2002 and 2001. In order
to show profit for each business on a comparable basis, a tax
equivalent adjustment has been made to reflect tax benefits the
Group has received in return for undertaking certain tax-based
lending at rates below market rates to provide incentives for
industrial development.

|                                                             |  |                                        |       |   |  |      |     |   |  |      |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|------------------------------------------------------------ |  | -------------------------------------- | ----- | - |  | ---- | --- | - |  | ---- | ----- | - |  |  | --- | - |  |  | ----- | - |  |  | --- | -
|                                                             |  |                                       
|                                                             |  | For the Financial Year Ended March 31,
|                                                             |  |                                       
|                                                             |  | 2003                                   |       | % |  | 2002 |     | % |  | 2001 |       | %
|                                                             |  |                                        |       |   |  |      |     |   |  |      |       |  
|                                                             |  |                                       
|                                                             |  | (in  millions, except percentages)   
|Income Before Tax                                            |  |                                        |       |   |  |      |     |   |  |      |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Retail Republic of Ireland                                   |  |                                        | 375   |   |  |      | 32  |   |  |      | 321   |   |  |  | 29  |   |  |  | 290   |   |  |  | 27  |  
|Bank of Ireland Life                                         |  |                                        | 87    |   |  |      | 7   |   |  |      | 122   |   |  |  | 11  |   |  |  | 131   |   |  |  | 12  |  
|Wholesale Financial Services                                 |  |                                        | 389   |   |  |      | 33  |   |  |      | 355   |   |  |  | 32  |   |  |  | 283   |   |  |  | 26  |  
|UK Financial Services                                        |  |                                        | 352   |   |  |      | 30  |   |  |      | 318   |   |  |  | 28  |   |  |  | 324   |   |  |  | 30  |  
|Asset Management Services                                    |  |                                        | 113   |   |  |      | 10  |   |  |      | 126   |   |  |  | 11  |   |  |  | 133   |   |  |  | 12  |  
|Group and Central                                            |  |                                        | (85   | ) |  |      | (7  | ) |  |      | (64   | ) |  |  | (6  | ) |  |  | (30   | ) |  |  | (3  | )
|Tax equivalent adjustment(1)                                 |  |                                        | (54   | ) |  |      | (5  | ) |  |      | (56   | ) |  |  | (5  | ) |  |  | (46   | ) |  |  | (4  | )
|                                                             |  |                                        |       |   |  |      |     |   |  |      |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Income from ordinary activities before
    exceptional items |  |                                        | 1,177 |   |  |      | 100 |   |  |      | 1,122 |   |  |  | 100 |   |  |  | 1,085 |   |  |  | 100 |  
|Group Transformation Programme                               |  |                                        |      |   |  |      |    |   |  |      | (37   | ) |  |  |    |   |  |  | (93   | ) |  |  |    |  
|Exceptional items                                            |  |                                        | (164  | ) |  |      |    |   |  |      |      |   |  |  |    |   |  |  |      |   |  |  |    |  
|                                                             |  |                                        |       |   |  |      |     |   |  |      |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Income before taxation                                       |  |                                        | 1,013 |   |  |      | 100 |   |  |      | 1,085 |   |  |  | 100 |   |  |  | 992   |   |  |  | 100 |  
|                                                             |  |                                        |       |   |  |      |     |   |  |      |       |   |  |  |     |   |  |  |       |   |  |  |     |  

|                             |  |                                     |         |   |  |      |     |   |  |      |         |   |  |  |     |  |  |  |        |  |  |  |     | 
|---------------------------- |  | ----------------------------------- | ------- | - |  | ---- | --- | - |  | ---- | ------- | - |  |  | --- |  |  |  | ------ |  |  |  | --- | 
|                             |  |                                    
|                             |  | At March 31,                       
|                             |  |                                    
|                             |  | 2003                                |         | % |  | 2002 |     | % |  | 2001 |         | %
|                             |  |                                     |         |   |  |      |     |   |  |      |         |  
|                             |  |                                    
|                             |  | (in  millions, except percentages)
|Assets                       |  |                                     |         |   |  |      |     |   |  |      |         |   |  |  |     |  |  |  |        |  |  |  |     | 
|Retail Republic of Ireland   |  |                                     | 28,269  |   |  |      | 22  |   |  |      | 23,427  |   |  |  | 21  |  |  |  | 19,449 |  |  |  | 19  | 
|Bank of Ireland Life         |  |                                     | 5,728   |   |  |      | 5   |   |  |      | 6,028   |   |  |  | 5   |  |  |  | 5,305  |  |  |  | 5   | 
|Wholesale Financial Services |  |                                     | 51,241  |   |  |      | 41  |   |  |      | 43,538  |   |  |  | 39  |  |  |  | 38,573 |  |  |  | 39  | 
|UK Financial Services        |  |                                     | 31,222  |   |  |      | 25  |   |  |      | 33,338  |   |  |  | 29  |  |  |  | 30,575 |  |  |  | 31  | 
|Asset Management Services    |  |                                     | 1,611   |   |  |      | 1   |   |  |      | 930     |   |  |  | 1   |  |  |  | 1,020  |  |  |  | 1   | 
|Group and Central            |  |                                     | 7,618   |   |  |      | 6   |   |  |      | 5,767   |   |  |  | 5   |  |  |  | 5,051  |  |  |  | 5   | 
|                             |  |                                     |         |   |  |      |     |   |  |      |         |   |  |  |     |  |  |  |        |  |  |  |     | 
|Total(2)                     |  |                                     | 125,689 |   |  |      | 100 |   |  |      | 113,028 |   |  |  | 100 |  |  |  | 99,973 |  |  |  | 100 | 
|                             |  |                                     |         |   |  |      |     |   |  |      |         |   |  |  |     |  |  |  |        |  |  |  |     | 






|    |                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Group undertakes tax based transactions at
    rates which are less than normal market rates in return for tax
    relief arising from incentives for industrial development and
    other reliefs. To assist in making valid comparison of pre-tax
    performance, the analysis of business unit performance is
    grossed up.
|   
|(2) | Total Assets include intra-group items of
    36,184 million
    (2002:
    25,703 million,
    2001:
    21,098 million).                                                                                                                                                                                                        

Retail Republic of Ireland

Retail Republic of Ireland includes all the
Groups branch banking operations in the Republic of
Ireland. The branches offer a wide range of financial products
and services in addition to the deposit, lending, checking
account and other money transmission services traditionally
offered by banks. It also includes ICS Building Society,
instalment credit and leasing facilities, as well as a direct
telephone banking unit, credit card operations and commercial
finance/ factoring businesses.

16



---



##### Table of Contents



As at March 31, 2003, Branch Banking
Republic operated 262 full-time branches. A full range of
banking services is provided to all major sectors of the Irish
economy including small and medium sized commercial and
industrial companies. Branches provide checking accounts, demand
and term deposit accounts, overdrafts, term loans and home loans
as well as customary money transmission and foreign exchange
services. Also available through branches are credit cards and
assurance and investment products as well as the loan and
deposit products of other Group businesses.

As a building society, ICS is mainly involved in
the collection of deposits and the making of loans secured by
residential properties. Its mortgage business is generated by
its own mortgage stores and by referrals from intermediaries.
ICSs deposits are generated by referrals from Bank
branches. Deposits sourced by the Groups branches come
principally from customers who prefer to maintain their funds
with a building society. In addition, ICS operates a mortgage
servicing center which processes the Banks mortgage
portfolio as well as its own.

Bank of Ireland Finance provides instalment
credit and leasing facilities. Its products are marketed to the
personal, commercial and agricultural sectors by a direct sales
force, through the Banks branches and by intermediaries
such as dealers, brokers, retailers and professionals with whom
it has established relationships. Its products include secured
instalment credit, leasing, and insurance premium finance. It
also provides current asset financing through invoice
discounting, factoring and export credit finance and stock
purchasing.

Card Services is responsible for the Groups
credit card activities in the Republic of Ireland and in
Northern Ireland. It provides MasterCard, VISA and American
Express cards and is supported by Bank branches in marketing its
services.

Banking 365, a direct selling operation, offers
personal loan facilities by telephone, outside as well as during
normal business hour and it also operates a call centre which
deals with customer queries and processes transactions. A
related company Premier Direct Insurance Services offers motor
insurance over the telephone.

Bank of Ireland Life

The Group operates in the life and pensions
market through Bank of Ireland Life and offers life assurance,
protection, pension and investment products primarily to Group
customers in Ireland, throughout the Groups extensive
branch banking network and it also operates through the broker
channel and its direct sales force, to access the domestic life
assurance and pensions markets.

Wholesale Financial Services

The principal constituents of this division are
Corporate Banking, Treasury and International Banking, J&E
Davy Stockbrokers, First Rate Enterprises Limited, IBI Corporate
Finance Limited and Private Banking.

Corporate Banking provides an integrated banking
service to a significant number of the major corporations in
Ireland. The range of lending products provided includes
overdraft and short-term loan facilities, term loans, project
financing, tax sheltered lending and leasing. Corporate Banking
also manages Bank of Ireland International Finance Limited,
which operates out of the IFSC in Dublin. This company is
engaged in international asset financing, the provision of
structured financial transactions in Europe, leveraged
acquisition and project finance, and syndicated lending to major
multi-national companies, principally in the United Kingdom and
the United States.

Treasury and International Banking is responsible
for the Groups liquidity and funding requirements and
interest and exchange rate risk management. In Dublin, Treasury
and International Banking deals in a full range of market
instruments on behalf of the Group itself and the Groups
principal corporate clients. Activities include dealing in
foreign exchange spot and forward contracts, interbank deposits
and loans, financial futures, bonds, swaps and forward rate
agreements and equity tracker products. Banking services are
provided in the Isle of Man. Treasury and International Banking
is also represented overseas in Bristol, in the United Kingdom.

Davy Stockbrokers is one of the largest
stockbrokers in Ireland in both the gilt and equity markets
(based on turnover in the gilt market and commissions in the
equity market).

17



---



##### Table of Contents



First Rate Enterprises Limited specialises in the
provision of foreign exchange services through a number of
separate businesses. In Ireland, First Rate Ireland operates
through its own bureaux located in key tourist locations and
through its agencies in more than 400 hotels, shops and tourist
sites. It also provides Foreign Exchange Services to An Post
(the Irish postal service) and has responsibility for the
provision of Foreign Exchange Currency and travellers cheques to
the Bank of Ireland Branch Network. In the UK, First Rate
Enterprises operates as First Rate Travel Services, a joint
venture with the UK Post Office. This company supplies the UK
Post Office with foreign currency and travellers cheques through
the latters 17,500 branches.

IBI Corporate Finance Limited acts as a financial
advisor to companies in Ireland and Britain in connection with
take-overs, mergers and restructurings, other acquisitions and
disposals and the raising of equity and loan capital, public
flotations and stock exchange listings.

Bank of Ireland Private Banking provides wealth
management solutions to high net worth individuals in Ireland.
It offers a complete private banking service utilising an
extensive range of investment, fiduciary and banking products.

UK Financial Services

UK Financial Services (UKFS) brings together all
of the Groups significant activities in the sterling area,
thus bringing greater focus to our sterling activities. The UKFS
structure facilitates the operation of business units by
customer segments and needs rather than by traditional brand
considerations. The Group believes that the combination of
businesses in UKFS represents a business of scale within the UK
Financial Services market-place.

Bristol & West provides standard and
non-standard residential mortgages, savings and investment
products to retail customers, and operates advice based
businesses and is based in Bristol, operating out of 131
branches located mainly in the South West of England. Bristol
& West also operates through broker and intermediary
channels in sourcing residential mortgages.

Savings and investment products include
traditional savings accounts, online and postal savings
accounts, single premium bonds, Individual Savings Accounts and
guaranteed equity products.

Bristol & Wests principal subsidiaries
are Bank of Ireland Home Mortgages, a centralised mortgage
lender, and Chase de Vere Financial Solutions plc, which is one
of the UKs leading Independent Financial Advisors and
provider of online services. Chase de Vere Financial Solutions
plc was formed on June 1, 2003 from the merger of the two
businesses, both of which had previously operated within the
Bristol & West Group.

Branch Banking Northern Ireland and Great Britain
offers deposit, lending, checking account and other money
transmission services traditionally offered by banks. In
addition, it offers instalment credit and leasing. Business
banking units provide loan facilities for medium to large
corporate clients while also providing international banking,
treasury, current asset financing and electronic banking
services.

Asset Management Services

Asset Management Services is the investment
management arm of the Bank of Ireland Group. It provides active
and passive investment services for Irish institutional clients
and active management of equities and fixed interest securities
for international clients. It also acts as sub-advisor for a
number of retail distributors in Ireland and overseas. The
companys head office is located in Dublin and it has nine
international offices servicing clients across five continents.
It had assets under management of
42.7 billion
at March 31, 2003.

Bank of Ireland Securities Services is the
investment administration and custodial arm of the group. It has
offices in Dublins IFSC and Jersey. It provides a full
range of fund administration services to leading international
fund managers and it supplies a full range of custody services
for all Irish and UK instruments to an international and
domestic client base as well as offering a full administration
out-sourcing service to fund managers. Assets under
administration/ custody were
118 billion
at March 31, 2003.

18



---



##### Table of Contents



Group and Central

Group and Central mainly includes earnings on
surplus capital, and unallocated central overheads.

Material Subsidiaries

The principal group undertakings at
March 31, 2003 were:

|                                               |  |                    |                                    |               |  |           |         |  |  |  |              | 
|---------------------------------------------- |  | ------------------ | ---------------------------------- | ------------- |  | --------- | ------- |  |  |  | ------------ | 
|                                               |  |                    |                                    | Country of    |  | Statutory
|Name                                           |  | Principal activity |                                    | incorporation |  | year end 
|                                               |  |                    |                                    |               |  |          
|Bank of Ireland Asset Management Limited       |  |                    | Asset management                   |               |  |           | Ireland |  |  |  | March 31     | 
|Bank of Ireland International Finance Limited* |  |                    | International asset financing      |               |  |           | Ireland |  |  |  | March 31     | 
|Bank of Ireland Life Holdings plc*             |  |                    | Life assurance and pensions        |               |  |           | Ireland |  |  |  | December  31 | 
|Bristol & West plc                             |  |                    | Mortgages, savings and investments |               |  |           | England |  |  |  | March 31     | 
|ICS Building Society*                          |  |                    | Building society                   |               |  |           | Ireland |  |  |  | December  31 | 
|IBI Corporate Finance Limited                  |  |                    | Corporate finance                  |               |  |           | Ireland |  |  |  | March 31     | 
|J & E Davy Holdings Limited                    |  |                    | Stockbroking                       |               |  |           | Ireland |  |  |  | December  31 | 






|  |                                                                          
|- | -------------------------------------------------------------------------
|* | Direct subsidiary of The Governor and Company of
    the Bank of Ireland.

All the Group undertakings are included in the
consolidated accounts. The Group owns 90.44% of the equity of
J & E Davy Holdings Limited and holds 49% of
its voting shares. The Group owns 100% of the equity share
capital of the other principal group undertakings and 100% of
the voting shares of all these undertakings and in the case of
ICS Building Society, 100% of the investment shares.




DESCRIPTION OF PROPERTY

At March 31, 2003 the Bank operated 327
full-time retail bank branches of which 262 were in Ireland, 45
in Northern Ireland and 20 in Britain. Additionally, the Bank
has a representative office in Frankfurt, and wholly owned
subsidiaries in Jersey and the Isle of Man. The majority of
these premises are owned directly by the Group with the
remainder being held under commercial leases. The premises are
subject to continuous maintenance and upgrading and are
considered suitable and adequate for the Banks current and
anticipated operations.

The Bank of Ireland Group headquarters, located
at Lower Baggot Street, Dublin, Ireland, comprises a complex of
three buildings constructed in the 1970s having approximately
18,600 square metres (200,000 square feet) net floor space. The
Bank has a 30% equity interest in the premises which are held on
a lease which expires in 2071. The freehold interest in the
Banks headquarters is held in trust on behalf of the Bank
of Ireland Staff Pension Fund, which is the Groups
principal pension fund. The Group also occupies approximately
56,000 square metres (602,000 square feet) net for central
functions in Dublin; of this space 12,000 square metres (124,000
square feet) net is owned, the balance is held on commercial
leases.

The Bank occupies approximately 2,600 square
metres (28,000 square feet) net floor space in Queen Street,
London. These premises are held on a lease which expires
in 2011.

Bristol & Wests Head Office is located
at Temple Quay, Bristol, England. The administrative building
occupies approximately 14,000 square metres net floor space and
is 100% freehold. It has a network of 131 operational
branches.

The Head Office of New Ireland Assurance, now
part of Bank of Ireland Life, is located at 9/12 Dawson Street,
Dublin, Ireland. It has a network of 20 operational
branches. The Head Office and Administrative buildings occupy
approximately 4,900 square metres (53,000 square feet) net floor
space, of which 91% is held freehold.

Bank of Ireland Asset Management is due to
relocate its Head Office to a new building of approximately
9,500 square metres (102,000 square feet) net floor space in
October 2003. The premises will be shared with

19



---



##### Table of Contents



other group units including Bank of Ireland
Private Banking and IBI Corporate Finance and are held on a
25 year commercial lease.





COMPETITION

The Bank of Ireland Group faces strong
competition in all of its major markets. Other financial
services groups compete for the provision of services to
customers in the larger financial markets while local banks and
other financial services companies compete within each national
market.

Ireland and Northern Ireland

The Group provides a full range of banking
services in Ireland and Northern Ireland. It is subject to
competition from various types of institutions within the
financial services area. The main competition across the full
range of banking activity is from other banks, in particular
Allied Irish Banks plc, Ulster Bank Ltd, National Irish
Bank Ltd, Northern Bank Ltd and Irish Life and Permanent plc.
Allied Irish Banks plc, which also has its head office in
Dublin, is the largest competitor in Ireland. Irish Life and
Permanent plc, whose retail banking operations trade as
Permanent TSB, is also based in Dublin whereas Ulster
Bank Ltd, Northern Bank Ltd and AIB Group (UK) plc (which
trades as First Trust Bank and is wholly owned by Allied Irish
Banks, plc) are the main competitors in Northern Ireland. Ulster
Bank Ltd and Northern Bank Ltd are both based in Belfast.
Ulster Bank Ltd is a subsidiary of The Royal Bank of Scotland
Group plc, and Northern Bank Ltd and National Irish Bank Ltd are
subsidiaries of National Australia Bank.

The Group also competes in the corporate and
investment banking services areas with a range of other domestic
and foreign banks. There is also competition from the building
societies, the Post Office, credit unions and national savings
organizations in both Ireland and Northern Ireland. The general
competitive environment in Ireland has been affected by the
operation of the Competition Act, 2002 which is modelled closely
on Articles 81 and 82 of the EC Treaty, and by the
implementation of EC Directive 89/ 646 of December 15,
1989 (known as the Second Banking Coordination
Directive), which permits in Ireland the establishment of
branches and the provision of cross border services by banks
headquartered elsewhere in the European Union.

Britain

The Bank of Ireland Groups operations in
Britain are small in the overall market context. Britain has a
very highly competitive and sophisticated financial market with
over 500 licensed banking institutions with extensive retail
networks. In addition, there are approximately 80 building
societies, Girobank (utilizing the extensive post office
network) and the major insurance companies which also operate
nationwide branch networks.

In Britain, the Groups principal
competitors include, in addition to building societies, other
providers of personal financial services, such as banks and
insurance companies. Each of these types of financial service
providers has expanded the range of services offered in recent
years.




SUPERVISION AND REGULATION

IRELAND

The Central Bank and Financial Services Authority
of Ireland Act, 2003 was enacted in April 2003. The Act brings
under one supervisory umbrella all of the financial services
activities in the State. The Financial Services Regulatory
Authority of Ireland (the Regulatory Authority or
IFSRA) is a constituent part of the Central Bank but
has no responsibility either for contributing to the stability
of the financial system or promoting the efficient and effective
operating of payment and settlement systems (the responsibility
of the Central Bank) or for holding and managing the foreign
reserves of the State, promoting the efficient and effective
operations of settlement systems or for the performance of
functions imposed on the Central Bank under the Rome Treaty or
the European System of Central Banks Statute (the sole
responsibility of the Governor of the Central Bank). By
contrast, the Regulatory Authority is entrusted with the
supervisory activities of the former Central Bank under
29 designated enactments and 35 statutory instruments
or orders listed in the Act of 2003. Although the Chairperson,
the Chief Executive and four other members of IFSRA are members
of the Board of Directors of the

20



---



##### Table of Contents



Bank, IFSRA itself has a subsidiary structure
comprising the Chairperson, the Chief Executive, the Consumer
Director and no fewer than six and no more than eight other
persons. Two particular features of the Central Bank and
Financial Services Authority of Ireland Act should be noted.
First, it established as a separate function the office of the
Consumer Director with particular responsibility for the
administration of the Consumer Credit Act, 1995, and the
consumer protection provisions of other supervisory enactments.
The Consumer Credit Act had been administered by a separate
office, the Director of Consumer Affairs, since 1995. Second, it
established the Irish Financial Services Appeal Tribunal which
will hear and determine appeals under any of the designated
enactments or statutory instruments referred to above that have
the effect of imposing a sanction or liability on any person.
The provisions relating to the Irish Financial Services Appeal
Tribunal are not yet effective.


In respect of banking operations in Ireland, the
provisions of the Central Bank of Ireland Acts, 1942 to 1998,
the Central Bank and Financial Services Authority of Ireland
Act, 2003, the European Communities (Consolidated Supervision of
Credit Institutions) Regulations, 1992 (the 1992
Consolidated Supervision Regulations) and the European
Communities (Licensing and Supervision of Credit Institutions)
Regulations 1992 (the 1992 Licensing
Regulations) apply to the Group.

All licensed Banks are obliged to draw up and
publish their annual accounts in accordance with the European
Communities legislation and regulation. Subject to the
provisions of the 1992 Licensing Regulations relating to mutual
recognition of credit institutions authorized elsewhere in the
European Union, the Central Bank Act, 1971 (as amended) (the
1971 Act) restricts the carrying-on of banking
business in Ireland to holders of licenses granted under the
1971 Act. The 1971 Act stipulates that license holders must
maintain a minimum deposit with IFSRA. IFSRA has a qualified
discretion to grant or refuse a license and may attach
conditions to any licenses granted. Bank of Ireland and The
Investment Bank of Ireland hold licenses granted under the 1971
Act and no conditions have been attached to them. In September
2000, by means of a scheme of transfer under Part III of
the 1971 Act, Bank of Ireland Finance Limited transferred all of
its business and undertakings to Bank of Ireland and surrendered
its banking license. IFSRA, after consultation with the Minister
for Finance, may revoke a license under certain circumstances
specified in the 1971 Act.

IFSRA has statutory power to carry out
inspections of the books and records of license holders and to
obtain information from license holders about their banking and
bank-related business. Pursuant to this power, IFSRA carries out
regular review meetings and periodically inspects licensed
banks. IFSRA is also empowered by law to obtain information from
license holders about their banking and bank-related business.

IFSRA may also prescribe ratios to be maintained
between, and requirements as to the composition of, the assets
and liabilities of licensed banks, to prescribe maximum interest
rates permitted to be charged and to make regulations for the
prudent and orderly conduct of banking business of such banks.
The 1992 Licensing Regulations set forth minimum start-up and
ongoing capital requirements for banks licensed by IFSRA and
require applicants for a license to notify IFSRA of the identity
of certain shareholders and the size of their holdings in the
applicant. IFSRA also sets requirements and standards from time
to time for the assessment of applications for licenses. The
most recent requirements and standards were published in the
Quarterly Review of the Central Bank of Ireland, Winter 1995,
and are non-statutory requirements which are applied by IFSRA to
credit institutions as a supplement to the statutory
requirements referred to generally in this section but do not
purport to interpret or refer comprehensively to the statutory
provisions applicable to credit institutions.

The Group is also subject to EC Directives
relating to capital adequacy, and in the area of monitoring and
control of large exposures. The EC Directives have been
implemented in Ireland by way of administrative notice, and were
codified into a single text by Directive 2000/12/EC of
March 20, 2000.

The Groups operations in overseas locations
are subject to the regulations and reporting requirements of the
regulatory and supervisory authorities in the overseas locations
with the IFSRA having overall responsibility for their
regulation and supervision. IFSRA is required to supervise the
Group on a consolidated basis, i.e., taking account of the
entire Group activities and relationships.

Licensed banks must notify their existing fees
and charges and related terms and conditions, and any changes
therein from time to time to the Consumer Director of IFSRA, who
can direct that no fees, charges or

21



---



##### Table of Contents



increases or changes therein be made without his
or her approval. These requirements were extended to bureaux de
change by the Central Bank and Financial Services Authority of
Ireland Act, 2003.


Any acquisition by a person or more than one
person acting in concert of 10% or more of the total shares or
of the total voting rights attaching to shares (an
acquiring transaction) in a licensed bank, unless
exempted, requires the prior approval of IFSRA. A proposed
acquiring transaction must be notified to IFSRA, which may seek
further information. IFSRAs approval is subject to the
prior consent of the Minister for Finance where a person
proposes to participate in an acquiring transaction involving
the acquisition of shares or other interest in a licensed bank,
which controls directly or indirectly not less than 20% of the
total assets in Ireland of all licensed banks.

In addition, any person who proposes to acquire
directly or indirectly a qualifying holding in a
credit institution (which includes the Bank) must notify IFSRA
in advance of the proposed acquisition and must supply such
details of the proposal as IFSRA may specify. A qualifying
holding for these purposes means (i) a holding by a
person, either on his own or in concert with another person, of
10% or more of the shares (which includes certain interests
therein) or the voting rights attaching to the shares in the
credit institution, or (ii) a shareholding or interest held
by a person in a credit institution which either confers a right
to appoint or remove one or more members of the board of
directors or of the committee of management of the credit
institution, or otherwise allows that person to exercise a
significant influence over the direction or management of the
credit institution. Such a person must likewise notify IFSRA of
every proposal to increase its direct or indirect qualifying
holding so that the holding would reach or exceed 20%, 33% or
50% of the shares, or of the voting rights attaching to shares
in the credit institution or, in the case of a person that is a
corporate entity, if the person proposes to acquire any shares
or interest in the credit institution which would make that
institution its subsidiary for the purpose of the 1992 Licensing
Regulations.

A person must not acquire a qualifying holding or
increase the size of his qualifying holding as set out above
until the earlier of three months elapsing from the date of
notification to IFSRA or receipt of notification from IFSRA that
it will not object to the proposed acquisition or increase.

IFSRA is also entrusted with responsibility for
the regulation of payment systems and the supervision of bureaux
de change.

Building societies are subject to regulation by
IFSRA. Building societies may engage in a wide range of services
beyond the traditional activity of taking of interest bearing
deposits and the making of advances secured by mortgages on
freehold or leasehold property.

All credit institutions are obliged to take the
necessary measures to counteract money laundering effectively in
accordance with the Criminal Justice Act, 1994, (as amended) and
the Guidance Notes for Credit Institutions which were issued
with the approval of the Money Laundering Steering Committee.
Revised guidance notes were issued in 2002.

Under the European Communities (Deposit Guarantee
Schemes) Regulations, 1995 (amended in 1999 and 2002) IFSRA also
operates a statutory depositor protection scheme to which both
licensed banks and building societies are required to make
contributions amounting to 0.2% of their total deposits. The
Regulations extend to branches of the Bank in other European
Union States under the principle of home country
control. The maximum level of compensation payable to any one
depositor is 90% of the aggregate deposits held by that
depositor subject to a maximum compensation of
 20,000.

In parallel with European initiatives relating to
the mutual recognition of credit institutions authorized
elsewhere in the European Union, the legislative authorities of
the European Union have enacted a number of measures designed to
achieve similar liberalization in the investment services sector.

The Investor Compensation Act, 1998 provides for
the payment of compensation to clients of investment business
firms, stock exchange member firms, credit institutions and
assurance intermediaries (all Investment Firms) when
an Investment Firm is unable to return money or investment
instruments belonging to clients. IFSRA is the supervisory
authority for investor compensation schemes. The Investor
Compensation Company Limited administers investor compensation
arrangements. Investment Firms are required to contribute to a
fund

22



---



##### Table of Contents



maintained by the Company to pay compensation to
clients of Investment Firms. The Act allows separate
compensation schemes to be put in place, subject to IFSRA, for
certified persons under the Investment Intermediaries Act.
Clients of Investment Firms will be entitled to compensation of
up to 20,000 or
90% of the sum lost, whichever is the lesser.


In 2001 the Central Bank issued a Code of
Practice for Credit Institutions (setting down standards of good
banking practice to be followed by banks in their dealings with
consumers), a Code of Conduct for Investment Business Services
of Credit Institutions and advertising requirements applicable
to Credit Institutions.

The activities of the Groups assurance
business, Bank of Ireland Life, are regulated by IFSRA following
the enactment of the Central Bank and Financial Services
Authority of Ireland Act, 2003.

UNITED KINGDOM

In respect of the Groups separate banking
operations in Northern Ireland and Britain, the Bank has the
status of European institution under the Banking
Coordination (Second Council Directive) Regulations, 1992 (the
Regulations) and is entitled to carry on in the
United Kingdom any of the listed activities in the Second
Banking Coordination Directive which it is authorized to carry
on in Ireland.

Powers of the Financial Services Authority
(FSA) in relation to European institutions are
limited because, pursuant to the principle of home
country control incorporated in the Second Banking
Directive, IFSRA, as the competent authority in Ireland, has
primary responsibility for the supervision of credit
institutions incorporated in Ireland. The FSA, however, has a
specific responsibility to cooperate with IFSRA in ensuring that
branches of European credit institutions from Ireland maintain
adequate liquidity in the United Kingdom. The FSA also has the
responsibility to collaborate with IFSRA in ensuring that Irish
credit institutions carrying on activities listed in the Second
Banking Directive in the United Kingdom take sufficient steps to
cover risks arising from their open positions on financial
markets in the United Kingdom. In addition, it has made certain
rules with regard to the approval of advertisements and the
handling of complaints in the United Kingdom.

Under the Regulations, the FSA is empowered in
specified circumstances to impose a prohibition on, or to
restrict the listed activities of, a European institution.
Consistent with the allocation of supervisory responsibilities
in the Second Banking Directive, the FSA would usually exercise
its power only after consulting the Central Bank of Ireland
which, inter alia, expresses willingness of the respective
authorities to exchange information in order to facilitate the
effectiveness of the supervision of credit institutions in the
European Union. It also provides for the exchange of information
in crisis situations and in cases where the authorities become
aware of contraventions of the law by institutions covered by
the Second Banking Directive operating in their territory.

Because the Bank has established a place of
business in England, it is subject to the provisions of the
Companies Act 1985 which affect overseas companies. Equally, on
account of its having established a place of business in
Northern Ireland in connection with its operations there, the
Bank is subject to the provisions of Part XXIII of the
Companies (Northern Ireland) Order 1986 which apply to companies
incorporated outside Northern Ireland which have established a
place of business in Northern Ireland.

In respect of its banking operations in Northern
Ireland, the Bank is empowered under the Bank of Ireland Act,
1821 to issue bank notes as local currency, and is subject to
the provisions of the Bankers (Northern Ireland) Act, 1928, the
Bank of Ireland and Subsidiaries Act, 1969 and the Financial
Services and Markets Act, 2000 in respect thereof.

In addition to the role of the FSA in relation to
the Group as a European Institution described above, the FSA is
also the home country regulator of a number of UK incorporated
members of the Group. These include Bristol & West plc (an
authorised bank and successor to Bristol & West Building
Society) and Chase de Vere Financial Solutions plc (an
independent financial adviser). Since December 1, 2001, the
FSAs power and responsibilities derive from the Financial
Services and Markets Act 2000 (FSMA), which gave
effect to a major overhaul of the regulatory system in the UK.

The FSAs basic method of supervising banks
involves the regular reporting of statistical information and a
regular set of returns giving balance sheet and consolidated
statement of income and data, material on the

23



---



##### Table of Contents



maturity structure of assets and liabilities,
sectoral analysis of business and details of concentration of
risk in assets and deposits. Review meetings are held by the FSA
with the management of regulated firms. Under the risk based
approach introduced in 2001 (ARROW) the FSAs
supervision of banks is based on a systematic analysis of the
risk profile of each bank. The FSA also publishes requirements
it expects banks to meet on matters such as capital adequacy,
limits on large exposures to individual entities and groups of
closely connected entities and liquidity.


In order to maintain authorisation under the
FSMA, regulated firms must be able to demonstrate that they have
adequate resources and that they are fit and proper. In
addition, firms must meet the FSAs requirements with
regard to senior management arrangements, systems and controls,
conduct of business, training and competence, money laundering
and complaints handling.

In addition to various powers to make rules and
issue guidance, the FSMA also gives the FSA power to gather
information, undertake investigations and to impose sanctions
both on regulated firms and on certain of their directors and
managers. For example, under FSMA section 166 the FSA may
require an authorised firm to provide it with a report from a
skilled person (for example an accountant) in relation to the
exercise of the FSAs functions.

Various members of the Group hold licences from
the UK Director General of Fair Trading under the Consumer
Credit Act, 1974 in relation to regulated consumer credit
lending and mortgage broking. The Director General of Fair
Trading has certain powers in relation to these activities.




THE IRISH ECONOMY

Ireland is a small open economy with a population
of 3.9 million people. It was a founding member of the
European Monetary System in 1979 and was in the first group of
countries to participate in the European Monetary Union in 1999.
Total Gross Domestic Product (GDP) in 2002 was
129 billion
and is estimated by the Government at
139 billion
in 2003. The Irish economy has expanded very strongly over the
past decade, with real GDP growth averaging 7.8% per annum
between 1992 and 2002. Growth has been broadly based, with
consumption, investment and external trade all making a strong
contribution over the period.

The growth of the Irish economy began to slow in
2001, largely due to a deceleration in export growth and a fall
in investment spending, in turn reflecting the weaker global
backdrop. Consumption growth remained resilient, however,
underpinning GDP growth of 6.2%. Investment recovered somewhat
in 2002, recording marginally positive growth, driven by
residential investment. Public consumption grew strongly,
partially offsetting a deceleration in personal consumption.
This resulted in domestic demand growth of 2.9%, which is a
better guide to underlying economic conditions in 2002, as
export growth was skewed towards a few specific industries,
resulting in GDP growth of 6.9%. Unusually high profits in these
industries also distorted GNP, which grew by 0.1%.

Employment has held up well despite slower
economic growth, rising by 1.4% in 2002. Consequently, Ireland
has seen only a moderate pickup in unemployment, with the rate
increasing from a low of 3.6% in early 2001 to 4.6% by
mid 2003.




Item 5     OPERATING
& FINANCIAL REVIEW AND PROSPECTS






CRITICAL ACCOUNTING POLICIES


The Groups financial statements are
prepared in accordance with accounting principles generally
accepted in the Republic of Ireland. In preparing these
accounts, management are required to select suitable accounting
policies and make judgements and estimates that are reasonable
and prudent. Full details of the significant accounting policies
and estimation techniques adopted in the preparation of the 2003
accounts are set out on pages F-11 to F-15.

The group believes that of its significant
accounting policies and estimation techniques, the following may
involve a higher degree of judgement and complexity.

24



---



##### Table of Contents



Loan Losses

The Group lends money to its customers by means
of unsecured lending and secured lending, where collateral is
held in respect of some or all of the outstanding balance. Where
there is a risk that the Group will not receive full repayment
of the amount advanced, provisions are made in the financial
statements to reduce the carrying value of loans and advances to
the amount expected to be recovered.

The estimation of credit losses is inherently
uncertain and depends on many factors such as general economic
conditions, collateral values, cash flows, structural changes
within industries and other external factors. The calculation of
specific provisions is based on the likelihood of default and
the estimated loss arising to the Group in that instance. These
assessments are made using a combination of specific reviews,
statistical techniques based on previous loan loss experience
and managements judgement. Certain aspects of this process
may require estimation, such as the amounts and timing of future
cash flows and the assessment of the realisable value of
collateral held. For the purpose

General provisions are also maintained to cover
loans, which are impaired at the balance sheet date and while
not specifically identified, are known from experience to be
present in any portfolio of loans. The general provision is
calculated by reference to among other things, loss experience
by loan type or sector and the underlying grade profile of the
loan book at year end and is assessed independently of line
management by the Groups central credit review function.
The methodology adopted, whilst continuing to be refined, has
been consistently applied in recent years and is in line with
industry practice in the UK and Ireland.

At March 31, 2003, the bank held provisions
for bad and doubtful debts of
480m against
total loans and advances of
57,367m. The
Group considers that the provisions for bad and doubtful debts
at March 31, 2003 were adequate based on information
available at that time. However, actual losses may differ as a
result of changes in collateral values, the timing and amounts
of cash flows or other economic events. Interest is accrued on
loans and advances unless its receipt is in significant doubt.

Further details setting out the provisioning
policy relating to loan losses is set out on page 89 of
this document.

Pensions

The Group operates a number of defined benefit
pension schemes. In determining the actual pension cost, the
actuarial value of the assets and liabilities of the scheme are
calculated. This involves modelling their future growth and
requires management to make assumptions as to price inflation,
dividend growth, salary and pensions increases, return on
investments and employee mortality. There are acceptable ranges
in which these estimates can validly fall. The impact on the
results for the period and financial position could be
materially different if alternative assumptions were used.

Goodwill

In accordance with Financial Reporting Standard
10, Goodwill and Intangible Assets, goodwill on
acquisitions after April 1, 1998 is capitalised as an asset
on the balance sheet and amortised to the profit and loss
account over its estimated useful economic life. Of the
266 million
of unamortised goodwill at March 31, 2003,
99 million
relates to the acquisition of Chase de Vere and is
amortised over 20 years and
163m relating to
Iridian and is amortised over its estimated useful life of
15 years.

The determination of the estimated economic
useful life of goodwill requires the exercise of judgement. The
profit and loss charge for the year would be different if a
useful life longer or shorter than the periods referred to were
used.

Management also have to consider at least
annually whether the current carrying value of goodwill is
impaired. This is particularly important under US GAAP where
goodwill is not being amortised. For the purposes impairment
reviews, the goodwill is allocated to business segments that
represent independent operating units. The first element of this
allocation is based on the areas of the business expected to
benefit from the synergies derived from the acquisition. The
second element reflects the allocation of the net assets
acquired and the

25



---



##### Table of Contents



difference between the consideration paid for
those net assets and their fair value. The carrying value of the
operating unit, including the allocated goodwill, is compared to
its fair value to determine whether any impairment exists. In
the absence of readily available market price data this
calculation is usually based upon discounting expected cashflows
at a relevant discount factor, the determination of both of
which require the exercise of judgement.


Life Assurance Operations

The Group accounts for the value of the
shareholders interest in long-term assurance business
using the embedded value basis of accounting. Embedded value is
comprised of the net tangible assets of BOI Life and the present
value of its in-force business. The value of in-force business
is calculated by projecting future surpluses and other net cash
flows attributable to the shareholder arising from business
written up to the balance sheet date and discounting the result
at a rate which reflects the shareholders overall risk
premium, after provision has been made for taxation.

Future surpluses will depend on experience in a
number of areas such as investment returns, lapse rates,
mortality and investment expenses. Surpluses are projected by
making assumptions about future experience, having regards to
both actual experience and forecast long-term economic trends.
Changes to these assumptions may cause the present value of
future surpluses to differ from those assumed at the balance
sheet date and could significantly affect the value attributed
to the in-force business. The value of in-force business could
also be affected by changes in the amounts and timing of other
net cash flows (principally annual management charges and other
fees levied upon the policyholders) or the rate at which the
future surpluses and cashflows are discounted. In addition, the
extent to which actual experience is different from that assumed
will be recognised in the profit and loss account for the period.

Fair Value of Financial
Instruments

Some of the Banks financial instruments are
carried at fair value, including both derivatives and debt
securities held for trading purposes. Financial instruments
entered into as trading transactions, together with associated
hedging thereof, are measured at fair value with the resulting
profit or loss included in dealing profits.

Fair values are based on quoted market prices or
appropriate pricing models. Where models are used, the
methodology is to calculate the expected cash flows and discount
these back to a present value. They use independently sourced
parameters including interest rate yield curves, equity prices,
option volatility and currency rates. The calculation of fair
value for any instrument may require adjustment to reflect
credit risk (where not embedded in the model used), hedging
costs or the cost of illiquid positions.

The valuation model used for a specific
instrument, the quality and liquidity of market data and other
adjustments all require the exercise of judgement. The use of
different models or other assumptions could result in changes in
reported financial results.

Debt Securities

Debt securities held for trading purposes are
valued at fair values using market values where available. Where
market values are not available, in the case of unlisted
securities fair values are represented by the use of other
means such as price quotations for similar investments, or
pricing models. At March 31, 2003 unlisted
securities represented 13.7% of the total portfolio of
debt securities held.

Debt securities held for investment purposes are
stated at cost, adjusted for the amortisation of premia or
discounts on an appropriate basis. The group conduct regular
impairment reviews of the investment portfolio and considers
indicators such as downgrades in credit ratings or breaches of
covenants as well as the application of judgement in determining
whether creation of a provision is appropriate. The use of
different models or other assumptions and methods with respect
to the valuation of debt securities could result in changes in
reported financial results.

26



---



##### Table of Contents



US GAAP

The significant differences between Irish and
U.S. GAAP are set out in Note 45 on page F-82 to F-100
which includes a reconciliation of the significant differences
from Irish GAAP to U.S. GAAP.

Liquidity including off balance sheet
arrangements

The Groups overall liquidity policy and
control is the responsibility of the asset and liability
committee (ALCO) and is managed by treasury and international
banking to ensure that the Group can meet its current and future
re-financing needs at all times and at acceptable costs. The
Group believed that its liquidity position was strong at
March 31, 2003. Bank of Ireland is currently unaware of any
terms, conditions or circumstances that could significantly
impair the Groups ability to raise short or long-term
funding.

Liquidity management within the Group has two
main strands. The first is day-to-day funding, managed by
monitoring future cash flows to ensure that requirements can be
met. This includes replenishment of existing funds as they
mature or are withdrawn to satisfy demands for additional
borrowings by customers. The second is maintaining a portfolio
of highly marketable assets that can easily be liquidated as
protection against any unforeseen interruption to cash flow.

An important source of liquidity is our core
retail deposits in Ireland and the United Kingdom, mainly
current accounts and savings accounts. Although current accounts
are repayable on demand and savings accounts are repayable at
short notice, maintaining a broad base of customers, both
numerically and by depositor type, helps to protect against
unexpected fluctuations. Such accounts form a stable deposit
base for the Groups operations and liquidity needs.

Monitoring and reporting take the form of cash
flow measurement and projections for the next day, week and
month as these are key periods for liquidity management. This is
based on principles agreed by the Irish Central Bank and the UK
Financial Services Authority. Each operation is required to
maintain sufficient access to funds, in terms of maturing assets
and proven capacity to borrow in the money markets.

Additionally, in evaluating its liquidity
position, the Group monitors unmatched medium-term assets and
the level and type of undrawn lending commitments, the usage of
overdraft facilities and the impact of contingent liabilities
such as standby letters of credit and guarantees.

Liquidity risk is discussed on page 91 and
capital resources are discussed on page 83 of the Financial
Condition. Details of contractual cash obligations and other
commercial commitments are set out on page F-69 and in
Note 39 to the accounts.

Special Purpose Vehicles

Irish GAAP requires that financial accounts
present a true and fair view, which includes reflecting the
substance of the transactions and arrangements and not just the
legal form. Accordingly, the substance of any transaction with a
Special Purpose Vehicle (SPV) forms the basis for the treatment
in the Groups accounts. An SPV is consolidated by the
Group either if it meets the criteria of Financial Reporting
Standard No. 2 Accounting for subsidiary
undertakings, or in accordance with Financial Reporting
Standard No. 5 Reporting for the substance of
transactions if the risk and rewards associated with the
SPV reside with the Group, such that the substance of the
relationship is that of a subsidiary.

Bank of Ireland Group uses SPVs in a number
of contexts



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The most common form of SPV in a banking context
    is a securitisation. This involves the acquisition of financial
    assets by the SPV that are funded by the issuance of securities
    to external investors which have cash flows different from those
    of the underlying instruments. The repayment of these securities
    is determined by the performance of the assets acquired. The
    Group has used SPVs to securitise some of its lending portfolio
    and continues to administer the loans for which it receives fees
    and income. Further information relating to the Groups
    securitisation programme is given in Note 15.

27



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Bank of Ireland provides investment advisory
    services and a liquidity facility to a company involved in a
    commercial paper conduit program. The company purchases publicly
    rated marketable investment securities with initial minimum
    ratings of Aa3/AA- by Moodys/S&P. The company funds
    the purchase of the securities by way of an uncommitted loan
    from a Delaware incorporated company (known as a multi-seller
    conduit) which in turn issues commercial paper to investors in
    the US and European commercial paper markets. A US bank
    administers the day-to-day operations of the company and the
    multi-seller conduit. The US bank is also responsible for
    arranging the issuance of the commercial paper by the
    multi-seller conduit. As of July 15, 2003, the commercial
    paper issued by the multi-seller conduit is rated P-1/A-1/F1 by
    Moodys/S&P/Fitch.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of March 31, 2003, the Group had an
    outstanding undrawn liquidity facility to the company amounting
    to 438.1m. Based
    on the company acquiring further high quality publicly rated
    marketable investment securities (with initial minimum ratings
    of Aa3/AA- by Moodys/S&P), the liquidity facility
    provided by the Group to the company could increase to a current
    maximum of US$1.03bn. The Groups maximum exposure to loss,
    in the highly unlikely event of non-performance of the entire
    portfolio of assets in the company, is represented by the
    contractual amount of the facility.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | As part of its normal lending activities, an SPV
    may be used to fund the purchase or construction of specific
    assets, typically property or equipment. This is common in the
    banking industry as it enables the customer to minimise its
    funding cost while facilitating the bank in minimising its
    collateral risk. Any financing relationships are entered into at
    arms length prices and subject to the Groups normal credit
    underwriting standards. In the case of Bank of Ireland, all of
    these types of entities are fully consolidated and the exposures
    arising from such lending and/or leasing is included in loans
    and advances to customers, while exposures in the form of
    guarantees or undrawn credit lines are included within
    commitments.

Capital Resources

As at March 31, 2003, Bank of Ireland Group
had 1,413m of
Undated Loan Capital and
1,290 million
of Dated Loan Capital, a total of
2,703 million
in aggregate Subordinated Liabilities. Of the Dated Loan Capital
1,145 million
is repayable in five or more years. The cost and availability of
subordinated debt are influenced by credit ratings. A reduction
in the ratings assigned to the Groups securities could
increase financing costs and reduce market access. At
March 31, 2003, the credit ratings of Bank of Ireland Group
were as follows:

|                 |  |             |     | 
|---------------- |  | ----------- | --- | 
|                 |  | Senior Debt
|                 |  |            
|Moodys          |  |             | Aa3 | 
|Standard & Poors |  |             | A+  | 
|Fitch            |  |             | AA- | 

These credit ratings are not a recommendation to
buy, hold or sell any security and each rating should be
evaluated independently of every other rating. These ratings are
based on current information furnished to the rating agencies by
Bank of Ireland and information obtained by the rating agencies
from other sources. The ratings are accurate only as of the date
of this document and may be changed, superceded or withdrawn as
a result of changes in, or unavailability, of such information.

As at March 31, 2003, Bank of Ireland Group
had
867 million
of obligations under non cancellable operating leases of which
53 million
are due within one year,
190 million
are due within one to five years and
624 million
are due after five years. Obligations under capital leases were
3.7 million
of which
0.6 million
are due within one year and
3.1 million
are due between one to five years.

Commitments for future capital expenditure are
not material. See Note 22 for further details.

In addition, the group takes deposits and other
liabilities in the normal course of its banking business. The
maturity of deposits by banks is given in Note 25, customer
accounts in Note 26 and debt securities in issue in
Note 27.

28



---



##### Table of Contents






ANALYSIS OF RESULTS OF OPERATIONS

Overview

In the year to March 31, 2003 the Group
reported profit on ordinary activities before tax and
exceptional items of
1,177 million,
an increase of 5% on the previous year. Alternative earnings per
share (which excludes goodwill amortisation and exceptional
items) of 99.2 cent increased by 6%. The Group has proposed a
final dividend of 23.8 cent, which, combined with the interim
dividend of 13.2 cent, represents a total dividend of 37 cent,
an increase of 4 cent or 12% year on year. Profit before
taxation, at
1,013 million,
compares with
1,085 million
for the previous year and is after the exceptional charge of
164 million
arising from the withdrawal from certain businesses and
reorganisation costs in the UK.

Return on average stockholders equity,
excluding exceptional items, was 22%, the tenth successive year
in which the Group has achieved ROE in excess of 20%. The share
buy-back programme will enhance ROE in the future.

During the year, the Group exited its joint
venture with Perot Systems and sold a UK processing operation,
Active Business Services. MX Financial Solutions, one of two
IFAs operated by the Group in the United Kingdom, was merged
with Chase de Vere Investments, which the Group expects will
result in significant cost savings.

Total income increased by 4%, with net interest
income growth of 10% being particularly strong, driven by good
volume growth and a slight widening of the Groups net
interest margin. The growth in net interest income more than
compensated for a fall in other income of 3%, due to the
downturn in world equity markets, which impacts on the embedded
value of our life assurance business, the income earned from
assets under management in our funds management business, income
from the sale of equity based products and income from our
advice based businesses in the UK.

Group costs increased by 5% compared to income
growth of 4%. This is a significant improvement on the position
that obtained last year when costs were up 14% against income
growth of 11%. The Group believes that this improvement
demonstrates the increasing importance of the Groups sound
cost culture in the face of a more challenging business
environment. A core strategic objective is that every business
unit will achieve an independently benchmarked, industry leading
cost structure. A number of Group businesses such as Wholesale
Financial Services and Asset Management Services are already at
or very close to best practice. Others still have some distance
to travel but are totally focused on the achievement of our
strategic cost objective.

In the year to March 31, 2002 the Group
reported profit on ordinary activities before tax and
exceptional item of
1,122 million
an increase of 3.4% on the previous year. Profit after taxation
for this same period increased by 14.7% to
920 million.
Total average earning assets increased by 14.1% to
69.9 billion.
The return on average total assets was 1.1% and return on
average stockholders funds was 23.5%.

In the year to March 31, 2001 the return on
average total assets was 1.1% and the return on average
stockholders funds was 24.5%.

29



---



##### Table of Contents



Results of Operations  Group
Analysis

The following is a discussion and analysis of the
results of operations of the Group by nature of income and
expense.

Group Income Statement

|                                                |  |                                        |       |               |  |               |       |   |  |  |       |  
|----------------------------------------------- |  | -------------------------------------- | ----- | ------------- |  | ------------- | ----- | - |  |  | ----- | -
|                                                |  |                                       
|                                                |  | For the Financial Year Ended March 31,
|                                                |  |                                       
|                                                |  | 2003                                   |       | 2002          |  | 2001         
|                                                |  |                                        |       |               |  |              
|                                                |  |                                        |       | (restated)(3) |  | (restated)(3)
|                                                |  |                                       
|                                                |  | (in  millions)                       
|Net interest income                             |  |                                        | 1,729 |               |  |               | 1,578 |   |  |  | 1,422 |  
|Other income(1)                                 |  |                                        | 1,210 |               |  |               | 1,228 |   |  |  | 1,122 |  
|Operating expenses                              |  |                                        | 1,662 |               |  |               | 1,582 |   |  |  | 1,387 |  
|Provision for loan losses                       |  |                                        | 100   |               |  |               | 102   |   |  |  | 72    |  
|                                                |  |                                        |       |               |  |               |       |   |  |  |       |  
|Income before exceptional items                 |  |                                        | 1,177 |               |  |               | 1,122 |   |  |  | 1,085 |  
|Group Transformation Programme                  |  |                                        |      |               |  |               | (37   | ) |  |  | (93   | )
|Exceptional items(2)                            |  |                                        | (164  | )             |  |               |      |   |  |  |      |  
|                                                |  |                                        |       |               |  |               |       |   |  |  |       |  
|Income from ordinary activities before taxation |  |                                        | 1,013 |               |  |               | 1,085 |   |  |  | 992   |  
|                                                |  |                                        |       |               |  |               |       |   |  |  |       |  






|    |                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes income from associated undertakings.                                                                                                                                                                                                                                                    
|   
|(2) | The exceptional item in the year to
    March 31, 2003 represents the charge for losses relating to
    the exit from two businesses Active Business Services, and PS
    Information Resource (IRL) Ltd and the costs associated with the
    rationalisation of the UK advice-based businesses.
|   
|(3) | Details of the restatement are outlined in the
    change in accounting policy in Note 1  Basis of
    Accounting and Accounting Policies.                                                                                                                                                      

Net Interest Income

The following table shows net interest income for
each of the three years ended March 31, 2003:

|                    |  |                                        |       |            |  |            |       |  |  |  |       | 
|------------------- |  | -------------------------------------- | ----- | ---------- |  | ---------- | ----- |  |  |  | ----- | 
|                    |  |                                       
|                    |  | For the Financial Year Ended March 31,
|                    |  |                                       
|                    |  | 2003                                   |       | 2002       |  | 2001      
|                    |  |                                        |       |            |  |           
|                    |  |                                        |       | (restated) |  | (restated)
|                    |  |                                       
|                    |  | (in  millions)                       
|Interest receivable |  |                                        | 3,691 |            |  |            | 3,980 |  |  |  | 4,055 | 
|Interest payable    |  |                                        | 1,962 |            |  |            | 2,402 |  |  |  | 2,633 | 
|                    |  |                                        |       |            |  |            |       |  |  |  |       | 
|Net interest income |  |                                        | 1,729 |            |  |            | 1,578 |  |  |  | 1,422 | 
|                    |  |                                        |       |            |  |            |       |  |  |  |       | 

The principal factors affecting the level of net
interest income earned by the Group are the volume of interest
earning assets and the spread earned on those assets. In the
year ended March 31, 2003, the level of interest earning
assets has increased significantly, and the Groups net
interest margin has increased slightly to 2.38% on a tax
equivalent basis.

Management believes that the Groups net
interest margin will continue to be influenced by the mix of
assets in the Group Balance Sheet, the general interest rate
environment in the jurisdictions which the Group operates within
and the continued trend in the movement to higher yielding
deposits out of ordinary demand deposits. Furthermore, future
changes in net interest spread will depend, among other factors,
on the demand for residential mortgages and savings products and
on the level of competition for these products.

30



---



##### Table of Contents





| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Financial Year ended March 31, 2003
    compared to financial year ended March 31,
    2002

Net interest income increased by 10% or
151 million
to
1,729 million.
A significant part of the increase was due to higher lending
volumes, with the Groups average earning assets increasing
by 6% during the year. The Groups net interest margin, at
2.38 % on a tax equivalent basis, was slightly higher than the
previous year.

Group average lending increased by 6%, with
Retail Republic of Ireland and UKFS accounting for most of the
increase. The Group net interest margin was 7 bps higher than
the previous year, with the domestic margin decreasing by 9 bps
to 2.65%  mainly attributable to higher wholesale
funding  and the foreign or overseas net interest
margin increasing by 20 bps to 1.99%, mainly in UKFS.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Financial Year ended March 31, 2002
    compared to financial year ended March 31,
    2001

Net interest income increased by 11% to
1,578 million
in 2002 from
1,422 million
in the prior year, an increase of
156 million.

The increase in net interest income was
principally driven by increases in average lending of 13% and
average customer deposits of 16% across the Group, with some
minor contraction in the Group net interest margin. Average
earning assets increased by 14% over the previous year from
61.3 billion
to
69.9 billion,
with domestic average earning assets increasing by 19% to
38.4 billion
and average foreign earning assets increasing by 9% to
31.5 billion.
Increases in volumes were recorded in all significant businesses.

The following tables set forth yield, spreads and
margins, prevailing average interest rates and average interest
earning assets for each of the three years ended March 31,
2003:

|                                                          |  |                                        |     |            |  |            |     |  |  |  |     | 
|--------------------------------------------------------- |  | -------------------------------------- | --- | ---------- |  | ---------- | --- |  |  |  | --- | 
|                                                          |  |                                       
|                                                          |  | For the Financial Year Ended March 31,
|                                                          |  |                                       
|                                                          |  | 2003                                   |     | 2002       |  | 2001      
|                                                          |  |                                        |     |            |  |           
|                                                          |  |                                        |     | (restated) |  | (restated)
|                                                          |  |                                       
|                                                          |  | (percentages)                         
|Gross yield(1)                                            |  |                                        | 5.0 |            |  |            | 5.7 |  |  |  | 6.6 | 
|Interest spread(2)                                        |  |                                        | 2.0 |            |  |            | 1.8 |  |  |  | 1.8 | 
|Net interest margin(3)                                    |  |                                        | 2.3 |            |  |            | 2.3 |  |  |  | 2.3 | 
|Net interest margin, tax equivalent basis(4)              |  |                                        | 2.4 |            |  |            | 2.3 |  |  |  | 2.4 | 
|Domestic net interest margin, tax equivalent
    basis(4) |  |                                        | 2.7 |            |  |            | 2.7 |  |  |  | 2.8 | 
|Foreign net interest margin, tax equivalent
    basis(4)  |  |                                        | 2.0 |            |  |            | 1.8 |  |  |  | 1.9 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Gross yield represents the average interest rate
    earned on interest-earning assets.                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | Interest rate spread represents the difference
    between the average interest rate earned on interest-earning
    assets and the average interest rate paid on interest-bearing
    liabilities.                                                                                                                                                                                                                           
|   
|(3) | Net interest margin represents net interest
    income as a percentage of average interest-earning assets.                                                                                                                                                                                                                                                                                                                   
|   
|(4) | Net interest margin on a tax equivalent basis
    includes an adjustment to reflect tax benefits received by the
    Group in return for tax-based lending at rates below market
    rates. The net interest margin is reduced as a result of such
    lending activity and this tax equivalent adjustment reflects the
    tax savings associated with such activity. (Further details can
    be seen in note 8 on page 11)

Average Interest Earning Assets

|         |  |                                        |      |            |  |            |      |  |  |  |      | 
|-------- |  | -------------------------------------- | ---- | ---------- |  | ---------- | ---- |  |  |  | ---- | 
|         |  |                                       
|         |  | For the Financial Year Ended March 31,
|         |  |                                       
|         |  | 2003                                   |      | 2002       |  | 2001      
|         |  |                                        |      |            |  |           
|         |  |                                        |      | (restated) |  | (restated)
|         |  |                                       
|         |  | (in  billions)                       
|Group    |  |                                        | 73.8 |            |  |            | 69.9 |  |  |  | 61.3 | 
|Domestic |  |                                        | 42.8 |            |  |            | 38.4 |  |  |  | 32.3 | 
|Foreign  |  |                                        | 31.0 |            |  |            | 31.5 |  |  |  | 29.0 | 

31



---



##### Table of Contents



|                                 |                     |                                        |      |      |  |      |      |      |  |  |      |      | 
|-------------------------------- | ------------------- | -------------------------------------- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | ---- | 
|                                 |                     |                                       
|                                 |                     | For the Financial Year Ended March 31,
|                                 |                     |                                       
|                                 |                     | 2003                                   |      | 2002 |  | 2001
|                                 |                     |                                        |      |      |  |     
|                                 |                     |                                       
|                                 |                     | (percentages)                         
|Ireland                          |                     |                                        |      |      |  |      |      |      |  |  |      |     
|European interbank offered rate: |                     |                                        |      |      |  |      |      |      |  |  |      |     
|                                 | One month Euribor   |                                        |      | 2.61 |  |      |      | 3.36 |  |  |      | 4.60 | 
|                                 | Three month Euribor |                                        |      | 2.56 |  |      |      | 3.45 |  |  |      | 4.70 | 
|United Kingdom                   |                     |                                        |      |      |  |      |      |      |  |  |      |     
|London interbank offered rate:   |                     |                                        |      |      |  |      |      |      |  |  |      |     
|                                 | One month           |                                        |      | 3.71 |  |      |      | 4.02 |  |  |      | 5.99 | 
|                                 | Three month         |                                        |      | 3.66 |  |      |      | 4.19 |  |  |      | 6.06 | 
|United States                    |                     |                                        |      |      |  |      |      |      |  |  |      |     
|Prime Rate                       |                     |                                        | 4.25 |      |  |      | 4.75 |      |  |  | 9.20 |     

Other Income

The following table sets forth other income for
each of the three years ended March 31, 2003.

|                                                           |  |                                        |       |            |  |            |       |  |  |  |       | 
|---------------------------------------------------------- |  | -------------------------------------- | ----- | ---------- |  | ---------- | ----- |  |  |  | ----- | 
|                                                           |  |                                       
|                                                           |  | For the Financial Year Ended March 31,
|                                                           |  |                                       
|                                                           |  | 2003                                   |       | 2002       |  | 2001      
|                                                           |  |                                        |       |            |  |           
|                                                           |  |                                        |       | (restated) |  | (restated)
|                                                           |  |                                       
|                                                           |  | (in  millions)                       
|Dealing profits                                            |  |                                        | 85    |            |  |            | 81    |  |  |  | 91    | 
|Contributions from life assurance business                 |  |                                        | 116   |            |  |            | 152   |  |  |  | 164   | 
|Fees and commissions                                       |  |                                        | 871   |            |  |            | 920   |  |  |  | 789   | 
|Other operating income                                     |  |                                        | 116   |            |  |            | 74    |  |  |  | 71    | 
|                                                           |  |                                        |       |            |  |            |       |  |  |  |       | 
|                                                           |  |                                        | 1,188 |            |  |            | 1,227 |  |  |  | 1,115 | 
|Income from associated undertakings and joint
    ventures |  |                                        | 22    |            |  |            | 1     |  |  |  | 7     | 
|                                                           |  |                                        |       |            |  |            |       |  |  |  |       | 
|Total                                                      |  |                                        | 1,210 |            |  |            | 1,228 |  |  |  | 1,122 | 
|                                                           |  |                                        |       |            |  |            |       |  |  |  |       | 

Financial year ended March 31, 2003
compared to March 31, 2002.

Other income excluding income from associated
undertakings and joint ventures was
1,188 million 
lower than the corresponding period by
39 million
or 3%. While this income segment bore the main impact of the
fall and volatility in equity values, the modest decrease is
after the benefits of strong growth in the sale of Group
products, the change in the discount rate in Bank of Ireland
Life and the profits from the sale of premises and lease
disposals.

Income from associated undertakings and joint
ventures increased by
21 million
in the year and includes the profit contribution from First Rate
Travel Services.

Financial year ended March 31, 2002
compared to March 31, 2001.

Other income increased by
106 million
or 9% to
1,228 million
in 2002. This increase was driven by the advice based businesses
in the UK and increased fee based income from Retail Republic of
Ireland and Wholesale Financial Services. Fee income in Asset
Management Services and the embedded value in Bank of Ireland
Life were impacted by the decline in equity markets.

32



---



##### Table of Contents



Operating Expenses

The following table sets forth operating expenses
for each of the three years ended March 31, 2003.

|                                               |  |                              |        |            |  |            |        |  |  |  |        | 
|---------------------------------------------- |  | ---------------------------- | ------ | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                                               |  |                             
|                                               |  | For the Financial Year Ended
|                                               |  | March 31,                   
|                                               |  |                             
|                                               |  | 2003                         |        | 2002       |  | 2001      
|                                               |  |                              |        |            |  |           
|                                               |  |                              |        | (restated) |  | (restated)
|                                               |  |                             
|                                               |  | (in  millions)             
|Staff expenses                                 |  |                              | 955    |            |  |            | 923    |  |  |  | 795    | 
|Other administrative expenses                  |  |                              | 525    |            |  |            | 504    |  |  |  | 462    | 
|Depreciation and goodwill amortisation         |  |                              | 182    |            |  |            | 155    |  |  |  | 130    | 
|                                               |  |                              |        |            |  |            |        |  |  |  |        | 
|Total                                          |  |                              | 1,662  |            |  |            | 1,582  |  |  |  | 1,387  | 
|                                               |  |                              |        |            |  |            |        |  |  |  |        | 
|Average staff headcount (full time equivalent) |  |                              | 18,214 |            |  |            | 18,438 |  |  |  | 17,356 | 
|                                               |  |                              |        |            |  |            |        |  |  |  |        | 

Financial year ended March 31, 2003
compared to financial year ended March 31,
2002.

Operating Expenses increased by
80 million
or 5%. Staff expenses rose by
32 million
from
923 million
to
955 million,
an increase of 3%, reflecting normal salary increments and the
national wage agreements in the Republic of Ireland and
continued benefits from the Group Transformation Programme. The
increase in administration expenses of 4% and depreciation and
goodwill amortisation of 17% is driven by higher volumes and
continued investments in the business. The Group cost income
ratio for the year was 56%, comparable with the previous year.

Financial year ended March 31, 2002
compared to financial year ended March 31,
2001.

Total operating expenses increased by 14% in 2002
to
1,582 million
and the cost income ratio widened from 54% to 56%. The cost
increase of 14% comprised higher staff costs of 16% or
128 million,
administrative expenses up 9% or
42 million
and depreciation and goodwill amortisation 19% higher. The
higher staff costs of 16% or
128 million
were due to higher rates of pay and benefits and increased
employer taxes together with higher performance related pay,
euro implementation costs and the development of advice based
businesses in the UK, partly offset by benefits arising from the
Group Transformation Programme.

Provisions for Loan Losses

The following table sets forth the provisions for
loan losses for each of the three years ended March 31,
2003. The Groups procedure for determining provisions for
loan losses is described under Item 11 
Market Risk  Risk Management and
Control  Credit Risk  Provisions and
Allowances for Loan Losses.

|                                       |  |                              |       |      |  |      |       |  |  |  |       | 
|-------------------------------------- |  | ---------------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                       |  |                             
|                                       |  | For the Financial Year Ended
|                                       |  | March 31,                   
|                                       |  |                             
|                                       |  | 2003                         |       | 2002 |  | 2001
|                                       |  |                              |       |      |  |     
|                                       |  |                             
|                                       |  | (in  millions)             
|Provision for bad and doubtful debts   |  |                              | 100   |      |  |      | 102   |  |  |  | 72    | 
|As a percentage of average total loans |  |                              | 0.18% |      |  |      | 0.19% |  |  |  | 0.15% | 

Financial year ended March 31, 2003
compared to financial year ended March 31,
2002.

The quality of the Groups loan book remains
strong. Recent interest rate reductions in the Groups
principal markets are a positive factor in underpinning the
present robust credit grade profile of the loan portfolio. Loan
losses, at
100 million,
are slightly lower than last year and represent a charge of
0.18% of average loans. Balances under provision (i.e. the total
balance of loans against which some provision has been recorded)
at
320 million
were slightly lower than last year, and total loan loss
provisions of
480 million
represent an average coverage ratio of 150%, similar to last
year.

33



---



##### Table of Contents



For a breakdown of the provision, see
Item 5  Operating & Financial
Review and Prospects  Description of Assets and
Liabilities  Risk Elements in Lending. The
Group believes that the low charge reflected the good economic
conditions in the countries in which the Group operates, the
quality of credit management processes, the strict lending
criteria which the Group applies across its markets and the
significant proportion of home loans in the overall portfolio.

The Group believes that the provision for loan
losses is adequate to cover its known losses and any losses
reasonably expected in its loan portfolio.

Financial year ended March 31, 2002
compared to financial year ended March 31,
2001

The Groups loan loss charge in 2002 was
0.19% of the average loan book, compared to 0.15% in the
previous year. The charge for the year included an addition to
the non-designated specific provision of
25 million;
the total of which stood at
174 million
at March 31, 2002 with total provisions of
500 million.
Balances under provision stood at
331 million
at March 31, 2002, compared to
315 million
for the corresponding period, representing a coverage ratio of
151%.

Exceptional Items

The exceptional charge of
164 million
relates to the exit from two businesses, Active Business
Services
(12 million)
and PS Information Resource (Irl) Ltd
(9 million)
and the costs associated with the rationalisation of the UK
advice-based businesses
(143 million)
(see Note 9).

Costs of
37 million
associated with the Group Transformation Programme in the year
to March 31, 2002 were treated as an exceptional item and
related to associated project implementation costs incurred
during the year and the costs of staff severance.

Costs associated with the Group Transformation
Programme, at
93 million
in the year to March 31, 2001, included a charge of
68 million,
to cover staff severance costs, together with associated project
implementation costs incurred during the year.

Taxes

The following tables set forth a reconciliation
of taxes chargeable at the statutory Irish corporation tax rate
and the Groups effective tax rate for each of the three
years ended March 31, 2003. The effective tax rate is
obtained by dividing taxes by profit on ordinary activities
before tax and exceptional items.

|                                                             |  |                                     |       |      |  |      |       |   |  |  |       |  
|------------------------------------------------------------ |  | ----------------------------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                             |  |                                    
|                                                             |  | For the Financial Year Ended       
|                                                             |  | March 31,                          
|                                                             |  |                                    
|                                                             |  | 2003                                |       | 2002 |  | 2001
|                                                             |  |                                     |       |      |  |     
|                                                             |  |                                    
|                                                             |  | (in  millions, except percentages)
|Average statutory corporation tax rate(1)                    |  |                                     | 15%   |      |  |      | 19%   |   |  |  | 23%   |  
|                                                             |  |                                     |       |      |  |      |       |   |  |  |       |  
|Tax charge based on the statutory rate                       |  |                                     | 153   |      |  |      | 206   |   |  |  | 228   |  
|Tax on foreign income subject to different rates
    of tax  |  |                                     | 15    |      |  |      | 22    |   |  |  | 13    |  
|Non-deductable goodwill impairment                           |  |                                     | 33    |      |  |      |      |   |  |  |      |  
|Tax-exempted income and income taxed at reduced
    tax rate |  |                                     | (63   | )    |  |      | (62   | ) |  |  | (55   | )
|Levy on certain financial institutions                       |  |                                     | 7     |      |  |      |      |   |  |  |      |  
|Other items                                                  |  |                                     | 18    |      |  |      | (1    | ) |  |  | 4     |  
|                                                             |  |                                     |       |      |  |      |       |   |  |  |       |  
|Taxes(3)                                                     |  |                                     | 163   |      |  |      | 165   |   |  |  | 190   |  
|                                                             |  |                                     |       |      |  |      |       |   |  |  |       |  
|Effective tax rate(2)                                        |  |                                     | 16.1% |      |  |      | 15.2% |   |  |  | 19.2% |  
|                                                             |  |                                     |       |      |  |      |       |   |  |  |       |  






|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | For 2003, the average statutory rate reflected
    the reduction in the statutory rate from 16% to 12.5%, effective
    January 1, 2003.



| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | For 2002, the average statutory rate reflected
    the reduction in the statutory rate from 20% to 16%, effective
    January 1, 2002.

34



---



##### Table of Contents





| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | For 2001, the average statutory rate reflected
    the reduction in the statutory rate from 24% to 20%, effective
    January 1, 2001.



|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The effective rate of tax is normally lower than
    the standard Irish corporation tax rate principally due to
    relief arising from tax-based lending and the International
    Financial Services Center tax rate of 10%.
|   
|(3) | Taxation for the year ended March 31, 2001
    excludes the effect of the DIRT settlement.                                                                                                                                    

Financial year ended March 31, 2003
compared to financial year ended March 31,
2002.

The effective tax rate of 16% is slightly higher
than the corresponding year and is impacted by the goodwill
impairment in the current year. The benefit of the reduction in
Irish Corporation Tax Rate will be offset somewhat over the next
three years by the levy on bank profits introduced by the Irish
Government: the current year includes a charge of
7 million,
being a quarter of the Group share of the levy for this year. It
is expected that the levy will not be continued beyond its three
year period.

Financial year ended March 31, 2002
compared to financial year ended March 31,
2001.

The effective tax rate was reduced to 15.2%,
mainly due to reductions in Irish Corporation Tax rates. The
effect of adopting FRS 19: Deferred Tax increased the tax on
profit on ordinary activities by
3m resulting in
a decrease in profit after tax of the same amount for the year
to March 31, 2002.

Results of Operations  Business
Analysis

Set out below is a discussion and analysis of the
Groups income before tax for the three years ended
March 31, 2003. The discussion includes reference to the
contributions to income before tax in addition to total assets,
by business class.

The following tables set forth the Groups
income before tax by business class for each of the years in the
three year period ended March 31, 2003 and total assets by
business class as at the end of each year.

|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  
|------------------------------------------------------------ |  | ----------------------------------- | ------- | ---- |  | ---- | ------- | - |  |  | ------ | -
|                                                             |  |                                    
|                                                             |  | At and for the Financial Year Ended
|                                                             |  | March 31,                          
|                                                             |  |                                    
|                                                             |  | 2003                                |         | 2002 |  | 2001
|                                                             |  |                                     |         |      |  |     
|                                                             |  |                                    
|                                                             |  | (in  millions)                    
|Income Before Tax                                            |  |                                     |         |      |  |      |         |   |  |  |        |  
|Retail Republic of Ireland                                   |  |                                     | 375     |      |  |      | 321     |   |  |  | 290    |  
|Bank of Ireland Life                                         |  |                                     | 87      |      |  |      | 122     |   |  |  | 131    |  
|Wholesale Financial Services                                 |  |                                     | 389     |      |  |      | 355     |   |  |  | 283    |  
|UK Financial Services                                        |  |                                     | 352     |      |  |      | 318     |   |  |  | 324    |  
|Asset Management Services                                    |  |                                     | 113     |      |  |      | 126     |   |  |  | 133    |  
|Group and Central                                            |  |                                     | (85     | )    |  |      | (64     | ) |  |  | (30    | )
|Tax-equivalent adjustment(1)                                 |  |                                     | (54     | )    |  |      | (56     | ) |  |  | (46    | )
|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  
|Income from ordinary activities before
    exceptional items |  |                                     | 1,177   |      |  |      | 1,122   |   |  |  | 1,085  |  
|Group Transformation Programme                               |  |                                     |        |      |  |      | (37     | ) |  |  | (93    | )
|Exceptional items                                            |  |                                     | (164    | )    |  |      |        |   |  |  |       |  
|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  
|Income before taxation                                       |  |                                     | 1,013   |      |  |      | 1,085   |   |  |  | 992    |  
|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  
|Assets                                                       |  |                                     |         |      |  |      |         |   |  |  |        |  
|Retail Republic of Ireland                                   |  |                                     | 28,269  |      |  |      | 23,427  |   |  |  | 19,449 |  
|Bank of Ireland Life                                         |  |                                     | 5,728   |      |  |      | 6,028   |   |  |  | 5,305  |  
|Wholesale Financial Services                                 |  |                                     | 51,241  |      |  |      | 43,538  |   |  |  | 38,573 |  
|UK Financial Services                                        |  |                                     | 31,222  |      |  |      | 33,338  |   |  |  | 30,575 |  
|Asset Management Services                                    |  |                                     | 1,611   |      |  |      | 930     |   |  |  | 1,020  |  
|Group and Central                                            |  |                                     | 7,618   |      |  |      | 5,767   |   |  |  | 5,051  |  
|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  
|Total(2)                                                     |  |                                     | 125,689 |      |  |      | 113,028 |   |  |  | 99,973 |  
|                                                             |  |                                     |         |      |  |      |         |   |  |  |        |  




35



---



##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Group undertakes tax based transactions at
    rates which are less than normal market rates in return for tax
    relief arising from incentives for industrial development and
    other reliefs. To assist in making valid comparison of pre-tax
    performance, the analysis of business unit performance is
    grossed up.
|   
|(2) | Total Assets include intra-group items of
    36,184 million
    (2002:
    25,703 million,
    2001:
    21,098 million).                                                                                                                                                                                                        

Financial year ended March 31, 2003
compared to financial year ended March 31,
2002.

Retail Republic of Ireland

Pre-tax profits in Retail Banking in the
Republic, which combines Retail Financial Services through the
branch network, electronic and telephone channels and Retail
Businesses, increased by
54 million
or 17% to
375 million.
Income increased by 7% and costs by 2%, with loan losses as a
percentage of advances slightly lower than last year. This
performance occurred against the backdrop of a somewhat weaker
economy.

Market share of resources increased, with volumes
at year end 9% higher than last year and average growth over the
period of 11%. Lending volumes increased by 17%, with
particularly strong growth in residential mortgages, of which
Bank of Ireland continues to be the leading provider. The
mortgage market was very buoyant throughout the year and the
Group achieved further increases in market share. New mortgage
volumes were up 49%, with particularly strong growth in investor
demand. Year-end balances were 29% higher than last year.
Non-mortgage loan demand improved in the final quarter and
year-end balances were up 8%.

Net interest margin contracted by 16 basis
points, primarily as a result of the narrowing of deposit
margins in a historically low interest rate environment and a
more rapid growth in lower margin assets.

Taken together, the volume and margin trends
resulted in growth in net interest income of 7%.

Non interest income increased by 6%. Insurance
commissions, branch fee income and gains from property disposals
contributed to the growth.

Loan losses at
51 million
were
3 million
higher than last year. The loan loss charge as a percentage of
advances fell by 2 bps to 28 bps. The Group believes that the
quality of the loan books continues to be very strong.

Costs rose by 2%. Salary increases, together with
higher pension costs and increased depreciation charges, were
ameliorated by savings generated by the Group Transformation
Programme and the absence of exceptional costs borne in the
prior year for the Euro changeover. The Transformation Programme
is nearing completion and has met its key objectives. The
network has been re-configured without any significant
disruption to customer service and the principles of Customer
Relationship Management have been successfully applied across
the Division, with consequent improvements in customer
satisfaction. Credit management has been further centralised,
allowing greater customer focus in branches.

During the year, the Group announced a material
expansion of its ATM network in the Republic of Ireland with the
planned installation of 500 additional machines, located, in the
main, in retail convenience stores. At year end, some 100 of the
new installations had been completed.

Bank of Ireland Life

Bank of Ireland Life, the Groups life and
pensions business, had operating profits of
130 million
for the year compared with
129 million
last year.

The company is now the leading provider of life
assurance products to the Irish retail market. This was achieved
in part through an excellent sales performance with overall new
business sales, excluding the Government Special Savings
Accounts (SSIAs), which have a distorting effect, up 9% year on
year.

36



---



##### Table of Contents



Bank of Ireland Life results are summarised
below:-

|                                                                             |                                |         |     |         |   |  |     |    | 
|---------------------------------------------------------------------------- | ------------------------------ | ------- | --- | ------- | - |  | --- | -- | 
|                                                                             |                                | 2002/03 |     | 2001/02
|                                                                             |                                |         |     |        
|                                                                             |                                | m      |     | m     
|New business contribution                                                    |                                |         | 55  |         |   |  | 57  |   
|Profit from existing business                                                |                                |         |     |         |   |  |     |   
|                                                                             |  expected return              |         |     | 56      |   |  |     | 49 | 
|                                                                             |  experience variances         |         |     | 11      |   |  |     | 12 | 
|                                                                             |  operating assumption changes |         |     | (2      | ) |  |     | 1  | 
|Return on shareholder funds                                                  |                                |         | 10  |         |   |  | 10  |   
|                                                                             |                                |         |     |         |   |  |     |   
|Operating profit                                                             |                                |         | 130 |         |   |  | 129 |   
|Investment variance                                                          |                                |         | (49 | )       |   |  | (8  | ) 
|Effect of economic assumption changes                                        |                                |         | 35  |         |   |  | 31  |   
|                                                                             |                                |         |     |         |   |  |     |   
|Sub-total                                                                    |                                |         | 116 |         |   |  | 152 |   
|Less: income adjustment for certain services
    provided by Group companies |                                |         | (29 | )       |   |  | (30 | ) 
|                                                                             |                                |         |     |         |   |  |     |   
|Profit before tax                                                            |                                |         | 87  |         |   |  | 122 |   
|                                                                             |                                |         |     |         |   |  |     |   

Sales of regular premium products 
excluding SSIAs  increased by 19%, with pensions
sales, underpinned by the Groups strong relative
investment performance and service proposition, performing very
strongly. Sales of single premium products were impacted by the
loss of confidence in world equity markets and fell by 10%,
although, within this category, sales of single premium pension
products increased by 14%.

The negative investment variance of
49 million
reflects the scale of the fall in world equity values, with all
of the main indices down substantially for the third successive
year.

The effect of changes in economic assumptions is
35 million,
of which
22 million
arises from the reduction in the discount rate to 10%. The
reduction in the Irish corporation tax rate from 16% to 12.5%
was the most significant item in the prior year.

While the outlook for equity markets remains
uncertain and the short-term challenges facing the life
assurance industry are considerable, Bank of Ireland Life is
well positioned for further growth based on its financial
strength. The company has 3.4 times the required solvency margin
cover, which the Group believes will represent an increasingly
significant competitive advantage in coming years.

Wholesale Financial Services

Wholesale Financial Services incorporates
Corporate Banking, Treasury and International Banking
(Treasury), J&E Davy Stockbrokers (Davy), Private Banking,
First Rate Enterprises (First Rate) and IBI Corporate Finance
(Corporate Finance). Pre-tax profits increased by 10% to
389 million.
Total Income, including Share of Associates and Joint Ventures,
increased by
49 million
or 8% reflecting strong growth of 13% in other income and a more
modest 2% growth in net interest income. Cost performance was
good, with costs up 5% on last year.

Corporate Banking, which increased its profit by
42%, generated a number of large once-off fees in both its
domestic and international businesses. Its lending margin was
slightly higher than last year. Treasury had a strong trading
performance as interest rates declined to historically low
levels, but profits were lower because of the high levels of
one-off trading gains in 2001/02. First Rate, the Groups
specialist foreign exchange subsidiary, reported further
substantial growth, underpinned by the success of its joint
venture with the UK Post Office.

Davy and Private Banking produced good
performances in difficult market conditions while Corporate
Finance had an excellent year.

The charge for loan losses was
28 million
compared with
25 million
the previous year. Loan losses were 21 basis points of average
loans, marginally up on last year. The Group believes that the
loan book remains well diversified, with good asset quality and
no undue risk concentrations.

37



---



##### Table of Contents



UK Financial Services

UK Financial Services (UKFS), which brings
together all of the significant Groups activities in the
Sterling area, thus bringing greater focus to our sterling
activities, generated pre tax profits of £228 million
(352 million),
an increase of 13%. The division contributed 30% of total Group
profits, illustrating the extent and significance of the
Groups operations in the UK.

Total income increased by £44 million
or 8% with net interest income increasing by 14% and other
income declining by 2%. The improvement in net interest income
reflects the further diversification of the residential mortgage
book into non-standard lending and improved savings margins
following a decision to avoid the most price sensitive segments
of the savings market. Other income decreased by
£4 million reflecting difficult trading conditions in
the market for investment products. Income growth in the
division exceeded cost growth by 1%.

Asset quality remains strong with the loan loss
charge declining from 10 bps to 7 bps year on year.

The UK loan book grew by 5% over the year, with
increases in both the residential mortgage and commercial loan
books. Non standard loans as a proportion of the total
residential mortgage book increased from 16% at the beginning of
the year to 24% at year end and represent 18% of the total UK
loan book. Resources decreased by 4% over the year.

UKFS operates in four business segments: Personal
Lending UK, a specialist provider of secured and unsecured
lending products sold to personal customers, predominantly
through intermediaries and through the Bristol & West branch
network; Northern Ireland, an integrated banking business for
personal and business/ corporate customers in Northern Ireland;
Business Financial Services, predominately the Bank of Ireland
branch network in Britain, develops, manufactures and
distributes products to corporate customers in Great Britain;
and Financial Advice and Savings, incorporating Chase de Vere
and Bristol & West Financial Advice &
Savings  a branch and direct distribution business.

There was a particularly strong performance from
Personal Lending UK, due to its continuing successful product
diversification and good cost management. It contributed
approximately 60% of the UKFS profit for the year. Northern
Ireland also delivered strong results and continues to achieve
very good organic growth. Business Financial Services operates
successfully as a specialist business bank in Britain. It has
developed expertise in some targeted segments and has gained a
material market share in these segments. Both Northern Ireland
and Business Financial Services each contributed approximately
20% of UKFS profits for the year.

Financial Advice and Savings was adversely
affected by equity market conditions, which depressed activity
in the IFA sector and in the sales of savings and investment
products. The savings margin, and consequently savings income,
held up well, but non-interest income was sharply down. A
rationalisation of the IFA businesses under the Chase de Vere
brand, announced in February 2003, will substantially cut costs
and create a more diversified and stronger IFA enterprise that
is well positioned to benefit from market improvement. The
rationalisation gave rise to an exceptional charge of
£92 million, which included goodwill impairment of
£80 million.

Asset Management Services

In the context of a most difficult operating
environment, the Division did very well in delivering pre-tax
profits of
113 million 
10% below the previous year. Strong new business inflows
combined with rigorous cost management mitigated some of the
effects of declining equity values.

The total value of assets under management at
Bank of Ireland Asset Management (BIAM) fell from
57.1 billion
in March 2002 to
42.7 billion
in March 2003, reflecting the weakness in equity markets
globally. This was despite net inflows of
6.1 billion 
the second best sales performance in the companys history.
BIAM won significant new business in Ireland, Japan and
Australia during the period.

Profits at Bank of Ireland Securities Services
(BOISS) were steady with good levels of new business. Post the
year-end, BOISS reached agreement on the sale of its share in
the alliance jointly operated with State Street in the IFSC.
This followed the acquisition by State Street of the global
securities services business of Deutsche Bank in 2002.

38



---



##### Table of Contents



The Group completed the acquisition of a 61%
interest in Iridian on September 6, 2002, giving it a
presence in the biggest product segment of the
US investment market, and the Groups share of the
results of this business have been consolidated since this date.
Since the acquisition was completed, Iridian has made
substantial progress in implementing the agreed operating model.

Group & Central

Group & Central which includes earnings
on surplus capital and central unallocated costs together with
some small business units, had a net cost of
85 million
in the current year compared to a cost of
64 million
in the previous year. Total income including share of associates
in Group & Central reduced by
7 million,
mainly as a result of the sale of Active Business Services and
lower property gains, offset somewhat by higher earnings on
reserves. Costs increased by
13 million
as a result of increased operating expenses and expenditure on a
range of development projects, offset by the effect of the sale
of Active Business Services.

Financial year ended March 31, 2002
compared to financial year ended March 31,
2001.

Retail Republic of Ireland

Retail Republic of Ireland, had a successful year
in 2002 with profits of
321 million,
an 11% increase on the prior year. This was a very creditable
performance against the backdrop of the foot & mouth crisis
in the UK, the general economic slowdown and the impact of
September 11 on business confidence. Total income was ahead
by 12% reflecting good increases in both interest and
non-interest income.

Resources were particularly strong and Bank of
Ireland increased its market share in this segment. Volumes were
up by 16% with excellent growth in credit balances. The Group
was particularly successful in attracting customers to its SSIA
products. By the end of the qualifying period,
273,000 SSIAs were opened representing a market share of
around 23%.

The Mortgage Business reported an excellent
performance. There was a 23% increase in mortgage balances
against market growth of 18% and the Groups market share
of new mortgage business was 26%.

The Life Loan product, which enables older
customers to borrow up to 30% of the assessed value of their
principal residence without repayment during their lifetime, was
particularly successful. New mortgage products for investors
were also well received by the market.

Non-mortgage lending slowed as a result of the
general slowdown in the economy, with volumes increasing by 8%.
The full unsecured lending portfolio is now managed centrally
and the Consumer Lending Business is increasingly adopting a
proactive stance with customers by offering pre-approved loans,
overdrafts and credit card limits linked to customers
requirements and repayment capacity.

Usage, satisfaction levels and sales through
direct channels increased strongly. The telephone channel,
Banking 365 Telephone, has 320,000 active users and handled
8 million calls during the year, an increase of 60%. More
significantly, 130,000 product sales were completed via the
telephone.

The ATM network was enlarged by 15% with the
addition of 57 new machines. Bank of Ireland ATMs recorded
59 million transactions, 15% ahead of the previous year.

The Retail Transformation Programme was
vigorously pursued during the year achieving better operating
efficiency. The rationalisation of the branch network advanced
well, largely through the amalgamation of contiguous urban
branches. Twenty-eight branches were closed.

Cost growth was 10% of which euro implementation
contributed 3%. Against a background of a general 7.5% wage
increase under the terms of the national wage agreement, higher
pension charges, increased employers taxes and higher business
volumes, this was viewed as a good outcome and owes much to the
impact of the Retail Transformation Programme.

Net interest margin in Retail Republic of Ireland
was 14 bps lower, mainly as a result of narrower deposit
margins in the low interest rate environment. The average margin
on the mortgage book was stable. Overall, net interest income
was up 12% as a result of good volume growth.

39



---



##### Table of Contents



Despite reduced tourist numbers and the
consequent impact on foreign exchange income, there was an 11%
increase in non-interest income with credit cards, general
insurance, commercial finance and branch banking fee income all
contributing.

The loan loss charge, at 30 bps of average
advances, while 5 bps higher than last year, was satisfactory
and reflected prudent credit criteria across all lending
products.

Bank of Ireland Life

Bank of Ireland Life, recorded profits from new
and existing business increasing by 14% to
118 million.

Sales, expressed in annual premium equivalent
terms, rose by 34% in the year to March 2002. Regular premium
savings were ahead by 140%, supported by the Government special
savings initiative. It was also a very good year for pension
sales, a performance underpinned by the Groups strong
relative investment performance and an outstanding service
proposition.

The result included non-operating gains of
25 million,
compared to
48 million
last year, and incorporated the final benefit from the reduction
in the corporation tax to 12.5% in Ireland.

Bank of Ireland Life results are summarised
below:-

|                                                                             |                                |         |     |         |  |  |     |    | 
|---------------------------------------------------------------------------- | ------------------------------ | ------- | --- | ------- |  |  | --- | -- | 
|                                                                             |                                | 2001/02 |     | 2000/01
|                                                                             |                                |         |     |        
|                                                                             |                                | m      |     | m     
|New business                                                                 |                                |         | 57  |         |  |  | 49  |   
|Profit from existing business                                                |                                |         |     |         |  |  |     |   
|                                                                             |  expected return              |         |     | 49      |  |  |     | 39 | 
|                                                                             |  experience variances         |         |     | 12      |  |  |     | 15 | 
|                                                                             |  operating assumption changes |         |     | 1       |  |  |     | 6  | 
|Return on shareholders funds                                                |                                |         | 10  |         |  |  | 13  |   
|                                                                             |                                |         |     |         |  |  |     |   
|Operating profit                                                             |                                |         | 129 |         |  |  | 122 |   
|Investment variance                                                          |                                |         | (8  | )       |  |  | 9   |   
|Effect of economic assumption changes                                        |                                |         | 31  |         |  |  | 33  |   
|                                                                             |                                |         |     |         |  |  |     |   
|Sub total                                                                    |                                |         | 152 |         |  |  | 164 |   
|Less: income adjustment for certain services
    provided by Group companies |                                |         | (30 | )       |  |  | (33 | ) 
|                                                                             |                                |         |     |         |  |  |     |   
|Profit before tax                                                            |                                |         | 122 |         |  |  | 131 |   
|                                                                             |                                |         |     |         |  |  |     |   

Wholesale Financial Services

Wholesale Financial Services incorporates
Corporate Banking, Treasury and International Banking
(Treasury), Davy Stockbrokers (Davy), Private Banking, First
Rate Enterprises (First Rate) and IBI Corporate Finance. Each of
the businesses contributed to an excellent outturn  a
profit increase of
72 million
to
355 million,
up 25% on the prior year. This followed profit growth of 30% in
2000/01 and underscored the growing significance of the
wholesale segment of the Groups operations.

Income including share of associates and joint
ventures, increased by
108 million
driven by trading gains in Treasury, good organic growth in
Corporate Banking, growth across all business lines in Davy, a
50% increase in income in First Rate generated mainly in the UK,
and increased volumes and fees in Private Banking.

Loan losses were 20 basis points of average
loans. This was a good outcome against the backdrop of a
somewhat weaker domestic and international economic environment
and reflected the overall quality of the wholesale loan
portfolio. Costs were 13% higher, reflecting performance bonuses
and expenditures related to the expansion of international
lending and First Rate.

Corporate Banking increased profits by 22%.
Resources increased by 16% and there was strong lending growth
in the international side of the business, up 26% year on year.
Net interest margin improved slightly. Non

40



---



##### Table of Contents



interest income kept pace with the very high
levels achieved in the prior year. Specialist teams were
established in London and the US with a specific focus on
project and acquisition finance transactions.


Treasury profits increased by 28%, principally
because of trading gains. Some
25 million
of the 2000/01 Treasury profit was categorised as one-off and,
based on the same criteria,
50 million
of the 2001/2002 result was similarly categorised having been
generated by good positioning in volatile markets ahead of
falling interest rates.

The successful integration of Treasury under the
Group Transformation Programme and the merging of the
Groups banking operations in The Isle of Man and Jersey
had a dramatic impact on costs, which increased by less than 2%.

Davy reported an increase in profits, largely
generated by its institutional equities and bonds business,
which performed strongly throughout the year. First Rate also
increased profits very significantly, helped by the expansion of
its relationship with the Post Office network in the UK, to
which it provides personal foreign exchange services. Private
Banking broadened its product range, enabling it to deliver
solid growth and extend its reach in the affluent sector in
Ireland. IBI Corporate Finance also had a satisfactory year.

UK Financial Services

UK Financial Services (UKFS) brings together all
of the significant Groups activities in the sterling area.
Combined, these businesses generated profit before tax and
goodwill amortisation of Sterling £210 million
(333 million),
up 3.4% on 2001.

The new UKFS structure facilitated the creation
of business units delineated by customer segments and needs
rather than by traditional brand considerations. Each business
pursued achievable growth strategies which are expected to
deliver sustainable profit growth. The Group believes that the
combination of businesses in the UKFS represents a business of
scale within the UK Financial Services market-place.

Margin on average assets in UK Financial Services
showed a small decline as a result of the decline in savings
margins. Margins in Bristol & West were also down but the
position improved considerably in the second half with improved
margins on resources and continued diversification into higher
margin lending.

In July 2001 Willis National, an Independent
Financial Advisor, was acquired and in October 2001 it was
merged with Moneyextra to create MX Financial Solutions
(MXFS). Chase de Vere Investments plc was acquired in September
2000. Chase de Vere Financial Solutions plc was formed on
June 1, 2003 from the merger of Chase de Vere
Investments plc and MX Financial Solutions business.
The entities comprising Chase de Vere Financial Solutions plc
have significantly contributed to the growth in fee based
income. The ratio of fee based income to total income has
increased to 34% as a result of the continued diversification
into advice-based activities. Such activities are less demanding
on capital but have inherently higher costs.

Bristol & West Mortgages continued to
follow a strategy of reducing reliance on the mass market, where
returns are low, in favour of niche mortgage markets where it
can add value for customers and the business.

The UK lending book increased by 9% during the
year. Non-standard lending constituted 16% of the UK residential
book and 12% of the total UK loan book.

Asset Management Services

Profits reduced by 5% to
126 million
from
133 million
in the previous year. This was a good performance in the
prevailing circumstances. Revenues and profits increased
materially in the second half compared to the first, by 7% and
11% respectively.

Bank of Ireland Asset Management (BIAM) increased
its assets under management by 15% to
57 billion;
the full impact of the increase did not reach the income line as
much of the increase occurred towards the end of the financial
year. Investment performance was strong relative to peers and
supported the buoyant sales of equity-based investment products
in domestic and international markets.

41



---



##### Table of Contents



8 billion
of new assets were added during the year with excellent sales
performances in North America, Australia and Japan, in
particular. In Ireland, BIAM was awarded two mandates by the
National Pension Reserve Fund Commission, from the funds set
aside by the Irish Government for future State pension provision.

Bank of Ireland Securities Services (BOISS)
maintained the strong growth reported since its formation and
increased assets under administration/ custody to
137 billion
from
121 billion
in the prior year. Income increased by 7% on the previous year.
BOISSs focus on acting as administrator to major global
investment management firms proved successful during a very
difficult year in world markets.

Group and Central

Group and Central reflected the full year impact
of the Preferred Securities raised towards the end of the
previous year and the funding costs arising from the buyback of
Preference Shares in September 2001, with a reduction of
20 million
in net interest income. In addition other income including share
of associates and joint ventures, increased by
28 million
through a combination of higher property gains and higher income
in operating businesses. Costs increased by
43 million
as a result of increased operating expenses and expenditure on a
range of Group development projects.

42



---



##### Table of Contents






AVERAGE BALANCE SHEET AND INTEREST
RATES

The following tables show the average balances
and interest rates of interest earning assets and interest
bearing liabilities for each of the three years ended
March 31, 2003. The calculations of average balances are
based on daily, weekly or monthly averages, depending on the
reporting unit. The average balances used are considered to be
representative of the operations of the Group.

|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|--------------------------------------------------------- |  | --------------- | ------ | ---------- |  | --------------- | ----- | ------- |  | --------------- | --- | ---- |  | ------- | ------ | -------- |  | ---- | ----- |  |  |  | --- |  |  |  | ------ | - |  |  | ----- |  |  |  | --- | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                
|                                                          |  |                 |        | 2002       |  | 2001           
|                                                          |  | 2003            |        | (restated) |  | (restated)     
|                                                          |  |                 |        |            |  |                
|                                                          |  | Average         |        |            |  | Average         |       |         |  | Average         |     |     
|                                                          |  | Balance         |        | Interest   |  | Rate            |       | Balance |  | Interest        |     | Rate |  | Balance |        | Interest |  | Rate
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |     
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     | %   
|                                                          |  | (in  millions) |        | %          |  | (in  millions) |       | %       |  | (in  millions) |     |     
|ASSETS                                                    |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Loans to banks                                            |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 6,835  |            |  |                 | 196   |         |  |                 | 2.9 |      |  |         | 6,064  |          |  |      | 270   |  |  |  | 4.5 |  |  |  | 5,584  |   |  |  | 292   |  |  |  | 5.2 | 
|Foreign offices                                           |  |                 | 406    |            |  |                 | 12    |         |  |                 | 2.9 |      |  |         | 1,230  |          |  |      | 44    |  |  |  | 3.6 |  |  |  | 1,153  |   |  |  | 57    |  |  |  | 5.0 | 
|Loans to customers(1)                                     |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 25,140 |            |  |                 | 1,419 |         |  |                 | 5.6 |      |  |         | 23,313 |          |  |      | 1,433 |  |  |  | 6.1 |  |  |  | 19,672 |   |  |  | 1,317 |  |  |  | 6.7 | 
|Foreign offices                                           |  |                 | 28,533 |            |  |                 | 1,503 |         |  |                 | 5.3 |      |  |         | 28,420 |          |  |      | 1,672 |  |  |  | 5.9 |  |  |  | 26,069 |   |  |  | 1,802 |  |  |  | 6.9 | 
|Central government and other eligible
    bills           |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 7      |            |  |                 |      |         |  |                 |    |      |  |         | 19     |          |  |      |      |  |  |  | 0.4 |  |  |  | 40     |   |  |  | 1     |  |  |  | 3.3 | 
|Foreign offices                                           |  |                 |       |            |  |                 |      |         |  |                 |    |      |  |         |       |          |  |      |      |  |  |  |    |  |  |  | 212    |   |  |  | 12    |  |  |  | 5.4 | 
|Debt Securities                                           |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 8,132  |            |  |                 | 279   |         |  |                 | 3.4 |      |  |         | 6,178  |          |  |      | 280   |  |  |  | 4.5 |  |  |  | 4,247  |   |  |  | 300   |  |  |  | 7.1 | 
|Foreign offices                                           |  |                 | 1,285  |            |  |                 | 65    |         |  |                 | 5.1 |      |  |         | 1,216  |          |  |      | 63    |  |  |  | 5.2 |  |  |  | 994    |   |  |  | 59    |  |  |  | 5.9 | 
|Instalment credit                                         |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 451    |            |  |                 | 32    |         |  |                 | 7.1 |      |  |         | 420    |          |  |      | 31    |  |  |  | 7.4 |  |  |  | 346    |   |  |  | 26    |  |  |  | 7.5 | 
|Foreign offices                                           |  |                 | 708    |            |  |                 | 56    |         |  |                 | 7.9 |      |  |         | 574    |          |  |      | 49    |  |  |  | 8.5 |  |  |  | 540    |   |  |  | 51    |  |  |  | 9.4 | 
|Finance lease receivables                                 |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 2,238  |            |  |                 | 126   |         |  |                 | 5.6 |      |  |         | 2,429  |          |  |      | 136   |  |  |  | 5.6 |  |  |  | 2,389  |   |  |  | 137   |  |  |  | 5.7 | 
|Foreign offices                                           |  |                 | 75     |            |  |                 | 3     |         |  |                 | 4.0 |      |  |         | 41     |          |  |      | 2     |  |  |  | 3.9 |  |  |  | 33     |   |  |  | 1     |  |  |  | 4.0 | 
|Total interest-earning assets                             |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 42,803 |            |  |                 | 2,052 |         |  |                 | 4.8 |      |  |         | 38,423 |          |  |      | 2,150 |  |  |  | 5.6 |  |  |  | 32,278 |   |  |  | 2,073 |  |  |  | 6.4 | 
|Foreign offices                                           |  |                 | 31,007 |            |  |                 | 1,639 |         |  |                 | 5.3 |      |  |         | 31,481 |          |  |      | 1,830 |  |  |  | 5.8 |  |  |  | 29,001 |   |  |  | 1,982 |  |  |  | 6.8 | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|                                                          |  |                 | 73,810 |            |  |                 | 3,691 |         |  |                 | 5.0 |      |  |         | 69,904 |          |  |      | 3,980 |  |  |  | 5.7 |  |  |  | 61,279 |   |  |  | 4,055 |  |  |  | 6.6 | 
|Allowance for loan losses                                 |  |                 | (485   | )          |  |                 |       |         |  |                 |     |      |  |         | (442   | )        |  |      |       |  |  |  |     |  |  |  | (415   | ) |  |  |       |  |  |  |     | 
|Non interest earning assets(2)                            |  |                 | 15,946 |            |  |                 |       |         |  |                 |     |      |  |         | 13,683 |          |  |      |       |  |  |  |     |  |  |  | 13,052 |   |  |  |       |  |  |  |     | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Total Assets                                              |  |                 | 89,271 |            |  |                 | 3,691 |         |  |                 | 4.1 |      |  |         | 83,145 |          |  |      | 3,980 |  |  |  | 4.8 |  |  |  | 73,916 |   |  |  | 4,055 |  |  |  | 5.5 | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Percentage of assets applicable to foreign
    activities |  |                 | 36.60% |            |  |                 |       |         |  |                 |     |      |  |         | 39.3%  |          |  |      |       |  |  |  |     |  |  |  | 40.5%  |   |  |  |       |  |  |  |     | 

43



---



##### Table of Contents



|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |     | 
|-------------------------------------------------------------- | ---------------- | --------------- | ------ | ---------- |  | --------------- | ----- | ------- |  | --------------- | --- | ---- |  | ------- | ------ | -------- |  | ---- | ----- | --- |  |  | --- | --- |  |  | ------ | ------ |  |  | ----- | --- |  |  | --- | --- | 
|                                                               |                  |                 |        |            |  |                 |       |         |  |                
|                                                               |                  |                 |        | 2002       |  | 2001           
|                                                               |                  | 2003            |        | (restated) |  | (restated)     
|                                                               |                  |                 |        |            |  |                
|                                                               |                  | Average         |        |            |  | Average         |       |         |  | Average         |     |     
|                                                               |                  | Balance         |        | Interest   |  | Rate            |       | Balance |  | Interest        |     | Rate |  | Balance |        | Interest |  | Rate
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |     
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     | %   
|                                                               |                  | (in  millions) |        | %          |  | (in  millions) |       | %       |  | (in  millions) |     |     
|LIABILITIES AND STOCKHOLDERS
    EQUITY                       |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Deposits by banks                                              |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 10,912 |            |  |                 | 353   |         |  |                 | 3.2 |      |  |         | 10,194 |          |  |      | 365   |     |  |  | 3.6 |     |  |  | 10,640 |        |  |  | 607   |     |  |  | 5.7 |    
|Foreign offices                                                |                  |                 | 1,144  |            |  |                 | 38    |         |  |                 | 3.3 |      |  |         | 1,225  |          |  |      | 52    |     |  |  | 4.2 |     |  |  | 1,491  |        |  |  | 85    |     |  |  | 5.7 |    
|Customer accounts                                              |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Demand deposits                                                |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 10,919     |  |                 |       | 186     |  |                 |     | 1.7  |  |         |        | 11,547   |  |      |       | 280 |  |  |     | 2.4 |  |  |        | 8,110  |  |  |       | 121 |  |  |     | 1.5 | 
|                                                               | Foreign offices  |                 |        | 9,628      |  |                 |       | 266     |  |                 |     | 2.8  |  |         |        | 9,692    |  |      |       | 392 |  |  |     | 4.0 |  |  |        | 8,014  |  |  |       | 435 |  |  |     | 5.4 | 
|Term deposits                                                  |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 7,559      |  |                 |       | 87      |  |                 |     | 1.2  |  |         |        | 5,532    |  |      |       | 167 |  |  |     | 3.0 |  |  |        | 6,522  |  |  |       | 196 |  |  |     | 3.0 | 
|                                                               | Foreign offices  |                 |        | 10,488     |  |                 |       | 487     |  |                 |     | 4.6  |  |         |        | 12,101   |  |      |       | 587 |  |  |     | 4.9 |  |  |        | 12,042 |  |  |       | 704 |  |  |     | 5.8 | 
|Other deposits                                                 |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 1,322      |  |                 |       | 54      |  |                 |     | 4.1  |  |         |        | 1,637    |  |      |       | 96  |  |  |     | 5.9 |  |  |        | 614    |  |  |       | 44  |  |  |     | 7.2 | 
|                                                               | Foreign offices  |                 |        | 24         |  |                 |       | 1       |  |                 |     | 4.2  |  |         |        | 32       |  |      |       | 2   |  |  |     | 5.0 |  |  |        | 41     |  |  |       | 3   |  |  |     | 6.2 | 
|Interest bearing current accounts                              |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 750        |  |                 |       | 11      |  |                 |     | 1.5  |  |         |        | 643      |  |      |       | 13  |  |  |     | 2.0 |  |  |        | 488    |  |  |       | 14  |  |  |     | 2.9 | 
|                                                               | Foreign offices  |                 |        | 2,013      |  |                 |       | 52      |  |                 |     | 2.6  |  |         |        | 1,604    |  |      |       | 50  |  |  |     | 3.1 |  |  |        | 1,360  |  |  |       | 49  |  |  |     | 3.6 | 
|Debt securities in issue                                       |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 6,233  |            |  |                 | 168   |         |  |                 | 2.7 |      |  |         | 2,972  |          |  |      | 131   |     |  |  | 4.4 |     |  |  | 1,633  |        |  |  | 102   |     |  |  | 6.2 |    
|Foreign offices                                                |                  |                 | 2,559  |            |  |                 | 103   |         |  |                 | 4.0 |      |  |         | 2,315  |          |  |      | 113   |     |  |  | 4.9 |     |  |  | 2,022  |        |  |  | 126   |     |  |  | 6.2 |    
|Subordinated liabilities                                       |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 1,431  |            |  |                 | 82    |         |  |                 | 5.7 |      |  |         | 1,589  |          |  |      | 81    |     |  |  | 5.1 |     |  |  | 1,479  |        |  |  | 111   |     |  |  | 7.5 |    
|Foreign offices                                                |                  |                 | 928    |            |  |                 | 74    |         |  |                 | 8.0 |      |  |         | 894    |          |  |      | 73    |     |  |  | 8.2 |     |  |  | 426    |        |  |  | 36    |     |  |  | 8.5 |    
|Total interest bearing liabilities                             |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 39,126 |            |  |                 | 941   |         |  |                 | 2.4 |      |  |         | 34,114 |          |  |      | 1,133 |     |  |  | 3.3 |     |  |  | 29,486 |        |  |  | 1,195 |     |  |  | 4.1 |    
|Foreign offices                                                |                  |                 | 26,784 |            |  |                 | 1,021 |         |  |                 | 3.8 |      |  |         | 27,863 |          |  |      | 1,269 |     |  |  | 4.6 |     |  |  | 25,396 |        |  |  | 1,438 |     |  |  | 5.7 |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               |                  |                 | 65,910 |            |  |                 | 1,962 |         |  |                 | 3.0 |      |  |         | 61,977 |          |  |      | 2,402 |     |  |  | 3.9 |     |  |  | 54,882 |        |  |  | 2,633 |     |  |  | 4.8 |    
|Non interest bearing liabilities                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Current accounts                                               |                  |                 | 6,547  |            |  |                 |       |         |  |                 |     |      |  |         | 5,785  |          |  |      |       |     |  |  |     |     |  |  | 4,655  |        |  |  |       |     |  |  |     |    
|Other non interest bearing
    liabilities(2)                  |                  |                 | 12,336 |            |  |                 |       |         |  |                 |     |      |  |         | 11,340 |          |  |      |       |     |  |  |     |     |  |  | 10,767 |        |  |  |       |     |  |  |     |    
|Stockholders equity including non equity
    interests         |                  |                 | 4,478  |            |  |                 |       |         |  |                 |     |      |  |         | 4,043  |          |  |      |       |     |  |  |     |     |  |  | 3,612  |        |  |  |       |     |  |  |     |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Total liabilities and stockholders
    equity                 |                  |                 | 89,271 |            |  |                 | 1,962 |         |  |                 | 2.2 |      |  |         | 83,145 |          |  |      | 2,402 |     |  |  | 2.9 |     |  |  | 73,916 |        |  |  | 2,633 |     |  |  | 3.6 |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Percentage of liabilities applicable to
    foreign activities |                  |                 | 36.60% |            |  |                 |       |         |  |                 |     |      |  |         | 39.3%  |          |  |      |       |     |  |  |     |     |  |  | 40.5%  |        |  |  |       |     |  |  |     |    






|    |                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Loans to customers include non-accrual loans and
    loans classified as problem loans.                                                                                                                                               
|   
|(2) | In accordance with Financial Reporting Standard
    2, the balance sheets of the life assurance companies have been
    consolidated and are reflected under Non Interest Earning
    Assets and Non Interest Bearing Liabilities.

44



---



##### Table of Contents



Change in Net Interest Income 
Volume and Rate Analysis

The following table allocates changes in net
interest income between volume and rate for 2003 compared to
2002 and for 2002 compared to 2001. Volume and rate variances
have been calculated based on movements in average balances over
the period and changes in average interest-earning assets and
average interest-bearing liabilities. Changes due to a
combination of volume and rate are allocated rateably to volume
and rate.

|                                                |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|----------------------------------------------- |  | ------------------------------------ | --- | -------------- |  | ------ | ---- | ------- |  | ------- | ---- | ------ |  |  | --- | - |  |  | ---- | - |  |  | ---- | -
|                                                |  |                                      |     |                |  |        |      |        
|                                                |  |                                      |     | 2002 over 2001
|                                                |  | 2003 over 2002                       |     | (restated)    
|                                                |  |                                      |     |               
|                                                |  |                                     
|                                                |  | Increase/(Decrease) due to change in
|                                                |  |                                     
|                                                |  | Average                              |     | Average        |  | Net    |      | Average |  | Average |      | Net   
|                                                |  | Volume                               |     | Rate           |  | Change |      | Volume  |  | Rate    |      | Change
|                                                |  |                                      |     |                |  |        |      |         |  |         |      |       
|                                                |  |                                     
|                                                |  | (in  millions)                     
|INTEREST EARNING ASSETS                         |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Loans to Banks                                  |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 31  |                |  |        | (105 | )       |  |         | (74  | )      |  |  | 24  |   |  |  | (46  | ) |  |  | (22  | )
|Foreign offices                                 |  |                                      | (25 | )              |  |        | (7   | )       |  |         | (32  | )      |  |  | 4   |   |  |  | (17  | ) |  |  | (13  | )
|Loans to customers                              |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 108 |                |  |        | (122 | )       |  |         | (14  | )      |  |  | 230 |   |  |  | (114 | ) |  |  | 116  |  
|Foreign offices                                 |  |                                      | 7   |                |  |        | (176 | )       |  |         | (169 | )      |  |  | 153 |   |  |  | (283 | ) |  |  | (130 | )
|Central government and other eligible
    bills |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      |    |                |  |        |     |         |  |         |     |        |  |  |    |   |  |  | (1   | ) |  |  | (1   | )
|Foreign offices                                 |  |                                      |    |                |  |        |     |         |  |         |     |        |  |  | (12 | ) |  |  |     |   |  |  | (12  | )
|Debt securities                                 |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 76  |                |  |        | (77  | )       |  |         | (1   | )      |  |  | 109 |   |  |  | (129 | ) |  |  | (20  | )
|Foreign offices                                 |  |                                      | 4   |                |  |        | (2   | )       |  |         | 2    |        |  |  | 12  |   |  |  | (8   | ) |  |  | 4    |  
|Instalment credit                               |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 2   |                |  |        | (1   | )       |  |         | 1    |        |  |  | 6   |   |  |  | (1   | ) |  |  | 5    |  
|Foreign offices                                 |  |                                      | 11  |                |  |        | (4   | )       |  |         | 7    |        |  |  | 3   |   |  |  | (5   | ) |  |  | (2   | )
|Finance lease receivables                       |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | (11 | )              |  |        | 1    |         |  |         | (10  | )      |  |  | 2   |   |  |  | (3   | ) |  |  | (1   | )
|Foreign offices                                 |  |                                      | 1   |                |  |        |     |         |  |         | 1    |        |  |  |    |   |  |  | 1    |   |  |  | 1    |  
|                                                |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Total interest income                           |  |                                      | 204 |                |  |        | (493 | )       |  |         | (289 | )      |  |  | 531 |   |  |  | (606 | ) |  |  | (75  | )
|                                                |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  

45



---



##### Table of Contents



|                                  |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|--------------------------------- |  | ------------------------------------ | --- | -------------- |  | ------ | ---- | ------- |  | ------- | ---- | ------ |  |  | --- | - |  |  | ---- | - |  |  | ---- | -
|                                  |  |                                      |     |                |  |        |      |        
|                                  |  |                                      |     | 2002 over 2001
|                                  |  | 2003 over 2002                       |     | (restated)    
|                                  |  |                                      |     |               
|                                  |  |                                     
|                                  |  | Increase/(Decrease) due to change in
|                                  |  |                                     
|                                  |  | Average                              |     | Average        |  | Net    |      | Average |  | Average |      | Net   
|                                  |  | Volume                               |     | Rate           |  | Change |      | Volume  |  | Rate    |      | Change
|                                  |  |                                      |     |                |  |        |      |         |  |         |      |       
|                                  |  |                                     
|                                  |  | (in  millions)                     
|INTEREST BEARING LIABILITIES      |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Deposits by Banks                 |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 25  |                |  |        | (37  | )       |  |         | (12  | )      |  |  | (24 | ) |  |  | (218 | ) |  |  | (242 | )
|Foreign offices                   |  |                                      | (3  | )              |  |        | (11  | )       |  |         | (14  | )      |  |  | (14 | ) |  |  | (19  | ) |  |  | (33  | )
|Customer accounts                 |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Demand deposits                   |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | (15 | )              |  |        | (79  | )       |  |         | (94  | )      |  |  | 64  |   |  |  | 95   |   |  |  | 159  |  
|Foreign offices                   |  |                                      | (3  | )              |  |        | (123 | )       |  |         | (126 | )      |  |  | 81  |   |  |  | (124 | ) |  |  | (43  | )
|Term deposits                     |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 47  |                |  |        | (127 | )       |  |         | (80  | )      |  |  | (30 | ) |  |  | 1    |   |  |  | (29  | )
|Foreign offices                   |  |                                      | (76 | )              |  |        | (24  | )       |  |         | (100 | )      |  |  | 3   |   |  |  | (120 | ) |  |  | (117 | )
|Other deposits                    |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | (16 | )              |  |        | (26  | )       |  |         | (42  | )      |  |  | 61  |   |  |  | (9   | ) |  |  | 52   |  
|Foreign offices                   |  |                                      |    |                |  |        | (1   | )       |  |         | (1   | )      |  |  | (1  | ) |  |  |     |   |  |  | (1   | )
|Interest bearing current accounts |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 2   |                |  |        | (4   | )       |  |         | (2   | )      |  |  | 4   |   |  |  | (5   | ) |  |  | (1   | )
|Foreign offices                   |  |                                      | 11  |                |  |        | (9   | )       |  |         | 2    |        |  |  | 8   |   |  |  | (7   | ) |  |  | 1    |  
|Debt securities in issue          |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 103 |                |  |        | (66  | )       |  |         | 37   |        |  |  | 66  |   |  |  | (37  | ) |  |  | 29   |  
|Foreign offices                   |  |                                      | 11  |                |  |        | (21  | )       |  |         | (10  | )      |  |  | 17  |   |  |  | (30  | ) |  |  | (13  | )
|Subordinated liabilities          |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | (9  | )              |  |        | 10   |         |  |         | 1    |        |  |  | 8   |   |  |  | (38  | ) |  |  | (30  | )
|Foreign offices                   |  |                                      | 3   |                |  |        | (2   | )       |  |         | 1    |        |  |  | 38  |   |  |  | (1   | ) |  |  | 37   |  
|                                  |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Total interest bearing expense    |  |                                      | 80  |                |  |        | (520 | )       |  |         | (440 | )      |  |  | 281 |   |  |  | (512 | ) |  |  | (231 | )
|                                  |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  
|Net interest income               |  |                                      | 124 |                |  |        | 27   |         |  |         | 151  |        |  |  | 250 |   |  |  | (94  | ) |  |  | 156  |  
|                                  |  |                                      |     |                |  |        |      |         |  |         |      |        |  |  |     |   |  |  |      |   |  |  |      |  




DESCRIPTION OF ASSETS AND
LIABILITIES

The following sections provide information
relating to the assets and liabilities of the Bank of Ireland
Group.

Assets

Loan Portfolio

The Bank of Ireland Groups loan portfolio
comprises loans to customers (including overdrafts) and
instalment credit and finance lease receivables.

The Bank provides mortgage loans for house
purchases as well as home improvement loans and secured personal
loans to existing mortgage customers. The Bank has a wide range
of home mortgage loan products including amortizing, interest
only and endowment loans. Interest on mortgage loans is
typically at a floating rate but the Bank also makes some fixed
rate loans. At March 31, 2003 residential mortgages
accounted for 53% of the Groups total loan portfolio. The
potential for loss on residential mortgages is limited by the
fact that they are secured by the underlying properties and the
extensive use of mortgage indemnity insurance which limits the
Groups potential loss in the case of defaults. Typically,
mortgage indemnity insurance is put in place where the original
loan to value ratio exceeds 75%. No other industry
classification accounts for more than 10% of the Groups
total loan portfolio.

A significant portion of the Groups lending
is in the form of overdrafts. An overdraft is a demand credit
facility operated through the customers checking account.
A credit limit is agreed with the customer based on the

46



---



##### Table of Contents



Groups lending criteria. The customer can
draw on the facility up to that limit, with the result that the
balance can change with the requirements of the customer. It is
expected that such accounts would fluctuate regularly between
debit and credit and that the account would, in each year, be in
credit for at least 30 days (which need not be
consecutive). Overdraft facilities are normally granted for a
specific period of time, generally twelve months, at which point
they are reviewed and, if appropriate, renewed. Interest rates
on overdrafts are variable and are usually quoted in relation to
interbank rates. Interest on overdrafts is normally debited
directly to the customers account.


Under certain provisions of the Consumer Credit
Act, 1995, a lender in Ireland is required to give at least
10 days (and in certain cases 21 days)
notice before any demand for early repayment is made on a
borrower who is a consumer for the purposes of the
Act.

Overdrafts are designed to meet a borrowers
short-term financing needs and, in the case of commercial
customers, are provided only for working capital requirements.
Medium or long-term financing requirements are provided through
loans with fixed repayment schedules.

47



---



##### Table of Contents



The following table sets forth the Bank of
Ireland Groups total loans to customers by origin at
March 31 for each of the five years ended March 31,
2003.

|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | - |  |  | ------ | -
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2003            |        | 2002 |  | 2001 |        | 2000 |  | 1999
|                                |  |                 |        |      |  |      |        |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Agriculture                     |  |                 | 963    |      |  |      | 1,044  |      |  |      | 977    |   |  |  | 873    |   |  |  | 865    |  
|Energy                          |  |                 | 639    |      |  |      | 693    |      |  |      | 651    |   |  |  | 406    |   |  |  | 216    |  
|Manufacturing                   |  |                 | 3,832  |      |  |      | 3,837  |      |  |      | 3,450  |   |  |  | 2,974  |   |  |  | 2,291  |  
|Construction and property       |  |                 | 2,412  |      |  |      | 1,862  |      |  |      | 2,187  |   |  |  | 1,561  |   |  |  | 1,038  |  
|Distribution                    |  |                 | 1,283  |      |  |      | 1,164  |      |  |      | 1,192  |   |  |  | 1,245  |   |  |  | 932    |  
|Transport                       |  |                 | 436    |      |  |      | 871    |      |  |      | 491    |   |  |  | 507    |   |  |  | 240    |  
|Financial                       |  |                 | 834    |      |  |      | 1,962  |      |  |      | 2,123  |   |  |  | 1,548  |   |  |  | 1,463  |  
|Business and other services     |  |                 | 4,002  |      |  |      | 3,706  |      |  |      | 3,044  |   |  |  | 2,175  |   |  |  | 1,588  |  
|Personal                        |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
| residential mortgages         |  |                 | 9,612  |      |  |      | 7,531  |      |  |      | 5,923  |   |  |  | 5,031  |   |  |  | 4,053  |  
| other lending                 |  |                 | 4,900  |      |  |      | 4,038  |      |  |      | 3,780  |   |  |  | 3,108  |   |  |  | 2,437  |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 | 28,913 |      |  |      | 26,708 |      |  |      | 23,818 |   |  |  | 19,428 |   |  |  | 15,123 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|United Kingdom                  |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Agriculture                     |  |                 | 58     |      |  |      | 55     |      |  |      | 53     |   |  |  | 60     |   |  |  | 55     |  
|Energy                          |  |                 | 158    |      |  |      | 142    |      |  |      | 91     |   |  |  | 45     |   |  |  | 8      |  
|Manufacturing                   |  |                 | 721    |      |  |      | 593    |      |  |      | 568    |   |  |  | 458    |   |  |  | 375    |  
|Construction and property       |  |                 | 1,984  |      |  |      | 2,091  |      |  |      | 1,650  |   |  |  | 1,457  |   |  |  | 852    |  
|Distribution                    |  |                 | 224    |      |  |      | 226    |      |  |      | 211    |   |  |  | 242    |   |  |  | 277    |  
|Transport                       |  |                 | 249    |      |  |      | 63     |      |  |      | 71     |   |  |  | 85     |   |  |  | 85     |  
|Financial                       |  |                 | 96     |      |  |      | 153    |      |  |      | 171    |   |  |  | 116    |   |  |  | 108    |  
|Business and other services     |  |                 | 1,250  |      |  |      | 1,094  |      |  |      | 994    |   |  |  | 706    |   |  |  | 473    |  
|Commercial mortgages            |  |                 | 1,855  |      |  |      | 1,989  |      |  |      | 1,719  |   |  |  | 1,566  |   |  |  | 1,307  |  
|Personal                        |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
| residential mortgages         |  |                 | 20,863 |      |  |      | 22,933 |      |  |      | 21,362 |   |  |  | 20,428 |   |  |  | 17,341 |  
| other lending                 |  |                 | 995    |      |  |      | 1,008  |      |  |      | 841    |   |  |  | 625    |   |  |  | 499    |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 | 28,453 |      |  |      | 30,347 |      |  |      | 27,731 |   |  |  | 25,788 |   |  |  | 21,380 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|United States                   |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Commercial loans                |  |                 | 1      |      |  |      | 22     |      |  |      | 28     |   |  |  | 26     |   |  |  | 23     |  
|Real estate loans, construction |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Real estate loans, mortgage     |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Consumer loans                  |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Bank card loans                 |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Leasing                         |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  | 16     |  
|Other loans                     |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 | 1      |      |  |      | 22     |      |  |      | 28     |   |  |  | 26     |   |  |  | 39     |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Group total loan portfolio      |  |                 | 57,367 |      |  |      | 57,077 |      |  |      | 51,577 |   |  |  | 45,242 |   |  |  | 36,542 |  
|Allowance for loan losses       |  |                 | (480   | )    |  |      | (500   | )    |  |      | (430   | ) |  |  | (398   | ) |  |  | (359   | )
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Total                           |  |                 | 56,887 |      |  |      | 56,577 |      |  |      | 51,147 |   |  |  | 44,844 |   |  |  | 36,183 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  

48



---



##### Table of Contents



The following table sets forth the percentage of
total loans to customers represented by each category of loan at
March 31, for each of the five years ended March 31,
2003.

|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------- |  | ------------ | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                |  |             
|                                |  | At March 31,
|                                |  |             
|                                |  | 2003         |       | 2002 |  | 2001 |       | 2000 |  | 1999
|                                |  |              |       |      |  |      |       |      |  |     
|                                |  | %            |       | %    |  | %    |       | %    |  | %   
|Ireland                         |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |              | 1.7   |      |  |      | 1.8   |      |  |      | 1.9   |  |  |  | 1.9   |  |  |  | 2.4   | 
|Energy                          |  |              | 1.1   |      |  |      | 1.2   |      |  |      | 1.3   |  |  |  | 0.9   |  |  |  | 0.6   | 
|Manufacturing                   |  |              | 6.7   |      |  |      | 6.7   |      |  |      | 6.7   |  |  |  | 6.6   |  |  |  | 6.3   | 
|Construction and property       |  |              | 4.2   |      |  |      | 3.3   |      |  |      | 4.2   |  |  |  | 3.4   |  |  |  | 2.8   | 
|Distribution                    |  |              | 2.2   |      |  |      | 2.0   |      |  |      | 2.3   |  |  |  | 2.8   |  |  |  | 2.6   | 
|Transport                       |  |              | 0.8   |      |  |      | 1.5   |      |  |      | 1.0   |  |  |  | 1.1   |  |  |  | 0.6   | 
|Financial                       |  |              | 1.4   |      |  |      | 3.5   |      |  |      | 4.1   |  |  |  | 3.4   |  |  |  | 4.0   | 
|Business and other services     |  |              | 7.0   |      |  |      | 6.5   |      |  |      | 5.9   |  |  |  | 4.8   |  |  |  | 4.3   | 
|Personal                        |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| residential mortgages         |  |              | 16.8  |      |  |      | 13.2  |      |  |      | 11.5  |  |  |  | 11.1  |  |  |  | 11.1  | 
| other lending                 |  |              | 8.5   |      |  |      | 7.1   |      |  |      | 7.3   |  |  |  | 6.9   |  |  |  | 6.7   | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              | 50.4  |      |  |      | 46.8  |      |  |      | 46.2  |  |  |  | 42.9  |  |  |  | 41.4  | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United Kingdom                  |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |              | 0.1   |      |  |      | 0.1   |      |  |      | 0.1   |  |  |  | 0.1   |  |  |  | 0.1   | 
|Energy                          |  |              | 0.3   |      |  |      | 0.2   |      |  |      | 0.2   |  |  |  | 0.1   |  |  |  |      | 
|Manufacturing                   |  |              | 1.3   |      |  |      | 1.0   |      |  |      | 1.1   |  |  |  | 1.0   |  |  |  | 1.0   | 
|Construction and property       |  |              | 3.4   |      |  |      | 3.7   |      |  |      | 3.2   |  |  |  | 3.2   |  |  |  | 2.3   | 
|Distribution                    |  |              | 0.4   |      |  |      | 0.4   |      |  |      | 0.4   |  |  |  | 0.5   |  |  |  | 0.8   | 
|Transport                       |  |              | 0.4   |      |  |      | 0.1   |      |  |      | 0.1   |  |  |  | 0.2   |  |  |  | 0.2   | 
|Financial                       |  |              | 0.2   |      |  |      | 0.3   |      |  |      | 0.3   |  |  |  | 0.3   |  |  |  | 0.3   | 
|Business and other services     |  |              | 2.2   |      |  |      | 1.9   |      |  |      | 1.9   |  |  |  | 1.6   |  |  |  | 1.3   | 
|Commercial mortgages            |  |              | 3.2   |      |  |      | 3.5   |      |  |      | 3.4   |  |  |  | 3.5   |  |  |  | 3.6   | 
|Personal                        |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| residential mortgages         |  |              | 36.4  |      |  |      | 40.2  |      |  |      | 41.4  |  |  |  | 45.1  |  |  |  | 47.5  | 
| other lending                 |  |              | 1.7   |      |  |      | 1.8   |      |  |      | 1.6   |  |  |  | 1.4   |  |  |  | 1.4   | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              | 49.6  |      |  |      | 53.2  |      |  |      | 53.7  |  |  |  | 57.0  |  |  |  | 58.5  | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United States                   |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Commercial loans                |  |              |      |      |  |      |      |      |  |      | 0.1   |  |  |  | 0.1   |  |  |  | 0.1   | 
|Real estate loans, construction |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, mortgage     |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Consumer loans                  |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Bank card loans                 |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Leasing                         |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Other loans                     |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              |      |      |  |      |      |      |  |      | 0.1   |  |  |  | 0.1   |  |  |  | 0.1   | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Group total loan portfolio      |  |              | 100.0 |      |  |      | 100.0 |      |  |      | 100.0 |  |  |  | 100.0 |  |  |  | 100.0 | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

Analysis of Loans to Customers by Maturity
and Interest Rate Sensitivity

The following tables analyze loans by maturity
and interest rate sensitivity. Overdrafts, which represent a
significant proportion of the portfolio, are classified as
repayable within one year. Approximately 7.8% of the Bank of
Ireland Groups loan portfolio at March 31, 2003 was
provided on a fixed-rate basis. Fixed-rate loans are defined as
those loans for which the interest rate is fixed for the full
life of the loan. Variable-rate loans include some loans for
which the interest rate is fixed for an initial period (e.g.,
some residential mortgages) but not for

49



---



##### Table of Contents



the full life of the loan. The interest rate
exposure is managed by Treasury and International Banking within
agreed policy parameters. See Item 11 
Market Risk.


|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|----------------------- |  | -------------------- | ----- | ---------- |  | ------- | ------ | ----- |  |  | ------ |  |  |  | ------ | 
|                        |  |                     
|                        |  | As at March 31, 2003
|                        |  |                     
|                        |  |                      |       | After      |  |        
|                        |  |                      |       | 1 year but |  |        
|                        |  | Within               |       | within     |  | After   |        |      
|                        |  | 1 year               |       | 5 years    |  | 5 years |        | Total
|                        |  |                      |       |            |  |         |        |      
|                        |  |                     
|                        |  | (in  millions)     
|Ireland                 |  |                      | 6,161 |            |  |         | 9,255  |       |  |  | 13,497 |  |  |  | 28,913 | 
|United Kingdom          |  |                      | 2,705 |            |  |         | 3,282  |       |  |  | 22,466 |  |  |  | 28,453 | 
|United States           |  |                      | 1     |            |  |         |       |       |  |  |       |  |  |  | 1      | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Total loans by maturity |  |                      | 8,867 |            |  |         | 12,537 |       |  |  | 35,963 |  |  |  | 57,367 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Fixed rate              |  |                      | 924   |            |  |         | 1,975  |       |  |  | 1,582  |  |  |  | 4,481  | 
|Variable rate           |  |                      | 7,943 |            |  |         | 10,562 |       |  |  | 34,381 |  |  |  | 52,886 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Total loans by maturity |  |                      | 8,867 |            |  |         | 12,537 |       |  |  | 35,963 |  |  |  | 57,367 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 

50



---



##### Table of Contents



The following tables set forth an analysis of
loans by maturity within each classification as at
March 31, 2003.

|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|------------------------------- |  | -------------------- | ----- | ---------- |  | ------- | ------ | ----- |  |  | ------ |  |  |  | ------ | 
|                                |  |                     
|                                |  | As at March 31, 2003
|                                |  |                     
|                                |  |                      |       | After      |  |        
|                                |  |                      |       | 1 year but |  |        
|                                |  | Within               |       | within     |  | After   |        |      
|                                |  | 1 year               |       | 5 years    |  | 5 years |        | Total
|                                |  |                      |       |            |  |         |        |      
|                                |  |                     
|                                |  | (in  millions)     
|Ireland                         |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Agriculture                     |  |                      | 398   |            |  |         | 307    |       |  |  | 258    |  |  |  | 963    | 
|Energy                          |  |                      | 112   |            |  |         | 316    |       |  |  | 211    |  |  |  | 639    | 
|Manufacturing                   |  |                      | 898   |            |  |         | 1,719  |       |  |  | 1,215  |  |  |  | 3,832  | 
|Construction and property       |  |                      | 679   |            |  |         | 1,072  |       |  |  | 661    |  |  |  | 2,412  | 
|Distribution                    |  |                      | 511   |            |  |         | 354    |       |  |  | 418    |  |  |  | 1,283  | 
|Transport                       |  |                      | 98    |            |  |         | 191    |       |  |  | 147    |  |  |  | 436    | 
|Financial                       |  |                      | 194   |            |  |         | 556    |       |  |  | 84     |  |  |  | 834    | 
|Business and other services     |  |                      | 1,025 |            |  |         | 1,178  |       |  |  | 1,799  |  |  |  | 4,002  | 
|Personal                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
| residential mortgages         |  |                      | 501   |            |  |         | 1,853  |       |  |  | 7,258  |  |  |  | 9,612  | 
| other lending                 |  |                      | 1,745 |            |  |         | 1,709  |       |  |  | 1,446  |  |  |  | 4,900  | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|                                |  |                      | 6,161 |            |  |         | 9,255  |       |  |  | 13,497 |  |  |  | 28,913 | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|United Kingdom                  |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Agriculture                     |  |                      | 25    |            |  |         | 22     |       |  |  | 11     |  |  |  | 58     | 
|Energy                          |  |                      | 87    |            |  |         | 56     |       |  |  | 15     |  |  |  | 158    | 
|Manufacturing                   |  |                      | 322   |            |  |         | 92     |       |  |  | 307    |  |  |  | 721    | 
|Construction and property       |  |                      | 740   |            |  |         | 559    |       |  |  | 685    |  |  |  | 1,984  | 
|Distribution                    |  |                      | 129   |            |  |         | 47     |       |  |  | 48     |  |  |  | 224    | 
|Transport                       |  |                      | 55    |            |  |         | 171    |       |  |  | 23     |  |  |  | 249    | 
|Financial                       |  |                      | 38    |            |  |         | 41     |       |  |  | 17     |  |  |  | 96     | 
|Business and other services     |  |                      | 450   |            |  |         | 403    |       |  |  | 397    |  |  |  | 1,250  | 
|Commercial Mortgages            |  |                      | 113   |            |  |         | 482    |       |  |  | 1,260  |  |  |  | 1,855  | 
|Personal                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
| residential mortgages         |  |                      | 221   |            |  |         | 1,067  |       |  |  | 19,575 |  |  |  | 20,863 | 
| other lending                 |  |                      | 525   |            |  |         | 342    |       |  |  | 128    |  |  |  | 995    | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|                                |  |                      | 2,705 |            |  |         | 3,282  |       |  |  | 22,466 |  |  |  | 28,453 | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|United States                   |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Commercial loans                |  |                      | 1     |            |  |         |       |       |  |  |       |  |  |  | 1      | 
|Real estate loans, construction |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|Real estate loans, mortgage     |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|Consumer loans                  |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|Bank card loans                 |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|Leasing                         |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|Other loans                     |  |                      |      |            |  |         |       |       |  |  |       |  |  |  |       | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|                                |  |                      | 1     |            |  |         |       |       |  |  |       |  |  |  | 1      | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Group total loan portfolio      |  |                      | 8,867 |            |  |         | 12,537 |       |  |  | 35,963 |  |  |  | 57,367 | 
|                                |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 

51



---



##### Table of Contents



Movement in the Allowance for Loan
Losses

The Group believes its loan loss experience in
recent years has been satisfactory. The charge to the Profit and
Loss account has not exceeded 20 bps in any of the past five
years.

The main factors contributing to this outcome
have been the exceptional performance of the Irish economy over
the period and the low interest rate environment in recent
times, brought about by membership of the single currency.

In Britain, the robust performance of the
economy, historically low interest rates and a concentration on
lower risk residential mortgage lending are responsible for the
acceptable loan loss experience there.

There can be no assurances as to how long these
economic conditions will continue. The Group also continues to
invest significantly in credit training for its staff and in
enhancing its credit management processes and procedures. This
investment has contributed to the satisfactory loan loss
outcome, which has been consistent across all units in the Group.

Group policy is to provide for bad and doubtful
debts to reflect the losses inherent in the loan portfolio at
the balance sheet date. There are two types of provisions,
specific and general. Part of the general provision is
calculated by reference to the underlying grade profile of the
loan book, while the balance is calculated based on estimated
rates of loss, taking cognisance of historic loss experience by
loan type/sector and the prevailing economic climate.

Over the past five years total Group loan loss
allowances have increased from
359 million
to
480 million,
representing 0.98% and 0.84% respectively of total loans.

The ratio of loan loss allowances to loans
accounted for on a non-accrual basis has increased from 81% in
1999 to 150% in 2003. The improved ratio has been driven in part
by significant growth in loan balances whilst non accrual loans
have been relatively static over the period as a result of a
very benign economy and the current low interest rate
environment.

52



---



##### Table of Contents



The following table presents information
regarding the movement in the allowance for loan losses in each
of the five years ended March 31, 2003.

|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|------------------------------------------------ |  | ------------------------------ | ----- | ------- |  | -------- | ----- | ------- |  | -------- | ----- | ------- |  |  | ----- |  |  |  | ----- | - |  |  | ----- | -
|                                                 |  |                               
|                                                 |  | Financial year ended March 31,
|                                                 |  |                               
|                                                 |  |                                |       |         |  |         
|                                                 |  | 2003                           |       | 2002    |  | 2001    
|                                                 |  |                                |       |         |  |         
|                                                 |  | Specific                       |       | General |  | Specific |       | General |  | Specific |       | General
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |        
|                                                 |  |                               
|                                                 |  | (in  millions)               
|Allowance at beginning of year                   |  |                                | 158.8 |         |  |          | 341.4 |         |  |          | 123.2 |         |  |  | 307.2 |  |  |  | 114.5 |   |  |  | 283.1 |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Total allowance                                  |  | 500.2                          |       | 430.4   |  | 397.6   
|                                                 |  |                                |       |         |  |         
|Exchange adjustments                             |  |                                | (7.7  | )       |  |          | (22.4 | )       |  |          | 1.4   |         |  |  | 2.2   |  |  |  | (1.5  | ) |  |  | (5.5  | )
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Other adjustments:                               |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Acquisitions/ Mergers                            |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  | (0.5  | )
|Disposals                                        |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  |      |  
|Transfers: general to specific                   |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  | (0.5  | )
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Recovery of amounts previously charged off:      |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | 4.1   |         |  |          |      |         |  |          | 14.4  |         |  |  |      |  |  |  | 9.6   |   |  |  |      |  
|United Kingdom                                   |  |                                | 1.5   |         |  |          |      |         |  |          | 4.7   |         |  |  |      |  |  |  | 7.1   |   |  |  |      |  
|United States                                    |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Total recovery of amounts previously charged off |  |                                | 5.6   |         |  |          |      |         |  |          | 19.1  |         |  |  |      |  |  |  | 16.7  |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Amounts charged off:                             |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | (77.4 | )       |  |          |      |         |  |          | (39.0 | )       |  |  |      |  |  |  | (29.1 | ) |  |  |      |  
|United Kingdom                                   |  |                                | (19.0 | )       |  |          |      |         |  |          | (16.1 | )       |  |  |      |  |  |  | (19.6 | ) |  |  |      |  
|United States                                    |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Total amounts charged off                        |  |                                | (96.4 | )       |  |          |      |         |  |          | (55.1 | )       |  |  |      |  |  |  | (48.7 | ) |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Provision for loan losses charged to income:     |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | 102.5 |         |  |          | (25.2 | )       |  |          | 62.1  |         |  |  | 9.6   |  |  |  | 28.1  |   |  |  | 30.3  |  
|United Kingdom                                   |  |                                | 6.7   |         |  |          | 16.4  |         |  |          | 8.1   |         |  |  | 22.4  |  |  |  | 14.1  |   |  |  | (0.2  | )
|United States                                    |  |                                |      |         |  |          |      |         |  |          |      |         |  |  |      |  |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|                                                 |  |                                | 109.2 |         |  |          | (8.8  | )       |  |          | 70.2  |         |  |  | 32.0  |  |  |  | 42.2  |   |  |  | 30.1  |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Allowance at end of year                         |  |                                | 169.5 |         |  |          | 310.2 |         |  |          | 158.8 |         |  |  | 341.4 |  |  |  | 123.2 |   |  |  | 307.2 |  
|                                                 |  |                                |       |         |  |          |       |         |  |          |       |         |  |  |       |  |  |  |       |   |  |  |       |  
|Total allowance                                  |  | 479.7                          |       | 500.2   |  | 430.4   
|                                                 |  |                                |       |         |  |         

53



---



##### Table of Contents



Movement in the Allowance for Loan
Losses

|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|------------------------------------------------ |  | ------------------------------ | ----- | ------- |  | -------- | ----- | ------- |  |  | ----- | - |  |  | ----- | -
|                                                 |  |                               
|                                                 |  | Financial year ended March 31,
|                                                 |  |                               
|                                                 |  |                                |       |        
|                                                 |  | 2000                           |       | 1999   
|                                                 |  |                                |       |        
|                                                 |  | Specific                       |       | General |  | Specific |       | General
|                                                 |  |                                |       |         |  |          |       |        
|                                                 |  |                               
|                                                 |  | (in  millions)               
|Allowance at beginning of year                   |  |                                | 122.9 |         |  |          | 236.2 |         |  |  | 143.5 |   |  |  | 212.7 |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Total allowance                                  |  | 359.1                          |       | 356.2  
|                                                 |  |                                |       |        
|Exchange adjustments                             |  |                                | 6.5   |         |  |          | 15.9  |         |  |  | (2.0  | ) |  |  | (4.8  | )
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Other adjustments:                               |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Acquisitions/ Mergers                            |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      |  
|Disposals                                        |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      |  
|Transfers: general to specific                   |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|                                                 |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Recovery of amounts previously charged off:      |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | 9.9   |         |  |          |      |         |  |  | 6.3   |   |  |  |      |  
|United Kingdom                                   |  |                                | 7.8   |         |  |          |      |         |  |  | 9.3   |   |  |  |      |  
|United States                                    |  |                                |      |         |  |          |      |         |  |  | 0.3   |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Total recovery of amounts previously charged off |  |                                | 17.7  |         |  |          |      |         |  |  | 15.9  |   |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Amounts charged off:                             |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | (26.3 | )       |  |          |      |         |  |  | (40.0 | ) |  |  |      |  
|United Kingdom                                   |  |                                | (20.8 | )       |  |          |      |         |  |  | (20.6 | ) |  |  |      |  
|United States                                    |  |                                | (10.4 | )       |  |          |      |         |  |  | (0.9  | ) |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Total amounts charged off                        |  |                                | (57.5 | )       |  |          |      |         |  |  | (61.5 | ) |  |  |      |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Provision for loan losses charged to income:     |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Ireland                                          |  |                                | 22.9  |         |  |          | 13.2  |         |  |  | 24.9  |   |  |  | 10.1  |  
|United Kingdom                                   |  |                                | 2.9   |         |  |          | 17.8  |         |  |  | 1.6   |   |  |  | 18.7  |  
|United States                                    |  |                                | (0.9  | )       |  |          |      |         |  |  | 0.5   |   |  |  | (0.5  | )
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|                                                 |  |                                | 24.9  |         |  |          | 31.0  |         |  |  | 27.0  |   |  |  | 28.3  |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Allowance at end of year                         |  |                                | 114.5 |         |  |          | 283.1 |         |  |  | 122.9 |   |  |  | 236.2 |  
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       |  
|Total allowance                                  |  | 397.6                          |       | 359.1  
|                                                 |  |                                |       |        

54



---



##### Table of Contents



The following table presents additional
information regarding provisions and allowances for loan losses
for each of the five years ending March 31, 2003.

|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                                                                              |  |                                       
|                                                                                                              |  | For the Financial Year Ended March 31,
|                                                                                                              |  |                                       
|                                                                                                              |  | 2003                                   |        | 2002 |  | 2001 |        | 2000 |  | 1999
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |     
|                                                                                                              |  |                                       
|                                                                                                              |  | (in  millions, except percentages)   
|                                                                                                              |  | %                                      |        | %    |  | %    |        | %    |  | %   
|Allowance at end of year as a percentage of total
    loans to customers at end of year:                      |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Ireland                                                                                                       |  |                                        | 1.12   |      |  |      | 1.02   |      |  |      | 0.92   |  |  |  | 0.89   |  |  |  | 1.20   | 
|United Kingdom                                                                                                |  |                                        | 0.54   |      |  |      | 0.75   |      |  |      | 0.76   |  |  |  | 0.87   |  |  |  | 0.79   | 
|United States                                                                                                 |  |                                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  | 25.86  | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.84   |      |  |      | 0.88   |      |  |      | 0.83   |  |  |  | 0.88   |  |  |  | 0.98   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Specific                                                                                                      |  |                                        | 0.30   |      |  |      | 0.28   |      |  |      | 0.23   |  |  |  | 0.25   |  |  |  | 0.34   | 
|General                                                                                                       |  |                                        | 0.54   |      |  |      | 0.60   |      |  |      | 0.60   |  |  |  | 0.63   |  |  |  | 0.64   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.84   |      |  |      | 0.88   |      |  |      | 0.83   |  |  |  | 0.88   |  |  |  | 0.98   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Allowance at end of year as a percentage of loans
    accounted for on a non-accrual basis at end of year:(1) |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Ireland                                                                                                       |  |                                        | 121.3  |      |  |      | 126.5  |      |  |      | 142.7  |  |  |  | 119.3  |  |  |  | 148.5  | 
|United Kingdom                                                                                                |  |                                        | 300.5  |      |  |      | 197.9  |      |  |      | 131.2  |  |  |  | 107.2  |  |  |  | 52.2   | 
|United States                                                                                                 |  |                                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 150.1  |      |  |      | 151.3  |      |  |      | 136.7  |  |  |  | 112.1  |  |  |  | 81.0   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Average loans to customers(2)                                                                                 |  |                                        | 57,145 |      |  |      | 55,197 |      |  |      | 49,049 |  |  |  | 40,136 |  |  |  | 33,836 | 
|Provisions charged to income as a percentage of
    average loans to customers:                               |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Specific                                                                                                      |  |                                        | 0.20   |      |  |      | 0.13   |      |  |      | 0.09   |  |  |  | 0.06   |  |  |  | 0.08   | 
|General                                                                                                       |  |                                        | (0.02  | )    |  |      | 0.06   |      |  |      | 0.06   |  |  |  | 0.08   |  |  |  | 0.08   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.18   |      |  |      | 0.19   |      |  |      | 0.15   |  |  |  | 0.14   |  |  |  | 0.16   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Net loans charged off as a percentage of average
    loans to customers                                       |  |                                        | 0.16   |      |  |      | 0.07   |      |  |      | 0.07   |  |  |  | 0.10   |  |  |  | 0.13   | 
|                                                                                                              |  |                                        |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Non-accrual loans include loans in Ireland and
    the United Kingdom against which interest continues to be
    accrued but against which specific provisions have been made.
    For the purposes of this calculation, non-accrual loans do not
    include accruing loans which are contractually past due
    90 days or more as to principal or interest payments and
    loans which are troubled debt restructurings as
    defined in SFAS No. 15 Accounting by Debtors and
    Creditors for Troubled Debt Restructurings.
|   
|(2) | Average loans include average interest earning
    and non-interest earning loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                     

55



---



##### Table of Contents



The following table provides information
regarding loans charged off for each of the five years ended
March 31, 2003.

|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|------------------------------- |  | --------------- | ---- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2003            |      | 2002 |  | 2001 |      | 2000 |  | 1999
|                                |  |                 |      |      |  |      |      |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 2.9  |      |  |      | 1.7  |      |  |      | 2.5  |  |  |  | 2.1  |  |  |  | 3.7  | 
|Energy                          |  |                 | 5.0  |      |  |      |     |      |  |      |     |  |  |  | 1.8  |  |  |  |     | 
|Manufacturing                   |  |                 | 21.9 |      |  |      | 12.8 |      |  |      | 0.2  |  |  |  | 1.0  |  |  |  | 6.0  | 
|Construction and property       |  |                 | 1.8  |      |  |      | 0.8  |      |  |      | 0.6  |  |  |  | 0.5  |  |  |  | 0.9  | 
|Distribution                    |  |                 | 2.1  |      |  |      | 1.3  |      |  |      | 1.6  |  |  |  | 1.5  |  |  |  | 3.4  | 
|Transport                       |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.4  | 
|Financial                       |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 14.5 |      |  |      | 5.7  |      |  |      | 5.4  |  |  |  | 5.0  |  |  |  | 3.0  | 
|Personal                        |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |     |      |  |      |     |      |  |      |     |  |  |  | 0.1  |  |  |  | 0.1  | 
| Other lending                 |  |                 | 29.2 |      |  |      | 16.7 |      |  |      | 18.8 |  |  |  | 14.3 |  |  |  | 22.5 | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 77.4 |      |  |      | 39.0 |      |  |      | 29.1 |  |  |  | 26.3 |  |  |  | 40.0 | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United Kingdom                  |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 0.1  |      |  |      | 0.1  |      |  |      | 0.1  |  |  |  | 0.1  |  |  |  |     | 
|Manufacturing                   |  |                 | 7.6  |      |  |      | 0.9  |      |  |      | 0.8  |  |  |  | 0.9  |  |  |  | 0.4  | 
|Construction and property       |  |                 | 1.1  |      |  |      | 0.4  |      |  |      | 6.1  |  |  |  | 0.2  |  |  |  | 0.5  | 
|Distribution                    |  |                 | 0.3  |      |  |      | 4.5  |      |  |      | 0.2  |  |  |  | 0.4  |  |  |  | 0.4  | 
|Transport                       |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.1  | 
|Financial                       |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 2.7  |      |  |      | 1.2  |      |  |      | 1.5  |  |  |  | 1.4  |  |  |  | 0.3  | 
|Commercial mortgages            |  |                 | 2.2  |      |  |      |     |      |  |      |     |  |  |  | 2.9  |  |  |  |     | 
|Personal                        |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 | 0.2  |      |  |      | 3.8  |      |  |      | 6.4  |  |  |  | 12.5 |  |  |  | 16.6 | 
| Other lending                 |  |                 | 4.8  |      |  |      | 5.2  |      |  |      | 4.5  |  |  |  | 2.4  |  |  |  | 2.3  | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 19.0 |      |  |      | 16.1 |      |  |      | 19.6 |  |  |  | 20.8 |  |  |  | 20.6 | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United States                   |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Commercial loans                |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.9  | 
|Real estate loans, construction |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, mortgage     |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Leases including consumer loans |  |                 |     |      |  |      |     |      |  |      |     |  |  |  | 10.4 |  |  |  |     | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |     |      |  |      |     |      |  |      |     |  |  |  | 10.4 |  |  |  | 0.9  | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Group total                     |  |                 | 96.4 |      |  |      | 55.1 |      |  |      | 48.7 |  |  |  | 57.5 |  |  |  | 61.5 | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 

56



---



##### Table of Contents



The following table presents an analysis of the
Groups recoveries of loans previously charged off for each
of the five years ended March 31, 2003.

|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|------------------------------- |  | --------------- | --- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2003            |     | 2002 |  | 2001 |      | 2000 |  | 1999
|                                |  |                 |     |      |  |      |      |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 0.2 |      |  |      | 1.2  |      |  |      | 0.8  |  |  |  | 0.9  |  |  |  | 0.9  | 
|Manufacturing                   |  |                 | 1.3 |      |  |      | 0.1  |      |  |      | 1.0  |  |  |  | 1.5  |  |  |  | 0.2  | 
|Construction and property       |  |                 | 0.1 |      |  |      | 0.3  |      |  |      | 0.2  |  |  |  | 0.2  |  |  |  | 0.3  | 
|Distribution                    |  |                 | 0.1 |      |  |      | 0.8  |      |  |      | 0.5  |  |  |  | 0.8  |  |  |  | 1.0  | 
|Transport                       |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.1  | 
|Financial                       |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 0.6 |      |  |      | 2.7  |      |  |      | 1.9  |  |  |  | 0.9  |  |  |  | 0.4  | 
|Personal                        |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.1  | 
| Other lending                 |  |                 | 1.8 |      |  |      | 9.3  |      |  |      | 5.2  |  |  |  | 5.6  |  |  |  | 3.3  | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 4.1 |      |  |      | 14.4 |      |  |      | 9.6  |  |  |  | 9.9  |  |  |  | 6.3  | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United Kingdom                  |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Manufacturing                   |  |                 | 0.1 |      |  |      | 0.2  |      |  |      | 0.3  |  |  |  | 0.1  |  |  |  | 0.1  | 
|Construction and property       |  |                 |    |      |  |      | 1.5  |      |  |      | 1.1  |  |  |  | 0.2  |  |  |  | 0.7  | 
|Distribution                    |  |                 | 0.4 |      |  |      | 0.1  |      |  |      | 0.2  |  |  |  | 0.1  |  |  |  | 0.5  | 
|Transport                       |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.1  | 
|Financial                       |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 0.1 |      |  |      | 1.1  |      |  |      | 0.5  |  |  |  | 0.2  |  |  |  | 0.3  | 
|Commercial mortgages            |  |                 | 0.4 |      |  |      |     |      |  |      |     |  |  |  | 2.9  |  |  |  |     | 
|Personal                        |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |    |      |  |      | 1.5  |      |  |      | 4.2  |  |  |  | 3.5  |  |  |  | 5.8  | 
| Other lending                 |  |                 | 0.5 |      |  |      | 0.3  |      |  |      | 0.8  |  |  |  | 0.8  |  |  |  | 1.8  | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 1.5 |      |  |      | 4.7  |      |  |      | 7.1  |  |  |  | 7.8  |  |  |  | 9.3  | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United States                   |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Commercial loans                |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.3  | 
|Real estate loans, construction |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, mortgage     |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Leases including consumer loans |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |    |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.3  | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Group total                     |  |                 | 5.6 |      |  |      | 19.1 |      |  |      | 16.7 |  |  |  | 17.7 |  |  |  | 15.9 | 
|                                |  |                 |     |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 

57



---



##### Table of Contents



The following table presents an analysis of
allowances for loan losses at March 31, for each of the
five years ended March 31, 2003.

|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2003            |       | 2002 |  | 2001 |       | 2000 |  | 1999
|                                |  |                 |       |      |  |      |       |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |                 | 11.2  |      |  |      | 10.8  |      |  |      | 10.7  |  |  |  | 12.3  |  |  |  | 10.3  | 
|Energy                          |  |                 | 5.9   |      |  |      | 0.1   |      |  |      |      |  |  |  |      |  |  |  | 0.3   | 
|Manufacturing                   |  |                 | 9.6   |      |  |      | 20.7  |      |  |      | 11.0  |  |  |  | 3.6   |  |  |  | 5.1   | 
|Construction and property       |  |                 | 12.9  |      |  |      | 4.3   |      |  |      | 2.3   |  |  |  | 2.5   |  |  |  | 2.0   | 
|Distribution                    |  |                 | 7.0   |      |  |      | 7.6   |      |  |      | 4.1   |  |  |  | 4.1   |  |  |  | 6.5   | 
|Transport                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 0.6   | 
|Financial                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 0.1   | 
|Business and Other Services     |  |                 | 28.9  |      |  |      | 13.6  |      |  |      | 9.0   |  |  |  | 9.8   |  |  |  | 5.2   | 
|Personal                        |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| Residential Mortgages         |  |                 | 0.6   |      |  |      | 0.5   |      |  |      | 0.4   |  |  |  | 0.4   |  |  |  | 0.4   | 
| Other lending                 |  |                 | 71.2  |      |  |      | 63.4  |      |  |      | 45.5  |  |  |  | 43.6  |  |  |  | 38.3  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 | 147.3 |      |  |      | 121.0 |      |  |      | 83.0  |  |  |  | 76.3  |  |  |  | 68.8  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United Kingdom                  |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |                 | 0.1   |      |  |      | 0.1   |      |  |      | 0.2   |  |  |  | 0.3   |  |  |  | 1.1   | 
|Manufacturing                   |  |                 | 4.2   |      |  |      | 12.9  |      |  |      | 12.2  |  |  |  | 12.0  |  |  |  | 2.0   | 
|Construction and property       |  |                 | 2.4   |      |  |      | 3.5   |      |  |      | 3.6   |  |  |  | 1.5   |  |  |  | 1.5   | 
|Distribution                    |  |                 | 0.5   |      |  |      | 1.4   |      |  |      | 0.7   |  |  |  | 0.6   |  |  |  | 2.9   | 
|Transport                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 0.1   | 
|Financial                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 0.1   | 
|Business and Other Services     |  |                 | 4.7   |      |  |      | 7.7   |      |  |      | 8.1   |  |  |  | 2.6   |  |  |  | 1.3   | 
|Commercial mortgages            |  |                 | 1.1   |      |  |      |      |      |  |      |      |  |  |  | 6.2   |  |  |  | 8.8   | 
|Personal                        |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| Residential Mortgages         |  |                 | 0.3   |      |  |      | 2.9   |      |  |      | 5.0   |  |  |  | 8.3   |  |  |  | 19.6  | 
| Other lending                 |  |                 | 8.9   |      |  |      | 9.3   |      |  |      | 10.4  |  |  |  | 6.7   |  |  |  | 6.3   | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 | 22.2  |      |  |      | 37.8  |      |  |      | 40.2  |  |  |  | 38.2  |  |  |  | 43.7  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United States                   |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Commercial loans                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, construction |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, mortgage     |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Leases (including consumer)     |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 10.4  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  | 10.4  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total specific allowance        |  |                 | 169.5 |      |  |      | 158.8 |      |  |      | 123.2 |  |  |  | 114.5 |  |  |  | 122.9 | 
|Total general allowance         |  |                 | 310.2 |      |  |      | 341.4 |      |  |      | 307.2 |  |  |  | 283.1 |  |  |  | 236.2 | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total group allowance           |  |                 | 479.7 |      |  |      | 500.2 |      |  |      | 430.4 |  |  |  | 397.6 |  |  |  | 359.1 | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

Risk Elements in Lending

The U.S. Securities and Exchange Commission
requires potential credit risk elements in lending to be
analyzed as (i) loans accounted for on a non-accrual basis;
(ii) accruing loans which are contractually past due
90 days or more as to principal or interest payments;
(iii) loans not included in (i) or (ii) which are
troubled debt restructurings as defined in Statement
of Financial Accounting Standards No. 15 Accounting
by Debtors and Creditors for Troubled Debt Restructurings,
and (iv) potential problem loans not included in (i), (ii)
or (iii).

58



---



##### Table of Contents



These categories reflect U.S. financial
reporting practices which differ from those used by the Bank of
Ireland Group. See Item 11  Market
Risk  Provisions and Allowances for Loan Losses.

The Bank of Ireland Groups loan control and
review procedures do not include the classification of loans as
non-accrual, past due 90 days or troubled debt
restructurings. However, management has set out below its
estimates of the amount of loans, without giving effect to
available security and before the deduction of specific
provisions, which would have been so reported had the
Commissions classifications been employed. In doing so it
has included under the category of non-accrual loans those loans
on which interest continues to be accrued but against which
specific provisions have been made.

|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|--------------------------------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  | ---- | --- | ---- |  | ---- | --- |  |  |  | --- |  |  |  | --- | 
|                                                                                                          |  |                
|                                                                                                          |  | At March 31,   
|                                                                                                          |  |                
|                                                                                                          |  | 2003            |     | 2002 |  | 2001 |     | 2000 |  | 1999
|                                                                                                          |  |                 |     |      |  |      |     |      |  |     
|                                                                                                          |  |                
|                                                                                                          |  | (in  millions)
|Loans accounted for on a non-accrual
    basis                                                            |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Ireland(1)                                                                                                |  |                 | 268 |      |  |      | 216 |      |  |      | 154 |  |  |  | 145 |  |  |  | 122 | 
|United Kingdom(1)                                                                                         |  |                 | 51  |      |  |      | 115 |      |  |      | 161 |  |  |  | 210 |  |  |  | 322 | 
|United States                                                                                             |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Total                                                                                                     |  |                 | 319 |      |  |      | 331 |      |  |      | 315 |  |  |  | 355 |  |  |  | 444 | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Accruing loans which are contractually past
    due
    90 days or more as to principal or interest(2)(3) |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Ireland                                                                                                   |  |                 | 228 |      |  |      | 167 |      |  |      | 128 |  |  |  | 109 |  |  |  | 109 | 
|United Kingdom                                                                                            |  |                 | 160 |      |  |      | 200 |      |  |      | 181 |  |  |  | 240 |  |  |  | 246 | 
|United States                                                                                             |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Total                                                                                                     |  |                 | 388 |      |  |      | 367 |      |  |      | 309 |  |  |  | 349 |  |  |  | 355 | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Restructured loans not included above                                                                     |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  | 5   | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 






|    |                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes loans in Ireland and the United Kingdom
    where interest is accrued but provision has been made. The loans
    on which no interest is accrued amounted to
    141m (2002:
    124m) and the
    provisions thereon amounted to
    88m (2002:
    77m). The amount
    of interest in suspense in 2003 was
    4.0m (2002:
    6.0m).
|   
|(2) | Overdrafts generally have no fixed repayment
    schedule and are not included in this category.                                                                                                                                                                                                                                                       
|   
|(3) | Includes home mortgage loans in Ireland and the
    United Kingdom (March 31, 2003:
    75.5 million
    in Ireland and
    143 million
    in the United Kingdom) which are secured and, typically, where
    the original loan to value ratio exceeds 75%, benefit from
    mortgage indemnity insurance.                                          

The Bank of Ireland Group generally expects that
loans, where known information about possible credit problems of
borrowers causes management to have serious doubts as to the
ability of such borrowers to comply with loan repayment terms,
would be included under its definition of non-accrual loans and
would therefore have been reported in the above table. However,
managements best estimate of loans not included above, but
concerning which the Bank of Ireland Group has doubts as to the
ability of the borrowers to comply with loan repayment terms,
totalled approximately
14.8 million
at March 31, 2003.

It is not normal practice for banks in Ireland or
the United Kingdom to take property onto their books in
settlement of problem loans or to classify them as Other Real
Estate Owned. Where formal insolvency procedures are entered
into, the property charged to the Bank is sold by the receiver,
administrator or liquidator, with the proceeds received by the
Bank. Loans subject to insolvency proceedings are included
within non-performing loans in the table above, to the extent
that they are not written off. This treatment is also followed
for loans in Ireland and the United Kingdom which would be
classified as In-Substance Foreclosure under
U.S. reporting practices.

Cross-Border Outstandings

Cross-border outstandings are those outstandings
that create claims outside a reporting centers country
unless loaned in and funded or hedged in the local currency of
the borrower. They comprise loans, acceptances,

59



---



##### Table of Contents



interest-bearing deposits with other banks, other
interest-bearing investments, leases and any other monetary
assets, but exclude finance provided within the Bank of Ireland
Group. The geographical and sectoral breakdown is based on the
country and sector of the borrower or of the guarantor of
ultimate risk.


Cross-border outstandings exceeding 1% of total
assets are set forth in the following table:

|                     |  |                                     |       |              |  |                |   |       |  |                  |     |  |  |  |       |  |  |  |      | 
|-------------------- |  | ----------------------------------- | ----- | ------------ |  | -------------- | - | ----- |  | ---------------- | --- |  |  |  | ----- |  |  |  | ---- | 
|                     |  | Banks and                           |       |              |  | Commercial     |   |       |  |                 
|                     |  | other                               |       | Government   |  | and industrial |   |       |  |                 
|                     |  | financial                           |       | and official |  | and other      |   |       |  | As percentage of
|                     |  | institutions                        |       | institutions |  | private sector |   | Total |  | total assets(1) 
|                     |  |                                     |       |              |  |                |   |       |  |                 
|                     |  |                                    
|                     |  | (in  millions, except percentages)
|As at March 31, 2003 |  |                                     |       |              |  |                |   |       |  |                  |     |  |  |  |       |  |  |  |      | 
|United Kingdom       |  |                                     | 1,080 |              |  |                |  |       |  |                  | 439 |  |  |  | 1,519 |  |  |  | 1.7% | 
|Germany              |  |                                     | 864   |              |  |                |  |       |  |                  | 54  |  |  |  | 918   |  |  |  | 1.0% | 
|As at March 31, 2002 |  |                                     |       |              |  |                |   |       |  |                  |     |  |  |  |       |  |  |  |      | 
|United Kingdom       |  |                                     | 1,310 |              |  |                |  |       |  |                  | 349 |  |  |  | 1,659 |  |  |  | 1.9% | 
|Cayman Islands       |  |                                     | 500   |              |  |                |  |       |  |                  | 620 |  |  |  | 1,120 |  |  |  | 1.3% | 
|As at March 31, 2001 |  |                                     |      |              |  |                |  |       |  |                  |    |  |  |  |      |  |  |  |     | 






|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Assets, consisting of total assets as reported in
    the consolidated balance sheet plus acceptances were
    89.6 billion
    at March 31, 2003 (March 31, 2002:
    87.4 billion,
    March 31, 2001:
    79.0 billion).

Cross-border outstandings to borrowers in
countries in which such outstandings amounted to between 0.75%
and 1.0% of total assets in aggregate were
739 million
at March 31, 2003,
868 million
at March 31, 2002 and
766 million
at March 31, 2001. The country concerned in 2003 was Cayman
Islands (2002: Germany, 2001: the United Kingdom).

As at March 31, 2003, Bank of Ireland Group
had no significant exposure to countries experiencing liquidity
problems.

Debt Securities

The following table shows the book value of Bank
of Ireland Groups debt securities at March 31, 2003,
2002 and 2001.

|                                                          |  |                 |        |      |  |      |        |  |  |  |       | 
|--------------------------------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ |  |  |  | ----- | 
|                                                          |  |                
|                                                          |  | At March 31,   
|                                                          |  |                
|                                                          |  | 2003            |        | 2002 |  | 2001
|                                                          |  |                 |        |      |  |     
|                                                          |  |                
|                                                          |  | (in  millions)
|Irish Government                                          |  |                 | 2,937  |      |  |      | 2,104  |  |  |  | 1,481 | 
|Other European government                                 |  |                 | 704    |      |  |      | 505    |  |  |  | 398   | 
|U.S. Treasury and U.S. government
    agencies            |  |                 |       |      |  |      | 3      |  |  |  | 3     | 
|Mortgage-backed obligations of federal agencies           |  |                 |       |      |  |      |       |  |  |  | 45    | 
|Collateralized mortgage obligations                       |  |                 |       |      |  |      | 3      |  |  |  | 5     | 
|Obligations of U.S. states and political
    subdivisions |  |                 |       |      |  |      |       |  |  |  |      | 
|Corporate bonds                                           |  |                 | 7,428  |      |  |      | 7,147  |  |  |  | 5,658 | 
|Other securities                                          |  |                 | 1,268  |      |  |      | 1,123  |  |  |  | 939   | 
|                                                          |  |                 |        |      |  |      |        |  |  |  |       | 
|                                                          |  |                 | 12,337 |      |  |      | 10,885 |  |  |  | 8,529 | 
|                                                          |  |                 |        |      |  |      |        |  |  |  |       | 

The market value of Bank of Ireland Groups
Irish Government securities (the book value of which exceeded
10% of stockholders equity) at March 31, 2003 was
2.9 billion
(2002:
2.1 billion;
2001:
1.5 billion).

60



---



##### Table of Contents



The following table categorizes the Groups
investment debt securities, excluding trading securities, by
maturity and weighted average yield at March 31, 2003.

|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 
|------------------------------------ |  | ----------------------------------- | ----- | ----------------- |  | ------------------ | ---- | -------------- |  | ----- | ----- | ------- |  | ----- | ---- | ------- |  |  | ----- |  |  |  | ---- |  |  |  | --- |  |  |  | ---- | 
|                                     |  |                                    
|                                     |  | At March 31, 2003                  
|                                     |  |                                    
|                                     |  |                                     |       |                   |  |                    |      |               
|                                     |  |                                     |       | More than 1 year  |  | More than 5 years  |      |               
|                                     |  | Less than 1 year                    |       | less than 5 years |  | less than 10 years |      | After 10 years
|                                     |  |                                     |       |                   |  |                    |      |               
|                                     |  | Book                                |       | Percent           |  | Book               |      | Percent        |  | Book  |       | Percent |  | Book  |      | Percent
|                                     |  | Value                               |       | Yield             |  | Value              |      | Yield          |  | Value |       | Yield   |  | Value |      | Yield  
|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |        
|                                     |  |                                    
|                                     |  | (in  millions, except percentages)
|Irish government                     |  |                                     |      |                   |  |                    |     |                |  |       |      |         |  |       |     |         |  |  |      |  |  |  |     |  |  |  | 185 |  |  |  | 5.00 | 
|Other European government            |  |                                     |      |                   |  |                    |     |                |  |       | 354   |         |  |       | 7.71 |         |  |  | 14    |  |  |  | 6.00 |  |  |  |    |  |  |  |     | 
|US Treasury & US government agencies |  |                                     |      |                   |  |                    |     |                |  |       |      |         |  |       |     |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|Collateralised mortgage obligations  |  |                                     |      |                   |  |                    |     |                |  |       |      |         |  |       |     |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|Corporate bonds                      |  |                                     | 1,552 |                   |  |                    | 3.46 |                |  |       | 4,196 |         |  |       | 3.22 |         |  |  | 1,325 |  |  |  | 3.58 |  |  |  | 135 |  |  |  | 2.51 | 
|Other                                |  |                                     | 637   |                   |  |                    | 4.13 |                |  |       | 242   |         |  |       | 2.94 |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 
|Total book value                     |  |                                     | 2,189 |                   |  |                    |      |                |  |       | 4,792 |         |  |       |      |         |  |  | 1,339 |  |  |  |      |  |  |  | 320 |  |  |  |      | 
|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 

Maturity is remaining contractual maturity except
for mortgage-backed securities where maturity has been
calculated on an expected duration basis. The weighted average
yield for each range of maturities is calculated by dividing the
annual interest income prevailing at the balance sheet date by
the book value of securities held at that date.

Loans and Advances to Banks

The Group places funds with other banks for a
number of reasons, including liquidity management, the
facilitation of international money transfers and the conduct of
documentary credit business with correspondent banks.

Limits on the aggregate amount of placings that
may be made with individual institutions are established in
accordance with Group credit policy.

The following table analyzes placings with banks,
based on the branches from which the placing is made. Placings
with banks are included in Loans and Advances to Banks in the
financial statements.

|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|--------------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                              |  |                
|                                              |  | At March 31,   
|                                              |  |                
|                                              |  | 2003            |       | 2002 |  | 2001
|                                              |  |                 |       |      |  |     
|                                              |  |                
|                                              |  | (in  millions)
|Placings with banks repayable within 30 days: |  |                 |       |      |  |      |       |  |  |  |       | 
|Domestic                                      |  |                 | 3,288 |      |  |      | 3,741 |  |  |  | 1,811 | 
|Foreign                                       |  |                 | 253   |      |  |      | 1,563 |  |  |  | 1,460 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 3,541 |      |  |      | 5,304 |  |  |  | 3,271 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Placings with banks repayable beyond 30 days: |  |                 |       |      |  |      |       |  |  |  |       | 
|Domestic                                      |  |                 | 3,800 |      |  |      | 3,024 |  |  |  | 4,795 | 
|Foreign                                       |  |                 | 139   |      |  |      | 57    |  |  |  | 49    | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 3,939 |      |  |      | 3,081 |  |  |  | 4,844 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 7,480 |      |  |      | 8,385 |  |  |  | 8,115 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 

61



---



##### Table of Contents



LIABILITIES

Deposits

The following tables analyze average deposits by
customers based on the location of the branches in which the
deposits are recorded.

|                         |  |                 |        |            |  |            |        |  |  |  |        | 
|------------------------ |  | --------------- | ------ | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                         |  |                
|                         |  | At March 31,   
|                         |  |                
|                         |  | 2003            |        | 2002       |  | 2001      
|                         |  |                 |        |            |  |           
|                         |  |                 |        | (restated) |  | (restated)
|                         |  |                
|                         |  | (in  millions)
|Branches in Ireland      |  |                 | 25,022 |            |  |            | 22,814 |  |  |  | 19,255 | 
|Branches outside Ireland |  |                 | 22,882 |            |  |            | 24,090 |  |  |  | 21,936 | 
|                         |  |                 |        |            |  |            |        |  |  |  |        | 
|Total                    |  |                 | 47,904 |            |  |            | 46,904 |  |  |  | 41,191 | 
|                         |  |                 |        |            |  |            |        |  |  |  |        | 

|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|------------------------ |  | ------------- | --- | --------------- |  | ------------- | ------ | --------------- |  | ------------- | --- | --------------- |  |  | ------ |  |  |  | --- |  |  |  | ------ | 
|                         |  |              
|                         |  | At March 31, 
|                         |  |              
|                         |  | Average       |     |                 |  | Average       |        |                 |  | Average       |     |                
|                         |  | Interest Rate |     |                 |  | Interest Rate |        |                 |  | Interest Rate |     |                
|                         |  | during 2003   |     | 2003            |  | during 2002   |        | 2002            |  | during 2001   |     | 2001           
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                
|                         |  | %             |     | (in  millions) |  | %             |        | (in  millions) |  | %             |     | (in  millions)
|Branches in Ireland      |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Current accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Interest bearing         |  |               | 1.5 |                 |  |               | 750    |                 |  |               | 2.0 |                 |  |  | 643    |  |  |  | 2.9 |  |  |  | 488    | 
|Non-interest bearing     |  |               |    |                 |  |               | 5,794  |                 |  |               |    |                 |  |  | 5,092  |  |  |  |    |  |  |  | 4,135  | 
|Deposit accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Demand                   |  |               | 1.7 |                 |  |               | 10,919 |                 |  |               | 2.4 |                 |  |  | 11,547 |  |  |  | 1.5 |  |  |  | 8,110  | 
|Time                     |  |               | 1.2 |                 |  |               | 7,559  |                 |  |               | 3.0 |                 |  |  | 5,532  |  |  |  | 3.0 |  |  |  | 6,522  | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|                         |  |               |     |                 |  |               | 25,022 |                 |  |               |     |                 |  |  | 22,814 |  |  |  |     |  |  |  | 19,255 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Branches outside Ireland |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Current accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Interest bearing         |  |               | 2.6 |                 |  |               | 2,013  |                 |  |               | 3.1 |                 |  |  | 1,604  |  |  |  | 3.6 |  |  |  | 1,360  | 
|Non-interest bearing     |  |               |    |                 |  |               | 753    |                 |  |               |    |                 |  |  | 693    |  |  |  |    |  |  |  | 520    | 
|Deposit accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Demand                   |  |               | 2.8 |                 |  |               | 9,628  |                 |  |               | 4.0 |                 |  |  | 9,692  |  |  |  | 5.4 |  |  |  | 8,014  | 
|Time                     |  |               | 4.6 |                 |  |               | 10,488 |                 |  |               | 4.9 |                 |  |  | 12,101 |  |  |  | 5.8 |  |  |  | 12,042 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|                         |  |               |     |                 |  |               | 22,882 |                 |  |               |     |                 |  |  | 24,090 |  |  |  |     |  |  |  | 21,936 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Total                    |  |               |     |                 |  |               | 47,904 |                 |  |               |     |                 |  |  | 46,904 |  |  |  |     |  |  |  | 41,191 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 

Current accounts are checking accounts raised
through the Groups branch network and in Ireland are
primarily non-interest bearing.

Demand deposits bear interest at rates which vary
from time to time in line with movements in market rates and
according to size criteria. Such accounts are not subject to
withdrawal by check or similar instrument and have no fixed
maturity dates.

Time deposits are generally larger and bear
higher rates of interest than demand deposits but have
predetermined maturity dates.

62



---



##### Table of Contents



The following table shows details of the
Groups large time deposits and certificates of deposit
(U.S.$100,000 and over or the equivalent in other currencies) by
time remaining until maturity.

|                        |  |                   |        |        |  |        |     |         |  |  |     |  |  |  |     | 
|----------------------- |  | ----------------- | ------ | ------ |  | ------ | --- | ------- |  |  | --- |  |  |  | --- | 
|                        |  |                  
|                        |  | At March 31, 2003
|                        |  |                  
|                        |  | 0-3               |        | 3-6    |  | 6-12   |     | Over 12
|                        |  | months            |        | months |  | months |     | months 
|                        |  |                   |        |        |  |        |     |        
|                        |  |                  
|                        |  | (in  millions)  
|Time deposits           |  |                   |        |        |  |        |     |         |  |  |     |  |  |  |     | 
|Domestic branches       |  |                   | 3,985  |        |  |        | 339 |         |  |  | 202 |  |  |  | 467 | 
|Foreign branches        |  |                   | 4,393  |        |  |        | 206 |         |  |  | 275 |  |  |  | 222 | 
|Certificates of deposit |  |                   |        |        |  |        |     |         |  |  |     |  |  |  |     | 
|Domestic branches       |  |                   |       |        |  |        |    |         |  |  |    |  |  |  |    | 
|Foreign branches        |  |                   | 2,097  |        |  |        | 396 |         |  |  | 82  |  |  |  |    | 
|                        |  |                   |        |        |  |        |     |         |  |  |     |  |  |  |     | 
|                        |  |                   | 10,475 |        |  |        | 941 |         |  |  | 559 |  |  |  | 689 | 
|                        |  |                   |        |        |  |        |     |         |  |  |     |  |  |  |     | 

Non-resident deposits held in domestic branches
at March 31, 2003 accounted for approximately 7% of total
deposits.

Short-Term Borrowings

The following table shows details of short-term
borrowings of the Group for each of the three years ended
March 31, 2003.

|                          |             |                                     |        |            |  |      |        |      |  |  |        |      | 
|------------------------- | ----------- | ----------------------------------- | ------ | ---------- |  | ---- | ------ | ---- |  |  | ------ | ---- | 
|                          |             |                                    
|                          |             | At March 31,                       
|                          |             |                                    
|                          |             | 2003                                |        | 2002       |  | 2001
|                          |             |                                     |        |            |  |     
|                          |             |                                     |        | (restated) |  |     
|                          |             |                                    
|                          |             | (in  millions, except percentages)
|Debt securities in issue  |             |                                     |        |            |  |      |        |      |  |  |        |     
|End of year outstandings  |             |                                     | 9,652  |            |  |      | 6,374  |      |  |  | 5,016  |     
|Highest month-end balance |             |                                     | 10,411 |            |  |      | 6,374  |      |  |  | 5,059  |     
|Average balance           |             |                                     | 8,792  |            |  |      | 5,287  |      |  |  | 3,655  |     
|Average rate of interest  |             |                                     |        |            |  |      |        |      |  |  |        |     
|                          | At year-end |                                     |        | 2.7%       |  |      |        | 3.8% |  |  |        | 4.2% | 
|                          | During year |                                     |        | 3.1%       |  |      |        | 4.6% |  |  |        | 6.2% | 
|Deposits by banks         |             |                                     |        |            |  |      |        |      |  |  |        |     
|End of year outstandings  |             |                                     | 10,149 |            |  |      | 11,900 |      |  |  | 10,802 |     
|Highest month-end balance |             |                                     | 13,771 |            |  |      | 14,764 |      |  |  | 15,844 |     
|Average balance           |             |                                     | 12,056 |            |  |      | 11,419 |      |  |  | 12,131 |     
|Average rate of interest  |             |                                     |        |            |  |      |        |      |  |  |        |     
|                          | At year-end |                                     |        | 2.7%       |  |      |        | 4.2% |  |  |        | 6.4% | 
|                          | During year |                                     |        | 3.2%       |  |      |        | 3.7% |  |  |        | 5.7% | 

Average interest rates during the year are
computed by dividing total interest expense by the average
amount borrowed. Average interest rates at year-end are average
rates for a single day and as such may reflect one-day market
distortion which may not be indicative of generally prevailing
rates.

63



---



##### Table of Contents






Item 6     DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES






DIRECTORS AND SENIOR MANAGEMENT


The strategic direction of the Group is provided
by the Court of Directors (the Court) which
comprises executive and non-executive Directors. Management is
delegated to certain officers and committees of the Court.

Certain information concerning the Directors and
executive officers as at July 23, 2003 is set out below
and, in the case of executive Directors, the year of appointment
to their present position in square brackets.

|                       |  |     |    |               |  |                                                |  |  |      | 
|---------------------- |  | --- | -- | ------------- |  | ---------------------------------------------- |  |  | ---- | 
|Name                   |  | Age |    | Position held |  | Year appointed a director                     
|                       |  |     |    |               |  |                                               
|Directors              |  |     |    |               |  |                                                |  |  |      | 
|Laurence G Crowley     |  |     | 66 |               |  | Governor                                       |  |  | 1990 | 
|Richard Burrows        |  |     | 57 |               |  | Deputy Governor                                |  |  | 2000 | 
|Michael D Soden [2002] |  |     | 56 |               |  | Group Chief Executive                          |  |  | 2001 | 
|Brian J Goggin [2003]  |  |     | 51 |               |  | Chief Executive, Asset Management Services     |  |  | 2000 | 
|John ODonovan [2001]  |  |     | 51 |               |  | Group Chief Financial Officer                  |  |  | 2002 | 
|Roy E Bailie           |  |     | 60 |               |  | Non-Executive Director                         |  |  | 1999 | 
|David Dilger           |  |     | 46 |               |  | Non-Executive Director                         |  |  | 2003 | 
|Donal J Geaney         |  |     | 52 |               |  | Non-Executive Director                         |  |  | 2000 | 
|Maurice A Keane        |  |     | 62 |               |  | Non-Executive Director                         |  |  | 1983 | 
|Raymond MacSharry      |  |     | 65 |               |  | Non-Executive Director                         |  |  | 1993 | 
|George Magan           |  |     | 57 |               |  | Non-Executive Director                         |  |  | 2003 | 
|Caroline A Marland     |  |     | 57 |               |  | Non-Executive Director                         |  |  | 2001 | 
|Thomas J Moran         |  |     | 50 |               |  | Non-Executive Director                         |  |  | 2001 | 
|Denis OBrien          |  |     | 45 |               |  | Non-Executive Director                         |  |  | 2000 | 
|Mary P Redmond         |  |     | 52 |               |  | Non-Executive Director                         |  |  | 1994 | 
|Executive Officers     |  |     |    |               |  |                                                |  |  |      | 
|John G Collins         |  |     | 56 |               |  | Chief Executive, Retail Businesses             |  |  |      | 
|Des Crowley            |  |     | 43 |               |  | Chief Executive, Retail Financial Services ROI |  |  |      | 
|Denis Donovan          |  |     | 49 |               |  | Chief Executive, Wholesale Financial Services  |  |  |      | 
|Roy Keenan             |  |     | 56 |               |  | Chief Executive, UK Financial Services         |  |  |      | 
|Cyril Dunne            |  |     | 43 |               |  | Group Chief Information Officer                |  |  |      | 
|Jeff R Warren          |  |     | 55 |               |  | Group Chief Development Officer                |  |  |      | 
|John Clifford          |  |     | 53 |               |  | Group Secretary                                |  |  |      | 

Non-Executive Officers

Laurence G Crowley ## OO

Governor


Appointed to the Court in 1990 and Deputy
Governor from 1995 to 1997. Appointed Governor following the
2000 Annual General Court. Chairman of PJ Carroll and Co. Ltd
and a director of Elan Corporation plc and a number of other
companies. Former Executive Chairman of the Michael Smurfit
Graduate School of Business at University College, Dublin.

(Age 66)

64



---



##### Table of Contents



Richard Burrows ++ # *

Deputy Governor


Appointed to the Court in 2000. Appointed Deputy
Governor in October 2002 and Senior Independent Director in
February 2003. Joint Managing Director of Pernod Ricard S.A. and
Chairman of Irish Distillers Group Ltd. Past President of the
Irish Business and Employers Confederation (IBEC).

(Age 57)

Executive Directors

Michael D Soden

Group Chief Executive


Joined the Group as Group Chief Executive
Designate on September 1, 2001. Appointed to the Court on
September 11, 2001. Appointed Group Chief Executive on
March 1, 2002. Formerly Executive General Manager of Global
Business and Personal Financial Services in National Australia
Bank.

(Age 56)

Brian J Goggin

Chief Executive Asset Management
Services


Joined Bank of Ireland in 1969. Subsequently
served in a variety of senior management positions within Bank
of Ireland Group in the United States, Britain and Ireland.
Appointed Chief Executive Corporate and Treasury in 1996, Chief
Executive Wholesale Financial Services in 2002 and Chief
Executive Asset Management Services with effect from
April 1, 2003. Appointed to the Court in 2000.

(Age 51)

John ODonovan

Group Chief Financial Officer


Joined the Group in November 2001 as Group Chief
Financial Officer. Appointed to the Court in July 2002. Formerly
Group Finance Director of Aer Lingus.

(Age 51)

Non-Executive Directors

Roy E Bailie, OBE + #

Appointed to the Court in 1999. Chairman of
W&G Baird Holdings Ltd. A director of the Bank of England
and UTV plc and formerly a member of the Northern Ireland
Advisory Board of Bank of Ireland.

(Age 60)

David Dilger

David Dilger is a Chartered Accountant. He has
been Chief Executive Officer of Greencore Group plc since 1995,
Chief Operating Officer from 1992 and Chief Executive of Food
Industries plc, which was acquired by Greencore, from 1988.
Previously, he was Group Finance Director of Woodchester
Investments plc, a publicly quoted Irish financial services
group.

(Age 46)

Donal J Geaney +

Appointed to the Court in 2000. Chairman of
Automsoft, the Irish Aviation Authority and the National
Pensions Reserve Fund Commission. Member of the Board of
Directors of BIO (The Biotechnology Industry

65



---



##### Table of Contents



Organisation) and of The Ireland-United States
Council. Member of the Board of The Trinity College Foundation.
Patron of Junior Achievement. Senior advisor to Elan
Corporation, plc.


(Age 52)

Maurice A Keane

Appointed to the Court in 1983 as an executive
Director. Group Chief Executive from February 1998 until he
retired from that post in February 2002, remaining as a
non-executive Director. Chairman of Bank of Ireland UK Holdings
plc and BUPA Ireland Ltd. A director of DCC plc.

(Age 62)

Raymond MacSharry + §

Appointed to the Court in 1993. A former Minister
for Finance and a former EU Commissioner for Agriculture.
Chairman of London City Airport Ltd and a director of Ryanair
Holdings plc.

(Age 65)

George Magan

George Magan is a Chartered Accountant and has
had a distinguished career as a corporate financier in the City
of London. He was a long-standing Director of Morgan Grenfell
before co-founding and becoming Chairman of J.O. Hambro Magan, a
merchant bank. When it was sold to NatWest in 1996, he became
Chairman of NatWest Markets Limited Corporate Finance, and
subsequently Hawkpoint Partners Limited. He is currently a
Partner in Rhône Group, a private equity company
headquartered in New York and he is Chairman of Morgan Shipley,
an investment banking company based in Dubai.

(Age 57)

Caroline A Marland

Appointed to the Court in 2001. Director of
Burberry Group plc. Former Managing Director of Guardian
Newspapers and a former member of the main board of directors of
the Institute of Directors in the UK.

(Age 57)

Thomas J Moran + #

Appointed to the Court in 2001. President and
Chief Executive Officer of Mutual of America Life Insurance
Company. A member of the Taoiseachs Economic Advisory
Board, the boards of the Irish Chamber of Commerce in the USA
and the Ireland  US Council for Commerce. Chairman of
Concern Worldwide (U.S.) and of the North American Board of the
Michael Smurfit Graduate School of Business at UCD.

(Age 50)

Denis OBrien §

Appointed to the Court in 2000. Former Chairman
of ESAT Telecom Group plc. Chairman of 2003 Special Olympics
World Summer Games. Chairman, Governing Body National College of
Ireland. A director of Oakhill plc, Digicel Ltd., and a number
of other companies.

(Age 45)

66



---



##### Table of Contents



Mary P Redmond # §

Appointed to the Court in 1994 and appointed
Deputy Governor from 2000 to September 2002. Consultant
Solicitor in Employment Law at Arthur Cox and founder of the
Irish Hospice Foundation and of The Wheel, the Community and
Voluntary Sector network.

(Age 52)




|   |  |                                             
|-- |  | --------------------------------------------
|*  |  | Senior Independent Director                 
|++ |  | Chairman of the Group Audit Committee       
|+  |  | Member of the Group Audit Committee         
|## |  | Chairman of the Group Remuneration Committee
|#  |  | Member of the Group Remuneration Committee  
|OO |  | Chairman of the Group Nominations Committee 
|§  |  | Member of the Group Nominations Committee   

Terms of Office of the Directors

In accordance with the Bye-Laws of the Bank each
Director, if eligible, must submit himself/ herself for
re-election by the stockholders every three years. The normal
retirement age for Directors is age 68.




REMUNERATION OF DIRECTORS AND
OFFICERS

The aggregate remuneration paid by the Group to
the Directors and Executive Officers, (22 persons), then in
office, for the financial year ended March 31, 2003 was
8.57 million,
including amounts paid under bonus and/or profit-sharing plans.
The aggregate amount, included in the above figure, set aside by
the Group, in the financial year ended March 31, 2003, to
provide pension benefits for these Directors and Executive
Officers amounted to
0.53 million.
None of the Executive Officers beneficially holds more than 1%
of the Share Capital on an individual basis. Additional
information regarding remuneration of Directors is set out in
Note 41 to the Consolidated Financial Statements.

Executive Directors Remuneration
Policy

Reward policies are aligned with the objective of
maximising stockholder value. In determining remuneration levels
account is taken of such factors as each individuals
responsibilities and performance and levels of remuneration in
comparable organisations both in Ireland and the United Kingdom
and the general pay awards made to staff overall.

Service contracts

No service contract exists between the Bank and
any Director which provides for a notice period from the Group
of greater than one year.

Employees Profit Sharing Plan

All employees of the Bank and of its
participating wholly owned subsidiaries in Ireland, Northern
Ireland and Britain (each a Participating Company),
including Executive Directors, whose remuneration is subject to
Irish or U.K. Income Tax under Schedule E, may participate
in a profit sharing plan, the Bank of Ireland Group Employee
Stock Issue Scheme (the Scheme). To be eligible to
do so, they must have had an existing contract of employment
with a Participating Company on the last day of the Groups
financial year, which contract must have existed for a period of
at least 12 months as at that date and be still in
existence on the date on which a profit sharing announcement is
made. Employees have the choice of taking their allocation under
the Scheme in cash, or in the Ordinary Stock of the Bank. Such
stock, when allotted, is held on the employees behalf by
the Trustees of the Scheme for a minimum period of two years. An
additional feature of the Irish version of the plan permits
those who choose to take the free stock to forego an amount of
their salary towards the acquisition of up to an equivalent
amount of stock to be held on the same basis. The Directors have
authority from the stockholders to

67



---



##### Table of Contents



approve profit share payments under the Scheme.
To date, annual payments have ranged between zero and 3.5% of
each participants basic remuneration. The most recent
payment approved under the Scheme was 2.0% of basic remuneration
(9 million)
for the financial year ended March 31, 2003. As at
March 31, 2003, 0.5% of the Banks Issued Ordinary
Stock was held by the Trustees of the Scheme.


Group Pension Plans

The Group operates a number of pension plans in
Ireland and overseas. The plans are funded and are primarily of
the defined benefit type and the assets of the plans are held in
separate trustee administered funds. Payments to these defined
benefit funds are determined on an actuarial basis, designed to
build up reserves during the working life of full-time employees
to pay the employees, or their dependants, a pension after
retirement. A formal actuarial valuation is undertaken at least
triennially to determine the payments to each of these defined
benefit funds. At each valuation the funds actuaries
confirm that the liabilities of each fund, based on current
salary levels, are fully funded on a discontinuance basis.

The total pension cost for the Group in respect
of the financial year ended March 31, 2003 was
57 million
of which
32 million
related to the main scheme.

Interest of Management in Certain
Transactions

No transaction, material to the Group, has been
entered into in the last three fiscal years to which the Bank or
any of its subsidiaries was a party in which any Director or
officer of the Bank, any significant shareholder or any relative
or spouse thereof had a direct or indirect material interest,
and to the knowledge of the Group, no such transactions are
presently proposed.

Indebtedness of Directors and Executive
Officers

The aggregate amount of indebtedness of Directors
(11 persons), on normal commercial terms to the Bank of Ireland
Group amounted to
27 million
at March 31, 2003. The interest rates payable thereon and
other terms were at prevailing market rates and terms and
reflect ordinary commercial transactions and do not involve more
than the normal risk of collectibility or present other
unfavourable features. The aggregate amount of indebtedness of
Executive Directors and Executive Officers of the Group (10
persons) and two connected persons, not included in the above
figure, on terms similar to those on which loans are made to
members of staff generally, which are at interest rates more
favorable than prevailing market rates, was
513,399 at
March 31, 2003. These loans were outstanding at the time of
the enactment of the U.S. Sarbanes-Oxley Act. Loans to Directors
and Executive Officers at rates more favorable than prevailing
market rates, while conforming with Irish practice and law,
would in most cases not be permissible for similar institutions
subject to regulation in the U.S.




CORPORATE GOVERNANCE STATEMENT

The Court of Directors is accountable to the
stockholders for corporate governance and continues to be
committed to maintaining the highest standards of corporate
governance as set out in the Combined Code: Principles of
Good Governance and Code of Best Practice (the
Code). The Directors believe that the Group has
complied fully with the provisions of the Code throughout
financial year 2002/2003. The Directors have considered the many
developments in corporate governance over the past year and
following the publication in January 2003 of the Review of
the role and effectiveness of non-executive directors will
have regard to the revised provisions of the Code when they
become effective.




COURT OF DIRECTORS

The following statements indicate how the Court
of Directors has applied the principles contained in the Code:



| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | it is the practice that the Court of Directors
    comprises a significant majority of non-executive Directors;
|
| |  | as at May 14, 2003, the Court comprised 13
    Directors, 10 of whom are non-executive Directors;              

68



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the non-executive Directors have varied
    backgrounds, skills and experience and each brings his/her own
    independent judgement to bear on issues of strategy, performance
    and standards of conduct; all are considered to be independent
    of management and free from any business or other relationship
    which could materially interfere with the exercise of their
    independent judgement; collectively, the Court brings strong and
    effective leadership to the Group (see short biographical
    descriptions of each of the Court members on pages 64 to
    67);                  
|
| |  | Richard Burrows, as Deputy Governor, was
    appointed Senior Independent Director in February 2003 on the
    retirement of Anthony Barry;                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | all non-executive Directors are appointed for an
    initial four year term but may be asked to stay for a final term
    of up to a maximum of a further four years;                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | all Directors retire by rotation at least every
    three years and if eligible may offer themselves for re-election;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | on appointment all non-executive Directors
    receive comprehensive briefing documents designed to familiarise
    them with the Groups operations, management and governance
    structures. These cover the functioning of the Court and the
    role of the key Court Committees. In addition, new Directors are
    offered an induction programme, including visits to Group
    businesses and meetings with senior management as appropriate.
    On an ongoing basis special training/ briefing sessions
    appropriate to the business of the Group are provided to all
    non-executive Directors;
|
| |  | all newly appointed Directors are provided with
    documentation detailing their responsibilities as Directors;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | there is a clear distinction between the
    responsibilities at the head of the Group through the separation
    of the position of the chairman of the Court (the Governor), who
    is non-executive and the Group Chief Executive;                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | a minimum of nine scheduled meetings of the Court
    are held each year. Additional meetings are arranged if
    required. When necessary the Court appoints a committee to
    consider and progress specific matters which require attention
    between scheduled Court meetings;                                                                                                                                                                                                                                                                                                                           
|
| |  | a programme is prepared and agreed each year
    which ensures that the Directors are able to review corporate
    strategy on a regular basis as well as the operations and
    performance of business units;                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | agenda and papers which provide the Directors
    with relevant information to enable them to discharge their
    duties are circulated in advance of each meeting. Additionally,
    the Court has a schedule of matters specifically reserved for
    its decision and periodically reviews and appraises its own
    performance and effectiveness;                                                                                                                                                                                                                                                          
|
| |  | in addition, the Court meets informally from time
    to time to explore business and banking issues in more detail
    than might be practicable at the regular formal meetings;                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | the Court receives regular reports, both directly
    and through the Group Audit Committee on corporate governance,
    compliance issues and internal controls;                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | the non-executive Directors meet annually,
    without management present, to review in detail the
    effectiveness of the Court itself and of Court Committee
    procedures and corporate governance in general;                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | the Directors have access to the advice and
    services of the Group Secretary, who is responsible to the Court
    to ensure Court procedures and regulations are complied with.
    The Directors also have access to independent professional
    advice, at the Groups expense, if and when required.                                                                                                                                                                                                                                                                                                     




COURT COMMITTEES

The Court delegates responsibility for a range of
specific issues to different committees, whose terms of
reference are reviewed periodically, as set out below. In all
cases the Court is kept fully informed of the activities

69



---



##### Table of Contents



of each committee through formal reports and
minutes thereby providing it with an opportunity to have its
views taken into account.


Group Audit
Committee The Group Audit
Committee, which comprises non-executive Directors only, is
responsible for meeting regularly with the Groups senior
management, the external auditors, the Group Chief Internal
Auditor and the Head of Group Compliance to review the
Groups internal controls, the internal and external audit
plans and subsequent findings, the selection of accounting
policies, the auditors report, financial reporting
including the annual audited accounts and other related matters
including monitoring the management of operational risk. The
Group Audit Committee is also charged with the responsibility of
reviewing the independence, objectivity and effectiveness of the
services provided by the external auditors and annually reviews
the nature and extent of non-audit work carried out by them to
ensure a proper balance between objectivity and cost
effectiveness. The external auditors, the Group Chief Internal
Auditor and the Head of Group Compliance all have full and
unrestricted access to the Group Audit Committee. The external
auditors attend meetings of the Group Audit Committee and once a
year meet with the Committee without management present to
ensure that there are no outstanding issues of concern. The
membership of the Group Audit Committee currently comprises
Richard Burrows (Chairman), Roy Bailie, Donal Geaney, Thomas
Moran and Raymond MacSharry. The committee met on six occasions
during the year ended March 31, 2003.

Group Remuneration
Committee The Group
Remuneration Committee comprises non-executive Directors only.
The membership of this committee currently comprises Laurence
Crowley (Chairman), Roy Bailie, Richard Burrows, Tom Moran and
Mary Redmond. The Committee met on four occasions during the
year ended March 31, 2003.

Group Nominations
Committee The Group
Nominations Committee comprises non-executive Directors only. It
is responsible for recommending to the Court names of Directors
for co-option to the Court and for overseeing top management
succession plans. The membership of the Group Nominations
Committee currently comprises Laurence Crowley (Chairman),
Raymond MacSharry, Denis OBrien and Mary Redmond. The
Committee met twice during the year ended March 31, 2003.

Group Risk Policy
Committee The Group Risk
Policy Committee is responsible for recommending high-level risk
policy and risk strategy to the Court for approval and for
overseeing management of risk within approved policy parameters.
It is a sub-committee of the Court and is chaired by Brian
Goggin. For further details see page 84.

Group Investment
Committee The Group
Investment Committee is responsible for evaluating all material
investment/ divestment/ capital expenditure proposals and
approving those within its authority and recommending those
outside its authority to the Court. It is also responsible for
monitoring the progression of such proposals and ensuring
satisfactory delivery of expected benefits. This Committee is
chaired by Michael Soden, Group Chief Executive.




EMPLOYEES

For the year ended March 31, 2003 the Group
employed 18,214 staff on an average full time equivalent basis
(see Note 8 on page F-25). The decrease in staff over
the previous years figure (18,438) is mainly due to the
Group Transformation Programme which is now nearing completion.

The Bank continues to operate an Employee Stock
Issue scheme under which Group employees may be granted
allocation of shares depending on Group performance. This year
the three year Sharesave Scheme (SAYE Scheme)
matured and will be replenished by a new scheme later in the
year.




STOCK OPTIONS

Under the terms of the Senior Executive Stock
Option Schemes approved by the stockholders, options may be
granted, at the discretion of the Directors, enabling Senior
Executives to subscribe for specified numbers of units of
Ordinary Stock.

70



---



##### Table of Contents



As at June 30, 2003 options were outstanding
over 7,012,066 units of stock representing 0.71% of the total
Ordinary Stock then in issue.

Such options are exercisable as follows:

|                        |  |                |           |                 |  |  |                       | 
|----------------------- |  | -------------- | --------- | --------------- |  |  | --------------------- | 
|                        |  | Number         |           |                
|                        |  | Outstanding at |           |                
|Exercise price ( cent) |  | June 30, 2003  |           | Exercise Period
|                        |  |                |           |                
|1.670                   |  |                | 20,000    |                 |  |  | May 1997  May 2004   | 
|2.111                   |  |                | 90,000    |                 |  |  | May 1998  May 2005   | 
|2.819                   |  |                | 601,000   |                 |  |  | June 1999  June 2006 | 
|3.241                   |  |                | 80,000    |                 |  |  | Nov 1999  Nov 2006   | 
|4.529                   |  |                | 435,000   |                 |  |  | June 2000  June 2007 | 
|5.753                   |  |                | 272,600   |                 |  |  | Nov 2000  Nov 2007   | 
|8.264                   |  |                | 234,000   |                 |  |  | May 2001  May 2008   | 
|8.933                   |  |                | 622,000   |                 |  |  | July 2002  July 2009 | 
|8.430                   |  |                | 80,250    |                 |  |  | Nov 2002  Nov 2009   | 
|6.960                   |  |                | 732,066   |                 |  |  | May 2003  May 2010   | 
|9.150                   |  |                | 171,150   |                 |  |  | Nov 2003  Nov 2010   | 
|11.050                  |  |                | 702,000   |                 |  |  | May 2004  May 2011   | 
|10.540                  |  |                | 234,000   |                 |  |  | Nov 2004  Nov 2011   | 
|12.500                  |  |                | 1,003,000 |                 |  |  | May 2005  May 2012   | 
|10.65                   |  |                | 20,000    |                 |  |  | Nov 2005  Nov 2012   | 
|10.77                   |  |                | 1,715,000 |                 |  |  | June 2006  June 2013 | 

As at June 30, 2003, Executive Directors and
Executive Officers as a group held options under the above
scheme over a total of 1,233,150 units, representing 0.12% of
the total Ordinary Stock in issue.

In addition to their interests in Ordinary Stock
through their holding of stock options and the conditional
awards of stock they have received under the Long Term
Performance Stock Plan (LTSP) as set out in
Note 33, the interests of the Directors and Secretary in
office at June 30, 2003, and of their spouses and minor
children, in the stocks issued by the Bank are set out below:

|             |  |                     |           | 
|------------ |  | ------------------- | --------- | 
|             |  | UNITS OF 0.64     
|             |  | OF ORDINARY STOCK  
|             |  | As at June 30, 2003
|             |  | Beneficial         
|             |  |                    
|DIRECTORS    |  |                     |           | 
|R E Bailie   |  |                     | 1,265     | 
|R Burrows    |  |                     | 44,746    | 
|L G Crowley  |  |                     | 31,097    | 
|D J Geaney   |  |                     | 7,587     | 
|B J Goggin   |  |                     | 321,577   | 
|M A Keane    |  |                     | 1,191,185 | 
|R MacSharry  |  |                     | 1,473     | 
|C A Marland  |  |                     | 1,224     | 
|T J Moran    |  |                     | 1,239     | 
|D OBrien    |  |                     | 201,224   | 
|J ODonovan  |  |                     | 3,000     | 
|M P Redmond  |  |                     | 2,396     | 
|M D Soden    |  |                     | 89,756    | 
|SECRETARY    |  |                     |           | 
|J B Clifford |  |                     | 48,527    | 

71



---



##### Table of Contents



Limitations on Stock Issue and Stock Option
Plans

All of the employee stock issue and stock option
schemes are subject to a range of flow rate controls approved by
the Stockholders and which conform to institutional investor
guidelines.

The exercise of all options granted since the
commencement of the financial year 1996/97 is conditional upon
earnings per share achieving a cumulative growth of at least 2%
per annum compound above the increase in the Consumer Price
Index over either the three year period, or if not achieved, the
six year period, commencing with the period in which the options
are granted.

Group Sharesave Scheme

At the 1999 Annual General Court the Stockholders
approved the establishment of a Sharesave (SAYE)
Scheme. This Scheme was launched in February 2000 and options to
purchase units of Ordinary Stock were granted to participating
employees at an option price of
5.40, which
represented a 20% discount to the then market price. As at
May 1, 2003 there were outstanding options under the Scheme
over 12,410,524 units of Ordinary Stock (1.32% of the Issued
Ordinary Stock). These options are ordinarily exercisable,
provided the participants savings contracts are complete,
between May 2003 and May 2007. See Note 33.




Item 7     MAJOR
STOCKHOLDERS AND RELATED PARTY TRANSACTIONS






CONTROL OF REGISTRANT

As far as the Bank is aware, it is neither
directly nor indirectly owned or controlled by another
corporation or any government and there are no arrangements in
place the operation of which may result in a change in its
control.

As at June 30, 2003 the Bank had received
notification of the following substantial interests in its
Issued Ordinary Stock:

|                                          |  |            |  |    
|----------------------------------------- |  | ---------- |  | ---
|NAME                                      |  | Units Held |  | %  
|                                          |  |            |  |    
|Bank of Ireland Asset Management Limited* |  | 58,190,061 |  | 5.9






|  |                                                                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | This stockholding is not beneficially owned by
    this company, but is held on behalf of a range of clients, none
    of whom hold, so far as the Directors have been notified, more
    than 3% of the Issued Ordinary Stock.

As at June 30, 2003, Directors and executive
officers of the Bank as a group beneficially held 0.2%
(2.2 million units) of the Banks Issued Ordinary
Stock.

The Groups major stockholders do not have
different voting rights from other stockholders.




RELATED PARTY TRANSACTIONS

Refer to Note 41 and Note 43 in the
Financial Statements. Also see Interest of Management in
Certain Transactions and Indebtedness of Directors
and Executive Officers on page 68.




DESCRIPTION OF US STOCKHOLDERS

At March 31, 2003, 764,418 units of Ordinary
Stock were held by 418 stockholders with registered addresses in
the U.S. and 3,125,259 ADSs were held by 240
registered holders with addresses in the U.S. The combined
shareholdings of these holders comprise approximately 1.3% of
the total number of units of Ordinary Stock in issue at
March 31, 2003 (being 996,170,626 units). These figures do
not include either the number of units of Ordinary Stock held by
stockholders with registered addresses outside the U.S. in
which U.S. residents have an interest or the number of such
U.S. residents.

72



---



##### Table of Contents






RELATIONS WITH STOCKHOLDERS

The Group recognises the importance of
communicating with its stockholders. It seeks to provide through
its Annual Report a balanced, clear assessment of the
Groups performance and prospects. The Group also uses its
internet website (www.bankofireland.ie) to provide
investors with the full text of the Annual and Interim reports,
the Form 20-F, (which is filed annually with the US
Securities and Exchange Commission) and with copies of slide
presentations to analysts and investors relating to the
Groups full year and half year results. Additionally the
Investor Information section on the Groups
homepage on the website is updated with all Stock Exchange
releases as they are made by the Group.

All stockholders are encouraged to participate in
the Annual General Court, the notice of this meeting issuing at
least 20 working days before the meeting. At the Annual General
Court separate resolutions are proposed on each substantially
separate issue and when an issue has been determined at the
meeting on a show of hands, the Chairman indicates to the
meeting the proportion of proxy votes for and against that
resolution to demonstrate what the voting position would have
been if the votes of those not in attendance at the meeting were
taken into account. It is usual for all Directors to attend the
Annual General Court and to be available to meet stockholders
both before and after the meeting. In addition a Help
Desk facility is available at the meeting to assist
stockholders to resolve any issues in relation to their
stockholdings.

The Group has an active and well developed
Investor Relations programme which involves regular meetings
between the Group Chief Executive, members of his senior
executive team, the Head of Investor Relations and the
Groups principal institutional stockholders and with
financial analysts and brokers. All such meetings are governed
by procedures to ensure that price sensitive information is not
divulged.




Item 8     FINANCIAL
INFORMATION

See pages F-1 through F-102.




DIVIDEND POLICY

The table below provides a summary of dividends
per unit of Ordinary Stock paid in respect of the past five
financial years.

|                                        |  |                |       |                   |  |  |       | 
|--------------------------------------- |  | -------------- | ----- | ----------------- |  |  | ----- | 
|                                        |  | Dividends      |       | Translated into  
|                                        |  | per unit of    |       | U.S. cents       
|                                        |  | Ordinary Stock |       | per Unit of      
|Dividend Payment Date                   |  | (in euro cent) |       | Ordinary Stock(1)
|                                        |  |                |       |                  
|Financial Year ended March 31,
    2003 |  |                |       |                   |  |  |       | 
|January 7, 2003                         |  |                | 13.20 |                   |  |  | 13.75 | 
|Financial Year ended March 31,
    2002 |  |                |       |                   |  |  |       | 
|January 8, 2002                         |  |                | 11.60 |                   |  |  | 10.35 | 
|July 19, 2002                           |  |                | 21.40 |                   |  |  | 21.73 | 
|Financial Year ended March 31,
    2001 |  |                |       |                   |  |  |       | 
|July 13, 2001                           |  |                | 19.60 |                   |  |  | 16.71 | 
|January 16, 2001                        |  |                | 9.40  |                   |  |  | 8.81  | 
|Financial Year ended March 31,
    2000 |  |                |       |                   |  |  |       | 
|July 14, 2000                           |  |                | 16.14 |                   |  |  | 15.13 | 
|January 11, 2000                        |  |                | 7.36  |                   |  |  | 7.60  | 
|Financial Year ended March 31,
    1999 |  |                |       |                   |  |  |       | 
|July 16, 1999                           |  |                | 12.57 |                   |  |  | 12.83 | 
|January 11, 1999                        |  |                | 5.84  |                   |  |  | 6.71  | 






|    |                                                                
|--- | ---------------------------------------------------------------
|(1) | Translated at the Noon Buying Rate on the dates
    of payment.

The Group operates a progressive dividend policy
based on the medium term outlook as well as earnings in any
particular year. Total dividend for 2002/2003 is covered 2.7
times compared to 2.8 times in the previous year.

73



---



##### Table of Contents






LEGAL PROCEEDINGS

There are no legal or arbitration proceedings
pending or threatened of which the Bank is aware involving the
Group which may or have had in the recent past a significant
effect on the financial position of the Group taken as a whole.




PROSPECTIVE ACCOUNTING CHANGES

International Accounting
Standards

The European Commission has adopted a regulation
on the application of International Financial Reporting
Standards (IFRS). This requires that the Group
accounts of all listed companies in the EU should, from January
2005, be drawn up on the basis of adopted IFRSs. The adoption of
the International Accounting Standards Board (IASB)
standards is the responsibility of the Accounting Regulatory
Committee of the European Commission. The Group is currently
considering the implications of the regulation and expects to
prepare its first financial statements in accordance with
adopted IFRSs for the year ending March 31, 2006.

During 2002, the IASB proposed improvements to a
number of its standards, and the Accounting Standards Board
(ASB) in the UK instituted a convergence program
whereby a number of these standards when updated would be
substituted for existing Irish standards in order to facilitate
convergence with IFRS.

Financial Reporting Standard 17,
Retirement Benefits (FRS 17)

In November 2000, FRS 17 was issued by the
UK Accounting Standards Board. The standard sets out the
requirements for accounting for retirement benefits. It requires
that scheme assets are valued at fair value and scheme
liabilities are measured using the projected unit method. The
pensions charge in the profit and loss account is to consist of
three elements: (i) the current service cost, (ii) the
net of the expected return on pension assets and (iii) the
interest cost of the pension liabilities. Actuarial gains or
losses are to be recognized through the statement of total
recognized gains or losses and not amortized through the profit
and loss account. In June 2002, the Accounting Standards Board
delayed the implementation of this accounting standard to
facilitate convergence with IFRS.

Accounting for costs associated with exit or
disposals

SFAS 146 was issued in June 2002 and
addresses the financial accounting and reporting for costs
associated with exit or disposal activities. This standard
requires that the fair value of a liability for a cost
associated with an exit or disposal activity be recognised when
the liability is incurred and nullifies EITF 94-3 which
requires the recognition of a liability at the date of an
entitys commitment to an exit plan. The Group does not
expect SFAS 146 to have a material impact on its results or
financial position.

Accounting of certain financial institutions,
an amendment to SFAS 72 and 144 and FIN 9

SFAS 147 was issued on October 1, 2002
and amends the requirements of FASB 72 and 144 and
FIN 9. It requires that for acquisitions of financial
institutions that occur after October 1, 2002 and which
meet the definitions of a business combination, the excess of
assumed liabilities over acquired assets should be treated as
goodwill rather than as an unidentifiable intangible asset. The
Group does not expect SFAS 147 to have a material impact on
its results or financial position.

Accounting for share-based
compensation-transition and disclosures

In November 2002, the ASB issued Financial
Reporting Exposure Draft 31  Share-based payment
(FRED31) which would apply to all entities and all
types of share based payment transactions including all employee
share option plans. The proposed standard would require entities
to recognize an expense in the profit and loss account in
respect of share based payments over the period in which the
services are rendered by the employees. The expense will be
measured by reference to the fair value of the equity
instruments granted taking into account the terms and conditions
upon which those equity instruments were granted. The ASB
expects to

74



---



##### Table of Contents



publish a standard during 2003. As the Group
operates a number of share based schemes, implementation of this
standard would result in a change to the profit and loss
account. For further details see Note 33.


SFAS 148 was issued on January 1, 2003. It
amends SFAS 123 to provide alternate methods of transition
for entities voluntarily adopting a fair value based method of
accounting for stock-based employee compensation. It also amends
the disclosure provisions of SFAS 123. The Group has elected to
continue to follow the principles of APB25 in Accounting for
Stock Options under US GAAP.

Amendment of Statement 133 on Derivative
Instruments and Hedging Activities

SFAS 149 amends and clarifies financial
accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities. It requires
that contracts with comparable characteristics be accounted for
similarly. In particular, it clarifies under what circumstances
a contract with an initial net investment meets the
characteristic of a derivative discussed in paragraph 6(b)
of Statement 133, clarifies when a derivative contains a
financing component, amends the definition of an underlying to
conform it to language used in FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others, and amends certain other existing pronouncements.
This Statement is effective for contracts entered into or
modified after June 30, 2003. The Group does not expect
SFAS 149 to have a material impact on its results or financial
position.

Accounting for Certain Financial Instruments
with Characteristics of Both Liabilities and Equity

SFAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. It requires
that an issuer classify a financial instrument that is within
its scope as a liability (or an asset in some circumstances).
Many of those instruments were previously classified as equity.
This Statement is effective for financial instruments entered
into or modified after May 31, 2003, and otherwise is
effective for the year ended March 31, 2004. The Group is
currently considering the impact of this pronouncement.

Guarantors accounting and disclosure
requirements for guarantees, including indirect guarantees of
indebtedness of others

FIN 45 was issued on November 25, 2002. It
addresses disclosure requirements for guarantors in respect of
certain guarantees issued (including guarantees embedded in
other contracts) and requires recognition of a liability to be
recognised for the fair value of obligations assumed under
guarantees issued.

FIN 45 applies to contracts of indemnification
agreements that contingently require the guarantor to make
payments to the guaranteed party based on changes in a variable
that is related to an asset, liability or equity security of the
guaranteed party. Certain guarantee contracts are excluded from
both the disclosure and recognition requirements of this
interpretation, including, among others, guarantees relating to
employee compensation, residual value guarantees under capital
lease arrangements, commercial letters of credit, loan
commitments, subordinated interests in a special purpose entity
and guarantees of a companys own future performance. The
Group does not expect FIN 45 to have a material impact on
its results or financial position.

Consolidation of Variable Interest
Entities

FIN 46 was issued in January 2003. FIN 46
provides guidance on how to identify a variable interest entity
(VIE) and determine when the assets, liabilities,
non controlling interests, and results of operations of a VIE
need to be included in a companys consolidated financial
statements. A company that holds variable interests in an entity
will need to consolidate the entity if the companys
interest in the VIE is such that the company will absorb a
majority of the VIEs expected losses and/or receive a
majority of the entitys expected residual returns, if they
occur.

75



---



##### Table of Contents



The consolidation requirements apply immediately
to all VIEs created after January 31, 2003 and effective
July 1, 2003 for VIEs acquired before February 1,
2003. At March 31, 2003 based on the Groups
interpretation of FIN 46, it did not have a material effect on
its results or financial position.




Item 9     THE
OFFER AND LISTING






NATURE OF TRADING MARKET


As at June 30, 2003 the authorized capital
stock of the Bank was made up of
960,000,000
divided into 1,500,000,000 units of Ordinary Stock of
0.64 each,
U.S.$200,000,000 divided into 8,000,000 units of Non-Cumulative
Preference Stock of U.S.$25 each, STG£100,000,000 divided
into 100,000,000 units of Non-Cumulative Preference Stock of
STG£1 each and
127,000,000
divided into 100,000,000 units of Non-Cumulative Preference
Stock of 1.27
each.

As at June 30, 2003, there were 990,117,991
units of Ordinary Stock of
0.64 each issued
and outstanding.

The principal trading markets for the Ordinary
Stock are the Irish Stock Exchange and the London Stock Exchange.

At June 30, 2003, 71 companies were quoted
on the Irish Stock Exchange. These companies had a combined
market capitalization of more than
151,255 million
at that date. The 11 companies with the largest market
capitalization accounted for over 90% of the Exchanges
total market capitalization.

The Banks ADSs are listed on the New York
Stock Exchange. Each ADS, evidenced by one ADR, represents four
units of Ordinary Stock. The ADR Depositary is The Bank of New
York.

The following table sets forth, for the periods
indicated, the reported highest and lowest closing price for one
unit of Ordinary Stock on the Irish Stock Exchange, as derived
from the Daily Official List of the Irish Stock

76



---



##### Table of Contents



Exchange quoted in euro and the highest and
lowest sales prices for the ADSs as reported on the New York
Stock Exchange Composite tape.


|                              |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|----------------------------- |  | -------------- | ----- | ------------ |  | ---- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|                              |  |                |       |             
|                              |  | Ordinary Stock |       | ADSs        
|                              |  |                |       |             
|                              |  | High           |       | Low          |  | High |       | Low
|                              |  |                |       |              |  |      |       |    
|                              |  |                |       |             
|                              |  | (in euro)      |       | (in dollars)
|Financial Year ended March 31 |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|1999                          |  |                | 10.61 |              |  |      | 6.13  |     |  |  | 50.00 |  |  |  | 30.29 | 
|2000                          |  |                | 9.70  |              |  |      | 5.68  |     |  |  | 42.38 |  |  |  | 22.25 | 
|2001                          |  |                | 10.80 |              |  |      | 6.36  |     |  |  | 41.75 |  |  |  | 24.07 | 
|2002                          |  |                | 12.61 |              |  |      | 7.85  |     |  |  | 44.15 |  |  |  | 28.31 | 
|2003                          |  |                | 14.05 |              |  |      | 8.70  |     |  |  | 52.40 |  |  |  | 34.70 | 
|Financial year 2001/2002      |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|First quarter                 |  |                | 11.80 |              |  |      | 9.10  |     |  |  | 40.15 |  |  |  | 31.30 | 
|Second quarter                |  |                | 12.00 |              |  |      | 7.85  |     |  |  | 41.00 |  |  |  | 28.31 | 
|Third quarter                 |  |                | 10.69 |              |  |      | 8.07  |     |  |  | 37.20 |  |  |  | 29.90 | 
|Fourth quarter                |  |                | 12.61 |              |  |      | 10.32 |     |  |  | 44.15 |  |  |  | 36.72 | 
|Financial year 2002/2003      |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|First quarter                 |  |                | 14.05 |              |  |      | 12.29 |     |  |  | 52.40 |  |  |  | 43.20 | 
|Second quarter                |  |                | 12.80 |              |  |      | 9.85  |     |  |  | 50.62 |  |  |  | 39.05 | 
|Third quarter                 |  |                | 11.74 |              |  |      | 8.70  |     |  |  | 46.65 |  |  |  | 34.70 | 
|Fourth quarter                |  |                | 10.43 |              |  |      | 9.13  |     |  |  | 44.82 |  |  |  | 40.27 | 
|Month ended                   |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|January 2003                  |  |                | 10.43 |              |  |      | 9.13  |     |  |  | 44.51 |  |  |  | 40.30 | 
|February 2003                 |  |                | 10.35 |              |  |      | 9.37  |     |  |  | 44.82 |  |  |  | 40.27 | 
|March 2003                    |  |                | 10.32 |              |  |      | 9.45  |     |  |  | 44.32 |  |  |  | 40.70 | 
|April 2003                    |  |                | 10.98 |              |  |      | 9.80  |     |  |  | 49.80 |  |  |  | 42.60 | 
|May 2003                      |  |                | 11.60 |              |  |      | 10.55 |     |  |  | 53.55 |  |  |  | 49.09 | 
|June 2003                     |  |                | 11.20 |              |  |      | 10.49 |     |  |  | 52.35 |  |  |  | 48.15 | 

Fluctuations in the exchange rate between the
euro and the dollar will affect the dollar equivalent of the
price of the Ordinary Stock on the Irish Stock Exchange and as a
result may affect the market price of the ADSs on the New York
Stock Exchange. See Exchange Rates.




Item 10     ADDITIONAL
INFORMATION






CHARTER AND BYE-LAWS


1.   Objects and Registration
Details



| |                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Governor and Company of the Bank of Ireland
    (the Bank) is registered in Ireland with the
    Companies Office under No. C-1. The corporation was
    established pursuant to a Charter granted by King George III on
    foot of an Act of the Irish Parliament passed in 1781/82. The
    Charter was granted in 1783.                                                        
|
| | The corporations objects and purposes were
    set out originally in the Charter and have been amended by
    legislation (in 1872 and 1929) and by resolutions passed by the
    stockholders meeting in General Court in 1972 and 1995. The
    principal objects of the corporation are to carry on the
    business of banking and to undertake all types of financial
    services.

2.   Directors



| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Any director interested in a contract must
    declare his/her interest at a meeting of the directors at which
    the question of entering into such contract first arises. The
    Bye-Laws also require that a director may not vote in

77



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | respect of any proposal in which he or any person
    connected with him has a material interest. Interests in stock,
    shares, debenture or other securities of the Bank are
    disregarded for the purpose. A director cannot be counted in a
    quorum of the Court of Directors or of the meeting of a
    committee in relation to any resolution on which he is debarred
    from voting. The prohibition on voting in respect of contracts
    in which directors are interested is disapplied in respect of
    proposals:



| |     |                                                                                                                                                                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | where a director is given security or indemnified
    in respect of money lent or obligations incurred by him for the
    benefit of the Bank;                                                                                                                              
|
| | (b) | giving security or indemnifying a third party in
    respect of a debt or obligation of the Bank;                                                                                                                                                                           
|
| | (c) | relating to an offer of debentures or securities
    of the Bank in which a director is interested as an underwriter;                                                                                                                                                       
|
| | (d) | regarding any proposal concerning any other
    company in which a director is interested, directly or
    indirectly, provided that the director does not hold or is not
    beneficially interested in more than 1% of any class of share
    capital of that company; and
|
| | (e) | regarding any pension or retirement fund or stock
    option scheme from which a director might benefit and which has
    been approved by the Revenue Commissioners.                                                                                                       



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The remuneration of directors is fixed from time
    to time by the stockholders in General Court. Such remuneration
    is divided among them as the directors determine. Such
    remuneration shall be independent of any remuneration to which a
    director may be entitled in respect of any other office or
    appointment within the Group. In the absence of an independent
    quorum, the Directors are not competent to vote compensation to
    themselves or any members of their body. The Governor and Deputy
    Governor, elected from time to time by the Directors, are office
    holders and are remunerated on terms established by the
    Directors.
|
| | Directors may exercise all the borrowing powers
    of the Bank and may give security in connection therewith. These
    borrowing powers may be amended or restricted only by the
    stockholders in General Court.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | There is no age limit requirement in the Bye-laws
    that specifies when a Director must retire. However the
    Directors have adopted as a guideline that the normal retirement
    age for non-executive directors is age 68.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | All Directors must hold at least 1,000 units of
    Ordinary Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | In accordance with the Combined Code:
    Principles of Good Governance and Code of Best Practice,
    adopted by the Irish Stock Exchange and the London Stock
    Exchange, all directors retire by rotation every three years
    and, if eligible, may offer themselves for re-election.                                                                                                                                                                                                                                                                                                                                                                                 



|   |                                               
|-- | ----------------------------------------------
|3. | Rights and Restrictions Attaching to
    Stock



|    |               
|--- | --------------
|(a) | Ordinary Stock

Dividend
Rights



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Irish law, and under the Bye-Laws of the
    Bank, dividends are payable on the Ordinary Stock of the Bank
    only out of profits available for distribution. Holders of the
    Ordinary Stock of the Bank are entitled to receive such
    dividends as may be declared by the stockholders in General
    Court, provided that the dividend cannot exceed the amount
    recommended by the Directors. The Bank may pay stockholders such
    interim dividends as appear to the Directors to be justified by
    the profits of the Bank. Any dividend which has remained
    unclaimed for 12 years from the date of its declaration may
    be forfeited and cease to remain owing by the Bank.

Voting
Rights



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Voting at any General Court is by a show of hands
    unless a poll is properly demanded. On a show of hands every
    stockholder who is present in person or by proxy has one vote
    regardless of the number of units of stock held by him. On a
    poll, every shareholder who is present in person or by proxy has
    one vote for every unit of Ordinary Stock of
    0.64 each. A
    poll may be demanded by: the chairman of the meeting, or
    by at

78



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | least nine members of the Bank present in person
    or by proxy and entitled to vote on a poll. The necessary quorum
    for a General Court is ten persons present in person or by proxy
    and entitled to vote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | All business is considered to be special business
    if it is transacted at an Extraordinary General Court as is all
    business transacted at an Annual General Court other than the
    declaration of a dividend, the consideration of the accounts,
    the balance sheet and reports of the Directors and Auditors, the
    election of Directors in the place of those retiring, the
    re-appointment of the retiring Auditors, and the fixing of the
    remuneration of the Auditors, all of which is deemed ordinary
    business. Special business is dealt with by way of a special
    resolution, which must be passed by not less than three fourths
    of the votes cast by such members as being entitled so to do,
    vote in person or, where proxies are allowed, by proxy at a
    General Court at which not less than 21 days notice
    specifying the intention to propose a resolution as a special
    resolution has been duly given. Ordinary business is dealt with
    by way of an ordinary resolution which requires a simple
    majority of the votes cast by the members voting in person or by
    proxy at a General Court. Where an equal number of votes has
    been cast on any resolution the chairman of the meeting is
    entitled to a second or casting vote.

Liquidation
Rights



| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the event of any surplus arising on the
    occasion of the liquidation of the Bank the Ordinary
    Stockholders would be entitled to a share in that surplus pro
    rata to their holdings of Ordinary Stock.

(b)  Preference Stock



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The capital of the Bank is divided into Ordinary
    Stock and Non-Cumulative Dollar Preference Stock, Non-Cumulative
    Sterling Preference Stock and Non-Cumulative euro Preference
    Stock. At March 31, 2003 there were in issue 1,876,090
    units of non-cumulative Sterling Preference Stock and 3,026,599
    units of Non-Cumulative euro Preference Stock. The holders of
    Non-Cumulative Sterling and euro Preference Stock are entitled
    to a fixed annual dividend in accordance with the terms and
    conditions relating to the issue of the Preference Stock. Any
    dividend which has remained unclaimed for 12 years from the
    date of its declaration may be forfeited and cease to remain
    owing by the Bank.                                                                                                                                          
|
| | The Non-Cumulative Sterling Preference Stock and
    the Non-Cumulative euro Preference Stock ranks pari passu
    inter se and the right to a fixed dividend is in priority to
    the dividend rights of Ordinary Stock in the capital of the
    Bank. On a winding up or other return of capital by the Bank the
    Non-Cumulative Sterling Preference Stockholders and the
    Non-Cumulative euro Preference Stockholders are entitled to
    receive, out of the surplus assets available for distribution to
    the Banks members, an amount equal to the amount paid up
    on their Preference Stock including any Preference Dividend
    outstanding at the date of the commencement of the winding-up or
    other return of capital. Otherwise the Preference Stockholders
    are not entitled to any further or other right of participation
    in the assets of the Bank.

4.   Variation of
Class Rights



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The rights attached to the Ordinary Stock of the
    Bank may be varied or abrogated, either while the Bank is a
    going concern or during or in contemplation of a winding-up,
    with the sanction of a resolution passed at a class meeting of
    the holders of the Ordinary Stock. Similarly, the rights,
    privileges, limitations or restrictions attached to the
    Preference Stock may be varied, altered or abrogated, either
    while the Bank is a going concern or during or in contemplation
    of a winding-up, with the written consent of the holders of not
    less than 75% of such class of stock or with the sanction of a
    resolution passed at a class meeting at which the holders of 75%
    in nominal value of those in attendance vote in favour of the
    resolution.

5.   Convening of General
Courts



| |                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Annual General Courts and a Court called for the
    passing of a special resolution must be called by
    21 days notice in writing. The notice must specify
    the place and date of the meeting and, in the case of special
    business, must give the general nature of that business.
    Admission to General Courts is limited to members of the Bank
    and validly appointed proxies.

79



---



##### Table of Contents



6.   Limitation on the Rights
to Own Securities



| |                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Neither the Charter nor the Bye-Laws impose
    restrictions on the right of non-resident or foreign
    shareholders to own securities in the Bank. See, however,
    Exchange Control and other Limitations affecting Security
    Holders on page 80, for restrictions imposed in the
    context of EU and UN sanctions.

7.   Limitation on a Change of
Control



| |                
| | ---------------
| | Not applicable.

8.   Disclosure of Stock
Ownership



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under Irish company law where a person acquires
    an interest in shares in a public limited company (and the Bank
    is considered to be a public limited company for these purposes)
    or ceases to be interested in such shares, he has an obligation
    to notify the company of the interests he has, or had, in its
    shares. The initial notifiable threshold is 5% of the aggregate
    nominal value of the issued share capital carrying rights to
    vote in all circumstances at a general meeting of the company.
    In addition, if the shares of the company are quoted on the
    Irish Stock Exchange and a person becomes aware that he has
    acquired, or has ceased to have an interest in, shares in a
    quoted company, he must notify the exchange when his interest in
    such shares exceeds or falls below, as the case may be, certain
    reference levels: 10%, 25%, 50% and 75%.                                                                                                                                                                                                                                                                                                                                               
|
| | Under the Bye-Laws of the Bank any member may be
    requested to declare by statutory declaration whether he is
    beneficially entitled to Ordinary Stock of which he is the
    registered owner and, if not, to disclose the person or persons
    for whom he holds such Ordinary Stock in trust. Such a
    declaration must be made within 14 days of service of the
    notice. Failure to respond to the notice in the prescribed
    period entitles the Directors to serve a disenfranchisement
    notice to such member with the consequence that the member may
    not attend or vote, either personally or by proxy, at any
    General Court of the Bank or exercise any other rights conferred
    by membership in respect of his holding Ordinary Stock (the
    Default Stock). In addition, where the Default Stock
    amounts to more than 5% of the Ordinary Stock then in issue of
    the Bank then the disenfranchisement notice can state that no
    dividend will be payable on the Default Stock, and that no
    transfer of the Default Stock will be registered by, or on
    behalf of, the Bank. A disenfranchisement notice may continue in
    effect for as long as the default in respect of which it was
    issued continues.




EXCHANGE CONTROLS AND OTHER LIMITATIONS
AFFECTING SECURITY HOLDERS

There are no restrictions under the Bye-Laws of
the Bank, presently in force, that limit the right of
non-resident or foreign owners, as such, to hold securities of
the Bank freely or, when entitled, to vote such securities
freely. There are currently no Irish foreign exchange controls
or laws restricting the import or export of capital, although
the Council of the European Union does have the power, under
Articles 58-60 of the Treaty establishing the European
Community, to impose restrictions on capital movements to and
from third countries. There are currently no restrictions under
Irish law affecting the remittance of dividends, interest or
other payments to non-resident holders of securities of the
Bank, except in respect of: Osama Bin Laden and persons
associated with him, the Al-Qaida network and the Taliban;
Slobadan Milosevic and persons associated with him; Zimbabwe;
and Burma/ Myanmar, to whom or by whose order or on behalf of
whom such remittance or payment may not be made without the
permission of the Irish Financial Services Regulatory Authority.
These latter restrictions were introduced to comply with
European Union or United Nations sanctions. The ability of
institutions of government, and of certain named individuals, in
the states mentioned in this paragraph, to buy and sell publicly
traded securities, including those of the Bank, has been
curtailed by domestic measures based on EU or UN sanctions. The
Financial Transfers Act 1992 confers power on the Minister for
Finance to make orders for this purpose.




TAXATION

The following summary of certain consequences to
Eligible U.S. Holders (as defined below) of the purchase,
ownership and disposition of ADSs or units of Ordinary Stock
deals only with Eligible U.S. Holders that hold ADSs or
units of Ordinary Stock as capital assets for Irish and
U.S. Federal income tax purposes and does not

80



---



##### Table of Contents



deal with special classes of holders, such as
dealers in securities, traders in securities that elect to use a
mark-to-market method of accounting for their securities
holdings, tax-exempt organisations, life assurance companies,
persons liable for alternative minimum tax, persons that
actually or constructively own 10% or more of the voting stock
of the Bank, persons that hold units of Ordinary Stock or ADSs
as part of a straddle or a hedging or conversion transaction, or
Eligible U.S. holders whose functional currency is not the
U.S. dollar. While the summary discussion relates to
material matters relevant to the tax laws of the United States
and Ireland, holders should consult their own tax advisors as to
their particular circumstances.


This summary is based (i) on the income tax
treaty between Ireland and the United States of America (the
Tax Treaty), tax laws, regulations, administrative
rulings and court decisions of Ireland and the United States,
all as currently in effect and all subject to change at any
time, perhaps with retroactive effect, and (ii) in part, on
representations of the Depositary, and assumes that each
obligation in the Deposit Agreement and any related agreement
will be performed in accordance with its terms.

For purposes of this discussion, a
U.S. Holder is a beneficial owner of ADSs or units of
Ordinary Stock that is, for U.S. Federal income tax
purposes, (i) a citizen or resident of the United States,
(ii) a United States domestic corporation, (iii) an
estate whose income is subject to U.S. Federal income tax
regardless of its source, (iv) a trust if a U.S. court
can exercise primary supervision over the trusts
administration and one or more U.S. persons are authorized
to control all substantial decisions of the trust.

For purposes of this discussion, an
Eligible U.S. Holder is a U.S. Holder that
is (i) not a resident of Ireland for purposes of Irish
taxes, (ii) not engaged in a trade or business in Ireland
through a permanent establishment and (iii) otherwise
eligible for benefits under the Tax Treaty with respect to
income and gain from units of Ordinary Stock or ADSs.

For purposes of the Tax Treaty and the
U.S. Internal Revenue Code of 1986, as amended (the
Code), U.S. Holders will be treated as the
owners of the Ordinary Stock underlying the ADSs represented by
the ADRs.

Irish Taxation

Dividends paid by an Irish resident company on or
after April 6, 1999 do not carry a tax credit and are
subject to Dividend Withholding Tax (DWT) at the
standard rate of income tax, currently 20%. Liability to DWT is,
subject to certain conditions, dependent on whether the
stockholder is resident in Ireland for tax purposes. Dividends
will be exempt from DWT if the beneficial owner of such
dividends is resident in the European Union or any country with
which Ireland has a double tax treaty, such as the United States
and as regards dividends paid after April 5, 2000, where
completed declarations, supported by documentary evidence, have
been filed with the Banks Registration Department prior to
the relevant dividend payment date.

Gain on Disposition.A gain realized on the disposition of ADSs or units of Ordinary
Stock by a holder thereof who is not resident or ordinarily
resident in Ireland for Irish tax purposes is not subject to
Irish Capital Gains Tax unless such ADSs or units of Ordinary
Stock are held in connection with a trade or business carried on
by such holder in Ireland through a branch or agency.

Irish Stamp Duty.Section 90 of the Irish Stamp
Duties Consolidation Act 1999 exempts from Irish stamp duty
transfers of ADRs where the ADRs are dealt in and quoted on a
recognized stock exchange in the U.S. or the underlying
securities are dealt in and quoted on a recognized stock
exchange which is also situated in the U.S. The New York
Stock Exchange, Inc. (NYSE), on which the ADSs are
dealt and quoted, is regarded by the Irish tax authorities as a
recognized stock exchange.

Irish stamp duty will be charged at the rate of
1% rounded down to the nearest euro of the consideration on any
conveyance or transfer on the sale of Ordinary Stock or the
value of that Stock, if higher. If less than one euro, stamp
duty is rounded up to one euro.

There is an uncertainty whether or not Irish
stamp duty (which would be applicable at a rate of 1% rounded
down to the nearest euro of the price paid or, if higher, the
value of the Ordinary Stock) applies to a deposit of Ordinary
Stock with the Depositary in exchange for ADSs and withdrawals
of Ordinary Stock. The matter is

81



---



##### Table of Contents



under discussion between a working group
established by the Irish Stock Exchange and the Irish Revenue
Commissioners.


United States Federal Income
Taxation

Dividends.Under
U.S. Federal income tax law, the gross amount of any
dividend (including any related applicable DWT) made by the Bank
to a U.S. Holder out of its current or accumulated earnings
and profits (as determined for U. S. Federal income tax
purposes) is subject to U.S. Federal income taxation.
Dividends paid to a non-corporate U.S. Holder in taxable
years beginning after December 31, 2002 and before
January 1, 2009 that constitute qualified dividend income
will be taxable to the holder at a maximum rate of 15% provided
that the ADSs or units of Ordinary Stock are held for more than
60 days during the 120-day period beginning 60 days
before the ex-dividend date and the holder meets other holding
period requirements. Dividends paid by the Bank with respect to
its ADSs or units of Ordinary Stock generally will be qualified
dividend income. The dividend will not be eligible for the
dividends-received deduction generally allowed to corporations.
The amount of any dividend will be the U.S. dollar value of
the euro payment (determined at the spot U.S. dollar/euro
exchange rate) on the date of actual or constructive receipt by
the U.S. Holder, in the case of units of Ordinary Stock,
(or by the Depositary in the case of ADSs), regardless of
whether the payment is converted into dollars. Gain or loss, if
any, recognized by a U.S. Holder on the sale or disposition
of euros as a result of currency exchange rate fluctuations
generally will be ordinary income or loss and will not be
eligible for the special tax rate applicable to qualified
dividend income. The gain or loss generally will be income or
loss from sources within the United States for foreign tax
credit limitation purposes. Distributions in excess of current
and accumulated earnings and profits, as determined for
U.S. Federal income tax purposes, will be treated as a
non-taxable return of capital to the extent of the holders
basis in the ADSs or units of Ordinary Stock and
thereafter as capital gain.

An Eligible U.S. Holder that receives a
dividend which has been subjected to DWT may, in certain
circumstances, claim repayment of the DWT by making an
application to the Irish Tax Authorities in accordance with
provisions of Irish law. Where entitlement to repayment under
these provisions cannot be established, the procedures outlined
in the immediately following paragraphs will apply.

The Tax Treaty limits the Irish tax liability of
an Eligible U.S. Holder (that is unable to claim repayment
of the full DWT under provisions of Irish law) in respect of a
dividend paid by the Bank to 15% of the gross amount.
Consequently such holder may claim repayment from the Irish Tax
Authorities, in accordance with the Treaty, of the amount of DWT
in excess of 15% of the sum of the cash dividend and the related
DWT.

Subject to certain limitations, any Irish tax
(including DWT) withheld and paid over to Ireland will be
creditable against the U.S. holders U.S. Federal
income tax liability. Special rules apply in determining the
foreign tax credit limitation with respect to dividends that are
subject to the maximum 15% tax rate. To the extent a refund of
the tax withheld is available to a U.S. Holder under Irish
law or the Tax Treaty, the amount of tax withheld that is
refundable will not be eligible for credit against a
U.S. Holders U.S. Federal income tax liability.

Under the Code, the limitation on foreign taxes
eligible for credit is calculated separately with respect to
separate classes of income. Dividends paid by the Bank with
respect to ADSs or units of Ordinary Stock are foreign source
passive income or, in the case of certain
U.S. Holders, financial services income.
Foreign tax credits allowable with respect to each class of
income cannot exceed the U.S. Federal income tax otherwise
payable with respect to such class of income.

Gain on Disposition.Upon the sale, exchange or other disposition of ADSs or units of
Ordinary Stock, a U.S. Holder will recognize gain or loss,
if any, equal to the difference between the U.S. dollar
amount realized upon the sale, exchange, or other disposition
and the U.S. Holders tax basis in the ADSs or units
of Ordinary Stock. Such gain or loss generally will be capital
gain or loss. Capital gain of a non-corporate U.S. Holder that
is recognized on or after May 6, 2003, and before
January 1, 2009 is taxed at a maximum rate of 15% where the
U.S. Holder has a holding period greater than one year. The
gain or loss will generally be income or loss from sources
within the United States for foreign tax credit limitation
purposes.

82



---



##### Table of Contents



United States and Irish Estate and Gift
Taxation

Irish gift and inheritance tax would apply to
gifts and bequests of Ordinary Stock in Irish companies
maintaining their only or principal register in the State. The
Bank is such a company. Certain tax-free thresholds apply to
gifts and inheritances, depending on the relationship between
the donor and donee. In addition bequests to a spouse under a
will or voluntary inter vivos (lifetime) gifts to a spouse are
wholly exempt from Irish inheritance and gift tax. All gifts and
inheritances received on or after December 5, 1991 from
within the same group threshold are aggregated for the purposes
of calculating the applicable tax-free threshold.

There is no gift and inheritance tax convention
between the U.S. and Ireland. Although an estate tax
convention between the two countries was ratified in 1951,
estate duty was abolished in Ireland in 1975. Both U.S. and
Irish Revenue authorities accept that inheritance tax is a tax
of a similar nature to estate duty and therefore the Convention
is applicable to Irish inheritance tax. The Convention does not
apply to Irish gift tax. Nonetheless, under the Code any such
inheritance tax payable in Ireland may be allowed as a credit,
subject to certain limitations, against so much of the
U.S. Federal estate tax as is payable on the same property.

U.S. Federal gift tax may apply to gifts of
ADSs or units of Ordinary Stock subject to certain thresholds
and exemptions. No credit against U.S. Federal gift tax for
Irish gift tax paid on the same property is allowable.




DOCUMENTS AVAILABLE THROUGH THE SEC

It is possible to read and copy documents
referred to in this annual report on Form 20-F that have
been filed with the SEC at the SECs public reference room
located at 450 Fifth Street, NW, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms and their copy charges. Documents
filed with the SEC on or after November 4, 2002 are
available on the website maintained by the SEC (www.sec.gov).




Item 11 MARKET RISK






ANALYSIS OF FINANCIAL CONDITION


Capital Resources

The following table sets forth the Groups
capital resources at March 31, 2003, 2002, and 2001.

|                        |  |                 |       |      |  |      |       |  |  |  |       | 
|----------------------- |  | --------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                        |  |                
|                        |  | At March 31,   
|                        |  |                
|                        |  | 2003            |       | 2002 |  | 2001
|                        |  |                 |       |      |  |     
|                        |  |                
|                        |  | (in  millions)
|Stockholders funds     |  |                 |       |      |  |      |       |  |  |  |       | 
|Equity                  |  |                 | 4,130 |      |  |      | 4,132 |  |  |  | 3,618 | 
|Non-equity              |  |                 | 65    |      |  |      | 68    |  |  |  | 212   | 
|Minority interests      |  |                 |       |      |  |      |       |  |  |  |       | 
| equity                |  |                 | 54    |      |  |      | 91    |  |  |  | 5     | 
| non-equity            |  |                 | 73    |      |  |      | 82    |  |  |  | 81    | 
|Undated capital notes   |  |                 | 1,413 |      |  |      | 965   |  |  |  | 961   | 
|Dated capital notes     |  |                 | 1,290 |      |  |      | 1,559 |  |  |  | 1,549 | 
|                        |  |                 |       |      |  |      |       |  |  |  |       | 
|Total capital resources |  |                 | 7,025 |      |  |      | 6,897 |  |  |  | 6,426 | 
|                        |  |                 |       |      |  |      |       |  |  |  |       | 

In the year ended March 31, 2003 total Group
Capital Resources increased by
128 million
to
7,025 million,
reflecting retentions of
411 million,
cost of Ordinary Stock Buyback of
124 million,
a Preferred Securities Issue equivalent to
502 million,
a redemption of Subordinated Floating Rate Notes of
201 million,
translation differences of
453 million
(negative) and other miscellaneous minor movements of
7 million
negative. As a result of these changes the Tier 1 ratio
increased from 7.6% to 8%. However the total capital ratio
decreased from 11.5% to 11.1% due to the growth in risk weighted
assets, and the redemption of subordinated floating rate notes
equivalent to
201 million.

83



---



##### Table of Contents



In the year ended March 31, 2002, total
Group capital resources increased by
471 million
to
6,897 million
reflecting retentions of
562 million,
a Preference Share Buy Back of
261 million,
new capital stock subscribed of
48 million,
increase in minority interest of
86 million
and translation differences of
23 million.
Translation differences of
14 million
accounted for the increase in subordinated bonds. Overall, while
the Groups capital base has increased, the Tier 1 and
Total Capital ratios at March 31, 2002 had decreased to
7.6% and 11.5% respectively. This was due to normal growth in
the year in the Groups risk  weighted assets.

Capital Adequacy Requirements

It is the Groups policy to maintain a
strong capital base, to seek to expand this where appropriate
and to utilize it efficiently in the Banks development as
a diversified international financial services group. Long-term
debt, undated capital notes and preference stock are raised in
various currencies to help maintain a prudent relationship
between the capital base and the underlying currency risks of
the Groups business.

Bank of Ireland Groups capital resources
policy has been developed within the supervisory requirements of
the Irish Financial Services Regulatory Authority, which applies
a risk-asset ratio as the measure of capital adequacy, and with
reference to guidelines issued in 1988 by the Basel Committee
and capital adequacy requirements set by the European Union. See
Item 4  Information on the
Company  Supervision and Regulation 
Ireland.

The basic instrument of capital monitoring is the
risk-asset ratio as developed by the Basel Committee. This ratio
derives from a consideration of capital as a cover for the
credit and market risks inherent in Group assets. Capital is
defined by reference to the European Union Own Funds Directive
(OFD) and Capital Adequacy Directive
(CAD), and is divided into Tier 1
capital consisting largely of stockholders equity,
Tier 2 capital including general provisions and
debt capital instruments, and Tier 3 capital
including short-term subordinated loan capital and net trading
book profits. Assets (both on and off balance sheet) are
weighted to allow for relative risk according to rules derived
from the European Union Solvency Ratio Directive.

The target standard risk-asset ratio set by the
Basel Committee is 8%, of which the Tier 1 element must be at
least 4%. The minimum risk-asset ratio is set by the Irish
Financial Services Regulatory Authority and satisfies capital
adequacy requirements of the EU which took effect on
January 1, 1993.

84



---



##### Table of Contents



Capital Adequacy Data

The following table shows the components and
basis of calculation of the Groups Tier 1 and Total
capital ratios for the three years to March 31, 2003.

|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|---------------------- |  | ----------------------------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                       |  |                                    
|                       |  | For the Financial Year Ended       
|                       |  | March 31,                          
|                       |  |                                    
|                       |  | 2003                                |        | 2002 |  | 2001
|                       |  |                                     |        |      |  |     
|                       |  |                                    
|                       |  | (in  millions, except percentages)
|Adjusted Capital Base  |  |                                     |        |      |  |      |        |   |  |  |        |  
|Tier 1                 |  |                                     | 4,377  |      |  |      | 4,026  |   |  |  | 3,654  |  
|Tier 2                 |  |                                     | 2,442  |      |  |      | 2,724  |   |  |  | 2,745  |  
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|                       |  |                                     | 6,819  |      |  |      | 6,750  |   |  |  | 6,399  |  
|Supervisory Deductions |  |                                     | 752    |      |  |      | 646    |   |  |  | 599    |  
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|Total Capital          |  |                                     | 6,067  |      |  |      | 6,104  |   |  |  | 5,800  |  
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|Risk Weighted Assets   |  |                                     |        |      |  |      |        |   |  |  |        |  
|Banking book           |  |                                     | 52,580 |      |  |      | 51,537 |   |  |  | 45,239 |  
|Trading book           |  |                                     | 2,046  |      |  |      | 1,440  |   |  |  | 1,406  |  
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|Total                  |  |                                     | 54,626 |      |  |      | 52,977 |   |  |  | 46,645 |  
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|Capital Ratios         |  |                                     |        |      |  |      |        |   |  |  |        |  
|Tier 1 capital         |  |                                     | 8.0    | %    |  |      | 7.6    | % |  |  | 7.8    | %
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  
|Total capital          |  |                                     | 11.1   | %    |  |      | 11.5   | % |  |  | 12.4   | %
|                       |  |                                     |        |      |  |      |        |   |  |  |        |  

In the year to March 31, 2003 the
Tier 1 Capital Ratio increased to 8.0% from 7.6% at
March 31, 2002 and the Total Capital Ratio decreased from
11.5% to 11.1%. These changes in the Tier 1 Capital Ratio
largely reflected retained earnings and the issue of
Stg£350m Guaranteed Callable Perpetual Preferred Securities
offset by goodwill associated with the acquisition of Iridian
Asset Management and the buy back of ordinary stock. This factor
also affected the total capital ratio with the additional
redemption of US$175m Subordinated Floating Rate Notes and the
impact of the rise in risk weighted assets. In the year to
March 31, 2002 the tier 1 capital ratio decreased to
7.6% from 7.8% at March 31, 2001 and the total capital
ratio decreased from 12.4% to 11.5%. This decrease was primarily
due to a buyback of Preference Stock by the Bank of
261 million.

Capital management is a key strategic priority.
Active management of the composition of the capital base and of
the allocation of capital to Group units is a key driver of
enhanced returns to stockholders and we will seek every
opportunity to improve the capital structure of the business.
During February 2003, the Group began a rolling share buy back
programme and 1.3% of Group stock has been purchased to
March 31, 2003. The Group raised approx.
Stg£350 million of non-equity Tier 1 capital, the
cost of which is significantly lower than the cost of equity.
Thus, the Group has maintained a very strong capital base, but
at a lower cost, adding to stockholder value and creating the
potential to generate higher returns in the future.

Capital ratios are strong with Tier 1 and
Total Capital at 8.0% and 11.1% respectively. As a result the
Group has considerable capital flexibility  both to
continue its share buy-back programme and to pursue suitable
opportunities to grow its businesses, including through
acquisitions.

Capital management is complemented by a portfolio
management philosophy, which ensures that all Group units
meet  or are deemed capable of meeting within an
acceptable timeframe  exacting returns on capital
hurdles. The Group intends to dispose of businesses that cannot
meet this standard.




RISK MANAGEMENT AND CONTROL

The Group through its normal operations is
exposed to a number of risks, the most significant of which are
credit risk, market risk, liquidity risk and operational risk.

85



---



##### Table of Contents



The Group has adopted an integrated approach to
the oversight and governance of risk management. The Group Risk
Policy Committee (GRPC), a sub-committee of the Court of
Directors, is responsible for recommending high-level risk
policy and risk strategy to the Court for approval and for
overseeing management of risk within approved policy parameters.

In turn, the Group Risk Policy Committee
delegates specific responsibility for oversight of the principal
areas of risk to the following committees:



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | Group Credit Committee  all larger
    credit transactions.                 
|
| |  | Group Asset and Liability Committee
    (ALCO)  market and liquidity risk.
|
| |  | Group Operational Risk Committee 
    operational risk.                     

Group Financial Control, Group Credit Review,
Group Market Risk, Group Internal Audit, Group Compliance and
Group Operational Risk are central control functions,
independent of business unit management, whose roles include
monitoring the Groups activities to ensure compliance with
financial and operating controls. Risk, financial and
operational controls are designed to safeguard the Groups
assets while allowing sufficient operational freedom to earn an
acceptable return to stockholders.

Financial instruments are fundamental to the
Groups business and constitute a core element of its
operations. The risks associated with financial instruments are
a significant component of the risks faced by the Group.
Financial instruments create, modify or reduce the credit,
market and liquidity risks of the Groups balance sheet.
Each of these risks and the Groups policies and objectives
for managing such risks are discussed below.

Derivatives

A derivative is an agreement which defines
certain financial rights and obligations which are contractually
linked to interest rates, exchange rates or other market prices.
Derivatives are an efficient and cost effective means of
managing market risk and limiting counterparty exposures. As
such, they are an indispensable element of treasury management,
both for the Group and for many of its corporate customers.
Further details can be seen in Note 36 and the accounting
policy is set out in Note 1.

It is recognised that certain forms of
derivatives can introduce risks which are difficult to measure
and control. For this reason, it is Group policy to place clear
boundaries on the nature and extent of its participation in
derivatives markets and to apply industry and regulatory
standards to all aspects of its derivatives activities. In
addition, Treasury & International Banking and Davy are the
only Group businesses permitted to transact on the Groups
behalf in derivatives markets (including forward foreign
exchange).

The Groups derivatives activities are
governed by policies approved by the Group Risk Policy Committee
and, where appropriate, by the Court of Directors. These
policies relate to the management of the various types of risk
associated with derivatives, including market risk, credit risk,
liquidity risk and operational risk. Any significant change in
the nature of the Groups derivatives business is subject
to approval, depending on materiality, by the Group Risk Policy
Committee or the Court of Directors on the recommendation of the
GRPC.

Nature of Derivatives
Instruments

The following is a brief description of the
derivative instruments which account for the major part of the
Groups derivatives activities:

A swap is an over-the-counter
(OTC) agreement to exchange cash flows based on a
notional underlying amount and an agreed pair of observable
market rates or indices. A fixed-floating interest-rate
swap involves the exchange of a pre-determined set of
fixed interest payments, based on an agreed notional principal,
for periodically re-set floating interest payments. Swaps can
also involve an exchange of two floating-rate interest payments.

86



---



##### Table of Contents



A currency swap involves the initial
exchange of principal amounts denominated in two currencies, the
subsequent exchange of interest payments based on these
principal amounts and the final re-exchange of the same
principal amounts. The interest rates involved can be fixed/
fixed, fixed/ floating or floating/ floating.

A forward-rate agreement
(FRA) is an OTC contract which fixes the rate
payable on a future single-period loan or deposit. An FRA is
generally settled in cash at the start of the interest-rate
period to which the forward-rate applies.

A bond future is an exchange-traded
contract which fixes the future delivery price for one of a
defined basket of government bonds deliverable by the seller to
the buyer.

A forward foreign exchange contract
is an agreement which fixes the rate at which one currency can
be exchanged for a second currency at a pre-determined date in
the future.

An option provides its owner with the
right to buy or sell an underlying security, currency, commodity
or derivative at a pre-determined price, or in some cases
receive the cash value of doing so. Options involve asymmetric
rights and obligations: the owner, having purchased the option,
has the right but not the obligation to transact; the seller
(writer) of the option is obliged to honour its terms if the
option is exercised.

Interest-rate options are traded on exchanges (of
which the most important are options on interest-rate futures)
and over-the-counter. In the case of OTC interest rate options,
there are two basic instruments  caps (or
floors) and swaptions. A cap places an
upper limit on the rate payable on a loan; a floor is a lower
limit on the rate receivable on a deposit. A cap is a sequence
of options on FRAs or futures, each individually exercisable. A
swaption is a single option to pay or receive a fixed rate
against a periodically reset floating rate.

The following table summarises activities
undertaken by the Group, the related market risks associated
with such activities and the type of derivative used in managing
such risks. Such risks may also be managed using on-balance
sheet instruments as part of an integrated approach to risk
management.

|                    |  |                                             |  |                                   
|------------------- |  | ------------------------------------------- |  | ----------------------------------
|Activity            |  | Market Risk                                 |  | Type of Derivative                
|                    |  |                                             |  |                                   
|Fixed rate lending  |  | Sensitivity to increases in interest rates. |  | Pay fixed interest rate swaps.    
|Capped rate lending |  | Sensitivity to increases in interest rates. |  | Buy interest rate caps.           
|Fixed rate funding  |  | Sensitivity to falls in interest rates.     |  | Receive fixed interest rate swaps.

The market and credit risks arising in
derivatives are integrated within the Groups overall risk
management systems and controls.




CREDIT RISK

Credit Risk reflects the risk that a counterparty
will be unable to meet their contractual obligations to the
Group in respect of loans or other financial transactions
thereby causing the Group to incur a loss.

The Group continues to enhance its credit risk
management systems in line with best industry practice in loan
rating/ credit risk modelling, effective loan pricing for risk,
economic capital allocation and strategic loan portfolio
management.

These initiatives position the Group for
continued prudent loan growth and are also necessary to ensure
that the Group meets the requirements of Basel II. A dedicated
team has been established to ensure that the additional work
related to the proposed new capital accord will be completed in
advance of the implementation date.

Discretionary Authorities

The Group has a credit risk management system
which operates through a hierarchy of exposure discretions. All
exposures above a certain level require the approval of the
Group Credit Committee, which is a sub-committee of the Group
Risk Policy Committee, and comprises of Senior Executives some
of whom are Executive Directors. Exposures below Group Credit
Committees discretion are approved according to a system
of tiered discretions.

87



---



##### Table of Contents



Individuals are allocated discretionary limits
according to credit competence, proven judgement and experience.
The discretionary limits exercisable by individuals vary
depending on the nature and scale of lending in these units.
Lending proposals above the relevant discretionary limits are
referred to a credit department or to Group Credit for
independent assessment and subsequent adjudication by the
appropriate discretionary authorities including Heads of
Divisions, senior Executives and the Group Credit Committee.

Credit Policy

The core values governing the provision of credit
are contained in Group and Unit Credit Policy documents which
are approved and reviewed by Group Risk Policy Committee and,
where appropriate, by the Court of Directors.

The Unit Credit Policies define in greater detail
the credit approach appropriate to the Units concerned, taking
account of the markets in which they operate and the products
they provide. Procedures for the approval and monitoring of
exceptions to policy are clearly set out in each document. In a
number of cases these Unit policies are supplemented by Sectoral
Credit Policies. Lending caps are put in place when it is
considered appropriate to limit exposure to certain sectors.

In the case of retail business lending, a number
of Sectoral Guidelines have been developed setting out the key
factors to be taken into account in lending decisions and also
provide guidance on the structuring of credit facilities to
companies operating in these sectors.

An independent function, Group Credit Review,
reviews the quality and management of risk assets across the
Group and reports to Group Risk Policy Committee on a quarterly
basis.

Country/Bank Limits

For countries in which the Group has a
substantial presence (e.g. Ireland and the United Kingdom) no
specific country limits are in place. Instead lending is subject
to Unit and Sectoral Credit Policies described above. Exposure
limits and Maturity limits for other countries with which the
Group wishes to deal are approved annually by the Directors on
the recommendation of the Group Credit Committee (who in turn
review the limits twice yearly). The limits are based on
gradings applied to each country which reflect the Groups
perception of risk and willingness to accept future exposures.

Maximum limits on exposures to banks are approved
by the Directors on the recommendation of the Group Credit
Committee. Banks are risk graded on the basis of an assessment
of each banks credit worthiness. Maximum exposure and
maturity limits are set separately for direct/cash,
presettlement/ rewriting, contingent and settlement risks for
each grade of bank and individual limits are set within these,
based on business need.

Credit Grading/Assessment

The quality of the Groups lending is
monitored and measured using credit grading systems.

These systems guide loan underwriting and risk
selection decisions. They also play a central role in the early
identification of deteriorating individual loans or pools of
loans requiring early and decisive action to eliminate or
minimise any eventual loss to the Group.

Review

All loans and grades are reviewed at least
annually (except for small personal loans which are operating
within the terms of their approval and instalment credit and
residential mortgage loans which are conforming to a regular
repayment schedule). Where the credit grade indicates some
vulnerability or deterioration in the condition of the borrower,
more frequent reviews are carried out. Reviews consist of an
analysis of current financial information and discussions with
the borrower and incorporate an evaluation of the current
financial stability and liquidity of the borrower, the
feasibility of the borrowers plans and projections in the
context of the sector in which the borrower operates, the manner
in which the account is operated by the borrower and the
adequacy of security cover.

88



---



##### Table of Contents



The Group Risk Policy Committee also reviews the
Groups provisions for lending losses twice each year. New
large specific provisions are reported to the Group Credit
Committee as they occur.

Provisions and Allowances for Loan
Losses

Movement in provisions for loan losses is charged
to profit and added to specific or general provisions as
appropriate. Any subsequent write-off (charge-off) is charged
against the specific allowances.

A specific provision is made against a loan when,
in the judgment of management, the repayment realizable from the
borrower, including the realizable value of the available
security, is insufficient to meet the principal of and interest
outstanding on the loan. The amount of the provision is the
difference between the amount outstanding and the estimated
amount recoverable.

The Groups general provision recognizes
that a loan portfolio contains loans which are impaired but have
not yet been specifically identified as such and provided for on
an individual basis. The general provision is not, therefore,
allocated to specific loans or sectors. The general provision
comprises an element which is determined by the quality of the
loan portfolio, as evidenced by the grade profile, and a
non-designated element, for prudential purposes. The element
relating to the grade profile is calculated by applying risk
weightings to the volume of loans in each grade other than
provision grades. The weightings are reviewed annually and are
based on an analysis of the underlying risks associated with
each grade, taking into account current and prospective economic
and sectoral trends.

When management determines that a full or partial
write-off on a loan is appropriate, the amount of the write-off
is applied against the specific provision to reduce the debt to
its estimated realizable value. It is practice for banks in
Ireland and the United Kingdom to delay write-off until the
realization of security or alternative recovery action has been
completed or the required full or partial write-off can be
predicted with a high degree of certainty. Accordingly, the
Group does not, in the normal course, expect to recover amounts
charged off.

There are differences between the provisioning
policies generally applied in the United States and those
applied in Ireland and the United Kingdom. In its Irish and
United Kingdom operations, until such time as its payment is
considered to be doubtful, the Group continues to accrue
interest on outstanding balances.

This interest is charged to the account but is
offset by the creation of a specific provision in respect of the
amount considered doubtful. In contrast, banks in the United
States typically stop accruing interest when loans become
overdue by 90 days or more. As outlined above, banks in the
United States also charge off loans more rapidly than is the
practice in Ireland or the United Kingdom. The cumulative effect
of these policies is to increase the relative size of the
Groups loan portfolio and the allowance for lending
losses, and so to increase the Groups provisioning ratios,
compared with those which would result from the adoption of
U.S. provisioning policies. In comparison with such
policies net income is not affected.

There is also a difference between the
provisioning methodology for residential mortgages applied in
Ireland and that in the United Kingdom. In Ireland, the
aggregate of individual loan loss provision figures represents
the total provision reported in the financial accounts. In the
United Kingdom, the figure reported in the accounts is the
aggregate of individual provisions, discounted by a factor. The
factor reflects the percentage of provisions which, in the
Banks experience, have historically crystallized as actual
loan losses. This is a less conservative approach to that
employed in Ireland but is in line with accepted practice in the
United Kingdom mortgage sector.

MARKET RISK

Market risk is the potential adverse change in
Group income or the value of Group net worth arising from
movements in interest rates, exchange rates or other market
prices. Market risk arises from the structure of the balance
sheet, the execution of customer and interbank business and
proprietary trading. The Group recognises that the effective
management of market risk is essential to the maintenance of
stable earnings, the preservation of stockholder value and the
achievement of the Groups corporate objectives.

The Groups exposure to market risk is
governed by policy approved by the Group Risk Policy Committee
(GRPC) and, where appropriate, by the Court of Directors. This
policy sets out the nature of risk which can be

89



---



##### Table of Contents



taken, the types of financial instruments which
can be used to increase or reduce risk and the way in which risk
is controlled. In line with this policy, the Court approves
aggregate risk limits.


Based on these aggregate limits, the Group Asset
and Liability Committee (ALCO), which is accountable to the
GRPC, assigns risk limits to relevant Group businesses and ALCO
monitors compliance with these limits. Material exposure to
market risk is permitted only in specifically designated
business units. In other units, market risk is eliminated by way
of appropriate hedging arrangements with Treasury &
International Banking.

Market risk throughout the Group is subject to
independent measurement, reporting and control.

TRADING BOOK

In line with regulatory and accounting
conventions, the Groups Trading Book consists of Treasury
& International Bankings mark-to-market interest rate
and foreign exchange books, as well as risk positions arising
from J&E Davys market making and broking activities in
securities and equities.

In the case of interest rate markets in the year
ended March 31, 2003, risk arose predominately from
transactions in securities, interest rate swaps and interest
rate futures. Positions in forward foreign exchange, FRAs and
interest rate options also contributed to risk from time to time.

Trading Book risk is measured on a consistent
basis across different activities. A Value at Risk (VaR)
approach is used to measure risk and set limits. VaR provides an
estimate of the potential mark-to-market loss on a set of
exposures over a specified time horizon at a defined level of
statistical confidence. In the Groups case, the horizon is
1 day and the confidence level is 97.5%. This implies that
on any given day, VaR provides an estimate of potential
mark-to-market loss which has no more than a 2.5% probability of
being exceeded.

The VaR system uses a variance covariance matrix
approach. Matrices are updated weekly using the Exponentially
Weighted Moving Average methodology, which is widely applied in
the industry. Management recognises that VaR is subject to
certain inherent limitations. The past will not always be a
reliable guide to the future and the statistical assumptions
employed may understate the probability of very large market
moves. For this reason, VaR limits are supplemented by a range
of controls which include position limits and loss tolerances.
In addition scenario-based stress testing is used to calculate
the profit and loss impact of extreme market moves.

The Group uses a variety of backtests to assess
the reliability of its VaR modelling and these tests have been
supportive of the methodology and techniques used.

During the financial year ended March 31,
2003, the Groups average Trading Book VaR amounted to
1.7m. Its lowest
Trading Book VaR was
0.8m and its
peak was 3.0m.
At March 31, 2003, Trading Book VaR was
1.4m.

Interest rate risk in Treasury &
International Banking was the predominant source of Trading Book
VaR. The average VaR for this component of risk in the year
ended March 31, 2003 was
0.9m.

BANKING BOOK

Interest Rate Risk

The Groups Banking book consists of its
retail and corporate deposit and loan books, as well as Treasury
& International Bankings interbank cash books and its
investment portfolio. In the non-Treasury areas interest rate
risk arises primarily from the Groups fixed rate lending
and deposit business in Ireland and the UK. The exposure in
these books is managed using interest rate swaps and other
conventional hedging instruments.

For analytical and control purposes, VaR is
applied to Treasury & International Bankings non
trading books although these activities are accrual accounted
for financial reporting purposes. In the other businesses,
sensitivity analysis is used to measure and control interest
rate risk. This analysis involves calculating exposure in net
present value (NPV) terms to a 1% parallel interest rate shift.
This is supplemented by estimates of maturity mismatch exposure
using a methodology which provides estimates of the sensitivity
of positions to selected points on the yield curve.

90



---



##### Table of Contents



In calculating exposures, undated assets and
liabilities (principally non-interest bearing current accounts,
capital and fixed assets) are assigned a duration equivalent to
that of a portfolio of coupon-bearing bonds with an average life
of 4 years.

All of the Groups material banking book
exposure is in euro and sterling. At end March, a 1% parallel
downward shift in the euro and sterling yield curves would have
generated losses in NPV terms of
1.4m and
2.7m,
respectively.

The table in Note 37 to the Accounts
provides an indication of the repricing mismatch in the Non
Trading Books at March 31, 2003.

Foreign Exchange Risk

Structural foreign exchange risk is defined as
the Groups non-trading net asset position in foreign
currencies. Structural risk arises almost entirely from the
Groups net investments in its sterling-based subsidiaries.

A structural open position in a particular
currency can also be considered to be a measure of that part of
the Groups capital which is denominated in that currency.
In considering the most appropriate structural foreign exchange
position, the Group takes account of the currency composition of
its risk weighted assets and the desirability of maintaining a
similar currency distribution of capital. The Group believes
that in doing so it will ensure that capital ratios are not
excessively exposed to changes in exchange rates.

At March 31, 2003 and 2002, the Groups
structural foreign exchange position was as follows:

|                             |  |                 |       |           |  |  |       | 
|---------------------------- |  | --------------- | ----- | --------- |  |  | ----- | 
|                             |  | March 31,       |       | March 31,
|                             |  | 2003            |       | 2002     
|                             |  |                 |       |          
|                             |  |                
|                             |  | (in  millions)
|GBP                          |  |                 | 2,405 |           |  |  | 2,447 | 
|USD                          |  |                 | 248   |           |  |  | 129   | 
|                             |  |                 |       |           |  |  |       | 
|Total structural FX position |  |                 | 2,653 |           |  |  | 2,576 | 
|                             |  |                 |       |           |  |  |       | 

The positions indicate that a 10% depreciation in
the value of the euro against all other currencies at
March 31, 2003 would result in a gain taken to reserves of
265m.

At year ended March 31, 2003 the currency
composition of capital and risk-weighted assets was broadly in
line and, as a result, exchange rate movements could be expected
to have a non material impact on capital ratios. However, such
movements will have an impact on reserves.

TRANSLATION HEDGING OF OVERSEAS
EARNINGS

The Group may choose to hedge all or part of its
overseas earnings in a particular year, thereby fixing a
translation rate for the amount hedged.

LIQUIDITY RISK

It is Group policy to ensure that resources are
at all times available to meet the Groups obligations
arising from withdrawal of customer demand or term deposits, non
renewal of interbank liabilities, the drawdown of customer
facilities and asset expansion. The development and
implementation of the policy is the responsibility of ALCO. The
day-to-day management of liquidity is the responsibility of
Treasury & International Banking.

Limits on potential cashflow mismatches over
defined time horizons are the principal basis of liquidity
control. The cashflow mismatch methodology involves calculating
the potential net outflow of funds arising from the refinancing
of the existing wholesale book and projected net new financing.
This measure of the potential recourse to wholesale markets is
formally related to the level of the Groups holdings of
liquid assets.

91



---



##### Table of Contents



OPERATIONAL RISK

The Basel Committee on Banking Supervision
defines operational risk as the risk of loss resulting
from inadequate or failed internal processes, people and systems
or from external events. The risk is associated with human
error, systems failure, and inadequate controls and procedures.

While the Group has adopted this definition for
regulatory purposes, the operating definition is that,
operational risk is all risk other than market and credit
risk, thus including strategic risk, business risk and
reputational risk.

The Groups exposure to operational risk is
governed by policy formulated by the Group Operational Risk
Committee and approved by the Group Risk Policy Committee and,
where appropriate, by the Court. The policy specifies that the
Group will operate such measures of risk identification,
assessment, monitoring and management as are necessary to ensure
that operational risk management is consistent with the
approach, aims and strategic goals of the Group, and is designed
to safeguard the Groups assets while allowing sufficient
operational freedom to earn a satisfactory return to
stockholders.

The policy document further sets out the
responsibilities of management, the requirement for mandatory
reporting of incidents and the role of Group Internal Audit in
providing the independent review function.

The Group manages operational risk under an
overall strategy which is implemented by accountable executives
monitored by the Group Audit Committee and the Group Operational
Risk Committee and supported by the Group Operational Risk
Function. Potential risk exposures are assessed and appropriate
controls are put in place. Recognising that operational risk
cannot be entirely eliminated, the Group implements risk
mitigation controls including fraud prevention, contingency
planning and incident management. This strategy is further
supported by risk transfer mechanisms such as insurance, where
appropriate.




Item 12     DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

92



---



##### Table of Contents






PART II




Item 13     DEFAULTS,
DIVIDEND ARREARAGES & DELINQUENCIES

Not Applicable.






|        |                                                                               
|------- | ------------------------------------------------------------------------------
|Item 14 | MATERIAL MODIFICATIONS TO THE RIGHTS OF
    SECURITY HOLDERS & USE OF PROCEEDS

Not Applicable




Item 15     CONTROLS
AND PROCEDURES

An evaluation was carried out as of
March 31, 2003 under the supervision and with the
participation of the Groups management, including the
Group Chief Executive and the Group Finance Director, of the
effectiveness of the design and operation of the Groups
disclosure controls and procedures, which are defined in
Exchange Act Rule 13a-15(e) and generally refers to those
controls and procedures designed to ensure that information
required to be disclosed in reports filed under the US
Securities Exchange Act of 1934 is recorded, processed,
summarised and reported within specific time periods. As of the
date of the evaluation, the Groups management, including
the Group Chief Executive and Group Chief Financial Officer
concluded that the design and operation of these disclosure
controls and procedures were effective. There were no changes in
our internal control over financial reporting during the period
covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control
over financial reporting.




Item 16     RESERVED

93



---



##### Table of Contents






PART III






Item 17     FINANCIAL
STATEMENTS


(Not responded to as Item 18 complied with)




Item 18     FINANCIAL
STATEMENTS

(a)   Financial Statements

|                                                              |  |      |      | 
|------------------------------------------------------------- |  | ---- | ---- | 
|                                                              |  | Page
|                                                              |  |     
|Bank of Ireland Group Financial Statements:                   |  |      |      | 
|Statement of Directors Responsibilities                      |  |      | F-2  | 
|Report of Independent Auditors                                |  |      | F-3  | 
|Consolidated Statement of Income                              |  |      | F-4  | 
|Consolidated Balance Sheet                                    |  |      | F-6  | 
|Note of Historical Cost Profit and Loss                       |  |      | F-8  | 
|Reconciliation of Movement in Stockholders
    Funds         |  |      | F-8  | 
|Statement of Total Recognised Gains and Losses                |  |      | F-8  | 
|Consolidated Statement of Changes in
    Stockholders Equity |  |      | F-9  | 
|Consolidated Cash Flow Statement                              |  |      | F-10 | 
|Notes to the Consolidated Financial Statements                |  |      | F-11 | 




Item 19     EXHIBITS

|     |  |   |  |                                                                                                                                                                                                                                                                                 
|---- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1  |  |  |  | Charter & Acts (incorporated by reference to
    Exhibit 1.1 of the annual report on Form 20-F of The
    Governor and Company of the Bank of Ireland for the financial
    year ended March 31, 2001, File No. 1-14452).                                                       
|1.2  |  |  |  | Bye-Laws.                                                                                                                                                                                                                                                                       
|4.1  |  |  |  | Rules of the Bank of Ireland Group Stock Options
    Scheme  1996 (incorporated by reference to
    Exhibit 4 of the annual report on Form 20-F of The
    Governor and Company of the Bank of Ireland for the financial
    year ended March 31, 2001, File No. 1-14452).     
|4.2  |  |  |  | Rules of the Bank of Ireland Group Long Term
    Performance Stock Plan (incorporated by reference to
    Exhibit 4 of the annual report on Form 20-F of The
    Governor and Company of the Bank of Ireland for the financial
    year ended March 31, 2001, File No. 1-14452).
|8    |  |  |  | List of significant subsidiaries 
    incorporated by reference to page 19 of this Form 20-F.                                                                                                                                                                                  
|12.1 |  |  |  | Certification by the Chief Executive Officer as
    required by Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                      
|12.2 |  |  |  | Certification by the Chief Financial Officer as
    required by Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                      
|13.1 |  |  |  | Certification by the Chief Executive Officer as
    required by Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                      
|13.2 |  |  |  | Certification by the Chief Financial Officer as
    required by Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                      

94



---



##### Table of Contents



BANK OF IRELAND GROUP

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

Year Ended March 31, 2003

|                                                              |  |      |      | 
|------------------------------------------------------------- |  | ---- | ---- | 
|                                                              |  | Page
|                                                              |  |     
|Statement of Directors Responsibilities                      |  |      | F-2  | 
|Report of Independent Auditors                                |  |      | F-3  | 
|Consolidated Statement of Income                              |  |      | F-4  | 
|Consolidated Balance Sheet                                    |  |      | F-6  | 
|Note of Historical Cost Profit and Loss                       |  |      | F-8  | 
|Reconciliation of Movement in Stockholders
    Funds         |  |      | F-8  | 
|Statement of Total Recognised Gains and Losses                |  |      | F-8  | 
|Consolidated Statement of Changes in
    Stockholders Equity |  |      | F-9  | 
|Consolidated Cash Flow Statement                              |  |      | F-10 | 
|Notes on the Financial Statements                             |  |      | F-11 | 

F-1



---



##### Table of Contents



BANK OF IRELAND GROUP

STATEMENT OF DIRECTORS
RESPONSIBILITIES

The following statement, which should be read in
conjunction with the Report of Independent Auditors set out on
page F-3, is made with a view to distinguishing for
stockholders the respective responsibilities of the Directors
and of the auditors in relation to the accounts.

Irish company law requires the Directors to
ensure that accounts, which give a true and fair view of the
state of affairs of the Bank and the Group and of the profit or
loss of the Group for the year, are prepared for each financial
year.

With regard to the accounts on pages F-4 to
F-102, the Directors have determined that it is appropriate that
they continue to be prepared on a going concern basis and
consider that in their preparation:-



| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | suitable accounting policies have been selected
    and applied consistently;   
|
| |  | judgements and estimates that are reasonable and
    prudent have been made: and
|
| |  | applicable accounting standards have been
    followed.                         

The Directors have a responsibility for ensuring
that proper books of account are kept which disclose with
reasonable accuracy at any time the financial position of the
Bank and to enable them to ensure that the accounts are prepared
in accordance with accounting standards generally accepted in
Ireland and comply with Irish law including the Companies Acts,
1963 to 2001, and the European Communities (Credit Institutions:
Accounts) Regulations, 1992. They also have general
responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.

F-2



---



##### Table of Contents



BANK OF IRELAND GROUP

REPORT OF INDEPENDENT AUDITORS

To the Court of Directors and members of the
Governor and Company of the Bank of Ireland

We have audited the accompanying consolidated
balance sheets of the Governor and Company of the Bank of
Ireland and its subsidiaries as of March 31, 2003, and 2002
and the related consolidated statements of income, of cash flows
and of changes in stockholders equity, for each of the
three years in the period ended March 31, 2003 all
expressed in euro as set out on pages F-4 to F-102
inclusive. These accounts are the responsibility of the
Banks management. Our responsibility is to express an
opinion on these accounts based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the accounts
are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures
in the accounts. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall accounts presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated accounts audited
by us present fairly, in all material respects, the financial
position of the Governor and Company of the Bank of Ireland and
its subsidiaries at March 31, 2003 and 2002, and the
results of their operations and cash flows for each of the three
years in the period ended March 31, 2003 in conformity with
accounting principles generally accepted in Ireland.

Accounting principles generally accepted in
Ireland vary in certain significant respects from accounting
principles generally accepted in the United States as set out in
Note 45 to the consolidated accounts.

PRICEWATERHOUSECOOPERS

Chartered Accountants and


Registered Auditors


Dublin


Ireland


May 14, 2003


F-3



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED STATEMENT OF INCOME

|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|----------------------------------------------------------------------- |  | ----- | -- | -------------------- |  | ---------- | ----- | ---------- |  |  | ----- | - |  |  | ----- | -
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | Year ended March 31,
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | 2003                 |  | 2002       |       | 2001      
|                                                                        |  |       |    | Group                |  | Group      |       | Group     
|                                                                        |  | Notes |    | Total                |  | Total      |       | Total     
|                                                                        |  |       |    |                      |  |            |       |           
|                                                                        |  |       |    |                      |  | (restated) |       | (restated)
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | (in  millions)     
|INTEREST RECEIVABLE                                                     |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|Interest receivable and similar income arising
    from debt securities |  |       |    |                      |  |            | 344   |            |  |  | 343   |   |  |  | 359   |  
|Other interest receivable and similar income                            |  |       | 4  |                      |  |            | 3,347 |            |  |  | 3,637 |   |  |  | 3,696 |  
|INTEREST PAYABLE                                                        |  |       | 5  |                      |  |            | 1,962 |            |  |  | 2,402 |   |  |  | 2,633 |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|NET INTEREST INCOME                                                     |  |       |    |                      |  |            | 1,729 |            |  |  | 1,578 |   |  |  | 1,422 |  
|Fees and commissions receivable                                         |  |       |    |                      |  |            | 1,011 |            |  |  | 1,061 |   |  |  | 906   |  
|Fees and commissions payable                                            |  |       |    |                      |  |            | (140  | )          |  |  | (141  | ) |  |  | (117  | )
|Dealing profits                                                         |  |       | 36 |                      |  |            | 85    |            |  |  | 81    |   |  |  | 91    |  
|Contribution from life assurance business                               |  |       |    |                      |  |            | 116   |            |  |  | 152   |   |  |  | 164   |  
|Other operating income                                                  |  |       | 6  |                      |  |            | 116   |            |  |  | 74    |   |  |  | 71    |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|TOTAL OPERATING INCOME                                                  |  |       |    |                      |  |            | 2,917 |            |  |  | 2,805 |   |  |  | 2,537 |  
|Administrative expenses                                                 |  |       | 7  |                      |  |            | 1,480 |            |  |  | 1,427 |   |  |  | 1,257 |  
|Depreciation and amortisation                                           |  |       | 7  |                      |  |            | 182   |            |  |  | 155   |   |  |  | 130   |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|OPERATING PROFIT BEFORE PROVISIONS                                      |  |       |    |                      |  |            | 1,255 |            |  |  | 1,223 |   |  |  | 1,150 |  
|Provision for bad and doubtful debts                                    |  |       | 16 |                      |  |            | 100   |            |  |  | 102   |   |  |  | 72    |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|OPERATING PROFIT                                                        |  |       |    |                      |  |            | 1,155 |            |  |  | 1,121 |   |  |  | 1,078 |  
|Income from associated undertakings and joint
    ventures              |  |       |    |                      |  |            | 22    |            |  |  | 1     |   |  |  | 7     |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|PROFIT ON ORDINARY ACTIVITIES BEFORE
    EXCEPTIONAL ITEMS              |  |       |    |                      |  |            | 1,177 |            |  |  | 1,122 |   |  |  | 1,085 |  
|Group Transformation Program                                            |  |       | 9  |                      |  |            |      |            |  |  | (37   | ) |  |  | (93   | )
|Exceptional items                                                       |  |       | 9  |                      |  |            | (164  | )          |  |  |      |   |  |  |      |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|PROFIT BEFORE TAXATION                                                  |  |       |    |                      |  |            | 1,013 |            |  |  | 1,085 |   |  |  | 992   |  
|Taxation                                                                |  |       | 10 |                      |  |            | 163   |            |  |  | 165   |   |  |  | 190   |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|PROFIT AFTER TAXATION                                                   |  |       |    |                      |  |            | 850   |            |  |  | 920   |   |  |  | 802   |  
|                                                                        |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-4



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED STATEMENT OF INCOME

|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|--------------------------------------------------------- |  | ----- | -- | -------------------- |  | ---------- | ----- | ---------- |  |  | ----- |  |  |  | ----- | 
|                                                          |  |       |    |                     
|                                                          |  |       |    | Year ended March 31,
|                                                          |  |       |    |                     
|                                                          |  |       |    | 2003                 |  | 2002       |       | 2001      
|                                                          |  |       |    | Group                |  | Group      |       | Group     
|                                                          |  | Notes |    | Total                |  | Total      |       | Total     
|                                                          |  |       |    |                      |  |            |       |           
|                                                          |  |       |    |                      |  | (restated) |       | (restated)
|                                                          |  |       |    |                     
|                                                          |  |       |    | (in  millions)     
|PROFIT AFTER TAXATION                                     |  |       |    |                      |  |            | 850   |            |  |  | 920   |  |  |  | 802   | 
|Deposit Interest Retention Tax                            |  |       | 9  |                      |  |            |      |            |  |  |      |  |  |  | 35    | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|PROFIT FOR THE FINANCIAL YEAR                             |  |       |    |                      |  |            | 850   |            |  |  | 920   |  |  |  | 767   | 
|Minority interests: equity                                |  |       |    |                      |  |            | 9     |            |  |  | 2     |  |  |  | 3     | 
|: non equity                                              |  |       |    |                      |  |            | 6     |            |  |  | 6     |  |  |  | 7     | 
|Non-cumulative preference stock dividends                 |  |       | 11 |                      |  |            | 9     |            |  |  | 17    |  |  |  | 26    | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|PROFIT ATTRIBUTABLE TO THE                                |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|ORDINARY STOCKHOLDERS                                     |  |       |    |                      |  |            | 826   |            |  |  | 895   |  |  |  | 731   | 
|Transfer to capital reserve                               |  |       | 34 |                      |  |            | 44    |            |  |  | 73    |  |  |  | 101   | 
|Ordinary dividends                                        |  |       | 11 |                      |  |            | 371   |            |  |  | 333   |  |  |  | 290   | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|PROFIT RETAINED FOR THE YEAR                              |  |       |    |                      |  |            | 411   |            |  |  | 489   |  |  |  | 340   | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|Earnings per unit of
    0.64 Ordinary
    Stock         |  |       | 12 |                      |  |            | 82.0c |            |  |  | 89.0c |  |  |  | 73.4c | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 
|Diluted Earnings per unit of
    0.64 Ordinary
    Stock |  |       | 12 |                      |  |            | 81.2c |            |  |  | 88.1c |  |  |  | 72.7c | 
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |  |  |  |       | 

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-5



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED BALANCE SHEET

|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|------------------------------------------------------------ |  | ----- | -- | --------------- |  | ---- | ------ |  |  |  | ------ | 
|                                                             |  |       |    |                
|                                                             |  |       |    | At March 31,   
|                                                             |  |       |    |                
|                                                             |  | Notes |    | 2003            |  | 2002
|                                                             |  |       |    |                 |  |     
|                                                             |  |       |    |                
|                                                             |  |       |    | (in  millions)
|ASSETS                                                       |  |       |    |                 |  |      |        |  |  |  |        | 
|Cash and balances at central banks                           |  |       |    |                 |  |      | 679    |  |  |  | 569    | 
|Items in the course of collection from other banks           |  |       |    |                 |  |      | 508    |  |  |  | 554    | 
|Central government and other eligible bills                  |  |       | 13 |                 |  |      | 175    |  |  |  | 79     | 
|Loans and advances to banks                                  |  |       | 14 |                 |  |      | 7,480  |  |  |  | 8,385  | 
|Loans and advances to customers                              |  |       | 15 |                 |  |      | 56,887 |  |  |  | 56,577 | 
|Securitisation and loan transfers                            |  |       |    |                 |  |      | 794    |  |  |  | 1,106  | 
|Less: non returnable amounts                                 |  |       |    |                 |  |      | 667    |  |  |  | 964    | 
|                                                             |  |       |    |                 |  |      | 127    |  |  |  | 142    | 
|Debt securities                                              |  |       | 17 |                 |  |      | 12,337 |  |  |  | 10,885 | 
|Equity shares                                                |  |       | 18 |                 |  |      | 38     |  |  |  | 19     | 
|Own shares                                                   |  |       |    |                 |  |      | 35     |  |  |  | 27     | 
|Interests in associated undertakings                         |  |       | 19 |                 |  |      | 13     |  |  |  | 16     | 
|Interest in joint ventures                                   |  |       | 20 |                 |  |      | 25     |  |  |  | 4      | 
|Intangible fixed assets                                      |  |       | 21 |                 |  |      | 266    |  |  |  | 271    | 
|Tangible fixed assets                                        |  |       | 22 |                 |  |      | 1,209  |  |  |  | 1,234  | 
|Other assets                                                 |  |       | 23 |                 |  |      | 3,841  |  |  |  | 2,317  | 
|Prepayments and accrued income                               |  |       |    |                 |  |      | 543    |  |  |  | 591    | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|                                                             |  |       |    |                 |  |      | 84,163 |  |  |  | 81,670 | 
|Life assurance assets attributable to
    policyholders      |  |       | 24 |                 |  |      | 5,342  |  |  |  | 5,655  | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|                                                             |  |       |    |                 |  |      | 89,505 |  |  |  | 87,325 | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|LIABILITIES                                                  |  |       |    |                 |  |      |        |  |  |  |        | 
|Deposits by banks                                            |  |       | 25 |                 |  |      | 12,617 |  |  |  | 12,583 | 
|Customer accounts                                            |  |       | 26 |                 |  |      | 48,496 |  |  |  | 51,111 | 
|Debt securities in issue                                     |  |       | 27 |                 |  |      | 9,652  |  |  |  | 6,374  | 
|Items in the course of transmission to other banks           |  |       |    |                 |  |      | 136    |  |  |  | 152    | 
|Other liabilities                                            |  |       | 28 |                 |  |      | 5,453  |  |  |  | 3,633  | 
|Accruals and deferred income                                 |  |       |    |                 |  |      | 541    |  |  |  | 672    | 
|Provisions for liabilities and charges                       |  |       |    |                 |  |      |        |  |  |  |        | 
| deferred taxation                                          |  |       | 29 |                 |  |      | 54     |  |  |  | 89     | 
| other                                                      |  |       | 30 |                 |  |      | 189    |  |  |  | 159    | 
|Subordinated liabilities                                     |  |       | 31 |                 |  |      | 2,703  |  |  |  | 2,524  | 
|Minority interests                                           |  |       |    |                 |  |      |        |  |  |  |        | 
| equity                                                     |  |       |    |                 |  |      | 54     |  |  |  | 91     | 
| non equity                                                 |  |       | 32 |                 |  |      | 73     |  |  |  | 82     | 
|Called up capital stock                                      |  |       | 33 |                 |  |      | 679    |  |  |  | 679    | 
|Stock premium account                                        |  |       | 34 |                 |  |      | 770    |  |  |  | 773    | 
|Capital reserve                                              |  |       | 34 |                 |  |      | 436    |  |  |  | 397    | 
|Profit and loss account                                      |  |       | 34 |                 |  |      | 2,129  |  |  |  | 2,143  | 
|Revaluation reserve                                          |  |       | 34 |                 |  |      | 181    |  |  |  | 208    | 
|Stockholders funds including non equity
    interests       |  |       |    |                 |  |      | 4,195  |  |  |  | 4,200  | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|Life assurance liabilities attributable to
    policyholders |  |       | 24 |                 |  |      | 5,342  |  |  |  | 5,655  | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 
|                                                             |  |       |    |                 |  |      | 89,505 |  |  |  | 87,325 | 
|                                                             |  |       |    |                 |  |      |        |  |  |  |        | 

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-6



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED BALANCE SHEET

MEMORANDUM ITEMS

|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 
|-------------------------------------------------------- |  | ----- | -- | --------------- |  | ---- | ------ |  |  |  | ------ | 
|                                                         |  |       |    |                
|                                                         |  |       |    | At March 31,   
|                                                         |  |       |    |                
|                                                         |  | Notes |    | 2003            |  | 2002
|                                                         |  |       |    |                 |  |     
|                                                         |  |       |    |                
|                                                         |  |       |    | (in  millions)
|Contingent liabilities                                   |  |       |    |                 |  |      |        |  |  |  |        | 
|Acceptances and endorsements                             |  |       |    |                 |  |      | 81     |  |  |  | 86     | 
|Guarantees and assets pledged as collateral
    security |  |       |    |                 |  |      | 1,172  |  |  |  | 1,029  | 
|Other contingent liabilities                             |  |       |    |                 |  |      | 508    |  |  |  | 496    | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 
|                                                         |  |       | 39 |                 |  |      | 1,761  |  |  |  | 1,611  | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 
|Commitments                                              |  |       | 39 |                 |  |      | 19,050 |  |  |  | 16,314 | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-7



---



##### Table of Contents



BANK OF IRELAND GROUP

OTHER PRIMARY STATEMENTS

NOTE OF HISTORICAL COST PROFIT AND
LOSS

There is no significant difference between the
results as disclosed in the profit and loss account and the
results on an unmodified historical cost basis.

RECONCILIATION OF MOVEMENT IN
STOCKHOLDERS FUNDS

|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|------------------------------------------------ |  | ----- | ----- | --------------- |  | ---- | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                 |  | Notes |       | 2003            |  | 2002 |       | 2001
|                                                 |  |       |       |                 |  |      |       |     
|                                                 |  |       |       |                
|                                                 |  |       |       | (in  millions)
|At 1 April                                       |  |       |       |                 |  |      | 4,200 |      |  |  | 3,830 |   |  |  | 3,305 |  
|Profit attributable to the ordinary stockholders |  |       |       |                 |  |      | 826   |      |  |  | 895   |   |  |  | 731   |  
|Dividends                                        |  |       | 11    |                 |  |      | (371  | )    |  |  | (333  | ) |  |  | (290  | )
|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|                                                 |  |       |       |                 |  |      | 4,655 |      |  |  | 4,392 |   |  |  | 3,746 |  
|Other recognised (losses)/gains                  |  |       |       |                 |  |      | (346  | )    |  |  | 21    |   |  |  | 33    |  
|New capital stock subscribed                     |  |       | 33,34 |                 |  |      | 5     |      |  |  | 48    |   |  |  | 51    |  
|Preference stock buyback                         |  |       | 33    |                 |  |      |      |      |  |  | (261  | ) |  |  |      |  
|Ordinary stock buyback                           |  |       | 33    |                 |  |      | (124  | )    |  |  |      |   |  |  |      |  
|Goodwill written back on disposal of subsidiary  |  |       |       |                 |  |      | 5     |      |  |  |      |   |  |  |      |  
|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|At 31 March                                      |  |       |       |                 |  |      | 4,195 |      |  |  | 4,200 |   |  |  | 3,830 |  
|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|Stockholders funds:                             |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|Equity                                           |  |       |       |                 |  |      | 4,130 |      |  |  | 4,132 |   |  |  | 3,618 |  
|Non equity                                       |  |       |       |                 |  |      | 65    |      |  |  | 68    |   |  |  | 212   |  
|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  
|                                                 |  |       |       |                 |  |      | 4,195 |      |  |  | 4,200 |   |  |  | 3,830 |  
|                                                 |  |       |       |                 |  |      |       |      |  |  |       |   |  |  |       |  

STATEMENT OF TOTAL RECOGNISED GAINS AND
LOSSES

|                                                 |  |       |       |                 |  |      |      |      |  |  |     |   |  |  |     |  
|------------------------------------------------ |  | ----- | ----- | --------------- |  | ---- | ---- | ---- |  |  | --- | - |  |  | --- | -
|                                                 |  | Notes |       | 2003            |  | 2002 |      | 2001
|                                                 |  |       |       |                 |  |      |      |     
|                                                 |  |       |       |                
|                                                 |  |       |       | (in  millions)
|Profit attributable to the ordinary stockholders |  |       |       |                 |  |      | 826  |      |  |  | 895 |   |  |  | 731 |  
|Exchange adjustments                             |  |       | 33,34 |                 |  |      | (346 | )    |  |  | 23  |   |  |  | (52 | )
|Revaluation of property                          |  |       |       |                 |  |      |     |      |  |  |    |   |  |  | 85  |  
|Tax effect of disposal of revalued property      |  |       |       |                 |  |      |     |      |  |  | (2  | ) |  |  |    |  
|                                                 |  |       |       |                 |  |      |      |      |  |  |     |   |  |  |     |  
|Total recognised gains for the year              |  |       |       |                 |  |      | 480  |      |  |  | 916 |   |  |  | 764 |  
|Prior year adjustments                           |  |       |       |                 |  |      |     |      |  |  | 32  |   |  |  |    |  
|                                                 |  |       |       |                 |  |      |      |      |  |  |     |   |  |  |     |  
|Total recognised gains since last annual report  |  |       |       |                 |  |      | 480  |      |  |  | 948 |   |  |  | 764 |  
|                                                 |  |       |       |                 |  |      |      |      |  |  |     |   |  |  |     |  

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-8



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS EQUITY

|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|------------------------------------------------ |  | ----- | -- | -------------------- |  | ---- | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                 |  |       |    |                     
|                                                 |  |       |    | Year ended March 31,
|                                                 |  |       |    |                     
|                                                 |  | Notes |    | 2003                 |  | 2002 |       | 2001
|                                                 |  |       |    |                      |  |      |       |     
|                                                 |  |       |    |                     
|                                                 |  |       |    | (in  millions)     
|Preference stock                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 7     |      |  |  | 21    |   |  |  | 22    |  
|Exchange adjustments                             |  |       |    |                      |  |      |      |      |  |  |      |   |  |  | (1    | )
|Preference stock buyback                         |  |       |    |                      |  |      |      |      |  |  | (14   | ) |  |  |      |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 33 |                      |  |      | 7     |      |  |  | 7     |   |  |  | 21    |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Ordinary stock                                   |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 672   |      |  |  | 670   |   |  |  | 668   |  
|Stock alternative scheme issue                   |  |       |    |                      |  |      |      |      |  |  | 2     |   |  |  | 2     |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 33 |                      |  |      | 672   |      |  |  | 672   |   |  |  | 670   |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Stock premium                                    |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 773   |      |  |  | 726   |   |  |  | 679   |  
|Premium on issue of capital stock                |  |       |    |                      |  |      | 5     |      |  |  | 7     |   |  |  | 9     |  
|Premium on stock alternative scheme issue        |  |       |    |                      |  |      |      |      |  |  | 39    |   |  |  | 40    |  
|Exchange adjustments                             |  |       |    |                      |  |      | (8    | )    |  |  | 1     |   |  |  | (2    | )
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 34 |                      |  |      | 770   |      |  |  | 773   |   |  |  | 726   |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Capital reserve                                  |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 397   |      |  |  | 311   |   |  |  | 232   |  
|Exchange adjustments                             |  |       |    |                      |  |      | (5    | )    |  |  |      |   |  |  |      |  
|Transfer from revenue reserves                   |  |       |    |                      |  |      | 44    |      |  |  | 73    |   |  |  | 101   |  
|Capital Redemption Reserve Fund                  |  |       |    |                      |  |      |      |      |  |  | 14    |   |  |  |      |  
|Transfer to revenue reserves                     |  |       |    |                      |  |      |      |      |  |  | (1    | ) |  |  | (22   | )
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 34 |                      |  |      | 436   |      |  |  | 397   |   |  |  | 311   |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Profit and loss account                          |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 2,143 |      |  |  | 1,850 |   |  |  | 1,536 |  
|Profit attributable to the ordinary stockholders |  |       |    |                      |  |      | 826   |      |  |  | 895   |   |  |  | 731   |  
|Transfer to Capital Reserve                      |  |       |    |                      |  |      | (44   | )    |  |  | (87   | ) |  |  | (101  | )
|Ordinary dividends                               |  |       |    |                      |  |      | (371  | )    |  |  | (333  | ) |  |  | (290  | )
|Transfer from capital reserve                    |  |       |    |                      |  |      |      |      |  |  | 1     |   |  |  | 22    |  
|Ordinary stock buyback                           |  |       |    |                      |  |      | (124  | )    |  |  |      |   |  |  |      |  
|Exchange adjustments                             |  |       |    |                      |  |      | (328  | )    |  |  | 21    |   |  |  | (48   | )
|Preference stock buyback                         |  |       |    |                      |  |      |      |      |  |  | (247  | ) |  |  |      |  
|Transfer from revaluation reserve                |  |       |    |                      |  |      | 22    |      |  |  | 45    |   |  |  |      |  
|Tax effect of disposal of revalued property      |  |       |    |                      |  |      |      |      |  |  | (2    | ) |  |  |      |  
|Goodwill written back on disposal of subsidiary  |  |       |    |                      |  |      | 5     |      |  |  |      |   |  |  |      |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 34 |                      |  |      | 2,129 |      |  |  | 2,143 |   |  |  | 1,850 |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Revaluation reserve                              |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At April 1                                       |  |       |    |                      |  |      | 208   |      |  |  | 252   |   |  |  | 168   |  
|Revaluation of property                          |  |       |    |                      |  |      |      |      |  |  |      |   |  |  | 85    |  
|Exchange adjustments                             |  |       |    |                      |  |      | (5    | )    |  |  | 1     |   |  |  | (1    | )
|Transfer to revenue reserve on sale of property  |  |       |    |                      |  |      | (22   | )    |  |  | (45   | ) |  |  |      |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|At March 31                                      |  |       | 34 |                      |  |      | 181   |      |  |  | 208   |   |  |  | 252   |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  
|Total stockholders funds                        |  |       |    |                      |  |      | 4,195 |      |  |  | 4,200 |   |  |  | 3,830 |  
|                                                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  |       |  

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-9



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED CASH FLOW STATEMENT

|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  
|---------------------------------------------- |  | ----- | -- | -------------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                               |  |       |    |                     
|                                               |  |       |    | Year ended March 31,
|                                               |  |       |    |                     
|                                               |  | Notes |    | 2003                 |  | 2002 |        | 2001
|                                               |  |       |    |                      |  |      |        |     
|                                               |  |       |    |                     
|                                               |  |       |    | (in  millions)     
|Net cash flow from operating
    activities    |  |       | 42 |                      |  |      | 1,109  |      |  |  | 3,783  |   |  |  | 2,069  |  
|Dividend received from associated undertaking  |  |       |    |                      |  |      |       |      |  |  | 10     |   |  |  | 8      |  
|Returns on investment and servicing of finance |  |       | 42 |                      |  |      | (181   | )    |  |  | (183   | ) |  |  | (189   | )
|Taxation                                       |  |       |    |                      |  |      | (180   | )    |  |  | (153   | ) |  |  | (142   | )
|Deposit Interest Retention Tax                 |  |       |    |                      |  |      |       |      |  |  |       |   |  |  | (39    | )
|Capital expenditure and financial investment   |  |       | 42 |                      |  |      | (1,367 | )    |  |  | (2,427 | ) |  |  | (1,127 | )
|Acquisitions and disposals                     |  |       | 42 |                      |  |      | (172   | )    |  |  | (244   | ) |  |  | (228   | )
|Equity dividends paid                          |  |       |    |                      |  |      | (349   | )    |  |  | (271   | ) |  |  | (210   | )
|Financing                                      |  |       | 42 |                      |  |      | 205    |      |  |  | (253   | ) |  |  | 660    |  
|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  
|(Decrease)/Increase in cash in the
    year    |  |       |    |                      |  |      | (935   | )    |  |  | 262    |   |  |  | 802    |  
|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  

The notes on pages F-11 to
F-102

form an integral part of these consolidated
financial statements


F-10



---



##### Table of Contents



BANK OF IRELAND GROUP

NOTES ON THE FINANCIAL STATEMENTS

1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES

1.1 Accounting Convention

The financial statements have been prepared under
the historical cost convention as modified by the revaluation of
certain properties and investments, in accordance with the
Companies Acts, 1963 to 2001 and the European Communities
(Credit Institutions: Accounts) Regulations, 1992 and with
applicable accounting standards. The accounts are drawn up in
euro () and
except where otherwise indicated are expressed in millions.
Costs, assets and liabilities are inclusive of irrecoverable
value added taxes, where appropriate. Accounting standards
generally accepted in Ireland in preparing financial statements
giving a true and fair view are those published by the Institute
of Chartered Accountants in Ireland and issued by the Accounting
Standards Board.

The Group has adopted the transitional
arrangements for FRS 17, Post Retirement
Benefits and the related disclosures are detailed in
Note 35.

1.2 Change in Accounting Policy

As now permitted by a recent change in the
European Communities (Credit Institutions Accounts) Regulations,
1992 and in order to present trading revenues in accordance with
common practice in treasury and trading book operations, dealing
profits now include all profits and losses relating to treasury
activities, including interest and dividends arising from long
and short positions and funding costs and associated fees
receivable and payable. The comparative balances have also been
restated. There is no impact on total operating income, costs,
profit before tax or stockholders funds.

1.3 Basis of Consolidation

Assets, liabilities and results of all group
undertakings have been included in the Groups accounts on
the basis of accounts made up to the end of the financial year.

In order to reflect the different nature of the
policyholders interests in the long-term assurance
business, the assets and liabilities attributable to
policyholders are classified separately in the Group balance
sheet.

Assets held by the Bank and certain group
undertakings in their capacity as trustee and manager for
investment trusts, pension schemes and unit trusts are not
consolidated in the Group accounts as the Group does not have
beneficial ownership.

1.4 Foreign Currency
Translation

Assets and liabilities in foreign currencies are
translated into euro at rates of exchange ruling at the balance
sheet date or at hedge rates where appropriate. Exchange
differences, arising from the application of closing rates of
exchange to the opening net assets held in foreign currencies
and to related foreign currency borrowings are taken directly to
reserves. Profits and losses in foreign currencies are
translated into euro at the average rates of exchange for the
year or at hedge rates where appropriate and the differences
between these rates and closing rates are recorded as a movement
in reserves. All other exchange profits and losses, which arise
from normal trading activities, are included in operating
profits.

The principal rates of exchange used in the
preparation of the accounts are as follows:

|       |  |               |        |               |  |       |        |         |  |         |   |       |  |  |        |  |  |  |        |  |  |  |        | 
|------ |  | ------------- | ------ | ------------- |  | ----- | ------ | ------- |  | ------- | - | ----- |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|       |  |               |        |              
|       |  | 31 March 2003 |        | 31 March 2002
|       |  |               |        |              
|       |  | Closing       |        | Average       |  | Hedge |        | Closing |  | Average |   | Hedge
|       |  |               |        |               |  |       |        |         |  |         |   |      
|/US$  |  |               | 1.0895 |               |  |       | 1.0051 |         |  |         |  |       |  |  | 0.8724 |  |  |  | 0.8804 |  |  |  |       | 
|/Stg£ |  |               | 0.6896 |               |  |       | 0.6460 |         |  |         |  |       |  |  | 0.6130 |  |  |  | 0.6145 |  |  |  | 0.6487 | 

F-11



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


1.5 Income Recognition

Interest income is recognised as it accrues.
Interest is accounted for on a cash receipts basis where the
recovery of such interest is considered to be remote. Fees
receivable which represent a return for services provided, risk
borne or which are in the nature of interest are credited to
income when the service is performed or over the period of the
product as appropriate.

1.6 Mortgage Incentives

Mortgage interest discounts below the cost of
funds and cashbacks are capitalised in other assets when there
is a right and intention to recover the incentive in the event
of early redemption. The amount capitalised is charged against
interest received in the profit and loss account on a straight
line basis over the period of the clawback and early redemption
penalty period.

1.7 Leasing and Instalment
Finance

Leasing income is recognised in proportion to the
funds invested in the lease so as to give a constant rate of
return over each period after taking account of taxation cash
flows. Income from instalment finance transactions, including
hire purchase finance, is recognised in proportion to the
balances outstanding.

1.8 Debt Securities and Equity
Shares

Investment Securities

Debt securities and equity shares held for use on
a continuing basis in the Groups activities are classified
as investment securities. Such securities and shares are stated
at cost less provision for any permanent diminution in value.
The cost of dated securities is adjusted for the amortisation of
premiums or discounts over the period to maturity. The
amortisation of premiums or discounts is included in interest
income. In those rare instances where an investment security is
sold prior to maturity, profits and losses are recognised when
realised.

Other Securities

Other securities are stated at fair value using
mid-market values, except for those securities maintained for
the purpose of hedging, which are accounted for on the same
basis as the item hedged. Changes in the fair value of
securities marked to market are recognised in the profit and
loss account as they arise and included in dealing profits.
Profits and losses on disposal are recognised when realised and
included in dealing profits, except for those securities
maintained for hedging purposes, which are amortised over the
lives of the underlying transactions and included in net
interest income.

1.9 Derivatives

Derivative instruments used for trading purposes
or used to manage risk in the trading portfolios include swaps,
futures, forwards, forward rate agreements and options contracts
in the interest rate, foreign exchange and equity markets. These
derivatives, which include all customer and proprietary
transactions together with any associated hedges are measured at
fair value and the resultant profits and losses are included in
dealing profits. In the event of a market price not being
readily available internally generated prices will be used.
These prices are calculated using recognised formulae for the
type of transaction. Unrealised gains and losses are reported in
Other Assets or Other Liabilities on a gross basis.

Derivatives used for hedging purposes include
swaps, forwards, futures, forward rate agreements and options in
interest rate, foreign exchange and equity markets. Gains and
losses on these derivatives which are entered into

F-12



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


for specifically designated hedging purposes
against assets, liabilities, other positions and cash flows
accounted for on an accruals basis, are taken to the profit and
loss account in accordance with the accounting treatment of the
underlying transaction. Accrued income or expense is reported in
prepayments and accrued income or accruals and deferred income
on a gross basis. Profits and losses related to qualifying
hedges of firm commitments and anticipated transactions are
deferred and taken to the profit and loss account when the
hedged transactions occur.

The criteria required for a derivative instrument
to be classified as a designated hedge are:



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  | Adequate evidence of the intention to hedge must
    be established at the outset of the transaction.                                                                                                                                                                                                                                                                                                                              
|
| | (ii) | The transaction must match or eliminate a
    proportion of the risk inherent in the assets, liabilities,
    positions or cash flows being hedged and which results from
    potential movements in interest rates, exchange rates or market
    prices. Changes in the derivatives fair value must be highly
    correlated with changes in the fair value of the underlying
    hedged item for the entire life of the contract.

Where these criteria are not met, transactions
are measured at fair value.

Hedge transactions which are superseded, cease to
be effective or are terminated early are measured at fair value.
Any profit or loss arising is deferred and reported in Other
Assets or Other Liabilities. This profit or loss is amortised
over the remaining life of the asset, liability, position or
cash flow previously being hedged.

When the underlying asset, liability or position
is terminated, or an anticipated transaction is no longer likely
to occur, the hedging transaction is measured at fair value and
any profit or loss arising is recognised in full in dealing
profits. The unrealised profit or loss is reported in Other
Assets or Other Liabilities.

1.10 Capital Instruments

Issue expenses incurred in connection with the
issue of dated capital instruments other than equity shares are
deducted from the proceeds of the issue and amortised to the
profit and loss account as appropriate. Issue expenses incurred
in connection with the issue of undated capital instruments are
deducted from the proceeds of issue and taken to the profit and
loss account at the time of redemption.

1.11 Pensions

In accordance with SSAP 24, contributions to the
Groups defined benefit schemes are charged to the profit
and loss so as to spread the expected cost of pensions,
calculated in accordance with the advice of qualified actuaries,
on a systematic basis over employees working lives.
Variations from the regular cost are spread over the average
remaining service life of relevant employees. The costs of the
Groups defined contribution schemes are charged to the
profit and loss for the period in which they are incurred.

1.12 Tangible Fixed Assets

Properties held by the Group are stated at
valuation. All freehold and long leasehold premises are revalued
every 5 years with an interim revaluation in year 3.
Computer and other equipment is stated at cost less
depreciation. Leasehold property with unexpired terms of
50 years or less is depreciated by equal annual instalments
over the remaining period of the lease. Freehold and long
leasehold property is maintained in a state of good repair and
the Directors consider that residual values based on prices
prevailing at the time of acquisition or subsequent valuation
are such that depreciation is not material, accordingly this
property is not depreciated. Depreciation on adaptation works on
freehold and leasehold property is based on an estimated useful
life subject to a maximum period of 15 years or the
remaining period of the lease. Computer and other equipment is
depreciated by equal annual instalments over its estimated
useful life subject to a maximum period of 10 years.

F-13



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


1.13 Provision for Bad and Doubtful
Debts

Group policy is to provide for bad and doubtful
debts to reflect the losses inherent in the loan portfolio at
the balance sheet date. There are two types of provisions,
specific and general.

Specific provisions are made for loans and
advances when the Group consider that the credit-worthiness of a
borrower has deteriorated such that the recovery of the whole or
part of an outstanding advance is in serious doubt. The amount
of the specific provision is equivalent to the amount necessary
to reduce the carrying value of the advance to its expected
ultimate net realisable value. The calculation of specific
provisions is inherently subjective and is based on the
Groups assessment of the likelihood of default and the
estimated loss arising to the Group in that instance. The
assessments are performed on an individual basis and take into
account factors such as the financial condition of the borrower,
nature and value of collateral held and the costs associated
with obtaining repayment and realisation of collateral.

For a number of the Groups retail
portfolios, which comprise small balance homogeneous loans,
specific provisions are calculated based on formulae driven
approaches taking into account factors such as the length of
time that payments from borrowers are overdue and historic loan
loss experience.

A general provision is also made against loans
and advances to cover latent loan losses which are known from
experience to be present in any portfolio of loans and advances
but have yet to be specifically identified. Grading systems are
used to rate the credit quality of borrowers. Part of the
general provision is calculated by reference to the underlying
grade profile of the loan book. The non-designated specific
provision which is an integral part of the Groups general
loan loss provisioning methodology is calculated based on
estimated rates of loss taking cognisance of historic loss
experience by loan type/sector and the prevailing economic
climate.

The aggregate specific and general provisions
which are made during the year, less amounts released and net of
recoveries of loans previously written off, are charged against
profits for the year. Loans and advances are stated on the
balance sheet net of aggregate specific and general provisions.

1.14 Deferred Taxation

Deferred taxation is recognised on all timing
differences where the transaction or event that gives rise to an
obligation to pay more tax in the future or a right to pay less
tax in the future, have occurred by the balance sheet date.
Deferred tax assets are recognised when it is more likely than
not that they will be recovered. Deferred tax is measured using
rates of tax that have been enacted by the balance sheet date.
Deferred taxation is not provided in respect of timing
differences arising from the sale or revaluation of fixed assets
unless, by the balance sheet date, a binding commitment to sell
the asset has been entered into and it is unlikely that the gain
will be rolled over.

1.15 Investments in Associated
Undertakings and Joint Ventures

Investments in associated undertakings are stated
at acquisition cost, together with the appropriate share of
post-acquisition reserves. Investments in joint ventures are
stated at cost together with the appropriate share of
post-acquisition reserves.

1.16 Securitisation and Loan
Transfers

Assets sold under securitisation and loan
transfers, where there is no significant change in the
Groups rights or benefits to those assets or in the
Groups exposure to the risks inherent in those assets,
continue to be consolidated on a gross basis. In cases where
there is no significant change in the rights and benefits and
the financing is limited to a fixed monetary ceiling, only the
net amount is consolidated using the linked presentation and the
related gross amounts are shown on the face of the balance sheet.

F-14



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


1.17 Goodwill

Goodwill is a premium arising on acquisition
which represents the excess of cost over fair value of the
Groups share of net tangible assets acquired. Premiums
arising on acquisitions of subsidiary undertakings occurring
after  31, 1998 are capitalised as assets on the balance
sheet and amortised on a straight line basis over their
estimated useful economic lives. Goodwill on acquisitions prior
to March 31, 1998 was charged against reserves in the year
of acquisition and in the event of a subsequent disposal the
goodwill would be written back and reflected in the profit and
loss account. Goodwill carried in the Group Balance Sheet is
subject to impairment review when the carrying amount may not be
recoverable and is written down by the amount of any impairment
loss identified in the year.

1.18 Life Assurance Operations

The Group accounts for the value of the
shareholders interest in long-term assurance business
using the embedded value method of accounting. The embedded
value is comprised of the net tangible and financial assets of
the life assurance business, including any surpluses retained
within the long-term business fund and the present value of its
in-force business. The value of the shareholders interest
in in-force business is calculated annually in consultation with
independent actuaries. The calculation projects future surpluses
and other net cash flows, attributable to the shareholder
arising from business written up to the balance sheet date,
using prudent best estimates of economic and actuarial
assumptions, as set out in Note 24, and discounting the
result at a rate which reflects the shareholders overall
required return. The value is computed in accordance with bases
accepted in the life assurance market.

Changes in embedded value, which are determined
on a post tax basis, are included in the profit and loss
account. For the purposes of presentation the change in this
value is grossed up for tax at the effective tax rate.

The assets held within the long-term business
funds are legally owned by Bank of Ireland Life Holdings plc,
however the shareholder will only benefit from ownership of
these assets to the extent that surpluses are declared or from
other cashflows attributable to the shareholder. Reflecting the
different nature of these assets, they are classified separately
on the Groups balance sheet as Life assurance assets
attributable to the policyholders with a corresponding
liability to the policyholders also shown. Investments held
within the long-term business funds are set out in Note 24.
Property is valued at open market value as determined by
independent professional advisors every year, while securities
are valued at mid-market value.



|  |                   
|- | ------------------
|2 | SEGMENTAL ANALYSIS

The segmental analysis of the Groups
results and financial position is set out below by geographic
segment and by business class. For the geographic analysis
Republic of Ireland includes profits generated in the
International Financial Services Centre. Turnover is defined as
interest income, non interest income and income from associates
and joint ventures. Turnover by business class is not shown. The
Group has six business classes. The analysis of results by
business class is based on management accounts information. Net
assets are included below in order to comply with SSAP 25. The
segmental allocation of liabilities necessitates the allocation
of capital on a risk related basis which is in some cases
necessarily subjective. The basis of capital allocation to
segments is based on an economic capital basis which
incorporates a broader range of business risks. The Directors
believe that it is more meaningful to analyse total assets and
the result of this analysis is therefore also included in the
tables.

F-15



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                                    
|- | -----------------------------------
|2 | SEGMENTAL
    ANALYSIS  (continued)

(a)  Geographical segment

|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|------------------------------- |  | --------------- | ------ | ------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------- | -
|                                |  |                
|                                |  | 2003           
|                                |  |                
|                                |  | Republic of     |        | United  |  | Rest of |        |      
|                                |  | Ireland         |        | Kingdom |  | World   |        | Total
|                                |  |                 |        |         |  |         |        |      
|                                |  |                
|                                |  | (in  millions)
|Turnover                        |  |                 | 2,621  |         |  |         | 2,272  |       |  |  | 148   |  |  |  | 5,041   |  
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before exceptional items |  |                 | 869    |         |  |         | 319    |       |  |  | 43    |  |  |  | 1,231   |  
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Exceptional items               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (164    | )
|Grossing up(1)                  |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (54     | )
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before taxation          |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | 1,013   |  
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Net assets                      |  |                 | 2,373  |         |  |         | 1,448  |       |  |  | 374   |  |  |  | 4,195   |  
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Total assets(2)                 |  |                 | 71,237 |         |  |         | 38,941 |       |  |  | 2,224 |  |  |  | 112,402 |  
|                                |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  

|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|------------------------------ |  | --------------- | ------ | ------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------- | -
|                               |  |                
|                               |  | 2002           
|                               |  | (restated)     
|                               |  |                
|                               |  | Republic of     |        | United  |  | Rest of |        |      
|                               |  | Ireland         |        | Kingdom |  | World   |        | Total
|                               |  |                 |        |         |  |         |        |      
|                               |  |                
|                               |  | (in  millions)
|Turnover                       |  |                 | 2,751  |         |  |         | 2,470  |       |  |  | 128   |  |  |  | 5,349   |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before exceptional item |  |                 | 878    |         |  |         | 268    |       |  |  | 32    |  |  |  | 1,178   |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Group Transformation Program   |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (37     | )
|Grossing up(1)                 |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (56     | )
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before taxation         |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | 1,085   |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Net assets                     |  |                 | 2,418  |         |  |         | 1,618  |       |  |  | 164   |  |  |  | 4,200   |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Total assets(2)                |  |                 | 63,357 |         |  |         | 42,819 |       |  |  | 2,185 |  |  |  | 108,361 |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |         |  

|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|------------------------------ |  | --------------- | ------ | ------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------ | -
|                               |  |                
|                               |  | 2001           
|                               |  | (restated)     
|                               |  |                
|                               |  | Republic of     |        | United  |  | Rest of |        |      
|                               |  | Ireland         |        | Kingdom |  | World   |        | Total
|                               |  |                 |        |         |  |         |        |      
|                               |  |                
|                               |  | (in  millions)
|Turnover                       |  |                 | 2,471  |         |  |         | 2,639  |       |  |  | 177   |  |  |  | 5,287  |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|                               |  |                 | 813    |         |  |         | 282    |       |  |  | 36    |  |  |  | 1,131  |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|Profit before exceptional item |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|Group Transformation Programme |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (93    | )
|Grossing up(1)                 |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | (46    | )
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|Profit before taxation         |  |                 |        |         |  |         |        |       |  |  |       |  |  |  | 992    |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|Net assets                     |  |                 | 2,274  |         |  |         | 1,404  |       |  |  | 152   |  |  |  | 3,830  |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  
|Total assets(2)                |  |                 | 57,039 |         |  |         | 37,739 |       |  |  | 2,304 |  |  |  | 97,082 |  
|                               |  |                 |        |         |  |         |        |       |  |  |       |  |  |  |        |  

F-16



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                                    
|- | -----------------------------------
|2 | SEGMENTAL
    ANALYSIS  (continued)

(b) Business class

|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|---------------------------------------------------------- |  | --------------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------- |  | ----- | ------ |  |  |  | ----- |  |  |  | ----- | - |  |  | ------- | -
|                                                           |  |                
|                                                           |  | 2003           
|                                                           |  |                
|                                                           |  | Retail          |        |      |  | Wholesale |       | UK        |  | Asset      |        | Group   |  |      
|                                                           |  | Republic        |        | BOI  |  | Financial |       | Financial |  | Management |        | and     |  |      
|                                                           |  | of Ireland      |        | Life |  | Services  |       | Services  |  | Services   |        | Central |  | Total
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |      
|                                                           |  |                
|                                                           |  | (in  millions)
|Net interest income                                        |  |                 | 841    |      |  |           |      |           |  |            | 294    |         |  |       | 615    |  |  |  | 5     |  |  |  | 1     |   |  |  | 1,756   |  
|Other income                                               |  |                 | 242    |      |  |           | 87    |           |  |            | 351    |         |  |       | 271    |  |  |  | 233   |  |  |  | 31    |   |  |  | 1,215   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Total operating income                                     |  |                 | 1,083  |      |  |           | 87    |           |  |            | 645    |         |  |       | 886    |  |  |  | 238   |  |  |  | 32    |   |  |  | 2,971   |  
|Administrative expenses                                    |  |                 | 655    |      |  |           |      |           |  |            | 255    |         |  |       | 513    |  |  |  | 125   |  |  |  | 114   |   |  |  | 1,662   |  
|Provision for bad and doubtful debts                       |  |                 | 51     |      |  |           |      |           |  |            | 28     |         |  |       | 21     |  |  |  |      |  |  |  |      |   |  |  | 100     |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Operating Profit                                           |  |                 | 377    |      |  |           | 87    |           |  |            | 362    |         |  |       | 352    |  |  |  | 113   |  |  |  | (82   | ) |  |  | 1,209   |  
|Income from associated undertakings and joint
    ventures |  |                 | (2     | )    |  |           |      |           |  |            | 27     |         |  |       |       |  |  |  |      |  |  |  | (3    | ) |  |  | 22      |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Profit before exceptional items                            |  |                 | 375    |      |  |           | 87    |           |  |            | 389    |         |  |       | 352    |  |  |  | 113   |  |  |  | (85   | ) |  |  | 1,231   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Exceptional items                                          |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | (164    | )
|Grossing up(1)                                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | (54     | )
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Profit before taxation                                     |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | 1,013   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Net assets                                                 |  |                 | 1,016  |      |  |           | 88    |           |  |            | 652    |         |  |       | 1,467  |  |  |  | 344   |  |  |  | 628   |   |  |  | 4,195   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Total assets(2)                                            |  |                 | 28,269 |      |  |           | 5,728 |           |  |            | 51,241 |         |  |       | 31,222 |  |  |  | 1,611 |  |  |  | 7,618 |   |  |  | 125,689 |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  
|Total Risk Weighted Assets                                 |  |                 | 14,881 |      |  |           |      |           |  |            | 19,669 |         |  |       | 19,512 |  |  |  | 143   |  |  |  | 422   |   |  |  | 54,627  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |         |  

F-17



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                                    
|- | -----------------------------------
|2 | SEGMENTAL
    ANALYSIS  (continued)

|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|---------------------------------------------------------- |  | --------------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------- |  | ----- | ------ |  |  |  | --- |  |  |  | ----- | - |  |  | ------- | -
|                                                           |  |                
|                                                           |  | 2002           
|                                                           |  | (restated)     
|                                                           |  |                
|                                                           |  | Retail          |        |      |  | Wholesale |       | UK        |  | Asset      |        | Group   |  |      
|                                                           |  | Republic        |        | BOI  |  | Financial |       | Financial |  | Management |        | and     |  |      
|                                                           |  | of Ireland      |        | Life |  | Services  |       | Services  |  | Services   |        | Central |  | Total
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |      
|                                                           |  |                
|                                                           |  | (in  millions)
|Net interest income                                        |  |                 | 787    |      |  |           |      |           |  |            | 289    |         |  |       | 554    |  |  |  | 4   |  |  |  | (20   | ) |  |  | 1,614   |  
|Other income                                               |  |                 | 228    |      |  |           | 122   |           |  |            | 327    |         |  |       | 284    |  |  |  | 224 |  |  |  | 62    |   |  |  | 1,247   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total operating income                                     |  |                 | 1,015  |      |  |           | 122   |           |  |            | 616    |         |  |       | 838    |  |  |  | 228 |  |  |  | 42    |   |  |  | 2,861   |  
|Administrative expenses                                    |  |                 | 646    |      |  |           |      |           |  |            | 243    |         |  |       | 490    |  |  |  | 102 |  |  |  | 101   |   |  |  | 1,582   |  
|Provision for bad and doubtful debts                       |  |                 | 48     |      |  |           |      |           |  |            | 25     |         |  |       | 30     |  |  |  |    |  |  |  | (1    | ) |  |  | 102     |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Operating profit                                           |  |                 | 321    |      |  |           | 122   |           |  |            | 348    |         |  |       | 318    |  |  |  | 126 |  |  |  | (58   | ) |  |  | 1,177   |  
|Income from associated undertakings and joint
    ventures |  |                 |       |      |  |           |      |           |  |            | 7      |         |  |       |       |  |  |  |    |  |  |  | (6    | ) |  |  | 1       |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Profit before exceptional item                             |  |                 | 321    |      |  |           | 122   |           |  |            | 355    |         |  |       | 318    |  |  |  | 126 |  |  |  | (64   | ) |  |  | 1,178   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Group Transformation Programme                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | (37     | )
|Grossing up(1)                                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | (56     | )
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Profit before taxation                                     |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | 1,085   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Net assets                                                 |  |                 | 865    |      |  |           | 82    |           |  |            | 570    |         |  |       | 1,609  |  |  |  | 123 |  |  |  | 951   |   |  |  | 4,200   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total assets(2)                                            |  |                 | 23,427 |      |  |           | 6,028 |           |  |            | 43,538 |         |  |       | 33,338 |  |  |  | 930 |  |  |  | 5,767 |   |  |  | 113,028 |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total Risk Weighted Assets                                 |  |                 | 13,119 |      |  |           |      |           |  |            | 18,675 |         |  |       | 20,394 |  |  |  | 563 |  |  |  | 226   |   |  |  | 52,977  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  

|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|---------------------------------------------------------- |  | --------------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------- |  | ----- | ------ |  |  |  | ----- |  |  |  | ----- | - |  |  | ------ | -
|                                                           |  |                
|                                                           |  | 2001           
|                                                           |  | (restated)     
|                                                           |  |                
|                                                           |  | Retail          |        |      |  | Wholesale |       | UK        |  | Asset      |        | Group   |  |      
|                                                           |  | Republic        |        | BOI  |  | Financial |       | Financial |  | Management |        | and     |  |      
|                                                           |  | of Ireland      |        | Life |  | Services  |       | Services  |  | Services   |        | Central |  | Total
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |      
|                                                           |  |                
|                                                           |  | (in  millions)
|Net interest income                                        |  |                 | 704    |      |  |           |      |           |  |            | 215    |         |  |       | 532    |  |  |  | 7     |  |  |  |      |   |  |  | 1,458  |  
|Other income                                               |  |                 | 206    |      |  |           | 131   |           |  |            | 296    |         |  |       | 247    |  |  |  | 220   |  |  |  | 25    |   |  |  | 1,125  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Total operating income                                     |  |                 | 910    |      |  |           | 131   |           |  |            | 511    |         |  |       | 779    |  |  |  | 227   |  |  |  | 25    |   |  |  | 2,583  |  
|Administrative expenses                                    |  |                 | 586    |      |  |           |      |           |  |            | 215    |         |  |       | 434    |  |  |  | 94    |  |  |  | 58    |   |  |  | 1,387  |  
|Provision for bad and doubtful debts                       |  |                 | 34     |      |  |           |      |           |  |            | 17     |         |  |       | 21     |  |  |  |      |  |  |  |      |   |  |  | 72     |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Operating Profit                                           |  |                 | 290    |      |  |           | 131   |           |  |            | 279    |         |  |       | 324    |  |  |  | 133   |  |  |  | (33   | ) |  |  | 1,124  |  
|Income from associated undertakings and joint
    ventures |  |                 |       |      |  |           |      |           |  |            | 4      |         |  |       |       |  |  |  |      |  |  |  | 3     |   |  |  | 7      |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Profit before exceptional item                             |  |                 | 290    |      |  |           | 131   |           |  |            | 283    |         |  |       | 324    |  |  |  | 133   |  |  |  | (30   | ) |  |  | 1,131  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Group Transformation Program                               |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | (93    | )
|Grossing up(1)                                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | (46    | )
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Profit before taxation                                     |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  | 992    |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Net assets                                                 |  |                 | 733    |      |  |           | 71    |           |  |            | 451    |         |  |       | 1,385  |  |  |  | 117   |  |  |  | 1,073 |   |  |  | 3,830  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Total assets(2)                                            |  |                 | 19,449 |      |  |           | 5,305 |           |  |            | 38,573 |         |  |       | 30,575 |  |  |  | 1,020 |  |  |  | 5,051 |   |  |  | 99,973 |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  
|Total Risk Weighted Assets                                 |  |                 | 11,525 |      |  |           |      |           |  |            | 16,137 |         |  |       | 18,288 |  |  |  | 494   |  |  |  | 201   |   |  |  | 46,645 |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |       |  |  |  |       |   |  |  |        |  




F-18



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                                    
|- | -----------------------------------
|2 | SEGMENTAL
    ANALYSIS  (continued)



|    |                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Group undertakes tax based transactions at
    rates which are less than normal market rates in return for tax
    relief arising from incentives for industrial development and
    other reliefs. To assist in making valid comparison of pre-tax
    performance, the analysis of business unit performance is
    grossed up.
|   
|(2) | Total assets include intra-group items of
    22,897 million
    (2002:
    21,036 million;
    2001:
    18,207 million)
    in geographic segments and
    36,184 million
    (2002:
    25,703 million;
    2001:
    21,098 million)
    in business class.                                                                



|  |             
|- | ------------
|3 | ACQUISITIONS



|    |        
|--- | -------
|(a) | Iridian

On September 6, 2002 Bank of Ireland
announced that its wholly owned subsidiary, BIAM (US), Inc.
acquired a 61% interest in Iridian Asset Management LLC
(Iridian) for a consideration of $177m
(178.5m) and
deferred contingent consideration of up to $21.25m
(21.4m)
dependent on net client gains and losses in the first two years
post completion of this acquisition.

The Bank has the ability, if it wishes, to
acquire the remaining 39% over the subsequent five year period
via a series of call options exercisable each year in broadly
equal stakes at a pre-agreed market multiple of profits of the
business at the time of purchase of each individual stake. Each
year the Bank may purchase any available stakes not previously
purchased.

The Iridian members have a similar series of put
options applying the same price formula. The put and call
options are mismatched as to timing and consequently price with
yearly intervals between when the Bank can exercise each call
option followed by when the members can put the corresponding
stake.

The acquisition is being treated as a piecemeal
acquisition as, in the Directors view, the risks and
rewards of ownership over the 39% have not passed to the Bank
and, given the mismatched put and call mechanism there is
uncertainty as to the exercise of, and therefore the timing of,
either the put or call options. In the interim the remaining
members will have a continuing economic interest in Iridian,
including the right to any distributions declared.

As part of the transaction, the Bank also entered
into an obligation to acquire subsequent interests, which will
be issued to employees by Iridian in satisfaction of certain
pre-existing appreciation entitlements. These rights will vest
over years four through seven post acquisition. Consideration
will be linked to the increase in profitability of the company
over the period and the Bank estimates that this consideration
will amount to $8.2m
(8.3m).

As analysed below the acquisition gave rise to
goodwill of US$184.8m
(186.3m) which
has been capitalised and will be written off to the profit and
loss account over its useful estimated life of 15 years.

F-19



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                          
|- | -------------------------
|3 | ACQUISITIONS  (continued)

|                              |  |      |       |    |  |  |       |  
|----------------------------- |  | ---- | ----- | -- |  |  | ----- | -
|                              |  | US$m |       | m
|                              |  |      |       |   
|Debtors                       |  |      | 13.0  |    |  |  | 13.1  |  
|Cash at Bank and in Hand      |  |      | 10.0  |    |  |  | 10.1  |  
|Tangible Fixed Assets         |  |      | 0.5   |    |  |  | 0.5   |  
|Creditors Due Within One Year |  |      | (13.0 | )  |  |  | (13.1 | )
|Other Liabilities             |  |      | (0.8  | )  |  |  | (0.8  | )
|Minority Interests            |  |      | (3.8  | )  |  |  | (3.8  | )
|                              |  |      |       |    |  |  |       |  
|Net Assets acquired           |  |      | 5.9   |    |  |  | 6.0   |  
|Goodwill                      |  |      | 184.8 |    |  |  | 186.3 |  
|                              |  |      |       |    |  |  |       |  
|                              |  |      | 190.7 |    |  |  | 192.3 |  
|                              |  |      |       |    |  |  |       |  
|Consideration                 |  |      | 185.2 |    |  |  | 186.8 |  
|Costs of Acquisition          |  |      | 5.5   |    |  |  | 5.5   |  
|                              |  |      |       |    |  |  |       |  
|                              |  |      | 190.7 |    |  |  | 192.3 |  
|                              |  |      |       |    |  |  |       |  

There were no fair value adjustments to the
consolidated Balance Sheet of Iridian at September 5, 2002.

The profit before tax for Iridian for the period
January 1, 2002 to September 5, 2002 was US$22.5m
(23.0m) (year
ended December 31, 2001: US$43.5m
(48.3m)).

A summarised profit and loss account for the
period from September 6, 2002 to March 31, 2003 is as
follows:

|                   |  |      |       |    |  |  |       |  
|------------------ |  | ---- | ----- | -- |  |  | ----- | -
|                   |  | US$m |       | m
|                   |  |      |       |   
|Other income       |  |      | 28.9  |    |  |  | 28.8  |  
|Operating expenses |  |      | (15.1 | )  |  |  | (15.0 | )
|                   |  |      |       |    |  |  |       |  
|Operating profit   |  |      | 13.8  |    |  |  | 13.8  |  
|                   |  |      |       |    |  |  |       |  

(b) MX Financial Holdings
Limited

On July 31, 2001, the acquisition of MX
Financial Holdings Limited (formerly Willis National Holdings
Limited), the parent company of MX Moneyextra Financial
Solutions Limited (formerly Willis National Limited), was
completed for a cash consideration of Stg£41.4 million
(67.4 million)
including incidental costs. The results of this business have
been consolidated in full from the date of acquisition. On the
October 1 MX Moneyextra Financial Solutions Limited
acquired the business and trade of Moneyextra Limited. The
assets acquired were employed within the business of Moneyextra
Financial Solutions Limited and managed on a unified basis. It
is therefore not feasible to identify and report separately the
results of the acquired business from July 31, 2001.

As analysed below the acquisition gave rise to
goodwill on consolidation of Stg£33.3 million
(54.2 million)
which has been capitalised and will be written off to the profit
and loss account over its estimated useful life of 20 years.

F-20



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                          
|- | -------------------------
|3 | ACQUISITIONS  (continued)

There were no fair value adjustments to the
consolidated balance sheet of Willis National Holdings Limited
at July 31, 2001 which was as follows:

|                            |  |       |      |    |  |  |      |  
|--------------------------- |  | ----- | ---- | -- |  |  | ---- | -
|                            |  | Stg£m |      | m
|                            |  |       |      |   
|Loans and advances to banks |  |       | 8.8  |    |  |  | 14.3 |  
|Other assets                |  |       | 3.3  |    |  |  | 5.4  |  
|Other liabilities           |  |       | (4.0 | )  |  |  | (6.5 | )
|                            |  |       |      |    |  |  |      |  
|Net assets acquired         |  |       | 8.1  |    |  |  | 13.2 |  
|Goodwill                    |  |       | 33.3 |    |  |  | 54.2 |  
|                            |  |       |      |    |  |  |      |  
|                            |  |       | 41.4 |    |  |  | 67.4 |  
|                            |  |       |      |    |  |  |      |  
|Consideration               |  |       | 40.0 |    |  |  | 65.1 |  
|Costs of acquisition        |  |       | 1.4  |    |  |  | 2.3  |  
|                            |  |       |      |    |  |  |      |  
|                            |  |       | 41.4 |    |  |  | 67.4 |  
|                            |  |       |      |    |  |  |      |  

The consolidated profit after tax for Willis
National Holdings Limited for the period from January 1, to
July 31, 2001 was Stg£0.7 million (Year ended
December 31, 2000: Stg£0.7 million).

(c)  Chase de Vere Investments
plc

On September 11, 2000, Bank of Ireland
announced that its wholly owned subsidiary, Bristol & West
plc (Bristol & West) completed the acquisition
of Chase de Vere Holdings Limited (formerly M R Edge Holdings
Limited), the parent company of Chase de Vere Investments plc.
The acquisition was effective from August 1, 2000 and the
results of this business have been consolidated in full from the
date of acquisition.

The present value of the expected total cost of
the acquisition is Stg£122.3 million
(200.1 million).
This comprises initial consideration of
Stg£112.8 million
(184.6 million)
including incidental expenses, and deferred consideration of
Stg£9.5 million,
(15.5 million).
The deferred consideration can range from nil to
Stg£22.5 million
(36.8 million)
dependent on the performance of Chase de Vere investments plc
over the three year period to December 31, 2002.

As analysed below the acquisition gave rise to
goodwill on consolidation of Stg£112.9 million
(184.7 million)
which, has been capitalised and will be written off to the
profit and loss account over its estimated useful life of
20 years.

F-21



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                          
|- | -------------------------
|3 | ACQUISITIONS  (continued)

There were no fair value adjustments to the
consolidated balance sheet of Chase de Vere Holdings Limited
August 1, 2000 which was as follows:

|                                |  |       |       |    |  |  |       |  
|------------------------------- |  | ----- | ----- | -- |  |  | ----- | -
|                                |  | Stg£m |       | m
|                                |  |       |       |   
|Loans and advances to banks     |  |       | 9.7   |    |  |  | 15.9  |  
|Loans and advances to customers |  |       | 2.1   |    |  |  | 3.4   |  
|Other assets                    |  |       | 3.0   |    |  |  | 4.9   |  
|Other liabilities               |  |       | (5.4  | )  |  |  | (8.8  | )
|                                |  |       |       |    |  |  |       |  
|Net assets acquired             |  |       | 9.4   |    |  |  | 15.4  |  
|Goodwill                        |  |       | 112.9 |    |  |  | 184.7 |  
|                                |  |       |       |    |  |  |       |  
|                                |  |       | 122.3 |    |  |  | 200.1 |  
|                                |  |       |       |    |  |  |       |  
|Consideration                   |  |       | 119.6 |    |  |  | 195.7 |  
|Costs of acquisition            |  |       | 2.7   |    |  |  | 4.4   |  
|                                |  |       |       |    |  |  |       |  
|                                |  |       | 122.3 |    |  |  | 200.1 |  
|                                |  |       |       |    |  |  |       |  

The consolidated profit after tax for Chase de
Vere Holdings Limited for the period from January 1, 2000
to July 31, 2000 was Stg£4.9 million
(8.0 million)
(Year ended December 31, 1999: Stg£2.6 million)

A summarised consolidated profit and loss account
for the period from August 1, 2000 to March 31, 2001
is as follows:

|                     |  |       |       |    |  |  |       |  
|-------------------- |  | ----- | ----- | -- |  |  | ----- | -
|                     |  | Stg£m |       | m
|                     |  |       |       |   
|Net interest expense |  |       | (3.9  | )  |  |  | (6.4  | )
|Other income         |  |       | 21.2  |    |  |  | 34.5  |  
|Operating expenses   |  |       | (14.8 | )  |  |  | (24.1 | )
|                     |  |       |       |    |  |  |       |  
|Operating profit     |  |       | 2.5   |    |  |  | 4.0   |  
|                     |  |       |       |    |  |  |       |  

Bristol & West have included in net interest
income Stg£4.4 million
(7.2 million),
of finance costs incurred due to the acquisition.

(d) Moneyextra Limited and Moneyextra
Mortgages Limited

On December 27, 2000 the Groups
subsidiary Moneyextra Limited (formerly Great Western Financial
Services Limited) acquired the business of the Business 2
Customer (B2C) division of Moneyextra plc for a cash
consideration of Stg£25.9 million
(41.5 million).
The results of this business have been consolidated in full from
the date of acquisition. The assets acquired were employed
within the business of Moneyextra limited and managed on a
unified basis. It is therefore not feasible to identify and
report separately the results of the acquired

F-22



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|  |                          
|- | -------------------------
|3 | ACQUISITIONS  (continued)

business from December 27, 2000. The net
assets acquired, being tangible fixed assets, were
stg£0.2 million
(0.3 million).
There were no fair value adjustments made to the assets acquired.

|                     |  |       |      |    |  |  |      | 
|-------------------- |  | ----- | ---- | -- |  |  | ---- | 
|                     |  | Stg£m |      | m
|                     |  |       |      |   
|Net assets acquired  |  |       | 0.2  |    |  |  | 0.3  | 
|Goodwill             |  |       | 25.7 |    |  |  | 41.2 | 
|                     |  |       |      |    |  |  |      | 
|                     |  |       | 25.9 |    |  |  | 41.5 | 
|                     |  |       |      |    |  |  |      | 
|Consideration        |  |       | 25.4 |    |  |  | 40.7 | 
|Costs of acquisition |  |       | 0.5  |    |  |  | 0.8  | 
|                     |  |       |      |    |  |  |      | 
|                     |  |       | 25.9 |    |  |  | 41.5 | 
|                     |  |       |      |    |  |  |      | 

The goodwill on acquisition has been capitalised
and will be written off to the profit & loss account over
its estimated useful life of 10 years.

Only certain assets of Moneyextra plc were
acquired, being its B2C division. In these circumstances it is
not practical to provide details of profits or recognised gains
and losses for B2C division of Moneyextra plc for periods before
acquisition.

Moneyextra Mortgages Limited

On December 27, 2000 Bristol & West plc
completed the purchase of Moneyextra Mortgages Limited for a
cash consideration of stg£0.6 million
(1.0 million).
The goodwill on acquisition of stg£0.6 million
(1.0 million)
has been capitalised and will be written off to the profit and
loss account over its estimated useful life of 10 years.
There were no fair value adjustments to the assets acquired. The
results of the business have been consolidated in full from the
date of acquisition. The effect of the results on the Group is
not material.

4   OTHER INTEREST RECEIVABLE
AND SIMILAR INCOME

|                                |  |                      |       |      |  |      |       |  |  |  |       | 
|------------------------------- |  | -------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                |  |                     
|                                |  | Year ended March 31,
|                                |  |                     
|                                |  | 2003                 |       | 2002 |  | 2001
|                                |  |                      |       |      |  |     
|                                |  |                     
|                                |  | (in  millions)     
|Loans and advances to banks     |  |                      | 208   |      |  |      | 314   |  |  |  | 345   | 
|Loans and advances to customers |  |                      | 2,922 |      |  |      | 3,105 |  |  |  | 3,134 | 
|Finance leasing                 |  |                      | 129   |      |  |      | 138   |  |  |  | 140   | 
|Instalment credit               |  |                      | 88    |      |  |      | 80    |  |  |  | 77    | 
|                                |  |                      |       |      |  |      |       |  |  |  |       | 
|                                |  |                      | 3,347 |      |  |      | 3,637 |  |  |  | 3,696 | 
|                                |  |                      |       |      |  |      |       |  |  |  |       | 

5   INTEREST PAYABLE

|                                     |  |                      |       |            |  |            |       |  |  |  |       | 
|------------------------------------ |  | -------------------- | ----- | ---------- |  | ---------- | ----- |  |  |  | ----- | 
|                                     |  |                     
|                                     |  | Year ended March 31,
|                                     |  |                     
|                                     |  | 2003                 |       | 2002       |  | 2001      
|                                     |  |                      |       |            |  |           
|                                     |  |                      |       | (restated) |  | (restated)
|                                     |  |                     
|                                     |  | (in  millions)     
|Interest on subordinated liabilities |  |                      | 156   |            |  |            | 154   |  |  |  | 147   | 
|Other interest payable               |  |                      | 1,806 |            |  |            | 2,248 |  |  |  | 2,486 | 
|                                     |  |                      |       |            |  |            |       |  |  |  |       | 
|                                     |  |                      | 1,962 |            |  |            | 2,402 |  |  |  | 2,633 | 
|                                     |  |                      |       |            |  |            |       |  |  |  |       | 

F-23



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

6   OTHER OPERATING
INCOME

|                                            |  |      |    |                      |  |      |     |            |  |  |    |  |  |  |    | 
|------------------------------------------- |  | ---- | -- | -------------------- |  | ---- | --- | ---------- |  |  | -- |  |  |  | -- | 
|                                            |  |      |    |                     
|                                            |  |      |    | Year ended March 31,
|                                            |  |      |    |                     
|                                            |  | Note |    | 2003                 |  | 2002 |     | 2001      
|                                            |  |      |    |                      |  |      |     |           
|                                            |  |      |    |                      |  |      |     | (restated)
|                                            |  |      |    |                     
|                                            |  |      |    | (in  millions)     
|Profit on disposal of investment securities |  |      |    |                      |  |      | 5   |            |  |  | 2  |  |  |  |   | 
|Profit on disposal of tangible fixed assets |  |      |    |                      |  |      | 37  |            |  |  | 22 |  |  |  | 17 | 
|Profit on disposal of leases                |  |      |    |                      |  |      | 21  |            |  |  |   |  |  |  |   | 
|Securitisation servicing fees               |  |      | 15 |                      |  |      | 9   |            |  |  | 11 |  |  |  | 7  | 
|Other income                                |  |      |    |                      |  |      | 44  |            |  |  | 39 |  |  |  | 47 | 
|                                            |  |      |    |                      |  |      |     |            |  |  |    |  |  |  |    | 
|                                            |  |      |    |                      |  |      | 116 |            |  |  | 74 |  |  |  | 71 | 
|                                            |  |      |    |                      |  |      |     |            |  |  |    |  |  |  |    | 

7   OPERATING
EXPENSES

|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|----------------------------------------------------------- |  | ---- | -- | -------------------- |  | ---- | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                                                            |  |      |    |                     
|                                                            |  |      |    | Year ended March 31,
|                                                            |  |      |    |                     
|                                                            |  | Note |    | 2003                 |  | 2002 |       | 2001
|                                                            |  |      |    |                      |  |      |       |     
|                                                            |  |      |    |                     
|                                                            |  |      |    | (in  millions)     
|Staff Costs:                                                |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| wages and salaries                                        |  |      |    |                      |  |      | 821   |      |  |  | 802   |  |  |  | 707   | 
| social security costs                                     |  |      |    |                      |  |      | 67    |      |  |  | 72    |  |  |  | 55    | 
| pension costs                                             |  |      |    |                      |  |      | 57    |      |  |  | 39    |  |  |  | 16    | 
| staff stock issue                                         |  |      |    |                      |  |      | 9     |      |  |  | 8     |  |  |  | 16    | 
| severance packages                                        |  |      |    |                      |  |      | 1     |      |  |  | 2     |  |  |  | 1     | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|                                                            |  |      |    |                      |  |      | 955   |      |  |  | 923   |  |  |  | 795   | 
|Operating lease rentals:                                    |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| property                                                  |  |      |    |                      |  |      | 34    |      |  |  | 20    |  |  |  | 9     | 
| equipment                                                 |  |      |    |                      |  |      | 1     |      |  |  | 1     |  |  |  | 1     | 
|Other administrative expenses                               |  |      |    |                      |  |      | 490   |      |  |  | 483   |  |  |  | 452   | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total administrative expenses                               |  |      |    |                      |  |      | 1,480 |      |  |  | 1,427 |  |  |  | 1,257 | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Depreciation and amortisation:                              |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| freehold and leasehold property                           |  |      | 22 |                      |  |      | 18    |      |  |  | 15    |  |  |  | 14    | 
| computer and other equipment                              |  |      | 22 |                      |  |      | 141   |      |  |  | 125   |  |  |  | 109   | 
| amortisation of goodwill                                  |  |      | 21 |                      |  |      | 23    |      |  |  | 15    |  |  |  | 7     | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total depreciation and amortisation                         |  |      |    |                      |  |      | 182   |      |  |  | 155   |  |  |  | 130   | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total operating expenses                                    |  |      |    |                      |  |      | 1,662 |      |  |  | 1,582 |  |  |  | 1,387 | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Details of Directors remuneration are set
    out Note 41. |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 

Staff costs and other administrative expenses in
2002 and 2001 have been reclassified in line with the current
years classification.

The charge for staff stock issue represents an
amount payable to Trustees on behalf of employees to acquire an
issue of Ordinary Stock as provided pursuant to the Stock Issue
Schemes approved by the stockholders in 1984 and 1997. In 2003
the charge represents 2% of eligible employees basic
salary (2002: 2%, 2001: 3.5%).

F-24



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



7   OPERATING
EXPENSES  (continued)


Auditors remuneration (including
VAT)

|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|------------------------------------ |  | ----- | ----- | --------------- |  | ----------- | --- | ----- |  | ----- | --- | ----- |  |  | --- |  |  |  | ---- |  |  |  | ---- | 
|                                     |  |       |       |                 |  |             |     |      
|                                     |  |       |       | 2003            |  | 2002        |     | 2001 
|                                     |  |       |       |                 |  |             |     |      
|                                     |  | Notes |       | ROI             |  | Overseas(i) |     | Total |  | Total |     | Total
|                                     |  |       |       |                 |  |             |     |       |  |       |     |      
|                                     |  |       |       |                
|                                     |  |       |       | (in  millions)
|Audit and assurance services         |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|Statutory audit (including expenses) |  |       | (ii)  |                 |  |             | 1.4 |       |  |       | 0.8 |       |  |  | 2.2 |  |  |  | 2.0  |  |  |  | 1.9  | 
|Other audit and assurance services   |  |       | (iii) |                 |  |             | 1.6 |       |  |       | 1.1 |       |  |  | 2.7 |  |  |  | 1.7  |  |  |  | 1.2  | 
|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|                                     |  |       |       |                 |  |             | 3.0 |       |  |       | 1.9 |       |  |  | 4.9 |  |  |  | 3.7  |  |  |  | 3.1  | 
|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|Other services                       |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|Transaction services                 |  |       | (iv)  |                 |  |             | 0.2 |       |  |       | 0.7 |       |  |  | 0.9 |  |  |  | 0.7  |  |  |  | 0.0  | 
|Taxation services                    |  |       |       |                 |  |             | 1.0 |       |  |       | 1.8 |       |  |  | 2.8 |  |  |  | 2.5  |  |  |  | 2.2  | 
|Consultancy                          |  |       | (v)   |                 |  |             | 0.3 |       |  |       | 0.2 |       |  |  | 0.5 |  |  |  | 8.3  |  |  |  | 5.7  | 
|Other services                       |  |       |       |                 |  |             | 0.0 |       |  |       | 0.0 |       |  |  | 0.0 |  |  |  | 0.2  |  |  |  | 0.2  | 
|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|                                     |  |       |       |                 |  |             | 1.5 |       |  |       | 2.7 |       |  |  | 4.2 |  |  |  | 11.7 |  |  |  | 8.1  | 
|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 
|Total                                |  |       |       |                 |  |             | 4.5 |       |  |       | 4.6 |       |  |  | 9.1 |  |  |  | 15.4 |  |  |  | 11.2 | 
|                                     |  |       |       |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |      |  |  |  |      | 

The Audit Committee has reviewed the level of
fees and is satisfied that it has not affected the independence
of the auditors.



| |       |                                                                                                                                                                                                                             
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | Fees to overseas auditors principally consist of
    fees to PwC in the United Kingdom.                                                                                                                                     
|
| | (ii)  | Statutory audit fees include
    0.2 million
    to KPMG who are the auditors of a subsidiary company, Davy
    Stockbrokers.                                                                                              
|
| | (iii) | Other audit and assurance services consist
    primarily of fees in connection with reporting to regulators,
    SEC filings, letters of comfort and the Interim Statement review.                                          
|
| | (iv)  | Transaction services costs relate primarily to
    financial due diligence and other assignments.                                                                                                                           
|
| | (v)   | Consultancy fees relate primarily to work under
    taken as part of the Group Transformation Program (see
    Note 9). It is Group policy to subject all major
    consultancy assignments to a competitive tender process.

8   EMPLOYEE
INFORMATION

In the year ended 31 March 2003 the average
full time equivalents was 18,214 (2002: 18,438, 2001: 17,356),
categorised as follows in line with the business classes as
stated in Note 2.

|                             |  |      |        |      |  |      |        |  |  |  |        | 
|---------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                             |  | 2003 |        | 2002 |  | 2001
|                             |  |      |        |      |  |     
|Retail Republic of Ireland   |  |      | 7,501  |      |  |      | 7,702  |  |  |  | 7,927  | 
|BOI Life                     |  |      | 1,111  |      |  |      | 1,097  |  |  |  | 1,050  | 
|Wholesale Financial Services |  |      | 1,606  |      |  |      | 1,663  |  |  |  | 1,583  | 
|UK Financial Services        |  |      | 5,566  |      |  |      | 5,369  |  |  |  | 4,729  | 
|Asset Management Services    |  |      | 673    |      |  |      | 662    |  |  |  | 639    | 
|Group and Central            |  |      | 1,757  |      |  |      | 1,945  |  |  |  | 1,428  | 
|                             |  |      |        |      |  |      |        |  |  |  |        | 
|                             |  |      | 18,214 |      |  |      | 18,438 |  |  |  | 17,356 | 
|                             |  |      |        |      |  |      |        |  |  |  |        | 

F-25



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



8   EMPLOYEE
INFORMATION  (continued)


The staff costs in Note 7 are exclusive of
staff costs relating to the life assurance business. The
contribution from the life assurance business shown in the
Consolidated Statement of Income on page F-4 is net of
these staff costs.

9   EXCEPTIONAL ITEMS



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A) | Active Business Services was disposed of,
    resulting in a loss on disposal of
    12.4m.                                                                                                                                                                                                                                                                                                                                       
|
| | B) | On September 30, 2002 the Group terminated
    its joint venture with Perot Systems and reorganised the IT
    business within the Group and the costs associated with this
    reorganisation amounted to
    8.6m.                                                                                                                                                                                                              
|
| | C) | Following a fundamental review of the Independent
    Financial Advice operations in Bristol & West, the Group has
    decided to combine the operations of two of its subsidiaries,
    namely Chase de Vere Investments plc and MX Moneyextra Financial
    Solutions Ltd. The merger, and consequent restructuring, was
    announced by the Group on February 24, 2003 and is planned
    to be fully effective during 2003/04.

The carrying value of the two companies at
March 31, 2003 have been compared to their recoverable
amounts, represented by their value in use to the Group. As part
of this review it has been recognised that the carrying value of
goodwill relating to these businesses has been impaired to the
extent of Stg£80m
(123.8m). This
charge has been calculated by reference to the post tax cash
flows that are projected to arise from the merged business over
the estimated remaining life of the goodwill, discounted at a
rate of 9.5%.

Also included in the exceptional item is
Stg£7.8m
(12.1m) in
respect of the projected costs of restructure and the write-off
of certain fixed assets, Stg£4.6m
(7.1m),
representing the difference between their carrying net book
value and the cash flows that they are projected to generate
following restructure.



| |    |                             
| | -- | ----------------------------
| | D) | Group Transformation Program

A charge of
37m before tax
(30m after tax)
(2001: 93m
before tax, 72m
after tax) has been recognised in the year to 31 March 2002
for additional severance and implementation costs for the
ongoing transformation projects.



| |    |                               
| | -- | ------------------------------
| | E) | Deposit Interest Retention Tax

The Bank has reached agreement with the Revenue
Commissioners that the sum of
39 million
is in full and final settlement of the Bank of Ireland
Groups liability for arrears of DIRT (Deposit Interest
Retention Tax) including interest and penalties to
March 31, 2001. Of the aggregate amount, the sum of
4 million
was previously provided.

F-26



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

10  TAXATION

|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |    |  
|------------------------------------------------------- | ------------------------------------------------------------- | --------------- | --- | ---- | - | ---- | --- | --- | - |  | --- | -- | -
|                                                        |                                                               | 2003            |     | 2002 |   | 2001
|                                                        |                                                               |                 |     |      |   |     
|                                                        |                                                               |                
|                                                        |                                                               | (in  millions)
|The Group                                               |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|Current Tax                                             |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|Irish Corporation tax                                   |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        | Current year                                                  |                 |     | 108  |   |      |     | 129 |   |  |     | 95 |  
|                                                        | Prior years                                                   |                 |     | 17   |   |      |     |    |   |  |     | (4 | )
|Double taxation relief                                  |                                                               |                 | (16 | )    |   |      | (20 | )   |   |  | (24 | ) 
|Foreign tax                                             |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        | Current year                                                  |                 |     | 69   |   |      |     | 50  |   |  |     | 88 |  
|                                                        | Prior years                                                   |                 |     | (13  | ) |      |     | (9  | ) |  |     |   |  
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        |                                                               |                 | 165 |      |   |      | 150 |     |   |  | 155 |   
|Deferred taxation                                       |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        | Origination and reversal of timing differences
     Domestic |                 |     | (5   | ) |      |     | 7   |   |  |     | 40 |  
| Foreign                                               |                                                               |                 | (6  | )    |   |      | 7   |     |   |  | (6  | ) 
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        |                                                               |                 | (11 | )    |   |      | 14  |     |   |  | 34  |   
|Share of associated undertakings and joint
    ventures |                                                               |                 | 9   |      |   |      | 1   |     |   |  | 1   |   
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |   
|                                                        |                                                               |                 | 163 |      |   |      | 165 |     |   |  | 190 |   
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |   

The tax charge for the year, at an effective rate
of 16.1% is higher than the standard Irish Corporation Tax rate
mainly because the benefits derived from tax based lending and
the International Financial Services Centre reduced rate have
been offset by a combination of higher tax rates applying in
other jurisdictions, non-deductible goodwill write-off and the
new levy on certain financial institutions.

|                                                   |  |                 |     |      |  |      |    |   |  |  |    | 
|-------------------------------------------------- |  | --------------- | --- | ---- |  | ---- | -- | - |  |  | -- | 
|                                                   |  | 2003            |     | 2002 |  | 2001
|                                                   |  |                 |     |      |  |     
|                                                   |  |                
|                                                   |  | (in  millions)
|The deferred taxation (credit)/charge arises from: |  |                 |     |      |  |      |    |   |  |  |    | 
|Leased assets                                      |  |                 | 9   |      |  |      | 12 |   |  |  | 25 | 
|Own assets                                         |  |                 | (2  | )    |  |      | (4 | ) |  |  | 6  | 
|Short term timing differences                      |  |                 | (18 | )    |  |      | 6  |   |  |  | 3  | 
|                                                   |  |                 |     |      |  |      |    |   |  |  |    | 
|                                                   |  |                 | (11 | )    |  |      | 14 |   |  |  | 34 | 
|                                                   |  |                 |     |      |  |      |    |   |  |  |    | 

F-27



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



10  TAXATION  (continued)


The reconciliation of current tax on profit on
ordinary activities at the standard Irish Corporation tax rate
to the Groups actual current tax charge for the years
ended March 31, 2003, 2002 and 2001 is shown as follows:

|                                                                                                                                                        |  |                 |     |      |  |      |     |   |  |  |     |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                                                                                                                        |  | 2003            |     | 2002 |  | 2001
|                                                                                                                                                        |  |                 |     |      |  |     
|                                                                                                                                                        |  |                
|                                                                                                                                                        |  | (in  millions)
|Profit on ordinary activities before tax
    multiplied by the weighted standard rate of Corporate tax in
    Ireland of 15.125% (2002: 19%, 2001: 23%) |  |                 | 153 |      |  |      | 206 |   |  |  | 228 |  
|Effects of:                                                                                                                                             |  |                 |     |      |  |      |     |   |  |  |     |  
|Expenses not deductible for tax purposes                                                                                                                |  |                 | 5   |      |  |      | 7   |   |  |  | 7   |  
|Levy on certain financial institutions                                                                                                                  |  |                 | 7   |      |  |      |    |   |  |  |    |  
|Foreign earnings subject to different rates of tax                                                                                                      |  |                 | 15  |      |  |      | 22  |   |  |  | 13  |  
|Non-deductible goodwill impairment                                                                                                                      |  |                 | 33  |      |  |      |    |   |  |  |    |  
|Tax exempted income and income at a reduced Irish
    tax rate                                                                                          |  |                 | (63 | )    |  |      | (62 | ) |  |  | (55 | )
|Capital allowances in excess of depreciation                                                                                                            |  |                 | (7  | )    |  |      | (8  | ) |  |  | (31 | )
|Other deferred tax timing differences                                                                                                                   |  |                 | 18  |      |  |      | (6  | ) |  |  | (3  | )
|Other prior year adjustments                                                                                                                            |  |                 | 4   |      |  |      | (9  | ) |  |  | (4  | )
|                                                                                                                                                        |  |                 |     |      |  |      |     |   |  |  |     |  
|Current tax charge                                                                                                                                      |  |                 | 165 |      |  |      | 150 |   |  |  | 155 |  
|                                                                                                                                                        |  |                 |     |      |  |      |     |   |  |  |     |  

11  DIVIDENDS

|                                                                         |  |                      |     |      |  |      |     |  |  |  |     | 
|------------------------------------------------------------------------ |  | -------------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                                         |  |                     
|                                                                         |  | Year ended March, 31
|                                                                         |  |                     
|                                                                         |  | 2003                 |     | 2002 |  | 2001
|                                                                         |  |                      |     |      |  |     
|                                                                         |  |                     
|                                                                         |  | (in  millions)     
|Equity Stock:                                                            |  |                      |     |      |  |      |     |  |  |  |     | 
|2003                                                                     |  |                      |     |      |  |      |     |  |  |  |     | 
|On units of
    0.64 Ordinary
    Stock in issue Interim dividend 13.2c |  |                      | 133 |      |  |      |     |  |  |  |     | 
|Proposed final dividend 23.8c                                            |  |                      | 238 |      |  |      |     |  |  |  |     | 
|2002                                                                     |  |                      |     |      |  |      |     |  |  |  |     | 
|On units of
    0.64 Ordinary
    Stock in issue Interim dividend 11.6c |  |                      |     |      |  |      | 117 |  |  |  |     | 
|Proposed final dividend 21.4c                                            |  |                      |     |      |  |      | 216 |  |  |  |     | 
|2001                                                                     |  |                      |     |      |  |      |     |  |  |  |     | 
|On units of
    0.64 Ordinary
    Stock in issue Interim dividend 9.4c  |  |                      |     |      |  |      |     |  |  |  | 94  | 
|Final dividend 19.6c                                                     |  |                      |     |      |  |      |     |  |  |  | 196 | 
|                                                                         |  |                      |     |      |  |      |     |  |  |  |     | 
|                                                                         |  |                      | 371 |      |  |      | 333 |  |  |  | 290 | 
|                                                                         |  |                      |     |      |  |      |     |  |  |  |     | 

Holders of Bank of Ireland Ordinary Stock are
entitled to receive such dividends out of the profits of the
Bank as are available by law for distribution. The Court may,
without obtaining prior stockholder approval declare and pay to
the stockholders such interim dividends as appear to the Court
to be justified by the profits of the Bank. Final dividends must
be approved by the stockholders at a general meeting.

No Ordinary Stock dividend can be declared or
interim dividend paid unless the dividend on any outstanding
preference stock most recently payable shall have been paid in
cash.

F-28



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



11  DIVIDENDS  (continued)


|                                                                                   |  |                      |   |      |  |      |    |  |  |  |    | 
|---------------------------------------------------------------------------------- |  | -------------------- | - | ---- |  | ---- | -- |  |  |  | -- | 
|                                                                                   |  |                     
|                                                                                   |  | Year ended March 31,
|                                                                                   |  |                     
|                                                                                   |  | 2003                 |   | 2002 |  | 2001
|                                                                                   |  |                      |   |      |  |     
|                                                                                   |  |                     
|                                                                                   |  | (in  millions)     
|Non Equity Stock:                                                                  |  |                      |   |      |  |      |    |  |  |  |    | 
|2003                                                                               |  |                      |   |      |  |      |    |  |  |  |    | 
|On units of
    1.27 of
    Non-Cumulative Preference Stock, Dividend
    1.5237 |  |                      | 5 |      |  |      |    |  |  |  |    | 
|On units of Stg£1 of Non-Cumulative
    Preference Stock, Dividend Stg£1.2625      |  |                      | 4 |      |  |      |    |  |  |  |    | 
|2002                                                                               |  |                      |   |      |  |      |    |  |  |  |    | 
|On units of
    1.27 of
    Non-Cumulative Preference Stock, Dividend
    1.5237 |  |                      |   |      |  |      | 10 |  |  |  |    | 
|On units of Stg£1 of Non-Cumulative
    Preference Stock, Dividend Stg£1.2625      |  |                      |   |      |  |      | 7  |  |  |  |    | 
|2001                                                                               |  |                      |   |      |  |      |    |  |  |  |    | 
|On units of IR£1 of Non-Cumulative
    Preference Stock, Dividend IR£1.2p          |  |                      |   |      |  |      |    |  |  |  | 16 | 
|On units of Stg£1 of Non-Cumulative
    Preference Stock, Dividend Stg£1.2625p     |  |                      |   |      |  |      |    |  |  |  | 10 | 
|                                                                                   |  |                      |   |      |  |      |    |  |  |  |    | 
|                                                                                   |  |                      | 9 |      |  |      | 17 |  |  |  | 26 | 
|                                                                                   |  |                      |   |      |  |      |    |  |  |  |    | 

Dividend payments on Non Cumulative Preference
Stock are accrued.

12  EARNINGS PER UNIT OF
0.64 ORDINARY
STOCK

The calculation of basic earnings per unit of
0.64 Ordinary
Stock is based on the profit attributable to Ordinary
Stockholders divided by the weighted average Ordinary Stock in
issue.

|                                             |  |      |                 |      |  |      |                 |  |  |  |                | 
|-------------------------------------------- |  | ---- | --------------- | ---- |  | ---- | --------------- |  |  |  | -------------- | 
|                                             |  | 2003 |                 | 2002 |  | 2001
|                                             |  |      |                 |      |  |     
|Basic                                        |  |      |                 |      |  |      |                 |  |  |  |                | 
|Profit attributable to Ordinary Stockholders |  |      | 825.9 million  |      |  |      | 894.5 million  |  |  |  | 731.3 million | 
|Weighted average number of shares in issue   |  |      | 1,007.5 million |      |  |      | 1,005.6 million |  |  |  | 996.8 million  | 
|Basic earnings per share                     |  |      | 82.0c           |      |  |      | 89.0c           |  |  |  | 73.4c          | 

The diluted earnings per unit of
0.64 Ordinary
Stock is based on the profit attributable to Ordinary
Stockholders divided by the weighted average Ordinary Stock in
issue adjusted for the effect of all dilutive potential Ordinary
Stock.

|                                                |  |      |                 |      |  |      |                 |   |  |  |                 |  
|----------------------------------------------- |  | ---- | --------------- | ---- |  | ---- | --------------- | - |  |  | --------------- | -
|                                                |  | 2003 |                 | 2002 |  | 2001
|                                                |  |      |                 |      |  |     
|Diluted                                         |  |      |                 |      |  |      |                 |   |  |  |                 |  
|Profit attributable to Ordinary Stockholders    |  |      | 825.9 million  |      |  |      | 894.5 million  |   |  |  | 731.3 million  |  
|Average number of shares in issue               |  |      | 1,007.5  millio | n    |  |      | 1,005.6  millio | n |  |  | 996.8 million   |  
|Effect of all dilutive potential Ordinary Stock |  |      | 9.6 million     |      |  |      | 9.6 million     |   |  |  | 8.9 million     |  
|                                                |  |      |                 |      |  |      |                 |   |  |  |                 |  
|                                                |  |      | 1,017.1  millio | n    |  |      | 1,015.2  millio | n |  |  | 1,005.7  millio | n
|                                                |  |      |                 |      |  |      |                 |   |  |  |                 |  
|Diluted earnings per share                      |  |      | 81.2c           |      |  |      | 88.1c           |   |  |  | 72.7c           |  

F-29



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

13  CENTRAL GOVERNMENT AND OTHER
ELIGIBLE BILLS

|                                              |  |                 |     |      |  |  |    | 
|--------------------------------------------- |  | --------------- | --- | ---- |  |  | -- | 
|                                              |  |                
|                                              |  | At March 31,   
|                                              |  |                
|                                              |  | 2003            |     | 2002
|                                              |  |                 |     |     
|                                              |  |                
|                                              |  | (in  millions)
|Investment securities                         |  |                 |     |      |  |  |    | 
| government bills and similar
    securities |  |                 | 7   |      |  |  | 6  | 
| other eligible bills                        |  |                 |    |      |  |  | 12 | 
|Other securities                              |  |                 |     |      |  |  |    | 
| government bills and similar
    securities |  |                 | 168 |      |  |  | 61 | 
|                                              |  |                 |     |      |  |  |    | 
|                                              |  |                 | 175 |      |  |  | 79 | 
|                                              |  |                 |     |      |  |  |    | 

14  LOANS AND ADVANCES TO
BANKS

|                                                            |  |                 |       |      |  |  |       | 
|----------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                                            |  |                
|                                                            |  | At March 31,   
|                                                            |  |                
|                                                            |  | 2003            |       | 2002
|                                                            |  |                 |       |     
|                                                            |  |                
|                                                            |  | (in  millions)
|Funds placed with Central Bank of Ireland                   |  |                 | 111   |      |  |  | 101   | 
|Funds placed with other central banks                       |  |                 | 39    |      |  |  | 814   | 
|Funds placed with other banks                               |  |                 | 7,330 |      |  |  | 7,470 | 
|                                                            |  |                 |       |      |  |  |       | 
|                                                            |  |                 | 7,480 |      |  |  | 8,385 | 
|                                                            |  |                 |       |      |  |  |       | 
|Repayable on demand                                         |  |                 | 745   |      |  |  | 1,863 | 
|Other loans and advances to banks by remaining
    maturity |  |                 |       |      |  |  |       | 
| 3 months or less                                          |  |                 | 5,629 |      |  |  | 5,068 | 
| 1 year or less but over
    3 months                      |  |                 | 1,046 |      |  |  | 1,420 | 
| 5 years or less but over
    1 year                       |  |                 | 35    |      |  |  | 16    | 
| over 5 years                                              |  |                 | 25    |      |  |  | 18    | 
|                                                            |  |                 |       |      |  |  |       | 
|                                                            |  |                 | 7,480 |      |  |  | 8,385 | 
|                                                            |  |                 |       |      |  |  |       | 

The Group is required to maintain balances with
the Central Bank of Ireland and other Central Banks.

F-30



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

15  LOANS AND ADVANCES TO
CUSTOMERS

(a)  Loans and advances to
customers

|                                                                |  |                 |        |      |  |  |        |  
|--------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | -
|                                                                |  |                
|                                                                |  | At March 31,   
|                                                                |  |                
|                                                                |  | 2003            |        | 2002
|                                                                |  |                 |        |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Loans and advances to customers                                 |  |                 | 53,946 |      |  |  | 53,559 |  
|Loans and advances to customers 
    finance leases            |  |                 | 2,226  |      |  |  | 2,450  |  
|Hire purchase receivables                                       |  |                 | 1,195  |      |  |  | 1,068  |  
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 57,367 |      |  |  | 57,077 |  
|Provision for bad and doubtful debts                            |  |                 | (480   | )    |  |  | (500   | )
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 56,887 |      |  |  | 56,577 |  
|                                                                |  |                 |        |      |  |  |        |  
|Repayable on demand                                             |  |                 | 2,458  |      |  |  | 2,304  |  
|Other loans and advances to customers by
    remaining maturity |  |                 |        |      |  |  |        |  
| 3 months or less                                              |  |                 | 2,373  |      |  |  | 2,340  |  
| 1 year or less but over
    3 months                          |  |                 | 4,036  |      |  |  | 4,522  |  
| 5 years or less but over
    1 year                           |  |                 | 12,537 |      |  |  | 12,309 |  
| over 5 years                                                  |  |                 | 35,963 |      |  |  | 35,602 |  
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 57,367 |      |  |  | 57,077 |  
|                                                                |  |                 |        |      |  |  |        |  

The loans accounted for on a non-accrual basis at
March 31, 2003 amounted to
141 million
(2002:
124 million)
and the provisions thereon amounted to
88 million
(2002:
77 million).

(b) Securitisation and loan
transfers

The Group has sold the following pools of
mortgages.

|     |  |                                                      |  |       |           |           |  |                 |             |       |  |  |              |  |  |  |     | 
|---- |  | ---------------------------------------------------- |  | ----- | --------- | --------- |  | --------------- | ----------- | ----- |  |  | ------------ |  |  |  | --- | 
|     |  |                                                      |  |       |           |           |  | Presentation in |             | Value
|Year |  | Securitisations                                      |  | Notes |           | Mortgages |  | accounts        |             | m   
|     |  |                                                      |  |       |           |           |  |                 |             |      
|1993 |  | Private placements with UK financial Institutions    |  |       | (ii), (v) |           |  |                 | Residential |       |  |  | Consolidated |  |  |  | 145 | 
|1993 |  | Residential Property Securities No. 3 plc
    (RPS3) |  |       | (i),(ii)  |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 363 | 
|1994 |  | Residential Property Securities No. 4 plc
    (RPS4) |  |       | (i),(iii) |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 725 | 
|1997 |  | Residential Property Securities No. 5 plc
    (RPS5) |  |       | (i),(iii) |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 435 | 
|2000 |  | Liberator Securities No. 1 plc                       |  |       | (iv)      |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 500 | 
|2000 |  | Shipshape Residential Mortgages No. 1 plc
    (SS1)  |  |       | (vi)      |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 435 | 

All the issued shares in the above companies,
excluding the private placements, are held by Trusts. The Group
does not own directly or indirectly any of the share capital of
these companies or their parent companies. Under the terms of
separate agreements, the Group continues to administer the
mortgages, for which it receives fees and income. Specific
provisions are maintained by the Group on a case by case basis
for all loans where there is a likelihood of a loss arising and
general provisions are maintained as a percentage of all
remaining loans. The Group is not obliged, nor intends to
support any losses in respect of the sold mortgages, other than
as detailed below. Repayment of the funding will be made solely
from the cashflows generated by the underlying mortgage
portfolios. This is clearly stated in the agreements with the
providers of the funding. The proceeds generated by the mortgage
assets will be used to pay the interest and capital on the notes
and any other administrative expenses and taxation.
Substantially all of any residue is payable to the Group.

F-31



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



15  LOANS AND ADVANCES TO
CUSTOMERS  (continued)




(b) Securitisation and loan transfers
(continued)


Notes



|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)   | These companies issued Mortgage Backed Floating
    Rate Notes (Notes) to finance the purchase of the
    mortgage pools. Loan facilities have been made available by the
    Group to finance certain issue related expenses and loan losses
    arising on the pools of mortgages sold. The loans are repayable
    when all Notes have been redeemed subject to the issuer having
    sufficient funds available. The companies have hedged their
    interest rate exposure to fixed rate mortgages using interest
    exchange agreements with financial institutions including Bank
    of Ireland and Bank of Ireland Home Mortgages Limited. The
    companies are incorporated under the Companies Acts 1985 and are
    registered and operate in the UK.
|     
|(ii)  | Under the terms of the mortgage sale agreements,
    the Group has an option to repurchase the mortgages at par when
    the aggregate balances of the mortgages fall below 10% of the
    original sale proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     
|(iii) | Under the terms of the mortgage sale agreements,
    the Group has an option to repurchase the mortgages at par when
    the aggregate balances of the mortgages fall below 5% of the
    original sale proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     
|(iv)  | The company is incorporated under the Irish
    Companies Acts, 1963 to 2001 and is registered and operates in
    the Republic of Ireland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     
|(v)   | Under the terms of the agreements relating to the
    private placements, the Group has agreed to support losses to a
    maximum of Stg£1.2 million. The providers of finance
    have agreed that they will seek no further recourse to the
    Company above this amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     
|(vi)  | Under the terms of this issue, the Group is not
    obliged to repurchase any of the assets or to transfer in any
    additional assets, except in respect of individual mortgages in
    breach of warranty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

A summarised profit and loss account for the
periods to March 31, 2003, 2002 and 2001 for RPS3, RPS4,
RPS5, Liberator Securities No. 1 and SS 1 is set out
below:

|                                |  |                 |     |      |  |      |     |   |  |  |     |  
|------------------------------- |  | --------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2003            |     | 2002 |  | 2001
|                                |  |                 |     |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Interest receivable             |  |                 | 51  |      |  |      | 77  |   |  |  | 99  |  
|Interest payable                |  |                 | (41 | )    |  |      | (67 | ) |  |  | (89 | )
|Fee income                      |  |                 | 1   |      |  |      | 2   |   |  |  | 2   |  
|Deposit income                  |  |                 | 1   |      |  |      | 4   |   |  |  | 4   |  
|Operating expenses              |  |                 | (3  | )    |  |      | (5  | ) |  |  | (9  | )
|                                |  |                 |     |      |  |      |     |   |  |  |     |  
|Profit for the financial period |  |                 | 9   |      |  |      | 11  |   |  |  | 7   |  
|                                |  |                 |     |      |  |      |     |   |  |  |     |  

(c)  Concentration of exposure to
credit risk

The Groups exposure to credit risk from its
lending activities does not exceed 10% of loans and advances to
customers after provisions in any individual sector or industry
with the exception of residential mortgages.

The Groups residential mortgage portfolio
is widely diversified by individual borrower and amounts to 53%
(2002: 53%) of the total loans and advances to customers, 33%
(2002: 28%) of the loans and advances in the Republic of Ireland
and 73% (2002: 76%) in the United Kingdom.

F-32



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



15  LOANS AND ADVANCES TO
CUSTOMERS  (continued)


(d) Leasing and hire purchase

|                                        |                                       |                 |  |       |  |  |  |       | 
|--------------------------------------- | ------------------------------------- | --------------- |  | ----- |  |  |  | ----- | 
|                                        |                                       |                
|                                        |                                       | At March 31,   
|                                        |                                       |                
|                                        |                                       | 2003            |  | 2002 
|                                        |                                       |                 |  |      
|                                        |                                       |                
|                                        |                                       | (in  millions)
|Amount receivable by remaining maturity |                                       |                 |  |       |  |  |  |      
|                                        |  within 1 year                       |                 |  | 948   |  |  |  | 1,059 | 
|                                        |  5 years or less but over
    1 year |                 |  | 1,430 |  |  |  | 1,184 | 
|                                        |  over 5 years                        |                 |  | 1,043 |  |  |  | 1,275 | 
|                                        |                                       |                 |  |       |  |  |  |      
|                                        |                                       |                 |  | 3,421 |  |  |  | 3,518 | 
|                                        |                                       |                 |  |       |  |  |  |      

The cost of assets acquired for finance leases
and hire purchase contracts, net of grants received or
receivable, amounted to
1,029 million
(2002:
1,052 million).

Aggregate amounts receivable including capital
repayments during the year in respect of finance leases and hire
purchase contracts amounted to
1,183 million
(2002:
1,061 million).

16  PROVISION FOR BAD AND DOUBTFUL
DEBTS

|                                                            |  |                      |     |      |  |      |     |   |  |  |     |  
|----------------------------------------------------------- |  | -------------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                            |  |                     
|                                                            |  | Year ended March 31,
|                                                            |  |                     
|                                                            |  | 2003                 |     | 2002 |  | 2001
|                                                            |  |                      |     |      |  |     
|                                                            |  |                     
|                                                            |  | (in  millions)     
|At April 1,                                                 |  |                      | 500 |      |  |      | 430 |   |  |  | 398 |  
|Exchange adjustments                                        |  |                      | (30 | )    |  |      | 4   |   |  |  | (8  | )
|Charge against profits                                      |  |                      | 100 |      |  |      | 102 |   |  |  | 72  |  
|Amounts written off                                         |  |                      | (96 | )    |  |      | (55 | ) |  |  | (49 | )
|Recoveries                                                  |  |                      | 6   |      |  |      | 19  |   |  |  | 17  |  
|                                                            |  |                      |     |      |  |      |     |   |  |  |     |  
|At March 31,                                                |  |                      | 480 |      |  |      | 500 |   |  |  | 430 |  
|                                                            |  |                      |     |      |  |      |     |   |  |  |     |  
|All of which relates to loans and advances to
    customers |  |                      |     |      |  |      |     |   |  |  |     |  
|Provisions at March 31,                                     |  |                      |     |      |  |      |     |   |  |  |     |  
| specific                                                  |  |                      | 170 |      |  |      | 159 |   |  |  | 123 |  
| general                                                   |  |                      | 310 |      |  |      | 341 |   |  |  | 307 |  
|                                                            |  |                      |     |      |  |      |     |   |  |  |     |  
|                                                            |  |                      | 480 |      |  |      | 500 |   |  |  | 430 |  
|                                                            |  |                      |     |      |  |      |     |   |  |  |     |  

The Groups general provision, which
provides for the latent loan losses in the portfolio of loans
and advances, comprises an element relating to grade profiles of
175 million
(2002:
167 million,
2001:
160 million)
and a non designated element, for prudential purposes of
135 million
(2002:
174 million,
2001:
147 million).
The non designated element will be offset, in certain
pre-defined circumstances, against specific loan losses as they
crystallise in future years.

F-33



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

17  DEBT SECURITIES

|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|------------------------------------------------------- |  | ----------------- | ------ | ---------- |  | ---------- | --- | ----- |  |  | --- | - |  |  | ------ | 
|                                                        |  |                  
|                                                        |  | At March 31, 2003
|                                                        |  |                  
|                                                        |  |                   |        | Gross      |  | Gross      |     |      
|                                                        |  | Book              |        | Unrealised |  | Unrealised |     | Fair 
|                                                        |  | Value             |        | Gains      |  | Losses     |     | Value
|                                                        |  |                   |        |            |  |            |     |      
|                                                        |  |                  
|                                                        |  | (in  millions)  
|Issued by Public Bodies                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 553    |            |  |            | 56  |       |  |  |    |   |  |  | 609    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 3,088  |            |  |            |     |       |  |  |     |   |  |  | 3,088  | 
| other public sector securities                        |  |                   |       |            |  |            |     |       |  |  |     |   |  |  |       | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 3,088  |            |  |            |     |       |  |  |     |   |  |  | 3,088  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Issued by Other Issuers                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society
    certificates of deposit |  |                   | 637    |            |  |            |    |       |  |  |    |   |  |  | 637    | 
| other debt securities                                 |  |                   | 7,450  |            |  |            | 102 |       |  |  | (56 | ) |  |  | 7,496  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 8,087  |            |  |            | 102 |       |  |  | (56 | ) |  |  | 8,133  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society
    certificates of deposit |  |                   | 65     |            |  |            |     |       |  |  |     |   |  |  | 65     | 
| other debt securities                                 |  |                   | 544    |            |  |            |     |       |  |  |     |   |  |  | 544    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 609    |            |  |            |     |       |  |  |     |   |  |  | 609    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 12,337 |            |  |            | 158 |       |  |  | (56 | ) |  |  | 12,439 | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 

F-34



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



17  DEBT
SECURITIES  (continued)


|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|------------------------------------------------------- |  | ----------------- | ------ | ---------- |  | ---------- | --- | ----- |  |  | --- | - |  |  | ------ | 
|                                                        |  |                  
|                                                        |  | At March 31, 2002
|                                                        |  |                  
|                                                        |  |                   |        | Gross      |  | Gross      |     |      
|                                                        |  | Book              |        | Unrealised |  | Unrealised |     | Fair 
|                                                        |  | Value             |        | Gains      |  | Losses     |     | Value
|                                                        |  |                   |        |            |  |            |     |      
|                                                        |  |                  
|                                                        |  | (in  millions)  
|Issued by Public Bodies                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 674    |            |  |            | 33  |       |  |  | (14 | ) |  |  | 693    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 1,938  |            |  |            |     |       |  |  |     |   |  |  | 1,938  | 
| other public sector securities                        |  |                   |       |            |  |            |     |       |  |  |     |   |  |  |       | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 1,938  |            |  |            |     |       |  |  |     |   |  |  | 1,938  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Issued by Other Issuers                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society
    certificates of deposit |  |                   | 728    |            |  |            |    |       |  |  |    |   |  |  | 728    | 
| other debt securities                                 |  |                   | 6,886  |            |  |            | 71  |       |  |  | (33 | ) |  |  | 6,924  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 7,614  |            |  |            | 71  |       |  |  | (33 | ) |  |  | 7,652  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society
    certificates of deposit |  |                   | 31     |            |  |            |     |       |  |  |     |   |  |  | 31     | 
| other debt securities                                 |  |                   | 628    |            |  |            |     |       |  |  |     |   |  |  | 628    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 659    |            |  |            |     |       |  |  |     |   |  |  | 659    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 10,885 |            |  |            | 104 |       |  |  | (47 | ) |  |  | 10,942 | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 

|                                                                |  |                 |       |      |  |  |       |  
|--------------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | -
|                                                                |  |                
|                                                                |  | Year ended     
|                                                                |  | March 31,      
|                                                                |  |                
|                                                                |  | 2003            |       | 2002
|                                                                |  |                 |       |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Investment securities                                           |  |                 |       |      |  |  |       |  
| listed                                                        |  |                 | 7,316 |      |  |  | 7,226 |  
| unlisted                                                      |  |                 | 1,324 |      |  |  | 1,062 |  
|                                                                |  |                 |       |      |  |  |       |  
|                                                                |  |                 | 8,640 |      |  |  | 8,288 |  
|                                                                |  |                 |       |      |  |  |       |  
|Other securities                                                |  |                 |       |      |  |  |       |  
| listed                                                        |  |                 | 3,330 |      |  |  | 2,213 |  
| unlisted                                                      |  |                 | 367   |      |  |  | 384   |  
|                                                                |  |                 |       |      |  |  |       |  
|                                                                |  |                 | 3,697 |      |  |  | 2,597 |  
|                                                                |  |                 |       |      |  |  |       |  
|Unamortised premiums and discounts on investment
    securities |  |                 | 7     |      |  |  | (2    | )
|                                                                |  |                 |       |      |  |  |       |  

Income from listed and unlisted investments
amounted to
344 million
(2002:
343 million,
2001:
448 million).

F-35



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



17  DEBT
SECURITIES  (continued)


|                                 |  |                 |        |           |  |          |     |   |  |  |        |  
|-------------------------------- |  | --------------- | ------ | --------- |  | -------- | --- | - |  |  | ------ | -
|                                 |  |                 |        | Discount/ |  | Carrying
|Investment securities movements |  | Cost            |        | (Premium) |  | Value   
|                                 |  |                 |        |           |  |         
|                                 |  |                
|                                 |  | (in  millions)
|At April 1, 2002                 |  |                 | 8,335  |           |  |          | (47 | ) |  |  | 8,288  |  
|Exchange adjustments             |  |                 | (810   | )         |  |          | 1   |   |  |  | (809   | )
|Acquisitions                     |  |                 | 3,305  |           |  |          |    |   |  |  | 3,305  |  
|Disposals and redemptions        |  |                 | (2,112 | )         |  |          |    |   |  |  | (2,112 | )
|Reclassifications                |  |                 | (33    | )         |  |          |    |   |  |  | (33    | )
|Amortisation                     |  |                 |       |           |  |          | 1   |   |  |  | 1      |  
|                                 |  |                 |        |           |  |          |     |   |  |  |        |  
|At March 31, 2003                |  |                 | 8,685  |           |  |          | (45 | ) |  |  | 8,640  |  
|                                 |  |                 |        |           |  |          |     |   |  |  |        |  

|                                |  |                 |        |      |  |  |        | 
|------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                |  |                
|                                |  | Year ended     
|                                |  | March 31,      
|                                |  |                
|                                |  | 2003            |        | 2002
|                                |  |                 |        |     
|                                |  |                
|                                |  | (in  millions)
|Analysed by remaining maturity: |  |                 |        |      |  |  |        | 
|Due within one year             |  |                 | 2,601  |      |  |  | 2,446  | 
|Due one year and over           |  |                 | 9,736  |      |  |  | 8,439  | 
|                                |  |                 |        |      |  |  |        | 
|                                |  |                 | 12,337 |      |  |  | 10,885 | 
|                                |  |                 |        |      |  |  |        | 

The valuation of unlisted securities is based on
the Directors estimate. The cost of other securities is
not disclosed as its determination is not practicable. Debt
securities includes securities which are subject to sale and
repurchase agreements of
3,182 million
(2002:
2,756 million).

Debt securities with a market value of
4,165 million
(2002:
2,800 million)
were pledged as collateral to cover settlement risk for
securities transactions.

18  EQUITY SHARES

|                             |  |                 |    |      |  |  |      |  
|---------------------------- |  | --------------- | -- | ---- |  |  | ---- | -
|                             |  |                
|                             |  | Year ended     
|                             |  | March 31,      
|                             |  |                
|                             |  | 2003            |    | 2002
|                             |  |                 |    |     
|                             |  |                
|                             |  | (in  millions)
|At April 1                   |  |                 | 19 |      |  |  | 144  |  
|Net movement during the year |  |                 | 19 |      |  |  | (125 | )
|                             |  |                 |    |      |  |  |      |  
|At March 31                  |  |                 | 38 |      |  |  | 19   |  
|                             |  |                 |    |      |  |  |      |  

F-36



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

19  INTERESTS IN ASSOCIATED
UNDERTAKINGS

|                           |  |                 |    |      |  |  |    |  
|-------------------------- |  | --------------- | -- | ---- |  |  | -- | -
|                           |  |                
|                           |  | Year ended     
|                           |  | March 31,      
|                           |  |                
|                           |  | 2003            |    | 2002
|                           |  |                 |    |     
|                           |  |                
|                           |  | (in  millions)
|At April 1                 |  |                 | 16 |      |  |  | 14 |  
|Increase in investments    |  |                 | 3  |      |  |  | 5  |  
|Decrease in investments    |  |                 |   |      |  |  | (8 | )
|Retained profits           |  |                 | (2 | )    |  |  | 5  |  
|Transfer to Joint Ventures |  |                 | (4 | )    |  |  |   |  
|                           |  |                 |    |      |  |  |    |  
|At March 31                |  |                 | 13 |      |  |  | 16 |  
|                           |  |                 |    |      |  |  |    |  

In presenting details of the associated
undertakings of the Bank of Ireland Group the exemption
permitted by Regulation 10 of the European Communities
(Credit Institutions: Accounts) Regulations, 1992 has been
availed of and Bank of Ireland will annex to its annual return
to the Companies Office a full listing of associated
undertakings.

20  INTEREST IN JOINT
VENTURES

|                                      |  |                 |    |      |  |  |    |  
|------------------------------------- |  | --------------- | -- | ---- |  |  | -- | -
|                                      |  |                
|                                      |  | Year ended     
|                                      |  | March 31,      
|                                      |  |                
|                                      |  | 2003            |    | 2002
|                                      |  |                 |    |     
|                                      |  |                
|                                      |  | (in  millions)
|At April 1                            |  |                 | 4  |      |  |  | 9  |  
|Acquisitions                          |  |                 | 2  |      |  |  |   |  
|Retained profits/ losses              |  |                 | 16 |      |  |  | (5 | )
|Exchange adjustments                  |  |                 | (1 | )    |  |  |   |  
|Transfer from Associated undertakings |  |                 | 4  |      |  |  |   |  
|                                      |  |                 |    |      |  |  |    |  
|At March 31                           |  |                 | 25 |      |  |  | 4  |  
|                                      |  |                 |    |      |  |  |    |  

21  INTANGIBLE FIXED
ASSETS

|                                                 |  |                 |     |      |  |  |     | 
|------------------------------------------------ |  | --------------- | --- | ---- |  |  | --- | 
|                                                 |  |                
|                                                 |  | The Group      
|                                                 |  |                
|                                                 |  | 2003            |     | 2002
|                                                 |  |                 |     |     
|                                                 |  |                
|                                                 |  | (in  millions)
|Cost                                             |  |                 |     |      |  |  |     | 
|At April 1                                       |  |                 | 293 |      |  |  | 234 | 
|Goodwill arising on acquisitions during the year |  |                 | 186 |      |  |  | 57  | 
|Exchange adjustments                             |  |                 | (48 | )    |  |  | 2   | 
|Goodwill written back on disposals               |  |                 | (8  | )    |  |  |    | 
|                                                 |  |                 |     |      |  |  |     | 
|At March 31                                      |  |                 | 423 |      |  |  | 293 | 
|                                                 |  |                 |     |      |  |  |     | 
|Amortisation                                     |  |                 |     |      |  |  |     | 
|At April 1                                       |  |                 | 22  |      |  |  | 7   | 
|Charge for year                                  |  |                 | 23  |      |  |  | 15  | 
|Impairment                                       |  |                 | 124 |      |  |  |    | 
|Exchange adjustments                             |  |                 | (12 | )    |  |  |    | 
|                                                 |  |                 |     |      |  |  |     | 
|At March 31                                      |  |                 | 157 |      |  |  | 22  | 
|                                                 |  |                 |     |      |  |  |     | 
|Net Book Value                                   |  |                 | 266 |      |  |  | 271 | 
|                                                 |  |                 |     |      |  |  |     | 

The details relating to recent acquisitions are
set out in Note 3.

F-37



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

22  TANGIBLE FIXED ASSETS

|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|--------------------------------------------- |  | --------------- | --- | --------- |  | --------- | -- | --------- |  | ------- | -- | --------------- |  | ----- | ----- | - |  |  | -- |  |  |  | --- |  |  |  | ----- | -
|                                              |  |                 |     |           |  |           |    |           |  |         |    | Payments        |  |      
|                                              |  |                 |     | Leases of |  | Leases of |    |           |  |         |    | on account      |  |      
|                                              |  | Freehold        |     | 50 years  |  | less than |    | Computer  |  | Finance |    | and assets      |  |      
|                                              |  | land and        |     | or more   |  | 50 years  |    | and other |  | lease   |    | in the course   |  |      
|                                              |  | buildings       |     | unexpired |  | unexpired |    | equipment |  | assets  |    | of construction |  | Total
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |      
|                                              |  |                
|                                              |  | (in  millions)
|Cost or valuation                             |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At April 1 2002                               |  |                 | 583 |           |  |           | 26 |           |  |         | 71 |                 |  |       | 1,148 |   |  |  | 12 |  |  |  | 70  |  |  |  | 1,910 |  
|Exchange adjustments                          |  |                 | (26 | )         |  |           | (2 | )         |  |         | (2 | )               |  |       | (31   | ) |  |  |   |  |  |  |    |  |  |  | (61   | )
|Additions                                     |  |                 | 37  |           |  |           |   |           |  |         | 21 |                 |  |       | 125   |   |  |  |   |  |  |  | 116 |  |  |  | 299   |  
|Disposals                                     |  |                 | (80 | )         |  |           |   |           |  |         | (1 | )               |  |       | (45   | ) |  |  |   |  |  |  |    |  |  |  | (126  | )
|Acquisition/ disposal of subsidiary           |  |                 | (5  | )         |  |           |   |           |  |         |   |                 |  |       | (11   | ) |  |  |   |  |  |  |    |  |  |  | (16   | )
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At March 31 2003                              |  |                 | 509 |           |  |           | 24 |           |  |         | 89 |                 |  |       | 1,186 |   |  |  | 12 |  |  |  | 186 |  |  |  | 2,006 |  
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|Accumulated depreciation and
    amortisation |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At April 1 2002                               |  |                 | 7   |           |  |           |   |           |  |         | 7  |                 |  |       | 654   |   |  |  | 8  |  |  |  |    |  |  |  | 676   |  
|Exchange adjustments                          |  |                 |    |           |  |           |   |           |  |         |   |                 |  |       | (20   | ) |  |  |   |  |  |  |    |  |  |  | (20   | )
|Disposals                                     |  |                 | (1  | )         |  |           |   |           |  |         |   |                 |  |       | (16   | ) |  |  |   |  |  |  |    |  |  |  | (17   | )
|Charge for year                               |  |                 | 7   |           |  |           |   |           |  |         | 11 |                 |  |       | 148   |   |  |  |   |  |  |  |    |  |  |  | 166   |  
|Acquisition/ disposal of subsidiary           |  |                 |    |           |  |           |   |           |  |         |   |                 |  |       | (8    | ) |  |  |   |  |  |  |    |  |  |  | (8    | )
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At March 31 2003                              |  |                 | 13  |           |  |           |   |           |  |         | 18 |                 |  |       | 758   |   |  |  | 8  |  |  |  |    |  |  |  | 797   |  
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|Net book value                                |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At March 31 2003                              |  |                 | 496 |           |  |           | 24 |           |  |         | 71 |                 |  |       | 428   |   |  |  | 4  |  |  |  | 186 |  |  |  | 1,209 |  
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  
|At March 31 2002                              |  |                 | 576 |           |  |           | 26 |           |  |         | 64 |                 |  |       | 494   |   |  |  | 4  |  |  |  | 70  |  |  |  | 1,234 |  
|                                              |  |                 |     |           |  |           |    |           |  |         |    |                 |  |       |       |   |  |  |    |  |  |  |     |  |  |  |       |  

Property and Equipment

A revaluation of all Group property, with the
exception of property identified as surplus to requirements
under the Group Transformation Programme, was carried out as at
March 31, 2001. All freehold and long leasehold
(50 years or more unexpired) commercial properties were
valued by Jones Lang LaSalle as external valuers, who also
reviewed the valuation carried out by the Banks
professionally qualified staff of all other property. The
valuation was undertaken in accordance with the requirements of
FRS 15 and the Appraisal & Valuation Manual of the Royal
Institution of Chartered Surveyors, on the basis of existing use
value or open market value together with the depreciated
replacement cost of adaptation works where these are not
adequately reflected in the existing use value.

As at March 31, 2003 on a historical cost
basis the cost of group property would have been included at
426 million
(2002:
449 million)
less accumulated depreciation
86 million
(2002:
69 million).
The Group occupies properties with a net book value of
559 million
(2002:
612 million)
in the course of carrying out its own activities.

F-38



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



22  TANGIBLE FIXED
ASSETS  (continued)


In the year to March 31, 2003 salary and
other costs of
116 million
(2002:
83 million)
incurred on computer software development and other projects
have been capitalised. This expenditure when operational is
depreciated in equal annual instalments over its estimated
useful life, ranging between five and ten years.

|                             |  |                 |    |      |  |  |    | 
|---------------------------- |  | --------------- | -- | ---- |  |  | -- | 
|                             |  |                
|                             |  | Year ended     
|                             |  | March 31,      
|                             |  |                
|                             |  | 2003            |    | 2002
|                             |  |                 |    |     
|                             |  |                
|                             |  | (in  millions)
|Tangible fixed assets leased |  |                 | 31 |      |  |  | 52 | 
|                             |  |                 |    |      |  |  |    | 

|                                                     |  |                 |    |      |  |  |    | 
|---------------------------------------------------- |  | --------------- | -- | ---- |  |  | -- | 
|                                                     |  |                
|                                                     |  | Year ended     
|                                                     |  | March 31,      
|                                                     |  |                
|                                                     |  | 2003            |    | 2002
|                                                     |  |                 |    |     
|                                                     |  |                
|                                                     |  | (in  millions)
|Future capital expenditure                           |  |                 |    |      |  |  |    | 
| contracted but not provided in the
    accounts    |  |                 | 14 |      |  |  | 21 | 
|                                                     |  |                 |    |      |  |  |    | 
| authorised by the Directors but not
    contracted |  |                 | 7  |      |  |  | 11 | 
|                                                     |  |                 |    |      |  |  |    | 

Rentals payable in 2003 under non-cancellable
operating leases amounted to
53 million
(2002:
51 million).
Of this amount
6 million
(2002:
5 million)
relates to leases expiring within one year,
7 million
(2002:
8 million)
relates to leases expiring in two to five years and
40 million
(2002:
38 million)
relates to leases expiring after five years, split between
property
53 million
and equipment
nil.

Minimum future rentals under non cancellable
operating leases are as follows:

|                    |  |                 |     |            |  |  |   | 
|------------------- |  | --------------- | --- | ---------- |  |  | - | 
|Year ended March 31 |  | Payable         |     | Receivable
|                    |  |                 |     |           
|                    |  |                
|                    |  | (in  millions)
|2004                |  |                 | 53  |            |  |  | 2 | 
|2005                |  |                 | 50  |            |  |  | 2 | 
|2006                |  |                 | 48  |            |  |  | 2 | 
|2007                |  |                 | 46  |            |  |  | 2 | 
|2008                |  |                 | 46  |            |  |  | 2 | 
|Thereafter          |  |                 | 624 |            |  |  | 6 | 

The obligations under finance leases amount to
3.7 million
(2002:
5.3 million)
of which
0.6 million
(2002:
0.9 million)
is due within one year,
3.1 million
(2002:
3.7 million)
is due after more than one year but within five years and nil
(2002:
0.7 million)
is due after five years.

F-39



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

23  OTHER ASSETS

|                                             |  |                 |       |      |  |  |       | 
|-------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                             |  |                
|                                             |  | Year ended     
|                                             |  | March 31,      
|                                             |  |                
|                                             |  | 2003            |       | 2002
|                                             |  |                 |       |     
|                                             |  |                
|                                             |  | (in  millions)
|Sundry debtors                               |  |                 | 1,373 |      |  |  | 967   | 
|Foreign exchange and interest rate contracts |  |                 | 1,897 |      |  |  | 777   | 
|Value of life assurance business in force    |  |                 | 494   |      |  |  | 443   | 
|Other                                        |  |                 | 77    |      |  |  | 130   | 
|                                             |  |                 |       |      |  |  |       | 
|                                             |  |                 | 3,841 |      |  |  | 2,317 | 
|                                             |  |                 |       |      |  |  |       | 

24  LIFE ASSURANCE
BUSINESS

The net assets attributable to stockholders from
the life assurance business are analysed as follows:

|                                                                        |  |                 |     |      |  |  |     | 
|----------------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                                                        |  | 2003            |     | 2002
|                                                                        |  |                 |     |     
|                                                                        |  |                
|                                                                        |  | (in  millions)
|Long term assurance business                                            |  |                 |     |      |  |  |     | 
|Net tangible assets of life companies including
    surplus             |  |                 | 268 |      |  |  | 220 | 
|Value of life assurance business in force                               |  |                 | 494 |      |  |  | 443 | 
|                                                                        |  |                 |     |      |  |  |     | 
|                                                                        |  |                 | 762 |      |  |  | 663 | 
|                                                                        |  |                 |     |      |  |  |     | 
|Increase in net tangible assets of life companies
    including surplus |  |                 | 48  |      |  |  | 49  | 
|Increase in value of life assurance business in
    force               |  |                 | 51  |      |  |  | 75  | 
|                                                                        |  |                 |     |      |  |  |     | 
|Profit after tax                                                        |  |                 | 99  |      |  |  | 124 | 
|                                                                        |  |                 |     |      |  |  |     | 

The net assets above of
762m is before
the payment of a dividend of
13m to the
Governor and Company of the Bank of Ireland and other capital
movements of 1m.

The life assurance assets attributable to
policyholders consist of:

|                          |  |                 |       |      |  |  |       |  
|------------------------- |  | --------------- | ----- | ---- |  |  | ----- | -
|                          |  | 2003            |       | 2002
|                          |  |                 |       |     
|                          |  |                
|                          |  | (in  millions)
|Property                  |  |                 | 373   |      |  |  | 381   |  
|Fixed interest securities |  |                 | 1,426 |      |  |  | 1,598 |  
|Other securities          |  |                 | 3,071 |      |  |  | 3,325 |  
|Bank balances and cash    |  |                 | 430   |      |  |  | 275   |  
|Income receivable         |  |                 | 46    |      |  |  | 57    |  
|Other assets              |  |                 | 36    |      |  |  | 30    |  
|Other liabilities         |  |                 | (40   | )    |  |  | (11   | )
|                          |  |                 |       |      |  |  |       |  
|                          |  |                 | 5,342 |      |  |  | 5,655 |  
|                          |  |                 |       |      |  |  |       |  

F-40



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



24  LIFE ASSURANCE
BUSINESS  (continued)


Value of in-force business

The principal assumptions used in the calculation
of shareholders value of in-force business are:

|                                         |                             |      |       |      |  |  |       |      | 
|---------------------------------------- | --------------------------- | ---- | ----- | ---- |  |  | ----- | ---- | 
|                                         |                             | 2003 |       | 2002
|                                         |                             |      |       |     
|Risk adjusted discount rate (net of tax) |                             |      | 10%   |      |  |  | 11%   |     
|Investment returns on unit linked assets |                             |      | 6.5%  |      |  |  | 6.5%  |     
|                                         |  Equities and property     |      |       | 7.5% |  |  |       | 7.5% | 
|                                         |  Government fixed interest |      |       | 4.5% |  |  |       | 4.5% | 
|Shareholder taxation                     |                             |      | 12.5% |      |  |  | 12.5% |     

|                |  |                                                                                                                                                                              
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mortality Rates |  | Based on actual experience                                                                                                                                                   
|Lapse Rates     |  | Based on actual experience on each block of
    business.                                                                                                                    
|Asset Values    |  | The value of unit-linked assets used to project
    future management charges is based on actual market values.
    Assets supporting the solvency margin are not discounted.

Achieved Profits:

The profit, derived using the Achieved Profit
method, is analysed into five categories:



| |   |                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A contribution from new business, comprising the
    additional value added after providing for the return equal to
    the risk adjusted discount rate on capital employed in writing
    the new business;                                                                                                                                                       
|
| |  | A contribution from in-force business at the
    beginning of the year, comprising interest at the risk adjusted
    discount rate on the value of in-force business together with
    the effect of any deviations in experience compared with the
    assumptions (excluding any investment variance) and the effect
    of any changes in operating assumptions;
|
| |  | Investment earnings on the net assets
    attributable to shareholders;                                                                                                                                                                                                                                                                                            
|
| |  | Investment variance, which represents the
    difference between the actual and expected return on unit-linked
    assets and the impact this has on management charges in the
    current and future years. In 2002 this variance also includes
    the effect of the cessation of smoothing of the investment
    return.                                        
|
| |  | Changes in economic assumptions expected to be
    non-recurring.                                                                                                                                                                                                                                                                                                  

F-41



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



24  LIFE ASSURANCE
BUSINESS  (continued)


Premium Income Analysis

The table below sets out the levels of gross
premiums and new business written for 2003 and 2002.

|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|---------------------------------------------- |  | --------------- | --- | -------- |  | --------- | --- | ----- |  |  | -- |  |  |  | ----- | 
|                                               |  |                 |     |          |  |          
|                                               |  | Individual      |     |          |  |          
|                                               |  |                 |     | Group    |  |          
|                                               |  | Life            |     | Pensions |  | Contracts |     | Total
|                                               |  |                 |     |          |  |           |     |      
|                                               |  |                
|                                               |  | (in  millions)
|Gross premiums written 
    2003              |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |                 | 426 |          |  |           | 262 |       |  |  | 26 |  |  |  | 714   | 
|Single premiums                                |  |                 | 307 |          |  |           | 211 |       |  |  | 42 |  |  |  | 560   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross premiums written                   |  |                 | 733 |          |  |           | 473 |       |  |  | 68 |  |  |  | 1,274 | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross premiums written 
    2002              |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |                 | 308 |          |  |           | 197 |       |  |  | 11 |  |  |  | 516   | 
|Single premiums                                |  |                 | 404 |          |  |           | 198 |       |  |  | 23 |  |  |  | 625   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross premiums written                   |  |                 | 712 |          |  |           | 395 |       |  |  | 34 |  |  |  | 1,141 | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross new business premiums
    written  2003 |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |                 | 119 |          |  |           | 99  |       |  |  | 0  |  |  |  | 218   | 
|Single premiums                                |  |                 | 307 |          |  |           | 211 |       |  |  | 42 |  |  |  | 560   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross new business written               |  |                 | 426 |          |  |           | 310 |       |  |  | 42 |  |  |  | 778   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross new business premiums
    written  2002 |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |                 | 148 |          |  |           | 77  |       |  |  | 2  |  |  |  | 227   | 
|Single premiums                                |  |                 | 404 |          |  |           | 198 |       |  |  | 23 |  |  |  | 625   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross new business written               |  |                 | 552 |          |  |           | 275 |       |  |  | 25 |  |  |  | 852   | 
|                                               |  |                 |     |          |  |           |     |       |  |  |    |  |  |  |       | 

25  DEPOSITS BY BANKS

|                                       |  |                 |        |      |  |  |        | 
|-------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                       |  |                
|                                       |  | Year ended     
|                                       |  | March 31,      
|                                       |  |                
|                                       |  | 2003            |        | 2002
|                                       |  |                 |        |     
|                                       |  |                
|                                       |  | (in  millions)
|Deposits by Banks                      |  |                 | 12,617 |      |  |  | 12,583 | 
|of which:                              |  |                 |        |      |  |  |        | 
|Domestic                               |  |                 | 11,609 |      |  |  | 10,900 | 
|Foreign                                |  |                 | 1,008  |      |  |  | 1,683  | 
|                                       |  |                 |        |      |  |  |        | 
|                                       |  |                 | 12,617 |      |  |  | 12,583 | 
|                                       |  |                 |        |      |  |  |        | 
|Repayable on demand                    |  |                 | 3,908  |      |  |  | 3,476  | 
|Other deposits by remaining maturity   |  |                 |        |      |  |  |        | 
| 3 months or less                     |  |                 | 7,289  |      |  |  | 6,542  | 
| 1 year or less but over
    3 months |  |                 | 1,082  |      |  |  | 2,514  | 
| 5 years or less but over
    1 year  |  |                 | 318    |      |  |  | 32     | 
| over 5 years                         |  |                 | 20     |      |  |  | 19     | 
|                                       |  |                 |        |      |  |  |        | 
|                                       |  |                 | 12,617 |      |  |  | 12,583 | 
|                                       |  |                 |        |      |  |  |        | 

F-42



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

26  CUSTOMER ACCOUNTS

|                                                                                          |  |                 |        |      |  |  |        | 
|----------------------------------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                                                                          |  |                
|                                                                                          |  | Year ended     
|                                                                                          |  | March 31,      
|                                                                                          |  |                
|                                                                                          |  | 2003            |        | 2002
|                                                                                          |  |                 |        |     
|                                                                                          |  |                
|                                                                                          |  | (in  millions)
|Current accounts                                                                          |  |                 | 9,646  |      |  |  | 8,924  | 
|Demand deposits                                                                           |  |                 | 20,072 |      |  |  | 22,854 | 
|Term deposits and other products                                                          |  |                 | 18,331 |      |  |  | 18,638 | 
|Other short-term borrowings                                                               |  |                 | 447    |      |  |  | 695    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 48,496 |      |  |  | 51,111 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|of which:                                                                                 |  |                 |        |      |  |  |        | 
|Non interest bearing current accounts Domestic                                            |  |                 | 6,445  |      |  |  | 6,115  | 
|Foreign                                                                                   |  |                 | 770    |      |  |  | 769    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 7,215  |      |  |  | 6,884  | 
|                                                                                          |  |                 |        |      |  |  |        | 
|Interest bearing current accounts and short term
    borrowings                           |  |                 |        |      |  |  |        | 
|Domestic                                                                                  |  |                 | 21,212 |      |  |  | 20,094 | 
|Foreign                                                                                   |  |                 | 20,069 |      |  |  | 24,133 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 41,281 |      |  |  | 44,227 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|Repayable on demand                                                                       |  |                 | 29,496 |      |  |  | 31,767 | 
|Other deposits with agreed maturity dates or
    periods of notice, by remaining maturity |  |                 |        |      |  |  |        | 
| 3 months or less                                                                        |  |                 | 12,443 |      |  |  | 12,477 | 
| 1 year or less but over
    3 months                                                    |  |                 | 2,223  |      |  |  | 3,331  | 
| 5 years or less but over
    1 year                                                     |  |                 | 3,668  |      |  |  | 2,549  | 
| over 5 years                                                                            |  |                 | 666    |      |  |  | 987    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 48,496 |      |  |  | 51,111 | 
|                                                                                          |  |                 |        |      |  |  |        | 

27  DEBT SECURITIES IN
ISSUE

|                                                         |  |                 |       |      |  |  |       | 
|-------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                                         |  |                
|                                                         |  | Year ended     
|                                                         |  | March 31,      
|                                                         |  |                
|                                                         |  | 2003            |       | 2002
|                                                         |  |                 |       |     
|                                                         |  |                
|                                                         |  | (in  millions)
|Bonds and medium term notes by remaining maturity        |  |                 |       |      |  |  |       | 
| 3 months or less                                       |  |                 | 520   |      |  |  | 23    | 
| 1 year or less but over
    3 months                   |  |                 | 618   |      |  |  | 227   | 
| 5 years or less but over
    1 year                    |  |                 | 3,215 |      |  |  | 2,889 | 
|Other debt securities in issue by remaining
    maturity |  |                 |       |      |  |  |       | 
| 3 months or less                                       |  |                 | 4,179 |      |  |  | 2,227 | 
| 1 year or less but over
    3 months                   |  |                 | 1,120 |      |  |  | 997   | 
| 5 years or less but over
    1 year                    |  |                 |      |      |  |  | 11    | 
|                                                         |  |                 |       |      |  |  |       | 
|                                                         |  |                 | 9,652 |      |  |  | 6,374 | 
|                                                         |  |                 |       |      |  |  |       | 

F-43



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

28  OTHER LIABILITIES

|                                             |  |                 |       |      |  |  |       | 
|-------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                             |  |                
|                                             |  | Year ended     
|                                             |  | March 31,      
|                                             |  |                
|                                             |  | 2003            |       | 2002
|                                             |  |                 |       |     
|                                             |  |                
|                                             |  | (in  millions)
|Current taxation                             |  |                 | 126   |      |  |  | 151   | 
|Notes in circulation                         |  |                 | 683   |      |  |  | 785   | 
|Foreign exchange and interest rate contracts |  |                 | 2,016 |      |  |  | 720   | 
|Sundry creditors                             |  |                 | 1,340 |      |  |  | 1,017 | 
|Other                                        |  |                 | 1,050 |      |  |  | 744   | 
|Dividends                                    |  |                 | 238   |      |  |  | 216   | 
|                                             |  |                 |       |      |  |  |       | 
|                                             |  |                 | 5,453 |      |  |  | 3,633 | 
|                                             |  |                 |       |      |  |  |       | 

The Bank is authorised to issue bank notes in
Northern Ireland under the Bankers (Ireland) Act 1845 and the
Bankers (Northern Ireland) Act, 1928 as amended by
Section 11 of Bankers (NI) Act 1928.

29  DEFERRED TAXATION

|                                          |  |                 |     |      |  |  |     |  
|----------------------------------------- |  | --------------- | --- | ---- |  |  | --- | -
|                                          |  |                
|                                          |  | Year ended     
|                                          |  | March 31,      
|                                          |  |                
|                                          |  | 2003            |     | 2002
|                                          |  |                 |     |     
|                                          |  |                
|                                          |  | (in  millions)
|Taxation treatment of capital allowances: |  |                 |     |      |  |  |     |  
| finance leases                          |  |                 | 104 |      |  |  | 125 |  
| equipment used by group                 |  |                 | 8   |      |  |  | 11  |  
|Other short term timing differences       |  |                 | (58 | )    |  |  | (47 | )
|                                          |  |                 |     |      |  |  |     |  
|                                          |  |                 | 54  |      |  |  | 89  |  
|                                          |  |                 |     |      |  |  |     |  
|At April 1                                |  |                 | 89  |      |  |  | 72  |  
|Exchange adjustments                      |  |                 | 2   |      |  |  |    |  
|Charge for year                           |  |                 | (11 | )    |  |  | 14  |  
|Disposals                                 |  |                 | (27 | )    |  |  |    |  
|Other movements                           |  |                 | 1   |      |  |  | 3   |  
|                                          |  |                 |     |      |  |  |     |  
|At 31 March                               |  |                 | 54  |      |  |  | 89  |  
|                                          |  |                 |     |      |  |  |     |  

No provision is made for tax on capital gains
which might arise on the disposal of properties at their balance
sheet amounts, this is due to the expectation that the disposal
of land and buildings will not give rise to a tax liability
based on current valuations and indexed costs.

During the year the Group disposed of a number of
properties on which no tax has been provided as roll over relief
is expected to be available. A claim for roll over relief will
be based on the reinvestment of the proceeds on disposal. A
capital gains tax liability of
6m approximately
would crystallise if there were no further reinvestment of the
proceeds of these disposals. This year the Finance Act has
provided for the abolition of roll over relief for disposals
after December 4, 2002, however relief was retained in
respect of gains previously rolled over into assets disposed of
on or after that date provided the proceeds on the current
disposals are reinvested into further qualifying assets. In view
of the fact that it is considered unlikely that there will not
be a continuous programme of reinvestment in replacement assets
no provision is made in the accounts in respect of a tax
liability for roll over relief claimed to date.

F-44



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

30  OTHER PROVISIONS FOR LIABILITIES
AND CHARGES

|                     |  |                 |     |                |  |       |     |       |  |  |     |   |  |  |     |  
|-------------------- |  | --------------- | --- | -------------- |  | ----- | --- | ----- |  |  | --- | - |  |  | --- | -
|                     |  |                 |     | Group          |  |       |     |      
|                     |  | Pensions        |     | Transformation |  |       |     |      
|                     |  | obligations     |     | Programme      |  | Other |     | Total
|                     |  |                 |     |                |  |       |     |      
|                     |  |                
|                     |  | (in  millions)
|At April 1, 2002     |  |                 | 93  |                |  |       | 34  |       |  |  | 32  |   |  |  | 159 |  
|Exchange adjustments |  |                 | (2  | )              |  |       | (1  | )     |  |  | (3  | ) |  |  | (6  | )
|Provisions made      |  |                 | 52  |                |  |       |    |       |  |  | 61  |   |  |  | 113 |  
|Provisions utilised  |  |                 | (13 | )              |  |       | (22 | )     |  |  | (37 | ) |  |  | (72 | )
|Provisions released  |  |                 |    |                |  |       |    |       |  |  | (5  | ) |  |  | (5  | )
|                     |  |                 |     |                |  |       |     |       |  |  |     |   |  |  |     |  
|At March 31, 2003    |  |                 | 130 |                |  |       | 11  |       |  |  | 48  |   |  |  | 189 |  
|                     |  |                 |     |                |  |       |     |       |  |  |     |   |  |  |     |  

31  SUBORDINATED
LIABILITIES

|                                |                                                                            |                 |       |       |  |  |       |       | 
|------------------------------- | -------------------------------------------------------------------------- | --------------- | ----- | ----- |  |  | ----- | ----- | 
|                                |                                                                            |                
|                                |                                                                            | Year ended     
|                                |                                                                            | March 31,      
|                                |                                                                            |                
|                                |                                                                            | 2003            |       | 2002 
|                                |                                                                            |                 |       |      
|                                |                                                                            |                
|                                |                                                                            | (in  millions)
|Undated Loan Capital            |                                                                            |                 |       |       |  |  |       |      
|Bank of Ireland                 |                                                                            |                 |       |       |  |  |       |      
|                                | US$150m Undated Floating Rate Primary Capital
    Notes                    |                 |       | 136   |  |  |       | 170   | 
|Bank of Ireland UK Holdings plc |                                                                            |                 |       |       |  |  |       |      
|                                | 600m
    7.40% Guaranteed Step-up Callable Perpetual Preferred Securities |                 |       | 595   |  |  |       | 593   | 
|                                | Stg£350m 6.25% Guaranteed Callable Perpetual
    Preferred Securities      |                 |       | 502   |  |  |       |      | 
|Bristol & West                  |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£75m 13 3/8% Perpetual Subordinated
    Bonds                           |                 |       | 180   |  |  |       | 202   | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 1,413 |       |  |  | 965   |      
|                                |                                                                            |                 |       |       |  |  |       |      
|Dated Loan Capital              |                                                                            |                 |       |       |  |  |       |      
|Bank of Ireland                 |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£100m 9.75% Subordinated Bonds 2005                                     |                 |       | 145   |  |  |       | 163   | 
|                                | US$175m Subordinated Floating Rate Notes 2007                              |                 |       |      |  |  |       | 201   | 
|                                | Stg£200m Subordinated Floating Rate
    Notes 2009                         |                 |       | 290   |  |  |       | 326   | 
|                                | 750m
    6.45% Subordinated Bonds 2010                                    |                 |       | 747   |  |  |       | 747   | 
|Bristol & West                  |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£75m 10 3/4% Subordinated Bonds 2018                                    |                 |       | 108   |  |  |       | 122   | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 1,290 |       |  |  | 1,559 |      
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 2,703 |       |  |  | 2,524 |      
|                                |                                                                            |                 |       |       |  |  |       |      
|Repayable                       |                                                                            |                 |       |       |  |  |       |      
|                                | in 1 year or less                                                          |                 |       |      |  |  |       |      | 
|                                | Between 2 and not more than 5 years                                        |                 |       | 145   |  |  |       | 163   | 
|                                | 5 years or more                                                            |                 |       | 1,145 |  |  |       | 1,396 | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 1,290 |       |  |  | 1,559 |      
|                                |                                                                            |                 |       |       |  |  |       |      

The US$150m Undated Floating Rate Primary Capital
Notes which were issued at par on December 5, 1985 are
subordinated in right of payment to the claims of depositors and
other creditors of the Bank.

F-45



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



31  SUBORDINATED
LIABILITIES  (continued)


On March 7, 2001 Bank of Ireland UK Holdings
plc (the Issuer) issued
600m 7.4%
Guaranteed Step-up Callable Perpetual Preferred Securities (the
Preferred Securities) which have the benefit of a subordinated
guarantee by the Bank. The Preferred Securities are perpetual
securities and have no maturity date. However, they are
redeemable in whole or in part at the option of the Issuer
subject to the prior consent of the Central Bank of Ireland and
of the Bank, at their principal amount together with any
outstanding payments on March 7, 2011 or any coupon payment
date thereafter. The Preferred Securities bear interest at a
rate of 7.40% per annum to March 7, 2011 and thereafter at
a rate of three month EURIBOR plus 3.26% per annum, reset
quarterly.

The rights and claims of the holder of the
Preferred Securities are subordinated to the claims of the
senior creditors of the Issuer or of the Bank (as the case may
be) in that no payment in respect of the Preferred Securities or
the guarantee in respect of them shall be due and payable except
to the extent that the Issuer or the Bank (as applicable) is
solvent and could make such payment and still be solvent
immediately thereafter. Upon any winding up of the Issuer or the
Bank, the holders of the Preferred Securities will rank pari
passu with the holders of the most senior class or classes of
preference shares or stock (if any) of the issuer or of the Bank
then in issue and in priority to all other shareholders of the
Issuer and of the Bank.

On March 17, 2003 Bank of Ireland UK
Holdings plc (the Issuer) issued Stg£350m 6.25% Guaranteed
Callable Perpetual Preferred Securities (the Preferred
Securities) which have the benefit of a subordinated guarantee
by the Bank.

The Preferred Securities are perpetual securities
and have no maturity date. However they are redeemable in whole
but not in part at the option of the Issuer subject to the prior
consent of the Central Bank of Ireland and of the Bank, at their
principal amount together with any outstanding payments on
March 7, 2023 or any coupon date thereafter.

The Preferred Securities bear interest at a rate
of 6.25% per annum to March 7, 2023 and thereafter at a
rate of 6 month London Inter-Bank Offered Rate (LIBOR) plus
1.70 per cent per annum, reset semi annually.

The rights and claims of the holders of the
preferred securities are subordinated to the claims of the
senior creditors of the Issuer or the Bank (as the case may be)
in that no payment in respect of the preferred securities or the
guarantee shall be due and payable except to the extent that the
Issuer or the Bank (as applicable) is solvent and could make
such payment and still be solvent immediately thereafter.

Upon winding up of the Issuer or the Bank (in
respect of claims under the guarantee), the holder of the
Preferred Securities will rank pari passu with holders of the
most senior class or classes of preference shares or stock or
other Preferred Securities (if any) of the Issuer or the Bank
then in issue and in priority to all other shareholders of the
Issuer and the Bank.

The Bristol & West 13 3/8% Perpetual
Subordinated Bonds have a nominal value of
Stg£75 million and were revalued as part of the fair
value adjustments on acquisition.

The Bank issued Stg£100 million
9.75 per cent Subordinated Bonds due 2005 on
March 21, 1995.

The Bank set up a Stg£500 million Euro
Note Programme (the Programme) in July 1995 and
issued Stg£200 million Subordinated Floating Rate
Notes due 2009 on February 11, 1997. The Programme was
increased to Stg£1 billion in July 1997 and the Bank
issued US$175 million Subordinated Floating Rate Notes due
2007 on September 4, 1997. These notes were redeemed on
September 9, 2002. On November 9, 1999 the Programme
was redenominated from sterling to euro and increased to
4 billion.
On February 10, 2000 the Bank issued
600 million
6.45 per cent Subordinated Bonds due 2010.

On January 22, 2001 the Bank issued an
additional
150 million
6.45 per cent subordinated bonds due 2010 which are
fungible and form a single series with the
600 million
issued in February 2000. The Bonds and Notes

F-46



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



31  SUBORDINATED
LIABILITIES  (continued)


constitute unsecured obligations of the Bank
subordinated in right of payments to the claims of depositors
and other unsubordinated creditors of the Bank and rank pari
passu without any preference among themselves. In April 2001 the
programme was increased from
4 billion
to
8 billion.
In February 2003, the Programme was again increased from
8 billion
to
10 billion.

Interest rates on the floating rate and fixed
rate subordinated liabilities (accommodated through swaps) are
determined by reference to LIBOR.

The subordinated liabilities in Bristol &
West are redeemable in whole, at the option of Bristol &
West plc, in the event of certain tax changes affecting the
treatment of payments of interest on capital securities in the
United Kingdom, and provided prior relevant supervisory consent
has been obtained and adequate notice has been given, at their
principal amount plus accrued interest to the date of redemption.

32  MINORITY INTEREST 
NON EQUITY

|               |                                                                    |                 |  |      |  |  |  |    | 
|-------------- | ------------------------------------------------------------------ | --------------- |  | ---- |  |  |  | -- | 
|               |                                                                    |                
|               |                                                                    | Year ended     
|               |                                                                    | March 31,      
|               |                                                                    |                
|               |                                                                    | 2003            |  | 2002
|               |                                                                    |                 |  |     
|               |                                                                    |                
|               |                                                                    | (in  millions)
|Bristol & West |                                                                    |                 |  |      |  |  |  |   
|               | Stg£50.4m 8 1/8% Non-Cumulative
    Preference Shares of Stg£1each |                 |  | 73   |  |  |  | 82 | 
|               |                                                                    |                 |  |      |  |  |  |   

These Preference Shares which are non redeemable,
non equity shares rank equally amongst themselves as regards
participation in profits and in priority to the ordinary shares
of Bristol & West plc.

Holders of the Preference Shares are entitled to
receive, in priority to the holders of any other class of shares
in Bristol & West plc, a non-cumulative preference
dividend at a fixed rate per annum payable in equal half yearly
instalments in arrears on May 15 and November 15 each
year. Bank of Ireland Group holds 35.8% of these shares.

The preference dividend on the Preference Shares
will only be payable to the extent that payment can be made out
of profits available for distribution as at each dividend
payment date in accordance with the provisions of the UK
Companies Acts.

33  CAPITAL STOCK

|                                                                |  |                 |       |      |  |  |       | 
|--------------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                                                |  |                
|                                                                |  | Year ended     
|                                                                |  | March 31,      
|                                                                |  |                
|                                                                |  | 2003            |       | 2002
|                                                                |  |                 |       |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Authorised                                                      |  |                 |       |      |  |  |       | 
|1,500m units of
    0.64 of Ordinary
    Stock                 |  |                 | 960   |      |  |  | 960   | 
|8m units of Non-Cumulative Preference Stock of
    US$25 each   |  |                 | 184   |      |  |  | 229   | 
|100m units of Non-Cumulative Preference Stock of
    Stg£1 each |  |                 | 145   |      |  |  | 163   | 
|100m units of Non-Cumulative Preference Stock of
    1.27 each |  |                 | 127   |      |  |  | 127   | 
|                                                                |  |                 |       |      |  |  |       | 
|                                                                |  |                 | 1,416 |      |  |  | 1,479 | 
|                                                                |  |                 |       |      |  |  |       | 

F-47



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



33  CAPITAL
STOCK  (continued)


|                                                                |  |                 |     |      |  |  |     | 
|--------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                                                |  |                
|                                                                |  | Year ended     
|                                                                |  | March 31,      
|                                                                |  |                
|                                                                |  | 2003            |     | 2002
|                                                                |  |                 |     |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Allotted and fully paid                                         |  |                 |     |      |  |  |     | 
|Equity                                                          |  |                 |     |      |  |  |     | 
|996.2m units of
    0.64 of Ordinary
    Stock                 |  |                 | 637 |      |  |  | 645 | 
|53.9m units of
    0.64 of Treasury
    Stock                  |  |                 | 35  |      |  |  | 27  | 
|Non equity                                                      |  |                 |     |      |  |  |     | 
|1.9m units of Non-Cumulative Preference Stock of
    Stg£1 each |  |                 | 3   |      |  |  | 3   | 
|3.0m units of Non-Cumulative Preference Stock of
    1.27 each |  |                 | 4   |      |  |  | 4   | 
|                                                                |  |                 |     |      |  |  |     | 
|                                                                |  |                 | 679 |      |  |  | 679 | 
|                                                                |  |                 |     |      |  |  |     | 

The weighted average Ordinary Stock in issue at
March 31, 2003, used in the earnings per unit of Ordinary
Stock calculation, excludes the Treasury Stock which does not
represent Ordinary Stock in issue, (See Note 12). The
Treasury stock does not rank for dividend and 53,944,863 units
of Treasury stock remained as at March 31, 2003.

Movements in issued Ordinary Stock

|                                 |  |  |               |  
|-------------------------------- |  |  | ------------- | -
|At April 1, 2002                 |  |  | 1,007,557,674 |  
|Stock options schemes            |  |  | 1,889,242     |  
|Sharesave scheme                 |  |  | 55,630        |  
|Long Term Performance Stock Plan |  |  | 113,135       |  
|Buyback                          |  |  | (13,445,055   | )
|                                 |  |  |               |  
|At March 31, 2003                |  |  | 996,170,626   |  
|                                 |  |  |               |  

During the year the total Ordinary Stock in issue
decreased from 1,007,557,674 units of nominal value of
0.64 each to
996,170,626 units of nominal value of
0.64 each as a
result of:

1,889,242 units of Ordinary Stock were issued to
option holders on the exercise of their options under the terms
of the Senior Executive Stock Option Scheme at prices ranging
between 0.982
and 8.933, by
the re-issue of units of Treasury Stock.

55,630 units of Ordinary Stock were issued to
Sharesave option holders on the exercise of their options under
the terms of the SAYE Scheme at a price of
5.40, by the
re-issue of units of Treasury Stock.

113,135 units of Ordinary Stock were issued to
option holders on the vesting of their options under the terms
of the Long Term Performance Stock Plan (LTPSP) at a
price of 8.725
per unit, by the re-issue of units of Treasury Stock.

13,445,055 units of Ordinary Stock were bought
back at a weighted average price of
9.89 during
February and March 2003.

All units of Ordinary Stock in issue carry the
same voting rights.

Preference Stock

The Preference Stock is non-redeemable. The
holders of Preference Stock are entitled to receive a
non-cumulative preferential dividend, which in the case of the
Sterling Preference Stock will be payable in Sterling, in

F-48



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



33  CAPITAL
STOCK  (continued)


a gross amount of Stg£1.2625 per unit and in
the case of euro Preference Stock will be payable in euro in a
gross amount of
1.523686 per
unit per annum, in equal semi-annual instalments, in arrears, on
February 20, and August 20, in each year.

On a winding up of, or other return of capital by
the Bank (other than on a redemption), the holders of Preference
Stock will be entitled to receive an amount equal to the amount
paid up on each unit of the Preference Stock held (including the
premium) out of the surplus assets available for distribution to
the holders of Ordinary Stock.

The Preference Stockholders are not entitled to
vote at any General Court except in certain exceptional
circumstances when a restricted vote may apply.

The Bank has an obligation to increase the cash
dividend payable on each unit of Preference Stock so that the
sum of the cash dividend paid or payable together with the
associated dividend tax credit shall equal the appropriate gross
amounts.

As at March 31, 2003 1,876,090 units of
Sterling Preference Stock and 3,026,598 units of euro Preference
Stock were in issue.

Use of Ordinary Stock in employee stock
schemes

(a)  Employee Stock Issue
Scheme

At the 1997 Annual General Court the stockholders
approved the establishment of a new Employee Stock Issue Scheme
to replace the scheme originally approved by the stockholders in
1984. Under this scheme, which has an Irish and a UK version in
order to conform with the relevant revenue legislation in both
jurisdictions, all employees of the Bank and certain
subsidiaries are eligible to participate, provided they had an
existing contract of employment with a participating company on
the last day of the Groups financial year and their
employment contract existed for a period of at least
12 months as at that date and is still in existence on the
date on which a stock issue announcement is made. Each year the
Court of Directors may set aside an element of Group profit
before taxation for allocation to the trustees of the scheme to
enable them to acquire units of Ordinary Stock on behalf of the
scheme participants. The amount set aside is related to overall
Group performance assessed both in terms of real growth in
earnings per share (EPS) and how that real growth in
EPS compares with that experienced by a peer group of Irish and
UK financial institutions. In addition, as is permitted by Irish
taxation rules, Irish participants may, subject to certain
constraints, forego up to an equivalent amount of their salary
towards the acquisition by the trustees on their behalf of up to
an amount equal to their free scheme stock. The maximum
distribution under the schemes is 4% of a participants
salary. To-date, annual distributions under the schemes have
ranged between nil and 3.5% of each participants salary.

(b) Sharesave Scheme (SAYE
Scheme)

At the 1999 Annual General Court the stockholders
approved the establishment of a SAYE Scheme. Under this scheme,
which has an Irish and UK version in order to conform with the
relevant revenue legislation in both jurisdictions, all
employees of the Bank and of certain subsidiaries are eligible
to participate provided they are employed by the Bank on the day
that the invitation to participate issues and on the day that
the grant of options is made. This scheme was launched in
February 2000 and options to purchase units of Ordinary Stock
were granted to participating employees at an option price of
5.40, which
represented a 20% discount to the then market price. As at
May 1, 2003 there are outstanding options under the scheme
over 12,410,524 units of Ordinary Stock (1.25% of the issued
ordinary capital). These options are ordinarily exercisable,
provided the participants savings contracts are complete,
between May 2003 and May 2007.

F-49



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



33  CAPITAL
STOCK  (continued)


(c)  Stock Option Scheme

Options to subscribe for units of Ordinary Stock
are granted under the terms of the Stock Option Scheme. The
original scheme was approved by the stockholders at the Annual
General Court in July 1986 and its successor scheme, Bank
of Ireland Group Stock Option Scheme  1996, was
approved by the stockholders at the Annual General Court held in
July 1996. Key executives may participate in the current scheme
at the discretion of the Remuneration Committee. The total value
of options granted may not exceed four times an executives
remuneration. The subscription price per unit of stock shall not
be less than the market value of the stock at the date of grant.
The exercise of options granted since 1996 are conditional upon
EPS achieving a cumulative growth of at least 2% per annum
compound above the increase in the Consumer Price Index over
either the three year period, or if not achieved, the six year
period, commencing with the period in which the options are
granted. The performance conditions for options granted in 1996
up to and including 2001 have been satisfied. Options may not be
transferred or assigned and may be exercised only between the
third and tenth anniversaries of their grant. During the year
45,000 options lapsed. The market price of the Banks
Ordinary Stock at March 31, 2003 was
9.71 (2002:
12.41) and the
range during the year to March 31, 2003 was
8.70 to
14.05.
Outstanding options under the Stock Option Scheme are
exercisable at prices ranging between
1.436 to
12.50 between
now and December 2012. At March 31, 2003, options were
outstanding in respect of 5,744,500 units, 0.58% of the stock in
issue (2002: 6,645,742 units).

(d) Long Term Performance Stock
Plan

This plan, approved by the stockholders in 1999
links the number of units of stock receivable by participants,
to the Groups Total Shareholder Return (TSR).
TSR represents stock price growth plus dividends.

Each year selected key senior executives
participating in the plan receive a conditional award of a
number of units of Ordinary Stock. (The maximum value of these
units may not exceed 40% of the executives salary at the
time of the award).

The proportion of these units which actually vest
in the executive on the 3rd anniversary of the date of the
original award is based on the Groups TSR relative to
other companies as follows:



| |   |                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Before any proportion of a conditional award may
    vest, the cumulative growth in the Groups EPS must exceed
    the annual CPI plus 5%, compounded over the three years from the
    date of the award.                                                                                
|
| |  | Provided this condition has been satisfied, the
    proportion of the award which vests after 3 years is based
    on the Groups TSR relative to other companies both in a
    peer group of Irish and UK financial institutions and in
    relation to the FTSE-100 companies as follows:

|                                   |  |         |     |                      |  |                        |  |       |     |  |  |  |      | 
|---------------------------------- |  | ------- | --- | -------------------- |  | ---------------------- |  | ----- | --- |  |  |  | ---- | 
|                                  
|                                  
|                                  
|LEVEL OF VESTING AS A % OF AWARD  
|                                  
|                                  
|                                   |  | %       |     | TSR ranking          |  | %                      |  | Total
|TSR ranking relative to peer group |  | Vesting |     | relative to FTSE 100 |  | Vesting                |  | %    
|                                  
|                                  
|1st or 2nd                         |  |         | 50% |                      |  | Top decile             |  |       | 50% |  |  |  | 100% | 
|                                  
|3rd or 4th                         |  |         | 40% |                      |  | Top quartile           |  |       | 40% |  |  |  | 80%  | 
|                                  
|5th (Median)                       |  |         | 25% |                      |  | Median to top quartile |  |       | 25% |  |  |  | 50%  | 
|                                  
|Below median                       |  |         | Nil |                      |  | Below median           |  |       | Nil |  |  |  | Nil  | 
|                                  

F-50



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



33  CAPITAL
STOCK  (continued)




(d) Long Term Performance Stock
Plan (continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Additionally 80% of stock which vests in an
    executive must be held for a further two years following which,
    provided the executive is still employed by the Group, he or she
    will be awarded additional units of stock not exceeding 20% of
    the units which had vested and were held. If the original units
    which vested continue to be held for a further 5 years
    (i.e. 10 years from the date of the original
    conditional award) and the executive remains in the employment
    of the Group, he will be awarded a further 30% of the units
    which originally vested and were held.

As at March 31, 2003 conditional awards
totalling 779,766 units of stock were outstanding to the current
participants of this plan.

(e)  Limitations on Employee Stock
Issue and Stock Option Schemes

All of the above stock issue and stock option
schemes are subject to a range of flow rate controls approved by
the stockholders and which conform to current institutional
investor guidelines.

F-51



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

34  RESERVES

|                                                 |  |                 |       |      |  |  |       |  
|------------------------------------------------ |  | --------------- | ----- | ---- |  |  | ----- | -
|                                                 |  |                
|                                                 |  | At March 31,   
|                                                 |  |                
|                                                 |  | 2003            |       | 2002
|                                                 |  |                 |       |     
|                                                 |  |                
|                                                 |  | (in  millions)
|Stock premium account                            |  |                 |       |      |  |  |       |  
|Opening balance                                  |  |                 | 773   |      |  |  | 726   |  
|Premium on issue of capital stock                |  |                 | 5     |      |  |  | 7     |  
|Premium on stock alternative scheme issue        |  |                 |      |      |  |  | 39    |  
|Exchange adjustments                             |  |                 | (8    | )    |  |  | 1     |  
|                                                 |  |                 |       |      |  |  |       |  
|Closing balance                                  |  |                 | 770   |      |  |  | 773   |  
|                                                 |  |                 |       |      |  |  |       |  
|Capital reserve                                  |  |                 |       |      |  |  |       |  
|Opening balance                                  |  |                 | 397   |      |  |  | 311   |  
|Exchange adjustments                             |  |                 | (5    | )    |  |  |      |  
|Transfer from revenue reserves                   |  |                 | 44    |      |  |  | 73    |  
|Transfer to revenue reserve                      |  |                 |      |      |  |  | (1    | )
|Capital Redemption Reserve Fund(1)               |  |                 |      |      |  |  | 14    |  
|                                                 |  |                 |       |      |  |  |       |  
|Closing balance                                  |  |                 | 436   |      |  |  | 397   |  
|                                                 |  |                 |       |      |  |  |       |  
|Profit and loss account                          |  |                 |       |      |  |  |       |  
|Opening balance                                  |  |                 | 2,143 |      |  |  | 1,850 |  
|Profit retained                                  |  |                 | 411   |      |  |  | 489   |  
|Exchange adjustments                             |  |                 | (328  | )    |  |  | 21    |  
|Ordinary stock buyback                           |  |                 | (124  | )    |  |  |      |  
|Goodwill written back on disposal of subsidiary  |  |                 | 5     |      |  |  |      |  
|Transfer to capital redemption reserve fund      |  |                 |      |      |  |  | (14   | )
|Preference Stock buyback                         |  |                 |      |      |  |  | (247  | )
|Transfer from revaluation reserve                |  |                 | 22    |      |  |  | 45    |  
|Tax effect of disposal of revalued property      |  |                 |      |      |  |  | (2    | )
|Transfer from capital reserve                    |  |                 |      |      |  |  | 1     |  
|                                                 |  |                 |       |      |  |  |       |  
|Closing balance                                  |  |                 | 2,129 |      |  |  | 2,143 |  
|                                                 |  |                 |       |      |  |  |       |  
|Revaluation reserve                              |  |                 |       |      |  |  |       |  
|Opening balance                                  |  |                 | 208   |      |  |  | 252   |  
|Exchange adjustments                             |  |                 | (5    | )    |  |  | 1     |  
|Transfer to revenue reserves on sale of property |  |                 | (22   | )    |  |  | (45   | )
|                                                 |  |                 |       |      |  |  |       |  
|Closing balance                                  |  |                 | 181   |      |  |  | 208   |  
|                                                 |  |                 |       |      |  |  |       |  






|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As the Preference Stock which was purchased was
    cancelled, an amount equal to the nominal value of the units
    purchased was transferred to a capital redemption reserve fund.

35  PENSION COSTS

The Group operates a number of defined benefit
pension schemes in Ireland and overseas. The schemes are funded
and the assets of the schemes are held in separate trustee
administered funds.

The Group has continued to account for pensions
in accordance with SSAP 24 and the disclosures given in
(a) are those required by this standard. Accounting for
pensions under FRS 17 will not be mandatory for the Group until
year ended March 31, 2006 and prior to this, phased
transitional disclosures are required by this standard and these
additional disclosures are set out in (b).

F-52



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



35  PENSION
COSTS  (continued)


(a)  SSAP 24 Pension
disclosures

An independent actuarial valuation of the Bank of
Ireland Staff Pensions Fund (the main scheme) was carried out by
Watson Wyatt, consulting actuaries as at March 31, 2001
using the projected unit credit method of funding. The principal
assumption in the review was that the annual rate of return on
investments would be 4.0 per cent higher than the
annual rate of increase in pensionable remuneration and pensions
in course of payment.

The market value of the assets of the main scheme
at March 31, 2001 was
2,762.6 million
and the actuarial value of the net assets, after allowing for
expected future increases in earnings and pensions, represented
119 % of the benefits that had accrued to members. The surplus
is being utilised by charging to the surplus the cost of pension
augmentations and by the Bank ceasing its contributions to the
scheme until at least the next actuarial valuation, which will
be carried out as at March 31, 2004. The accounting
treatment that has been adopted in accordance with SSAP 24
is as follows:-



| |   |                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the actuarial surplus is being spread over the
    average remaining service lives of current employees;                                                                                                   
|
| |  | a provision of
    105 million
    (2002:
    73 million)
    in regard to the main scheme is included in the accounts being
    the excess of the accumulated pension charge over the amount
    funded;
|
| |  | the amortisation of the surplus gives rise to a
    net cost of
    32 million
    in relation to the main scheme, compared to a net cost of
    19 million
    in 2002.                                 

The total pension charge for the Group in respect
of the year ended March 31, 2003 was
57 million
(2002:
39 million).

Watson Wyatt have made an interim valuation of
the Bank of Ireland Staff Pensions Fund as at March 31,
2003. The actuary considers that the assumptions used for the
formal valuation at 31 March 2001 continue to be
appropriate. The interim valuation discloses that the actuarial
value of the net assets after allowing for expected future
increases in earnings and pensions represented 105% of the
benefits that have accrued to members. The actuary has
recommended that the existing funding programme be maintained
until the results of the next formal valuation of the Fund,
which will be made as at March 31, 2004, are available.

(b) FRS 17 Pension disclosures

The additional disclosures required by
FRS 17 in relation to the defined benefit plans in the
Group are set out below.

|                                        |  |                  |      |                  |  |  |      | 
|--------------------------------------- |  | ---------------- | ---- | ---------------- |  |  | ---- | 
|                                        |  | 2003             |      | 2002            
|Major assumptions                       |  | Weighted average |      | Weighted average
|                                        |  |                  |      |                 
|                                        |  | %                |      | %               
|Rate of general increase in salaries    |  |                  | 3.29 |                  |  |  | 3.26 | 
|Rate of increase in pensions in payment |  |                  | 2.91 |                  |  |  | 2.91 | 
|Rate of increase to deferred pensions   |  |                  | 2.50 |                  |  |  | 2.50 | 
|Discount rate for scheme liabilities    |  |                  | 5.50 |                  |  |  | 6.00 | 
|Inflation rate                          |  |                  | 2.50 |                  |  |  | 2.50 | 

F-53



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



35  PENSION
COSTS  (continued)




(b) FRS 17 Pension
disclosures (continued)


The expected long term rates of return and market
value of the assets of the material defined benefit plans at
March 31, 2003 and March 31, 2002 were as follows:-

|                                      |  |                 |       |                    |  |                 |      |                    |  |  |       |  |  |  |      | 
|------------------------------------- |  | --------------- | ----- | ------------------ |  | --------------- | ---- | ------------------ |  |  | ----- |  |  |  | ---- | 
|                                      |  |                 |       |                   
|                                      |  | March 31, 2003  |       | March 31, 2002    
|                                      |  |                 |       |                   
|                                      |  | Market          |       | Expected long term |  | Market          |      | Expected long term
|                                      |  | value           |       | rate of return     |  | value           |      | rate of return    
|                                      |  |                 |       |                    |  |                 |      |                   
|                                      |  | (in  millions) |       |                    |  | (in  millions) |      |                   
|Equities                              |  |                 | 1,734 |                    |  |                 | 9.0% |                    |  |  | 2,484 |  |  |  | 7.5% | 
|Bonds                                 |  |                 | 464   |                    |  |                 | 4.2% |                    |  |  | 579   |  |  |  | 5.5% | 
|Property                              |  |                 | 337   |                    |  |                 | 8.0% |                    |  |  | 329   |  |  |  | 6.5% | 
|Other                                 |  |                 | 73    |                    |  |                 | 4.0% |                    |  |  | 89    |  |  |  | 4.5% | 
|                                      |  |                 |       |                    |  |                 |      |                    |  |  |       |  |  |  |      | 
|Total market value of schemes assets |  |                 | 2,608 |                    |  |                 |      |                    |  |  | 3,481 |  |  |  |      | 
|                                      |  |                 |       |                    |  |                 |      |                    |  |  |       |  |  |  |      | 
|Present value of schemes liabilities |  |                 | 3,407 |                    |  |                 |      |                    |  |  | 2,908 |  |  |  |      | 
|                                      |  |                 |       |                    |  |                 |      |                    |  |  |       |  |  |  |      | 

|                                       |  |    |      |   |  |    |  |  |  |  |     |   |  |  |  | 
|-------------------------------------- |  | -- | ---- | - |  | -- |  |  |  |  | --- | - |  |  |  | 
|                                       |  | m |      |   |  | m |  | 
|                                       |  |    |      |   |  |    |  | 
|Aggregate deficit in schemes           |  |    | (800 | ) |  |    |  |  |  |  | (30 | ) |  |  |  | 
|Aggregate surplus in schemes           |  |    | 1    |   |  |    |  |  |  |  | 603 |   |  |  |  | 
|                                       |  |    |      |   |  |    |  |  |  |  |     |   |  |  |  | 
|Overall (deficit)/surplus in schemes   |  |    | (799 | ) |  |    |  |  |  |  | 573 |   |  |  |  | 
|Related deferred tax asset/(liability) |  |    | 118  |   |  |    |  |  |  |  | (67 | ) |  |  |  | 
|                                       |  |    |      |   |  |    |  |  |  |  |     |   |  |  |  | 
|Net pension (liability)/asset          |  |    | (681 | ) |  |    |  |  |  |  | 506 |   |  |  |  | 
|                                       |  |    |      |   |  |    |  |  |  |  |     |   |  |  |  | 

If the above amounts had been recognised in the
accounts, the net assets and profit and loss account reserves,
would be as follows:-

|                                                                |  |                 |       |           |  |  |       | 
|--------------------------------------------------------------- |  | --------------- | ----- | --------- |  |  | ----- | 
|                                                                |  | March 31,       |       | March 31,
|                                                                |  | 2003            |       | 2002     
|                                                                |  |                 |       |          
|                                                                |  |                
|                                                                |  | (in  millions)
|Net assets of the Group excluding pension asset                 |  |                 | 4,195 |           |  |  | 4,200 | 
|Pension provision (net of deferred tax)                         |  |                 | 110   |           |  |  | 79    | 
|                                                                |  |                 |       |           |  |  |       | 
|                                                                |  |                 | 4,305 |           |  |  | 4,279 | 
|Net pension (liability)/asset                                   |  |                 | (681  | )         |  |  | 506   | 
|                                                                |  |                 |       |           |  |  |       | 
|Net assets of the Group including pension
    (liability)/asset |  |                 | 3,624 |           |  |  | 4,785 | 
|                                                                |  |                 |       |           |  |  |       | 
|Profit and loss account reserve excluding pension
    asset     |  |                 | 2,235 |           |  |  | 2,213 | 
|Pension provision (net of deferred tax)                         |  |                 | 110   |           |  |  | 79    | 
|                                                                |  |                 |       |           |  |  |       | 
|                                                                |  |                 | 2,345 |           |  |  | 2,292 | 
|Pension reserve                                                 |  |                 | (681  | )         |  |  | 506   | 
|                                                                |  |                 |       |           |  |  |       | 
|Profit and loss account reserve including pension
    asset     |  |                 | 1,664 |           |  |  | 2,798 | 
|                                                                |  |                 |       |           |  |  |       | 

F-54



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



35  PENSION
COSTS  (continued)




(b) FRS 17 Pension
disclosures (continued)


The following table sets out the components of
the defined benefit cost.

|                                        |                                               |                 |     |      |  
|--------------------------------------- | --------------------------------------------- | --------------- | --- | ---- | -
|                                        |                                               | March 31,      
|                                        |                                               | 2003           
|                                        |                                               |                
|                                        |                                               | (in  millions)
|Other finance income                    |                                               |                 |     |     
|                                        | Expected return on pension scheme assets      |                 |     | 239  |  
|                                        | Interest on pension scheme liabilities        |                 |     | (170 | )
|                                        |                                               |                 |     |     
|                                        | Net return                                    |                 |     | 69   |  
|Included within administrative expenses |                                               |                 |     |     
|                                        | Current service cost                          |                 |     | (95  | )
|                                        | Past service cost                             |                 |     | (1   | )
|                                        |                                               |                 |     |     
|                                        |                                               |                 | (96 | )   
|                                        |                                               |                 |     |     
|                                        | Cost of providing defined retirement benefits |                 |     | (27  | )
|                                        |                                               |                 |     |     

|                                                                                                |  |                 |        |  
|----------------------------------------------------------------------------------------------- |  | --------------- | ------ | -
|                                                                                                |  | March 31,      
|                                                                                                |  | 2003           
|                                                                                                |  |                
|                                                                                                |  | (in  millions)
|Analysis of the amount recognised in Statement
    of Total Recognised Gains and Losses (STRGL) |  |                 |        |  
|(Loss) on assets                                                                                |  |                 | (989   | )
|Experience (loss) on liabilities                                                                |  |                 | (24    | )
|(Loss) on change of assumptions (financial and
    demographic)                                 |  |                 | (357   | )
|Currency gain                                                                                   |  |                 | 8      |  
|                                                                                                |  |                 |        |  
|Total (loss) recognised in STRGL before
    adjustment for tax                                  |  |                 | (1,362 | )
|                                                                                                |  |                 |        |  

|                                                  |  |                 |        |  
|------------------------------------------------- |  | --------------- | ------ | -
|                                                  |  | March 31,      
|                                                  |  | 2003           
|                                                  |  |                
|                                                  |  | (in  millions)
|Movement in surplus (deficit) during the
    year |  |                 |        |  
|Surplus in scheme at beginning of period          |  |                 | 573    |  
|Contributions paid                                |  |                 | 21     |  
|Current service cost                              |  |                 | (95    | )
|Past service cost                                 |  |                 | (1     | )
|Acquisitions (loss)                               |  |                 | (4     | )
|Other finance income                              |  |                 | 69     |  
|Actuarial (loss)                                  |  |                 | (1,370 | )
|Currency gain                                     |  |                 | 8      |  
|                                                  |  |                 |        |  
|(Deficit) in the scheme at end of period          |  |                 | (799   | )
|Related deferred tax asset                        |  |                 | 118    |  
|                                                  |  |                 |        |  
|                                                  |  |                 | (681   | )
|                                                  |  |                 |        |  

F-55



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



35  PENSION
COSTS  (continued)




(b) FRS 17 Pension
disclosures (continued)


|                                                                          |  |                 |        |  
|------------------------------------------------------------------------- |  | --------------- | ------ | -
|                                                                          |  | (in  millions)
|                                                                          |  |                
|History of experience gains and losses for the
    year to March 31, 2003 |  |                 |        |  
|(Loss) on scheme assets:                                                  |  |                 |        |  
|Amount                                                                    |  |                 | (989   | )
|Percentage of scheme assets                                               |  |                 | (37.9% | )
|Experience (loss) on scheme
    liabilities:                              |  |                 |        |  
|Amount                                                                    |  |                 | (24    | )
|Percentage of scheme liabilities                                          |  |                 | (0.7%  | )
|Total actuarial (loss) recognised in
    STRGL:                           |  |                 |        |  
|Amount                                                                    |  |                 | (1,362 | )
|Percentage of scheme liabilities at end of period                         |  |                 | (40.0% | )

36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS

The Group is party to various types of financial
instruments in the normal course of business to generate
incremental income, to meet the financing need of its customers
and to reduce its own exposure to fluctuations in interest and
exchange rates. These financial instruments involve to varying
degrees, exposure to loss in the event of a default by a
counterparty (credit risk) and exposure to future
changes in interest and exchange rates (market risk).

Details of the objectives, policies and
strategies arising from the Groups use of financial
instruments, including derivative financial instruments and
market risk exposures presented in Item 11 
Market Risk on pages 83 to 92 (up to and
including the paragraphs on operational risk), excluding the
following sections entitled Country/Bank Limits, Review,
Provisions and allowances for loan losses on pages 88 and
89.

In respect of interest rate and exchange rate
contracts, underlying principal amounts are used to express the
volume of these transactions, but the amounts potentially
subject to credit risk are much smaller. Replacement cost
provides a better indication of the credit risk exposures facing
a bank. Replacement cost is the gross cost of replacing all
contracts that have a positive fair value, without giving effect
to offsetting positions with the same counterparty.

The underlying principal amounts and replacement
cost, by residual maturity of the Groups over-the-counter
and other non-exchange traded derivatives are presented in the
table below. This table does not include exchange traded
contracts which are included in the following Trading
Instruments table and Non Trading Derivatives table.

F-56



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                             |  |                 |        |        |  |       |        |                |  |       |        |  |  |  |        |  |  |  |        | 
|---------------------------- |  | --------------- | ------ | ------ |  | ----- | ------ | -------------- |  | ----- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                             |  |                 |        |        |  |      
|                             |  | March 31, 2003  |        |        |  |      
|                             |  |                 |        |       
|                             |  | Within          |        | One to |  | Over  |        | March 31, 2002
|                             |  | one             |        | five   |  | five  |        |               
|                             |  | Year            |        | years  |  | years |        | Total          |  | Total
|                             |  |                 |        |        |  |       |        |                |  |      
|                             |  |                
|                             |  | (in  millions)
|Underlying Principal Amount: |  |                 |        |        |  |       |        |                |  |       |        |  |  |  |        |  |  |  |        | 
|Exchange Rate Contracts      |  |                 | 11,215 |        |  |       | 1,218  |                |  |       | 233    |  |  |  | 12,666 |  |  |  | 11,428 | 
|Interest Rate Contracts      |  |                 | 47,923 |        |  |       | 26,072 |                |  |       | 12,331 |  |  |  | 86,326 |  |  |  | 64,858 | 
|Equity Contracts             |  |                 | 427    |        |  |       | 1,975  |                |  |       | 690    |  |  |  | 3,092  |  |  |  | 2,859  | 
|Replacement Cost             |  |                 |        |        |  |       |        |                |  |       |        |  |  |  |        |  |  |  |        | 
|Exchange Rate Contracts      |  |                 | 421    |        |  |       | 50     |                |  |       | 18     |  |  |  | 489    |  |  |  | 533    | 
|Interest Rate Contracts      |  |                 | 192    |        |  |       | 474    |                |  |       | 456    |  |  |  | 1,122  |  |  |  | 598    | 
|Equity Contracts             |  |                 | 5      |        |  |       | 10     |                |  |       | 20     |  |  |  | 35     |  |  |  | 58     | 

The replacement cost of the Groups over the
counter and other non-exchange traded derivatives analysed into
financial and non-financial counterparties for exchange rate
contracts, interest rate contracts and equity contracts were as
follows:

|                        |  |                 |       |           |  |       |     |       |  |  |       |  |  |  |       | 
|----------------------- |  | --------------- | ----- | --------- |  | ----- | --- | ----- |  |  | ----- |  |  |  | ----- | 
|                        |  |                 |       |          
|                        |  | March 31, 2003  |       |          
|                        |  |                 |       | March 31,
|                        |  |                 |       | Non-      |  |       |     | 2002 
|                        |  | Financial       |       | Financial |  | Total |     | Total
|                        |  |                 |       |           |  |       |     |      
|                        |  |                
|                        |  | (in  millions)
|Exchange Rate Contracts |  |                 | 448   |           |  |       | 41  |       |  |  | 489   |  |  |  | 533   | 
|Interest Rate Contracts |  |                 | 1,055 |           |  |       | 67  |       |  |  | 1,122 |  |  |  | 598   | 
|Equity Contracts        |  |                 | 35    |           |  |       |    |       |  |  | 35    |  |  |  | 58    | 
|                        |  |                 |       |           |  |       |     |       |  |  |       |  |  |  |       | 
|                        |  |                 | 1,538 |           |  |       | 108 |       |  |  | 1,646 |  |  |  | 1,189 | 
|                        |  |                 |       |           |  |       |     |       |  |  |       |  |  |  |       | 

F-57



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


Trading Instruments

Bank of Ireland Group maintains trading positions
in a variety of financial instruments including derivatives.
Most of these positions are a result of activity generated by
corporate customers while others represent trading decisions of
the Groups derivative and foreign exchange traders with a
view to generating incremental income. The following table
represents the underlying principal amounts, fair values and
average fair values by class of derivative trading instrument
for the Group at March 31, 2003 and 2002:

|                                             |                             |                 |        |       |  |         |     |       |   |  |  |      |  
|-------------------------------------------- | --------------------------- | --------------- | ------ | ----- |  | ------- | --- | ----- | - |  |  | ---- | -
|                                             |                             |                
|                                             |                             | 2003           
|                                             |                             |                
|                                             |                             | Underlying      |        |       |  | Average
|                                             |                             | Principal       |        | Fair  |  | Fair   
|                                             |                             | Amount(1)       |        | Value |  | Value  
|                                             |                             |                 |        |       |  |        
|                                             |                             |                
|                                             |                             | (in  millions)
|Interest rate contracts:                     |                             |                 |        |       |  |         |     |       |   |  |  |     
|Interest rate swaps                          |                             |                 | 62,691 |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     | 1,018 |   |  |  | 775  |  
|                                             | in an unfavourable position |                 |        |       |  |         |     | (907  | ) |  |  | (666 | )
|Interest rate caps, floors & options held    |                             |                 | 8,903  |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     | 2     |   |  |  | 3    |  
|                                             | in an unfavourable position |                 |        |       |  |         |     |      |   |  |  |     |  
|Interest rate caps, floors & options written |                             |                 | 8,733  |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     |      |   |  |  |     |  
|                                             | in an unfavourable position |                 |        |       |  |         |     | (5    | ) |  |  | (3   | )
|Forward rate agreements                      |                             |                 | 4,362  |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     | 4     |   |  |  | 2    |  
|                                             | in an unfavourable position |                 |        |       |  |         |     | (4    | ) |  |  | (2   | )
|Financial futures                            |                             |                 | 661    |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     |      |   |  |  |     |  
|                                             | in an unfavourable position |                 |        |       |  |         |     |      |   |  |  |     |  
|                                             |                             |                 |        |       |  |         |     |       |   |  |  |     
|                                             |                             |                 | 85,350 |       |  |         | 108 |       |   |  |  |     
|                                             |                             |                 |        |       |  |         |     |       |   |  |  |     
|Foreign exchange contracts:                  |                             |                 |        |       |  |         |     |       |   |  |  |     
|Forward foreign exchange                     |                             |                 | 8,101  |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     | 115   |   |  |  | 83   |  
|                                             | in an unfavourable position |                 |        |       |  |         |     | (143  | ) |  |  | (136 | )
|Currency Swaps                               |                             |                 | 106    |       |  |         |     |       |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |     | 4     |   |  |  | 1    |  
|                                             | in an unfavourable position |                 |        |       |  |         |     | (6    | ) |  |  | (2   | )
|                                             |                             |                 |        |       |  |         |     |       |   |  |  |     
|                                             |                             |                 | 8,207  |       |  |         | (30 | )     |   |  |  |     
|                                             |                             |                 |        |       |  |         |     |       |   |  |  |     
|                                             |                             |                 | 93,557 |       |  |         |     |       |   |  |  |     
|                                             |                             |                 |        |       |  |         |     |       |   |  |  |     






|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The underlying principal amount represents the
    notional amount upon which the instruments are based and does
    not generally represent the amounts exchanged by the parties to
    the instruments.

F-58



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                             |                             |                 |        |       |  |         |    |      |   |  |  |      |  
|-------------------------------------------- | --------------------------- | --------------- | ------ | ----- |  | ------- | -- | ---- | - |  |  | ---- | -
|                                             |                             |                
|                                             |                             | 2002           
|                                             |                             |                
|                                             |                             | Underlying      |        |       |  | Average
|                                             |                             | Principal       |        | Fair  |  | Fair   
|                                             |                             | Amount(1)       |        | Value |  | Value  
|                                             |                             |                 |        |       |  |        
|                                             |                             |                
|                                             |                             | (in  millions)
|Interest rate contracts:                     |                             |                 |        |       |  |         |    |      |   |  |  |     
|Interest rate swaps                          |                             |                 | 47,002 |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    | 447  |   |  |  | 488  |  
|                                             | in an unfavourable position |                 |        |       |  |         |    | (368 | ) |  |  | (399 | )
|Interest rate caps, floors & options held    |                             |                 | 4,305  |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    | 3    |   |  |  | 8    |  
|                                             | in an unfavourable position |                 |        |       |  |         |    |     |   |  |  |     |  
|Interest rate caps, floors & options written |                             |                 | 3,514  |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    |     |   |  |  |     |  
|                                             | in an unfavourable position |                 |        |       |  |         |    | (2   | ) |  |  | (2   | )
|Forward rate agreements                      |                             |                 | 1,438  |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    | 1    |   |  |  | 1    |  
|                                             | in an unfavourable position |                 |        |       |  |         |    | (1   | ) |  |  | (1   | )
|Financial futures                            |                             |                 | 1,161  |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    |     |   |  |  |     |  
|                                             | in an unfavourable position |                 |        |       |  |         |    |     |   |  |  |     |  
|                                             |                             |                 |        |       |  |         |    |      |   |  |  |     
|                                             |                             |                 | 57,420 |       |  |         | 80 |      |   |  |  |     
|                                             |                             |                 |        |       |  |         |    |      |   |  |  |     
|Foreign exchange contracts:                  |                             |                 |        |       |  |         |    |      |   |  |  |     
|Forward foreign exchange                     |                             |                 | 6,163  |       |  |         |    |      |   |  |  |     
|                                             | in a favourable position    |                 |        |       |  |         |    | 41   |   |  |  | 50   |  
|                                             | in an unfavourable position |                 |        |       |  |         |    | (49  | ) |  |  | (73  | )
|                                             |                             |                 |        |       |  |         |    |      |   |  |  |     
|                                             |                             |                 | 6,163  |       |  |         | (8 | )    |   |  |  |     
|                                             |                             |                 |        |       |  |         |    |      |   |  |  |     
|                                             |                             |                 | 63,583 |       |  |         |    |      |   |  |  |     
|                                             |                             |                 |        |       |  |         |    |      |   |  |  |     






|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The underlying principal amount represents the
    notional amount upon which the instruments are based and does
    not generally represent the amounts exchanged by the parties to
    the instruments.

|                                       |  |                 |    |            |  |            |    |  |  |  |    | 
|-------------------------------------- |  | --------------- | -- | ---------- |  | ---------- | -- |  |  |  | -- | 
|                                       |  | 2003            |    | 2002       |  | 2001      
|                                       |  |                 |    |            |  |           
|                                       |  |                 |    | (restated) |  | (restated)
|                                       |  |                
|                                       |  | (in  millions)
|Dealing profits                        |  |                 |    |            |  |            |    |  |  |  |    | 
|Securities and interest rate contracts |  |                 | 48 |            |  |            | 45 |  |  |  | 52 | 
|Foreign exchange contracts             |  |                 | 34 |            |  |            | 24 |  |  |  | 37 | 
|Equity contracts                       |  |                 | 3  |            |  |            | 12 |  |  |  | 2  | 
|                                       |  |                 |    |            |  |            |    |  |  |  |    | 
|Total                                  |  |                 | 85 |            |  |            | 81 |  |  |  | 91 | 
|                                       |  |                 |    |            |  |            |    |  |  |  |    | 

Dealing profits include the interest and funding
costs and the profits and losses arising on the purchase, and
sale or revaluation of trading instruments.

F-59



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


Non Trading Derivatives

The Group has significant business activities in
a range of currencies.

The operations of the Group are exposed to risk
of interest rate fluctuations to the extent that assets and
liabilities mature or reprice at different times or in differing
amounts. Derivatives allow the Group to modify the repricing or
maturity characteristics of assets and liabilities in a cost
efficient manner. This flexibility helps the Group to achieve
liquidity and risk management objectives.

Derivatives fluctuate in value as interest or
exchange rates rise or fall just as on-balance sheet assets and
liabilities fluctuate in value. If the derivatives are purchased
or sold as hedges of balance sheet items, the appreciation or
depreciation of the derivatives, as interest or exchange rates
change, will generally be offset by the unrealised appreciation
or depreciation of the hedged items.

To achieve its risk management objectives, the
Group uses a combination of derivative financial instruments,
particularly interest rate and currency swaps, futures and
options, as well as other contracts.

The following tables represent the underlying
principal amounts, average maturities and fair values by class
of instrument utilised for non trading activities for the Group
at March 31, 2003 and 2002.

|                           |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |      |  
|-------------------------- | -------------- | ------------- | ------ | -------- |  | ------- |  | -------- |  | ----- |  | ---- |  |  |  | ---- |  |  | ---- | ---- | -
|                           |                |              
|                           |                | 31 March 2003
|                           |                |              
|                           |                |               |        | Weighted |  |        
|                           |                | Underlying    |        | Weighted |  | Average |  | Weighted |  |      
|                           |                | Principal     |        | Average  |  | Receive |  | Average  |  | Fair 
|                           |                | Amount        |        | Maturity |  | Rate    |  | Pay Rate |  | Value
|                           |                |               |        |          |  |         |  |          |  |      
|                           |                | m            |        | in Years |  | %       |  | %        |  | m   
|Interest rate contracts:   |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|Interest Rate Swaps        |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| receive fixed            |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |               |        | 9,804    |  |         |  | 0.21     |  |       |  | 3.23 |  |  |  | 3.19 |  |  |      | 49   |  
|                           | 1-5 years      |               |        | 2,169    |  |         |  | 3.69     |  |       |  | 0.98 |  |  |  | 3.29 |  |  |      | 20   |  
|                           | 5-10 years     |               |        | 556      |  |         |  | 5.66     |  |       |  | 0.91 |  |  |  | 2.26 |  |  |      | 7    |  
|                           | Over 10 years  |               |        | 174      |  |         |  | 19.0     |  |       |  | 5.26 |  |  |  |     |  |  |      | (2   | )
|Interest Rate Swaps        |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| pay fixed                |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |               |        | 1,849    |  |         |  | 0.37     |  |       |  | 2.58 |  |  |  | 2.81 |  |  |      | (6   | )
|                           | 1-5 years      |               |        | 846      |  |         |  | 3.28     |  |       |  | 2.67 |  |  |  | 6.61 |  |  |      | (102 | )
|                           | 5-10 years     |               |        | 550      |  |         |  | 7.57     |  |       |  | 2.54 |  |  |  | 5.55 |  |  |      | (62  | )
|                           | Over 10 years  |               |        | 750      |  |         |  | 15.72    |  |       |  | 2.58 |  |  |  | 5.66 |  |  |      | (92  | )
|Interest Rate Swaps        |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| pay and receive floating |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |               |        | 102      |  |         |  | 0.30     |  |       |  | 2.68 |  |  |  | 2.64 |  |  |      | (1   | )
|                           | 1-5 years      |               |        | 296      |  |         |  | 2.61     |  |       |  | 2.90 |  |  |  | 2.61 |  |  |      | 8    |  
|                           | 5-10 years     |               |        | 178      |  |         |  | 6.96     |  |       |  | 3.19 |  |  |  | 3.39 |  |  |      | 4    |  
|                           | Over 10 years  |               |        | 374      |  |         |  | 27.46    |  |       |  | 3.79 |  |  |  | 2.84 |  |  |      | 3    |  
|Forward Rate Agreements    |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |               |        | 20       |  |         |  | 0.47     |  |       |  |     |  |  |  | 2.26 |  |  |      |     |  
|Interest Rate Caps         |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |               |        | 29       |  |         |  | 0.87     |  |       |  | 5.40 |  |  |  |     |  |  |      |     |  
|                           | 1-5 years      |               |        | 153      |  |         |  | 3.04     |  |       |  | 6.09 |  |  |  |     |  |  |      |     |  
|                           |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           |                |               | 17,850 |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  | (174 | )   
|                           |                |               |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     

F-60



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                   |                |               |        |          |  |       |  |      |  |  |      |      |  
|---------------------------------- | -------------- | ------------- | ------ | -------- |  | ----- |  | ---- |  |  | ---- | ---- | -
|                                   |                |              
|                                   |                | 31 March 2003
|                                   |                |              
|                                   |                | Underlying    |        | Weighted |  |      
|                                   |                | Principal     |        | Average  |  | Fair 
|                                   |                | Amount        |        | Maturity |  | Value
|                                   |                |               |        |          |  |      
|                                   |                | m            |        | in Years |  | m   
|Exchange rate contracts:           |                |               |        |          |  |       |  |      |  |  |      |     
|Forward Foreign Exchange           |                |               |        |          |  |       |  |      |  |  |      |     
|                                   | 1 year or less |               |        | 1,702    |  |       |  | 0.16 |  |  |      | 55   |  
|                                   | 1-5 years      |               |        | 54       |  |       |  | 1.63 |  |  |      | 2    |  
|Currency Swaps                     |                |               |        |          |  |       |  |      |  |  |      |     
|                                   | 1 year or less |               |        | 1,313    |  |       |  | 0.41 |  |  |      | (36  | )
|                                   | 1-5 years      |               |        | 1,023    |  |       |  | 2.62 |  |  |      | (23  | )
|                                   | 5-10 years     |               |        | 181      |  |       |  | 5.70 |  |  |      | 5    |  
|                                   | Over 10 years  |               |        | 52       |  |       |  | 11.0 |  |  |      | 4    |  
|Currency Options                   |                |               |        |          |  |       |  |      |  |  |      |     
|                                   | 1 year or less |               |        | 134      |  |       |  | 0.07 |  |  |      | 1    |  
|                                   |                |               |        |          |  |       |  |      |  |  |      |     
|                                   |                |               | 4,459  |          |  |       |  |      |  |  | 8    |     
|                                   |                |               |        |          |  |       |  |      |  |  |      |     
|Equity and commodity contracts:    |                |               |        |          |  |       |  |      |  |  |      |     
|Equity Index Linked Contracts held |                |               |        |          |  |       |  |      |  |  |      |     
|                                   | 1 year or less |               |        | 427      |  |       |  | 0.48 |  |  |      | (8   | )
|                                   | 1-5 years      |               |        | 1,975    |  |       |  | 3.48 |  |  |      | (193 | )
|                                   | 5-10 years     |               |        | 690      |  |       |  | 5.81 |  |  |      | (43  | )
|                                   |                |               |        |          |  |       |  |      |  |  |      |     
|                                   |                |               | 3,092  |          |  |       |  |      |  |  | (244 | )   
|                                   |                |               |        |          |  |       |  |      |  |  |      |     
|                                   |                |               | 25,401 |          |  |       |  |      |  |  | (410 | )   
|                                   |                |               |        |          |  |       |  |      |  |  |      |     

F-61



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |      |  
|-------------------------- | -------------- | -------------- | ------ | -------- |  | ------- |  | -------- |  | ----- |  | ---- |  |  |  | ---- |  |  | --- | ---- | -
|                           |                |               
|                           |                | March 31, 2002
|                           |                |               
|                           |                |                |        | Weighted |  |        
|                           |                | Underlying     |        | Weighted |  | Average |  | Weighted |  |      
|                           |                | Principal      |        | Average  |  | Receive |  | Average  |  | Fair 
|                           |                | Amount         |        | Maturity |  | Rate    |  | Pay Rate |  | Value
|                           |                |                |        |          |  |         |  |          |  |      
|                           |                | m             |        | in Years |  | %       |  | %        |  | m   
|Interest Rate Contracts:   |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|Interest Rate Swaps        |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
| receive fixed            |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 5,911    |  |         |  | 0.33     |  |       |  | 3.82 |  |  |  | 3.55 |  |  |     | 52   |  
|                           | 1-5 years      |                |        | 2,637    |  |         |  | 2.42     |  |       |  | 1.01 |  |  |  | 3.10 |  |  |     | 54   |  
|                           | 5-10 years     |                |        | 728      |  |         |  | 6.33     |  |       |  | 1.25 |  |  |  | 2.93 |  |  |     | 3    |  
|Interest Rate Swaps        |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
| pay fixed                |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 728      |  |         |  | 0.34     |  |       |  | 3.43 |  |  |  | 4.20 |  |  |     | (7   | )
|                           | 1-5 years      |                |        | 1,356    |  |         |  | 2.03     |  |       |  | 2.31 |  |  |  | 4.30 |  |  |     | (115 | )
|                           | 5-10 years     |                |        | 568      |  |         |  | 5.68     |  |       |  | 2.47 |  |  |  | 4.90 |  |  |     | (32  | )
|                           | Over 10 years  |                |        | 754      |  |         |  | 15.44    |  |       |  | 3.33 |  |  |  | 5.60 |  |  |     | (17  | )
|Interest Rate Swaps        |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
| pay and receive floating |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 50       |  |         |  | 0.67     |  |       |  | 3.11 |  |  |  | 3.22 |  |  |     |     |  
|                           | 1-5 years      |                |        | 261      |  |         |  | 2.88     |  |       |  | 3.29 |  |  |  | 3.07 |  |  |     | 7    |  
|                           | 5-10 years     |                |        | 189      |  |         |  | 6.61     |  |       |  | 3.94 |  |  |  | 3.89 |  |  |     | 4    |  
|                           | Over 10 years  |                |        | 446      |  |         |  | 28.71    |  |       |  | 4.00 |  |  |  | 3.44 |  |  |     | 3    |  
|Forward Rate Agreements    |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 8        |  |         |  | 0.99     |  |       |  |     |  |  |  | 5.28 |  |  |     |     |  
|Interest Rate Caps         |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 33       |  |         |  | 0.33     |  |       |  | 7.29 |  |  |  | 1.12 |  |  |     |     |  
|                           | 1-5 years      |                |        | 172      |  |         |  | 4.00     |  |       |  | 6.09 |  |  |  | 0.0  |  |  |     |     |  
|Interest Rate Floors       |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           | 1 year or less |                |        | 20       |  |         |  | 0.54     |  |       |  | 1.22 |  |  |  | 4.22 |  |  |     |     |  
|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     
|                           |                |                | 13,861 |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  | (48 | )   
|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |     |     

F-62



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                   |                |                |        |          |  |       |  |       |  |  |      |      |  
|---------------------------------- | -------------- | -------------- | ------ | -------- |  | ----- |  | ----- |  |  | ---- | ---- | -
|                                   |                |               
|                                   |                | March 31, 2002
|                                   |                |               
|                                   |                | Underlying     |        | Weighted |  |      
|                                   |                | Principal      |        | Average  |  | Fair 
|                                   |                | Amount         |        | Maturity |  | Value
|                                   |                |                |        |          |  |      
|                                   |                | m             |        | in Years |  | m   
|Exchange Rate Contracts:           |                |                |        |          |  |       |  |       |  |  |      |     
|Forward Foreign Exchange           |                |                |        |          |  |       |  |       |  |  |      |     
|                                   | 1 year or less |                |        | 1,558    |  |       |  | 0.17  |  |  |      | 281  |  
|                                   | 1-5 years      |                |        | 155      |  |       |  | 1.70  |  |  |      |     |  
|Currency Swaps                     |                |                |        |          |  |       |  |       |  |  |      |     
|                                   | 1 year or less |                |        | 286      |  |       |  | 0.50  |  |  |      | 8    |  
|                                   | 1-5 years      |                |        | 2,887    |  |       |  | 1.90  |  |  |      | 62   |  
|                                   | 5-10 years     |                |        | 257      |  |       |  | 6.29  |  |  |      | 14   |  
|                                   | Over 10 years  |                |        | 89       |  |       |  | 11.95 |  |  |      | 17   |  
|Currency Options                   |                |                |        |          |  |       |  |       |  |  |      |     
|                                   | 1 year or less |                |        | 19       |  |       |  | 0.43  |  |  |      |     |  
|                                   |                |                |        |          |  |       |  |       |  |  |      |     
|                                   |                |                | 5,251  |          |  |       |  |       |  |  | 382  |     
|                                   |                |                |        |          |  |       |  |       |  |  |      |     
|Equity and Commodity Contracts:    |                |                |        |          |  |       |  |       |  |  |      |     
|Equity Index Linked Contracts held |                |                |        |          |  |       |  |       |  |  |      |     
|                                   | 1 year or less |                |        | 518      |  |       |  | 0.42  |  |  |      | 61   |  
|                                   | 1-5 years      |                |        | 1,777    |  |       |  | 3.03  |  |  |      | (172 | )
|                                   | 5-10 years     |                |        | 564      |  |       |  | 5.48  |  |  |      | (99  | )
|                                   |                |                |        |          |  |       |  |       |  |  |      |     
|                                   |                |                | 2,859  |          |  |       |  |       |  |  | (210 | )   
|                                   |                |                |        |          |  |       |  |       |  |  |      |     
|                                   |                |                | 21,971 |          |  |       |  |       |  |  | 124  |     
|                                   |                |                |        |          |  |       |  |       |  |  |      |     

The carrying value of derivatives is included in
the balance sheet under prepayments and accrued income or
accruals and deferred income depending on whether the carrying
value is an asset or a liability.

Reconciliation of movements in notional
amounts of interest rate, exchange rate and equity index linked
instruments.

|                           |  |                 |         |       |  |          |        |          |  |        |        |   |  |  |        |   |  |  |       |  
|-------------------------- |  | --------------- | ------- | ----- |  | -------- | ------ | -------- |  | ------ | ------ | - |  |  | ------ | - |  |  | ----- | -
|                           |  |                 |         |       |  |          |        | Forward  |  | Equity
|                           |  | Interest        |         |       |  | Currency |        | Foreign  |  | Index 
|                           |  | Rate Swaps      |         | FRAs |  | Swaps    |        | Exchange |  | Linked
|                           |  |                 |         |       |  |          |        |          |  |       
|                           |  |                
|                           |  | (in  millions)
|At April 1, 2002           |  |                 | 13,638  |       |  |          | 8      |          |  |        | 3,519  |   |  |  | 1,092  |   |  |  | 2,874 |  
|Exchange adjustments       |  |                 | (971    | )     |  |          | (1     | )        |  |        | (163   | ) |  |  | 95     |   |  |  | (262  | )
|Additions                  |  |                 | 37,934  |       |  |          | 2,509  |          |  |        | 1,921  |   |  |  | 9,254  |   |  |  | 959   |  
|Maturities/ amortisations |  |                 | (32,786 | )     |  |          | (2,516 | )        |  |        | (2,668 | ) |  |  | (8,054 | ) |  |  | (464  | )
|Cancellations              |  |                 | (158    | )     |  |          |       |          |  |        | (39    | ) |  |  | (1,369 | ) |  |  |      |  
|                           |  |                 |         |       |  |          |        |          |  |        |        |   |  |  |        |   |  |  |       |  
|At March 31, 2003          |  |                 | 17,657  |       |  |          |       |          |  |        | 2,570  |   |  |  | 1,018  |   |  |  | 3,107 |  
|                           |  |                 |         |       |  |          |        |          |  |        |        |   |  |  |        |   |  |  |       |  

All figures are translated at the closing
exchange rate.

Unrecognised gains and losses on derivative
hedges

Gains and losses on instruments used for hedging
are recognised in line with the underlying items which are being
hedged. As a result, any gains or losses on the hedging
instrument arising from changes in the fair value are

F-63



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


not recognised in the profit and loss account
immediately but are accounted for in the same manner as the
hedged item. See also Note 1.9 stating the accounting
policy on Derivatives for further details.

The unrecognised net losses on instruments used
for hedging as at 31 March 2003 were
242m (2002:
losses 297m).

The net losses expected to be recognised in
2003/2004 is 16m
(2002/03: gain
45m) and
thereafter the net losses expected to be recognised is
225m (2002/03:
losses 342m).

The net gains recognised in 2002/03 in respect of
previous years were
45m (2001/02:
gain 41m) and
the net gains arising in 2002/03 which were not recognised in
2002/03 were 11m
(2001/02 losses
281m).

Non Trading Derivative Deferred
Balances

The table below summarises the deferred gains and
losses at 31 March 2003.

|                                                                                                          |  |          |     |           |  |                |      |   |  |  |      |  
|--------------------------------------------------------------------------------------------------------- |  | -------- | --- | --------- |  | -------------- | ---- | - |  |  | ---- | -
|                                                                                                          |  |          |     |          
|                                                                                                          |  | Deferred |     | Total net
|                                                                                                          |  |          |     | deferred 
|                                                                                                          |  | Gains    |     | Losses    |  | gains/(losses)
|                                                                                                          |  |          |     |           |  |               
|                                                                                                          |  | m       |     | m        |  | m            
|As at 1 April 2002                                                                                        |  |          | 6.4 |           |  |                | (3.7 | ) |  |  | 2.7  |  
|Gains and losses arising in previous years that
    were recognised in the year ended 31 March 2003       |  |          | 2.6 |           |  |                | (1.8 | ) |  |  | 0.8  |  
|                                                                                                          |  |          |     |           |  |                |      |   |  |  |      |  
|Gains and losses arising before 1 April 2002
    that were not recognised in the year ended 31 March 2003 |  |          | 3.8 |           |  |                | (1.9 | ) |  |  | 1.9  |  
|Gains and losses arising in the year ended
    31 March 2003 that were not recognised in that year        |  |          | 0.3 |           |  |                | (1.4 | ) |  |  | (1.1 | )
|                                                                                                          |  |          |     |           |  |                |      |   |  |  |      |  
|As at 31 March 2003                                                                                       |  |          | 4.1 |           |  |                | (3.3 | ) |  |  | 0.8  |  
|                                                                                                          |  |          |     |           |  |                |      |   |  |  |      |  
|Of which:                                                                                                 |  |          |     |           |  |                |      |   |  |  |      |  
|Gains and losses expected to be recognised in the
    year ended 31 March 2004                            |  |          | 1.8 |           |  |                | (0.6 | ) |  |  | 1.2  |  
|                                                                                                          |  |          |     |           |  |                |      |   |  |  |      |  

37  INTEREST RATE REPRICING
GAP  NON TRADING BOOK

The table below provides an indication of the
repricing mismatch in the non Trading Books at March 31,
2003. For the major categories of assets and liabilities, this
gap table shows the volumes maturing in selected
maturity bands, taking account of any amortisation of principal.
Items are allocated to time bands by reference to the earlier of
the next interest rate repricing date and the maturity date.

The tables show actual on-balance sheet volumes
and net off-balance sheet amounts. In the case of undrawn fixed
rate lending where the Group is effectively committed in price
terms and there is a high degree of predictability in relation
to the expected drawdown  notably in relation to the
mortgage pipeline  the expected volumes have been
included as off balance sheet items in the table. The 2002
maturity profile of the net amounts due from/to Group
units has been reclassified in line with the current years
classification.

F-64



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  INTEREST RATE REPRICING
GAP  NON TRADING
BOOK  (continued)


Non Trading Interest Rate
Repricing  Total

|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|--------------------------------------------------------- |  | --------------- | ------ | ------------ |  | ---------- | ----- | ---------- |  | ---------- | ----- | -------- |  | ----- | ------ | - |  |  | ------ |  |  |  | ------- | - |  |  | ------ | -
|                                                          |  |                
|                                                          |  | March 31, 2003 
|                                                          |  |                
|                                                          |  |                 |        | Over         |  | Over       |       | Over       |  |           
|                                                          |  |                 |        | three months |  | six months |       | one year   |  |           
|                                                          |  | Not             |        | but not      |  | but not    |       | but not    |  |            |       | Non      |  |      
|                                                          |  | more than       |        | more than    |  | more than  |       | more than  |  | Over       |       | interest |  |      
|                                                          |  | three months    |        | six months   |  | one year   |       | five years |  | five years |       | bearing  |  | Total
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |      
|                                                          |  |                
|                                                          |  | (in  millions)
|Assets                                                    |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Central Government bills and other eligible bills         |  |                 | 175    |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  |       |  |  |  |        |   |  |  | 175    |  
|Loans and advances to banks                               |  |                 | 6,300  |              |  |            | 859   |            |  |            | 62    |          |  |       |       |   |  |  |       |  |  |  | 104     |   |  |  | 7,325  |  
|Loans and advances to customers                           |  |                 | 37,967 |              |  |            | 2,203 |            |  |            | 2,708 |          |  |       | 11,157 |   |  |  | 2,793  |  |  |  | 186     |   |  |  | 57,014 |  
|Debt securities and equity shares                         |  |                 | 6,356  |              |  |            | 476   |            |  |            | 404   |          |  |       | 1,286  |   |  |  | 696    |  |  |  | 61      |   |  |  | 9,279  |  
|Other assets                                              |  |                 | 908    |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  |       |  |  |  | 3,343   |   |  |  | 4,251  |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Total assets                                              |  |                 | 51,706 |              |  |            | 3,538 |            |  |            | 3,174 |          |  |       | 12,443 |   |  |  | 3,489  |  |  |  | 3,694   |   |  |  | 78,044 |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Liabilities                                               |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Deposits by banks                                         |  |                 | 10,817 |              |  |            | 839   |            |  |            | 434   |          |  |       | 18     |   |  |  | 16     |  |  |  | 44      |   |  |  | 12,168 |  
|Customer accounts                                         |  |                 | 34,802 |              |  |            | 1,491 |            |  |            | 1,213 |          |  |       | 2,917  |   |  |  | 456    |  |  |  | 7,606   |   |  |  | 48,485 |  
|Debt securities in issue                                  |  |                 | 8,057  |              |  |            | 765   |            |  |            | 550   |          |  |       | 280    |   |  |  |       |  |  |  |        |   |  |  | 9,652  |  
|Other liabilities                                         |  |                 | 355    |              |  |            | 34    |            |  |            | 3     |          |  |       | 56     |   |  |  | 111    |  |  |  | 2,778   |   |  |  | 3,337  |  
|Subordinated liabilities                                  |  |                 | 1,318  |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  | 1,385  |  |  |  |        |   |  |  | 2,703  |  
|Minority interests and shareholders funds                |  |                 |       |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  |       |  |  |  | 4,323   |   |  |  | 4,323  |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Total liabilities                                         |  |                 | 55,349 |              |  |            | 3,129 |            |  |            | 2,200 |          |  |       | 3,271  |   |  |  | 1,968  |  |  |  | 14,751  |   |  |  | 80,668 |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Net amounts due from/ to Group units                      |  |                 | 4,932  |              |  |            | (231  | )          |  |            | (536  | )        |  |       | (1,795 | ) |  |  | 179    |  |  |  | (55     | ) |  |  | 2,494  |  
|Off balance sheet items                                   |  |                 | (1,055 | )            |  |            | 259   |            |  |            | 755   |          |  |       | (3,192 | ) |  |  | 3,172  |  |  |  |        |   |  |  | (61    | )
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Interest rate repricing gap                               |  |                 | 234    |              |  |            | 437   |            |  |            | 1,193 |          |  |       | 4,185  |   |  |  | 4,872  |  |  |  | (11,112 | ) |  |  | (191   | )
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate
    repricing gap                |  |                 | 234    |              |  |            | 671   |            |  |            | 1,864 |          |  |       | 6,049  |   |  |  | 10,921 |  |  |  | (191    | ) |  |  |       |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Euro                                                      |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2003 |  |                 | (128   | )            |  |            | 962   |            |  |            | 1,319 |          |  |       | 4,454  |   |  |  | 7,453  |  |  |  | 902     |   |  |  |       |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Sterling                                                  |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2003 |  |                 | 543    |              |  |            | (427  | )          |  |            | 468   |          |  |       | 1,464  |   |  |  | 3,298  |  |  |  | (780    | ) |  |  |       |  
|                                                          |  |                 |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  

F-65



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  INTEREST RATE REPRICING
GAP  NON TRADING
BOOK  (continued)


Non Trading Interest Rate
Repricing  Total

|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|--------------------------------------------------------- |  | -------------- | ------ | ------------ |  | ---------- | ----- | ---------- |  | ---------- | ----- | -------- |  | ----- | ------ | - |  |  | ----- |  |  |  | ------ | - |  |  | ------ | -
|                                                          |  |               
|                                                          |  | March 31, 2002
|                                                          |  |               
|                                                          |  |                |        | Over         |  | Over       |       | Over       |  |           
|                                                          |  |                |        | three months |  | six months |       | one year   |  |           
|                                                          |  | Not            |        | but not      |  | but not    |       | but not    |  |            |       | Non      |  |      
|                                                          |  | more than      |        | more than    |  | more than  |       | more than  |  | Over       |       | interest |  |      
|                                                          |  | three months   |        | six months   |  | one year   |       | five years |  | five years |       | bearing  |  | Total
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |      
|Assets                                                    |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Central Government bills and other eligible bills         |  |                | 67     |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  |      |  |  |  | 12     |   |  |  | 79     |  
|Loans and advances to banks                               |  |                | 6,791  |              |  |            | 779   |            |  |            | 575   |          |  |       | 45     |   |  |  |      |  |  |  | 124    |   |  |  | 8,314  |  
|Loans and advances to customers                           |  |                | 35,712 |              |  |            | 2,778 |            |  |            | 4,932 |          |  |       | 10,392 |   |  |  | 2,645 |  |  |  | 260    |   |  |  | 56,719 |  
|Debt securities and equity shares                         |  |                | 6,174  |              |  |            | 525   |            |  |            | 220   |          |  |       | 1,523  |   |  |  | 352   |  |  |  | 32     |   |  |  | 8,826  |  
|Other assets                                              |  |                | 812    |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  | 3     |  |  |  | 3,542  |   |  |  | 4,357  |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Total assets                                              |  |                | 49,556 |              |  |            | 4,082 |            |  |            | 5,727 |          |  |       | 11,960 |   |  |  | 3,000 |  |  |  | 3,970  |   |  |  | 78,295 |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Liabilities                                               |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Deposits by banks                                         |  |                | 9,331  |              |  |            | 1,193 |            |  |            | 1,712 |          |  |       | 79     |   |  |  | 19    |  |  |  | 1      |   |  |  | 12,335 |  
|Customer accounts                                         |  |                | 38,331 |              |  |            | 1,775 |            |  |            | 1,845 |          |  |       | 1,926  |   |  |  | 166   |  |  |  | 6,867  |   |  |  | 50,910 |  
|Debt securities in issue                                  |  |                | 5,215  |              |  |            | 507   |            |  |            | 456   |          |  |       | 195    |   |  |  | 1     |  |  |  |       |   |  |  | 6,374  |  
|Other liabilities                                         |  |                | 177    |              |  |            | 44    |            |  |            |      |          |  |       | 80     |   |  |  | 168   |  |  |  | 3,099  |   |  |  | 3,568  |  
|Subordinated liabilities                                  |  |                | 1,609  |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  | 915   |  |  |  |       |   |  |  | 2,524  |  
|Minority interests and shareholders funds                |  |                |       |              |  |            |      |            |  |            |      |          |  |       |       |   |  |  |      |  |  |  | 4,373  |   |  |  | 4,373  |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Total liabilities                                         |  |                | 54,663 |              |  |            | 3,519 |            |  |            | 4,013 |          |  |       | 2,280  |   |  |  | 1,269 |  |  |  | 14,340 |   |  |  | 80,084 |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Net amounts due from/ to Group units                      |  |                | 3,339  |              |  |            | (187  | )          |  |            | (553  | )        |  |       | (1,354 | ) |  |  | 9     |  |  |  | 413    |   |  |  | 1,667  |  
|Off balance sheet items                                   |  |                | 1,027  |              |  |            | 1,548 |            |  |            | (636  | )        |  |       | (3,566 | ) |  |  | 1,537 |  |  |  |       |   |  |  | (90    | )
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Interest rate repricing gap                               |  |                | (741   | )            |  |            | 1,924 |            |  |            | 525   |          |  |       | 4,760  |   |  |  | 3,277 |  |  |  | (9,957 | ) |  |  | (212   | )
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Cumulative interest rate
    repricing gap                |  |                | (741   | )            |  |            | 1,183 |            |  |            | 1,708 |          |  |       | 6,468  |   |  |  | 9,745 |  |  |  | (212   | ) |  |  |        |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Euro                                                      |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2002 |  |                | (1,749 | )            |  |            | (710  | )          |  |            | (399  | )        |  |       | 3,218  |   |  |  | 5,112 |  |  |  | (233   | ) |  |  |        |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Sterling                                                  |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2002 |  |                | 1,763  |              |  |            | 1,699 |            |  |            | 2,214 |          |  |       | 3,302  |   |  |  | 4,602 |  |  |  | 150    |   |  |  |        |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |       |  |  |  |        |   |  |  |        |  

38  FAIR VALUES OF FINANCIAL
INSTRUMENTS

The Group has estimated fair value wherever
possible using market prices or data available for instruments
with characteristics either identical or similar to those of the
instruments held by Group. In certain cases, however, including
some advances to customers, there are no ready markets.
Accordingly, various techniques have been developed to estimate
what the approximate fair value of such instruments might be.
These estimation techniques are necessarily extremely subjective
in nature and involve assumptions which are based upon

F-66



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



38  FAIR VALUES OF FINANCIAL
INSTRUMENTS  (continued)


managements view of market conditions at
March 31, 2003 which may not necessarily be indicative of
any subsequent fair value. Furthermore, minor changes in the
assumptions used could have a significant impact on the
resulting estimated fair values, and, as a result, readers of
these financial statements are advised to use caution when using
this data to evaluate the Groups financial position.

The concept of fair value assumes realisation of
financial instruments by way of a sale. However, in many cases,
particularly in respect of lending to customers, the Group
intends to realise assets through collection over time. As such
the fair values calculated do not represent the value of the
Group as a going concern at March 31, 2003.

The following table represents the carrying
amount and the fair value of both the trading and non trading
financial assets and liabilities as at March 31, 2003 and
2002.

|                                                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|-------------------------------------------------------- |  | --------------- | ------ | ------ |  | -------- | ------ | ------ |  |  | ------ | - |  |  | ------ | -
|                                                         |  |                 |        |       
|                                                         |  | 2003            |        | 2002  
|                                                         |  |                 |        |       
|                                                         |  | Carrying        |        | Fair   |  | Carrying |        | Fair  
|                                                         |  | Amount          |        | Values |  | Amount   |        | Values
|                                                         |  |                 |        |        |  |          |        |       
|                                                         |  |                
|                                                         |  | (in  millions)
|Financial instruments held for
    trading               |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Debt securities                                          |  |                 | 3,120  |        |  |          | 3,120  |        |  |  | 2,090  |   |  |  | 2,090  |  
|Equity shares                                            |  |                 | 22     |        |  |          | 22     |        |  |  | 15     |   |  |  | 15     |  
|Derivative Financial Instruments                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Interest rate contracts                                  |  |                 | 108    |        |  |          | 108    |        |  |  | 80     |   |  |  | 80     |  
|Foreign exchange contracts                               |  |                 | (30    | )      |  |          | (30    | )      |  |  | (8     | ) |  |  | (8     | )
|Non trading financial instruments                        |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Assets                                                   |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Cash and balances at central banks(1)                    |  |                 | 679    |        |  |          | 679    |        |  |  | 569    |   |  |  | 569    |  
|Items in course of collection(1)                         |  |                 | 508    |        |  |          | 508    |        |  |  | 554    |   |  |  | 554    |  
|Central government bills and other eligible
    bills(1) |  |                 | 175    |        |  |          | 175    |        |  |  | 79     |   |  |  | 79     |  
|Loans and advances to banks                              |  |                 | 7,480  |        |  |          | 7,482  |        |  |  | 8,385  |   |  |  | 8,398  |  
|Loans and advances to customers                          |  |                 | 56,887 |        |  |          | 57,100 |        |  |  | 56,577 |   |  |  | 56,754 |  
|Securitisation and loan transfers(1)                     |  |                 | 127    |        |  |          | 127    |        |  |  | 142    |   |  |  | 142    |  
|Debt securities                                          |  |                 | 9,217  |        |  |          | 9,319  |        |  |  | 8,795  |   |  |  | 8,852  |  
|Equity shares                                            |  |                 | 16     |        |  |          | 16     |        |  |  | 4      |   |  |  | 4      |  
|Own shares                                               |  |                 | 35     |        |  |          | 524    |        |  |  | 27     |   |  |  | 528    |  
|Liabilities                                              |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Deposits by banks                                        |  |                 | 12,617 |        |  |          | 12,632 |        |  |  | 12,583 |   |  |  | 12,609 |  
|Customer accounts                                        |  |                 | 48,496 |        |  |          | 48,331 |        |  |  | 51,111 |   |  |  | 50,918 |  
|Debt securities in issue                                 |  |                 | 9,652  |        |  |          | 9,657  |        |  |  | 6,374  |   |  |  | 6,379  |  
|Items in course of transmission(1)                       |  |                 | 136    |        |  |          | 136    |        |  |  | 152    |   |  |  | 152    |  
|Subordinated liabilities                                 |  |                 | 2,703  |        |  |          | 2,876  |        |  |  | 2,524  |   |  |  | 2,621  |  
|Minority interests: non equity                           |  |                 | 73     |        |  |          | 82     |        |  |  | 82     |   |  |  | 96     |  
|Derivative financial instruments                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Interest rate contracts                                  |  |                 |        |        |  |          | (174   | )      |  |  |        |   |  |  | (48    | )
|Exchange rate contracts                                  |  |                 |        |        |  |          | 8      |        |  |  |        |   |  |  | 382    |  
|Equity and commodity contracts                           |  |                 |        |        |  |          | (244   | )      |  |  |        |   |  |  | (210   | )




F-67



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



38  FAIR VALUES OF FINANCIAL
INSTRUMENTS  (continued)




|    |                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The fair value of these financial instruments is
    equal to the carrying value. These instruments are either
    carried at market value, or have minimal credit losses and are
    either short term in nature or reprice frequently.

In December 1991, the U.S. Financial
Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 107, Disclosure
About Fair Value of Financial Instruments requiring
disclosure of the fair value of financial instruments (both on
and off-balance sheet) for which it is practicable to estimate
such value.

Wherever possible, the Group has estimated fair
value using market prices or data available for instruments with
characteristics either identical or similar to those of the
instruments held by Group. In certain cases, however, including
some advances to customers, there are no ready markets.
Accordingly, various techniques have been developed to estimate
what the approximate fair value of such instruments might be.
These estimation techniques are necessarily extremely subjective
in nature and involve assumptions which are based upon
managements view of market conditions at March 31,
2003 which may not necessarily be indicative of any subsequent
fair value. Furthermore, minor changes in the assumptions used
could have a significant impact on the resulting estimated fair
values, and, as a result, readers of these financial statements
are advised to use caution when using this data to evaluate the
Groups financial position.

Intangible assets, such as the value of the
Groups branch network and long-term relationships with its
depositors (core deposits intangible) and other customers are
not considered by the FASB to constitute financial instruments
for purposes of SFAS No. 107. The Group, however, believes
the value of such assets to be significant. Certain other assets
and liabilities are likewise excluded from the scope of SFAS
No. 107. Further, the concept of fair value assumes
realization of financial instruments by way of a sale. However,
in many cases, particularly in respect of lending to customers,
the Group intends to realize assets through collection over
time. As such the fair values calculated for the purposes of
reporting under SFAS No. 107 do not represent the value of
the Group as a going concern at March 31, 2003.

The following notes summarise the methods and
assumptions used in estimating the fair values of financial
instruments shown above.

1.   Loans and Advances to Banks

The Group places funds with Banks. Several
different techniques are employed, as considered appropriate, in
estimating the fair value of loans and advances. The carrying
amount of variable rate loans is considered to be at market
value. The fair value of fixed rate loans was calculated by
discounting expected cash flows using market rates where
practicable, or rates currently offered by other financial
institutions with similar characteristics.

2.   Loans and Advances to
Customers

The Group provides lending facilities of varying
rates and maturities to corporate and personal customers.
Several different techniques are employed as considered
appropriate in estimating the fair value of loans and advances.

Fair values are estimated for portfolios of loans
with similar financial characteristics. Loans are segregated by
type. Each loan category is further segmented into fixed and
variable rate interest terms and by performing and nonperforming
categories.

The carrying amount of variable rate loans was
considered to be at market rate if there was no significant
change in the credit risk of the borrower.

F-68



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



38  FAIR VALUES OF FINANCIAL
INSTRUMENTS  (continued)


The fair value of fixed rate loans is estimated
by discounting future cash flows using market rates for similar
loans with the same residual maturities, offered by the Group
including an adjustment, where necessary to reflect the fact
that the credit risk on a proportion of the loan has changed.

3.   Debt Securities and Equity
Shares

The fair value of listed debt securities and
equity shares is based on market prices received from external
pricing services or bid quotations received from external
securities dealers.

The estimated value of unlisted debt securities
and equity shares is based on the anticipated future cashflows
arising from these items.

4.   Own Shares

The fair value of the own shares are based on the
stock market price at year end.

5.   Deposits by Banks

The fair value of other borrowings is based on
the discounted cash flows using market rates applicable for
similar types of borrowing arrangements.

6.   Customer Accounts

The fair value of current accounts, short-term
borrowings, deposit accounts payable on demand and variable rate
deposits are equal to their carrying value. The fair value of
all other deposits, which are not repriced frequently is
estimated based on the discounted value of the contractual cash
flows. The discount rate is estimated using market rates for
deposits with similar remaining maturities.

7.   Debt Securities in issue

The carrying value of short-term debt securities
in issue approximate to their fair values. Fair values of other
debt securities in issue are based on quoted market prices where
available, otherwise by discounting anticipated cash flows.

8.   Subordinated Liabilities

The estimated fair value of subordinated
liabilities is based on quoted market rates for debt instruments
with similar maturities.

9.   Financial Instruments with
Off-Balance Sheet Risk

Financial instruments with off-balance sheet risk
are detailed in Note 36 of the Notes to the Consolidated
Financial Statements and include the fair value of these
instruments.

10. Life Assurance Assets and Liabilities

Life assurance assets and liabilities
attributable to policyholders have not been included in this
note in accordance with accounting standards.

F-69



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

39  CONTINGENT LIABILITIES AND
COMMITMENTS

The tables below give, for the Group, the
contract amounts and risk weighted amounts of contingent
liabilities and commitments. The maximum exposure to credit loss
under contingent liabilities and commitments is the contract
amount of the instrument in the event of non-performance by the
other party where all counter claims, collateral or security
proved worthless. The risk weighted amounts have been calculated
in accordance with the Irish Financial Services Regulatory
Authority guidelines implementing the Basel agreement on capital
adequacy (i).

|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |       | 
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | --------------- | ------ | --------------- |  | -------- | ----- | -------- |  |  | ------ | ------ |  |  | ----- | ----- | 
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              | 2003            |        | 2002           
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              |                 |        | Risk            |  |          |       | Risk    
|                                                                                                  |                                                                              | Contract        |        | Weighted        |  | Contract |       | Weighted
|                                                                                                  |                                                                              | Amount          |        | Amount          |  | Amount   |       | Amount  
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |         
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              | (in  millions) |        | (in  millions)
|Contingent Liabilities                                                                            |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Acceptances and endorsements                                                                      |                                                                              |                 | 81     |                 |  |          | 65    |          |  |  | 86     |        |  |  | 76    |      
|Guarantees and assets pledged as collateral
    security                                          |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
| Assets pledged                                                                                  |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
| Guarantees and irrevocable letters of
    credit                                                |                                                                              |                 | 1,172  |                 |  |          | 1,107 |          |  |  | 1,029  |        |  |  | 944   |      
|Other contingent liabilities                                                                      |                                                                              |                 | 508    |                 |  |          | 239   |          |  |  | 496    |        |  |  | 244   |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |                                                                              |                 | 1,761  |                 |  |          | 1,411 |          |  |  | 1,611  |        |  |  | 1,264 |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Commitments                                                                                       |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Sale and option to resell transactions                                                            |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
|Other commitments                                                                                 |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
| Documentary credits and short-term
    trade-related transactions                               |                                                                              |                 | 52     |                 |  |          | 19    |          |  |  | 30     |        |  |  | 10    |      
| Forward asset purchases, forward
    deposits placed and forward sale and repurchase agreements |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
| Undrawn note issuance and revolving
    underwriting facilities                                 |                                                                              |                 | 776    |                 |  |          | 27    |          |  |  | 636    |        |  |  |      |      
| Undrawn formal standby facilities,
    credit lines and other commitments to lend               |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |  irrevocable with original maturity of
    over 1 year                      |                 |        | 4,212           |  |          |       | 2,065    |  |  |        | 4,487  |  |  |       | 2,238 | 
|                                                                                                  |  revocable or irrevocable with
    original maturity of 1 year or less (ii) |                 |        | 14,010          |  |          |       |         |  |  |        | 11,161 |  |  |       |      | 
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |                                                                              |                 | 19,050 |                 |  |          | 2,111 |          |  |  | 16,314 |        |  |  | 2,248 |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      




Notes:



|     |                                                                                                                                                                                                   
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)  | Under the Basel agreement, a credit conversion
    factor is applied to the contract amount to obtain the credit
    equivalent amount, which is then risk weighted according to
    counterparty.
|    
|(ii) | Undrawn loan commitments which are
    unconditionally cancellable at any time or which have a maturity
    of less than one year have a risk weighting of zero.                                  

40  GENERAL



| |     |                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | The Bank has given guarantees in respect of
    liabilities and obligations of certain of its subsidiaries and
    has also given guarantees for the satisfaction of the relevant
    regulatory authorities for the protection of the depositors of
    certain of its banking subsidiaries in the various jurisdictions
    in which such subsidiaries operate.

F-70



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



40  GENERAL  (continued)




| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | The Bank has provided a guarantee under
    Section 17 of the Companies (Amendment) Act 1986 for the
    following companies: Addano Limited, Bank of Ireland Asset
    Management (U.S.) Limited, Bank of Ireland Asset Management
    Limited, Bank of Ireland Car Loans Limited, Bank of Ireland
    Commercial Finance Limited, Bank of Ireland Unit Trust Managers
    Limited, Davy Corporate Finance Limited, Davy Holdings
    (International) Limited, Davy International, First Rate
    Enterprises Limited, Florenville Limited, IBI Corporate Finance
    Limited, Ibidem Limited, Ilios Limited, J & E Davy, J &
    E Davy Holdings Limited and Louncil Limited.
|
| | (c) | There exists a contingent liability to repay in
    whole or in part grants received on finance leases if certain
    events set out in the relevant agreements occur.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

41  DIRECTORS
INFORMATION

The Group Remuneration Committee, comprising
Laurence Crowley (Chairman), Roy Bailie, Richard Burrows, Tom
Moran and Mary Redmond, makes recommendations to the Court on
the formulation of policy on the remuneration of executive
Directors and approves, on the Courts behalf, specific
remuneration packages for each of the executive Directors, the
Group Secretary and those senior executives who report directly
to the Group Chief Executive (Senior Executive
Group), which are developed in full consultation with the
Governor as Chairman of the Committee and the Group Chief
Executive. The remuneration of non-executive Directors is
determined by the Court. Directors do not participate in any
decisions relating to their own remuneration.

The constitution and operation of the Committee
throughout the year complied with the Code of Best Practice
Provisions on directors remuneration in The Combined
Code of the UK Listing Authority.

Directors remuneration policy

Group remuneration policy is to ensure that the
remuneration arrangements for Directors are competitive and
designed to attract, retain and motivate Directors of the
highest calibre, who are expected to perform to the highest
standards.

Reward policies for executive Directors are
aligned with the objective of maximising stockholder value. In
determining remuneration levels account is taken of such factors
as each individuals responsibilities and performance and
levels of remuneration in comparable organisations both in
Ireland and the United Kingdom and the general pay awards made
to staff overall.

The reward package for executive
Directors

In 2002 the elements of the total remuneration
package for executive Directors were reviewed by the Group
Remuneration Committee with external assistance from
international remuneration consultants. Currently the key
elements of the remuneration package for executive Directors are
basic salary, a performance related cash bonus, the Long Term
Performance Stock Plan, stock options, participation in the
Employee Stock Issue and in the Sharesave schemes and membership
of a defined benefit pension scheme. These various elements are
summarised below:-



| |   |                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Base
    salary is payable monthly
    and is set at a level to recognise an individuals market
    worth. Salaries are reviewed annually by the Group Remuneration
    Committee.                                                                                                                                               
|
| |  | Performance-related bonus
    scheme The level earned by
    each executive Director is a function of the Remuneration
    Committees assessment of that Directors performance
    against pre-determined goals and the overall performance of the
    Group in any year both in absolute terms and relative to a
    comparator

F-71



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



| |  |                                            
| |  | -------------------------------------------
| |  | 41  DIRECTORS
    INFORMATION  (continued)

group of other financial institutions, taking
into account the norms of the sector in which the individual
Director is engaged.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Long Term Performance Stock
    Plan In 1999 the Group
    established a Long Term Performance Stock Plan
    (LTPSP) for key senior executives who are best
    placed to maximise stockholder value. Under this Plan, which is
    described in more detail in Note 33, conditional awards
    have been made to the executive Directors as set out in the
    table on page F-75. As can be seen in Note 33,
    participants who remain with the Group for a further two years
    and a further seven years from the date of vesting, will be
    awarded additional units of stock representing a fraction of the
    units which vested. In relation to the Group Chief Executive,
    the Group Remuneration Committee has determined that as part of
    his total remuneration package, in addition to receiving his
    vested awards under the LTPSP, he will receive at that time a
    cash sum equal in value to the then value of the stock which
    vests in him under the plan.
|
| |  | Stock
    options It is policy to
    grant stock options under the terms of the Stock Option Scheme
    to executive Directors and senior executives across the Group to
    encourage identification with stockholders interests in
    general. The exercise of all options granted since 1996 is
    conditional upon earnings per share achieving a cumulative
    growth of at least 2% per annum compound above the increase in
    the Consumer Price Index over either the three year period, or
    if not achieved, the six year period, commencing with the period
    in which the options are granted. (See also Note 33).                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Employee Stock Issue
    Scheme The Bank operates
    an Employee Stock Issue Scheme under which Group employees may
    be granted free allocations of Ordinary Stock depending on Group
    performance. Executive Directors may participate in any such
    allocations on the same basis as staff generally (See also
    Note 33).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Sharesave
    In 1999 the Group established a Sharesave Scheme (SAYE
    scheme). Under this scheme the executive Directors who
    participated in the scheme were granted options over units of
    Ordinary Stock as set out in the table on page F-74. Under
    the scheme, launched in 2000, participants could save for three,
    five or seven years. The three year scheme matured in May 2003
    and it is the Groups intention to invite further
    participation in due course.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Pensions
    The executive Directors are members of the Bank Staff Pension
    Plan and have a normal retirement age of 60. This pension plan
    is contributory at the rate of 2.5% of basic salary and is a
    defined benefit plan based on an accrual rate of  1/60th of
    pensionable salary for each year of pensionable service with a
    maximum of  40/60ths payable at age 60. Of the executive
    Directors total remuneration package, only their basic
    salary is pensionable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Service
contracts No service
contract exists between the Bank and any Director which provides
for a notice period from the Group of greater than one year.

F-72



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  DIRECTORS
INFORMATION  (continued)


Directors remuneration 2002/2003 (all
figures in
000s)

|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|----------------------------------------------------------- |  | ------ | ----- | ----- |  | ----- | --- | ----- |  | ------ | -- | -------- |  | --------- | --- | --------- |  | --------- | -- |  |  |  | -- |  |  |  | --- |  |  |  | ----- |  |  |  | ----- | 
|                                                            |  |        |       | Court |  | Other |     | Perf. |  | Other  |    |          |  | Pension   |     | Total     |  | Total    
|                                                            |  | Salary |       | fees  |  | fees  |     | bonus |  | remun. |    | Benefits |  | contribs. |     | remun.    |  | remun.   
|                                                            |  | (1)    |       | (2)   |  | (3)   |     | (4)   |  | (5)    |    | (6)      |  | (7)       |     | 2002/2003 |  | 2001/2002
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |          
|Governor                                                    |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|L G Crowley                                                 |  |        | 292   |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  | 20  |  |  |  | 312   |  |  |  | 262   | 
|Deputy Governor                                             |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|M Redmond (to 30.09.2002)                                   |  |        | 41    |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 41    |  |  |  | 67    | 
|R Burrows (from 01.10.2002)                                 |  |        | 45    |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 45    |  |  |  |       | 
|Executive Directors                                         |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|B J Goggin                                                  |  |        | 438   |       |  |       |     |       |  |        |    |          |  |           | 206 |           |  |           | 12 |  |  |  | 38 |  |  |  | 49  |  |  |  | 743   |  |  |  | 488   | 
|J ODonovan (from 11.07.2002)                               |  |        | 232   |       |  |       |     |       |  |        |    |          |  |           | 87  |           |  |           | 9  |  |  |  | 20 |  |  |  | 26  |  |  |  | 374   |  |  |  |       | 
|M D Soden                                                   |  |        | 800   |       |  |       |     |       |  |        |    |          |  |           | 376 |           |  |           | 20 |  |  |  | 32 |  |  |  | 90  |  |  |  | 1,318 |  |  |  | 1,610 | 
|Non-Executive Directors                                     |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|R E Bailie                                                  |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 45    | 
|A D Barry (to January 31, 2003)                             |  |        |       |       |  |       | 47  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 47    |  |  |  | 45    | 
|R Burrows                                                   |  |        |       |       |  |       | 28  |       |  |        | 8  |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 36    |  |  |  | 58    | 
|D J Geaney                                                  |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 45    | 
|M A Keane                                                   |  |        |       |       |  |       | 57  |       |  |        | 42 |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 99    |  |  |  | 8     | 
|R MacSharry                                                 |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 45    | 
|C Marland                                                   |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 44    | 
|T Moran                                                     |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 44    | 
|D OBrien                                                   |  |        |       |       |  |       | 57  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 57    |  |  |  | 45    | 
|M Redmond                                                   |  |        |       |       |  |       | 30  |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 30    |  |  |  |       | 
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|Totals                                                      |  |        | 1,848 |       |  |       | 504 |       |  |        | 50 |          |  |           | 669 |           |  |           | 41 |  |  |  | 90 |  |  |  | 185 |  |  |  | 3,387 |  |  |  | 2,806 | 
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|Ex gratia payments paid to former Directors/
    Dependants |  |        |       |       |  |       |     |       |  |        |    |          |  |           |     |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 519   |  |  |  | 496   | 




Notes



|    |                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Governor and Deputy Governor, as
    non-executive Officers of the Bank, are not paid Court fees but
    are remunerated by way of non-pensionable salary.                                                                                                                                                                  
|   
|(2) | Court fees are paid only to non-executive
    Directors and are subject to review annually at June each year.                                                                                                                                                                                                                   
|   
|(3) | Includes fees paid by boards of subsidiary
    companies within the Group and payments relating to chairing
    Court Committees.                                                                                                                                                                                               
|   
|(4) | Payments under the performance bonus scheme.                                                                                                                                                                                                                                                                                    
|   
|(5) | Includes the cash value of Ordinary Stock
    receivable under the Employee Stock Issue Scheme.                                                                                                                                                                                                                                 
|   
|(6) | Benefits include the use of a company car, or car
    allowance and interest on any loans at staff rates.                                                                                                                                                                                                                       
|   
|(7) | Contributions to defined benefit pension schemes.
    The fees paid or payable to non-executive Directors appointed
    post April 1991 are not pensionable. As the Governor was
    appointed a director pre April 1991, an element of his salary,
    equivalent to the standard directors fee, is treated as
    pensionable.

Stock options held by Directors and
Secretary

(a)  Executive stock
options

Options to subscribe for Ordinary Stock in the
Bank granted and exercised during the year to 31 March 2003
are included in the table below:-

F-73



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  DIRECTORS
INFORMATION  (continued)


|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|------------ |  | ------------- | ----------- | -------- |  | ----------- | ----------- | -------- |  | ----------- | ----------- | ------- |  | --------- | ----- | -------- |  | -------- | ------- |  |  |  | ------ |  |  |  | ------- |  |  |  | ----- |  |  |  | ------- | 
|             |  |               |             |          |  |             |             |          |  | Options at  |             |         |  |           |       |          |  |         
|             |  |               |             |          |  |             |             |          |  | 1 April     |             |         |  |           |       |          |  |         
|             |  |               |             |          |  |             |             |          |  | 2002 or     |             |         |  |           |       | Market   |  | Options 
|             |  |               |             | Earliest |  |             |             |          |  | date of     |             |         |  |           |       | price at |  | at      
|             |  |               |             | exercise |  |             |             | Exercise |  | appointment |             | Granted |  | Exercised |       | exercise |  | 31 March
|             |  | Date of grant |             | date     |  | Expiry date |             | price    |  | if later    |             | in year |  | in year   |       | date     |  | 2003    
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |         
|             |  |               |             |          |  |             |             |         |  |             |             |         |  |           |       |         |  |         
|Directors    |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|B J Goggin   |  |               | 31-May-1993 |          |  |             | 31-May 1996 |          |  |             | 31-May-2003 |         |  |           | 1.436 |          |  |          | 35,214  |  |  |  |        |  |  |  | 35,214  |  |  |  | 12.96 |  |  |  | 0       | 
|             |  |               | 23-May-1994 |          |  |             | 23-May-1997 |          |  |             | 23-May-2004 |         |  |           | 1.67  |          |  |          | 80,000  |  |  |  |        |  |  |  | 80,000  |  |  |  | 10.08 |  |  |  | 0       | 
|             |  |               | 5-Jun-1996  |          |  |             | 5-Jun-1999  |          |  |             | 5-Jun-2006  |         |  |           | 2.819 |          |  |          | 60,000  |  |  |  |        |  |  |  | 60,000  |  |  |  | 10.08 |  |  |  | 0       | 
|             |  |               | 28-Nov-1996 |          |  |             | 28-Nov-1999 |          |  |             | 28-Nov-2006 |         |  |           | 3.241 |          |  |          | 80,000  |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  | 80,000  | 
|             |  |               | 13-Jul-1999 |          |  |             | 13-Jul-2002 |          |  |             | 13-Jul-2009 |         |  |           | 8.933 |          |  |          | 20,000  |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  | 20,000  | 
|             |  |               | 21-May-2001 |          |  |             | 21-May-2004 |          |  |             | 21-May-2011 |         |  |           | 11.05 |          |  |          | 25,000  |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  | 25,000  | 
|             |  |               | 24-Jun-2002 |          |  |             | 24-Jun-2005 |          |  |             | 24-Jun-2012 |         |  |           | 12.50 |          |  |          | 0       |  |  |  | 25,000 |  |  |  |         |  |  |  |       |  |  |  | 25,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          | 300,214 |  |  |  | 25,000 |  |  |  | 175,214 |  |  |  |      |  |  |  | 150,000 | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|J ODonovan  |  |               | 26-Nov-2001 |          |  |             | 26-Nov-2004 |          |  |             | 26-Nov-2011 |         |  |           | 10.54 |          |  |          | 38,000  |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 38,000  | 
|             |  |               | 24-Jun-2002 |          |  |             | 24-Jun-2005 |          |  |             | 24-Jun-2012 |         |  |           | 12.50 |          |  |          | 25,000  |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 25,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          | 63,000  |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 63,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|M D Soden    |  |               | 26-Nov-2001 |          |  |             | 26-Nov-2004 |          |  |             | 26-Nov-2011 |         |  |           | 10.54 |          |  |          | 181,000 |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 181,000 | 
|             |  |               | 24-Jun-2002 |          |  |             | 24-Jun-2005 |          |  |             | 24-Jun-2012 |         |  |           | 12.50 |          |  |          |        |  |  |  | 80,000 |  |  |  |        |  |  |  |      |  |  |  | 80,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          | 181,000 |  |  |  | 80,000 |  |  |  |        |  |  |  |      |  |  |  | 261,000 | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|Secretary    |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|J B Clifford |  |               | 5-Jun-1996  |          |  |             | 5-Jun-1999  |          |  |             | 5-Jun-2006  |         |  |           | 2.819 |          |  |          | 60,000  |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 60,000  | 
|             |  |               | 25-May-2000 |          |  |             | 25-May-2003 |          |  |             | 25-May-2010 |         |  |           | 6.96  |          |  |          | 15,000  |  |  |  |       |  |  |  |        |  |  |  |      |  |  |  | 15,000  | 
|             |  |               | 24-Jun-2002 |          |  |             | 24-Jun-2005 |          |  |             | 24-Jun-2012 |         |  |           | 12.50 |          |  |          |        |  |  |  | 10,000 |  |  |  |        |  |  |  |      |  |  |  | 10,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          | 75,000  |  |  |  | 10,000 |  |  |  |        |  |  |  |      |  |  |  | 85,000  | 
|             |  |               |             |          |  |             |             |          |  |             |             |         |  |           |       |          |  |          |         |  |  |  |        |  |  |  |         |  |  |  |       |  |  |  |         | 

No other Directors have been granted options to
subscribe for units of ordinary stock of the Bank or of other
group entities.

(b) Sharesave options

Under the terms of the Sharesave Scheme, options
were granted to all participating Group employees on
28 February 2000 at an option price of
5.40 per unit of
Ordinary Stock. (This price was set at a discount of 20% of the
then market price as permitted by the Rules). The options held
under this scheme by the Directors and Secretary are set out
below. Under the scheme, launched in 2000, participants could
save for three, five or seven years. The three year scheme
matured in May 2003.

|             |  |                 |       |              |  |  |       | 
|------------ |  | --------------- | ----- | ------------ |  |  | ----- | 
|             |  | Sharesave       |       | Sharesave   
|             |  | options granted |       | options held
|             |  | at 28 February  |       | at 31 March 
|Name         |  | 2000            |       | 2002        
|             |  |                 |       |             
|Directors:   |  |                 |       |              |  |  |       | 
|B J Goggin   |  |                 | 4,262 |              |  |  | 4,262 | 
|Secretary:   |  |                 |       |              |  |  |       | 
|J B Clifford |  |                 | 2,234 |              |  |  | 2,234 | 

F-74



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  DIRECTORS
INFORMATION  (continued)


(c)  Long Term Performance Stock
Plan (LTPSP)

Conditional awards of units of Ordinary Stock
have been made on 25 May 2000, 21 May and
26 November 2001 and on 24 June 2002 to senior
executives under the terms of the LTPSP. These awards do not
vest in the executives unless demanding performance criteria are
achieved (see description of LTPSP in Note 33). The
conditional awards of units of Ordinary Stock made to date to
the executive Directors are as follows:-

|             |  |             |        |             |  |             |        |             |  |  |        |  |  |  |        | 
|------------ |  | ----------- | ------ | ----------- |  | ----------- | ------ | ----------- |  |  | ------ |  |  |  | ------ | 
|             |  | Conditional |        | Conditional |  | Conditional |        | Total      
|             |  | award       |        | award       |  | award       |        | conditional
|Director     |  | 2000        |        | 2001        |  | 2002        |        | awards     
|             |  |             |        |             |  |             |        |            
|B J Goggin   |  |             | 15,046 |             |  |             | 10,811 |             |  |  | 13,763 |  |  |  | 39,620 | 
|M D Soden    |  |             |       |             |  |             | 23,756 |             |  |  | 25,137 |  |  |  | 48,893 | 
|J ODonovan  |  |             |        |             |  |             |        |             |  |  | 10,055 |  |  |  | 10,055 | 
|Secretary:   |  |             |        |             |  |             |        |             |  |  |        |  |  |  |        | 
|J B Clifford |  |             | 11,362 |             |  |             | 6,004  |             |  |  | 5,703  |  |  |  | 23,069 | 

Changes in the directorate during the
period

|                                |  |                     |               |                             |  |  |             |  |  |  |             |  |  |  |             | 
|------------------------------- |  | ------------------- | ------------- | --------------------------- |  |  | ----------- |  |  |  | ----------- |  |  |  | ----------- | 
|                                |  |                     |               |                             |  | 
|                                |  | Executive Directors |               |                             |  | 
|                                |  |                     |               |                             |  | 
|                                |  |                     |               |                            
|                                |  |                     |               | Non-executive Directors and
|                                |  |                     |               | Officers                   
|                                |  |                     |               |                            
|Number at 31 March 2002         |  | 2                   |               | 11                         
|Changes during year             |  |                     | + J ODonovan |                             |  |  | (11/7/2002) |  |  |  | - A D Barry |  |  |  | (31/1/2003) | 
|Number at 31 March 2003         |  | 3                   |               | 10                         
|Average number during 2002/2003 |  |                     |               |                             |  |  |             |  |  |  |             |  |  |  |             | 
|(2001/2002)                     |  | 2.75 (3.25)         |               | 10.8
    (10.75)           

Directors pension entitlements

Set out below are details of the pension benefits
earned by the Directors during the year ended 31 March 2003.

|                      |  |                    |      |                |  |                 |       |   |  |  |       | 
|--------------------- |  | ------------------ | ---- | -------------- |  | --------------- | ----- | - |  |  | ----- | 
|                      |  |                    |      |                |  | (c)            
|                      |  | (a)                |      | (b)            |  | Accrued pension
|                      |  | Additional pension |      | Increase in    |  | entitlement at 
|                      |  | earned in the year |      | transfer value |  | 31 March 2003  
|                      |  |                    |      |                |  |                
|                      |  | 000s              |      | 000s          |  | 000s          
|Executive Directors   |  |                    |      |                |  |                 |       |   |  |  |       | 
|B J Goggin            |  |                    | 75.9 |                |  |                 | 1,028 |   |  |  | 242.7 | 
|J ODonovan (1)       |  |                    | 5.2  | *              |  |                 | 66    | * |  |  | 97.0  | 
|M D Soden             |  |                    | 42.3 |                |  |                 | 697   |   |  |  | 47.8  | 
|Non-executive Officer |  |                    |      |                |  |                 |       |   |  |  |       | 
|L G Crowley           |  |                    | 2.5  |                |  |                 | 39    |   |  |  | 20.8  | 






|    |                                                  
|--- | -------------------------------------------------
|(1) | J ODonovan joined the Court on 11 July
    2002.



|  |                                              
|- | ---------------------------------------------
|* | Calculated from date of appointment to Court.

Column (a) above is the increase in pension
built up during the year.

Column (b) is the additional capital value
of column (a) which could arise if the pension were to be
transferred to another pension plan on the Director leaving the
Group and is based on factors supplied by the actuary in
accordance with actuarial guidance notes GN11 (ROI), less each
Directors contributions.

F-75



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  DIRECTORS
INFORMATION  (continued)


Column (c) is the aggregate pension
entitlement based on each Directors pensionable service
with the Group at 31 March 2003, or at date of leaving if
earlier, but payable at normal retirement age. Executive
Directors have the option to pay additional voluntary
contributions to their pension plan; neither the contributions
nor the resulting benefits are included in the above table.

Directors interests in stock

In addition to their interests in the Ordinary
Stock through their holding of stock options and the conditional
awards of stock they have received under the LTPSP as set out
above, the interests of the Directors and Secretary in office at
31 March 2003, and of their spouses and minor children, in
the stocks issued by the Bank are set out below:

|             |  |                                  |           |                        |  |  |           | 
|------------ |  | -------------------------------- | --------- | ---------------------- |  |  | --------- | 
|             |  |                                 
|             |  | UNITS OF 0.64 OF ORDINARY STOCK
|             |  |                                 
|             |  | As at March 31, 2003             |           | As at April 1, 2002(1)
|             |  | Beneficial                       |           | Beneficial            
|             |  |                                  |           |                       
|DIRECTORS    |  |                                  |           |                        |  |  |           | 
|R E Bailie   |  |                                  | 1,131     |                        |  |  | 1,041     | 
|R Burrows    |  |                                  | 34,536    |                        |  |  | 34,411    | 
|L G Crowley  |  |                                  | 30,395    |                        |  |  | 29,914    | 
|D J Geaney   |  |                                  | 7,453     |                        |  |  | 7,363     | 
|B J Goggin   |  |                                  | 308,036   |                        |  |  | 124,207   | 
|M A Keane    |  |                                  | 1,191,052 |                        |  |  | 1,189,280 | 
|R MacSharry  |  |                                  | 1,339     |                        |  |  | 1,249     | 
|C A Marland  |  |                                  | 1,090     |                        |  |  | 1,000     | 
|T J Moran    |  |                                  | 1,105     |                        |  |  | 1,015     | 
|D OBrien    |  |                                  | 201,090   |                        |  |  | 201,000   | 
|J ODonovan  |  |                                  | 3,000     |                        |  |  | 2,000     | 
|M P Redmond  |  |                                  | 2,263     |                        |  |  | 2,132     | 
|M D Soden    |  |                                  | 89,756    |                        |  |  | 88,765    | 
|SECRETARY    |  |                                  |           |                        |  |  |           | 
|J B Clifford |  |                                  | 38,301    |                        |  |  | 38,301    | 






|    |                                    
|--- | -----------------------------------
|(1) | or at date of appointment if later.

There have been no changes in the stockholdings
of the above Directors and Secretary between 31 March 2003
and 14 May 2003.

Apart from the interests set out above and in the
previous section, the Directors and Secretary and their spouses
and minor children have no other interests in the stocks of the
Bank or its group undertakings at 31 March 2003.

Transactions with Directors

The aggregate amounts outstanding and the number
of persons concerned, as at 31 March 2003 in respect of all
loans, quasi-loans and credit transactions made by the Bank to
its Directors, together with loans, other than in the ordinary
course of business, to connected persons are shown below:

F-76



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  DIRECTORS
INFORMATION  (continued)


|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|---------------------------------------------------------------- |  | ---------------- | ---------- | --------- |  | ---- | ---------- | ---- |  |  | ---- |  |  |  | ---- | 
|                                                                 |  |                  |            |          
|                                                                 |  | Aggregate Amount |            | Number of
|                                                                 |  | Outstanding      |            | Persons  
|                                                                 |  |                  |            |          
|                                                                 |  | 2003             |            | 2002      |  | 2003 |            | 2002
|                                                                 |  |                  |            |           |  |      |            |     
|                                                                 |  |                 |            |          |  |      |            |     
|Directors                                                        |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Loans to executive Directors on terms similar to
    staff loans |  |                  | 210,065    |           |  |      | 294,542    |      |  |  | 1    |  |  |  | 1    | 
|Other loans on normal commercial terms                           |  |                  | 27,397,372 |           |  |      | 30,310,332 |      |  |  | 11   |  |  |  | 10   | 
|Quasi-loans and credit transactions                              |  |                  |           |           |  |      |           |      |  |  | None |  |  |  | None | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  | 27,607,437 |           |  |      | 30,604,874 |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Connected Persons                                                |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Loans to connected persons                                       |  |                  | 45,588     |           |  |      | 91,344     |      |  |  | 2    |  |  |  | 4    | 
|Quasi-loans and credit transactions                              |  |                  |           |           |  |      |           |      |  |  | None |  |  |  | None | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  | 45,588     |           |  |      | 91,344     |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 

42  NOTES TO THE CASH FLOW
STATEMENT

(i)  Gross Cashflows

|                                                                                  |  |                 |        |      |  |      |        |   |  |  |        |  
|--------------------------------------------------------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                                  |  | 2003            |        | 2002 |  | 2001
|                                                                                  |  |                 |        |      |  |     
|                                                                                  |  |                
|                                                                                  |  | (in  millions)
|RECONCILIATION OF OPERATING PROFIT TO NET CASH
    FLOW FROM OPERATING ACTIVITIES |  |                 |        |      |  |      |        |   |  |  |        |  
|Operating Profit                                                                  |  |                 | 1,155  |      |  |      | 1,121  |   |  |  | 1,078  |  
|Decrease in accrued income and prepayments                                        |  |                 | 31     |      |  |      | 27     |   |  |  | (117   | )
|(Decrease) in accruals and deferred income                                        |  |                 | (87    | )    |  |      | (99    | ) |  |  | 170    |  
|Provision for bad and doubtful debts                                              |  |                 | 100    |      |  |      | 102    |   |  |  | 72     |  
|Loans and advances written off net of recoveries                                  |  |                 | (90    | )    |  |      | (36    | ) |  |  | (32    | )
|Depreciation and amortisation                                                     |  |                 | 182    |      |  |      | 155    |   |  |  | 130    |  
|Interest charged on subordinated liabilities                                      |  |                 | 156    |      |  |      | 154    |   |  |  | 147    |  
|Other non-cash movements                                                          |  |                 | (2     | )    |  |      | (1     | ) |  |  | 3      |  
|Profit on disposal of fixed assets                                                |  |                 | (37    | )    |  |      | (22    | ) |  |  | (17    | )
|Profit on disposal of leases                                                      |  |                 |        |      |  |      |        |   |  |  | (21    | )
|                                                                                  |  |                 |        |      |  |      |        |   |  |  |        |  
|Net cash flow from trading
    activities                                         |  |                 | 1,387  |      |  |      | 1,401  |   |  |  | 1,434  |  
|Net decrease in collections / transmissions                                       |  |                 | 18     |      |  |      | 129    |   |  |  | (137   | )
|Net (increase) in loans and advances to banks                                     |  |                 | (257   | )    |  |      | (216   | ) |  |  | (421   | )
|Net (increase) in loans and advances to customers                                 |  |                 | (3,774 | )    |  |      | (5,217 | ) |  |  | (7,236 | )
|Net increase in deposits by banks                                                 |  |                 | 187    |      |  |      | 899    |   |  |  | 1,425  |  
|Net increase in customers accounts                                                |  |                 | 60     |      |  |      | 5,224  |   |  |  | 5,389  |  
|Net increase in debt securities in issue                                          |  |                 | 3,617  |      |  |      | 1,309  |   |  |  | 2,260  |  
|Net (increase)/decrease in non-investment debt
    and equity securities          |  |                 | (1,192 | )    |  |      | 290    |   |  |  | (335   | )
|Net (increase)/decrease in other assets                                           |  |                 | (1,572 | )    |  |      | 422    |   |  |  | (690   | )
|Net (increase)/(decrease) in other liabilities                                    |  |                 | 1,934  |      |  |      | (432   | ) |  |  | 477    |  
|Exchange movements                                                                |  |                 | 701    |      |  |      | (26    | ) |  |  | (97    | )
|                                                                                  |  |                 |        |      |  |      |        |   |  |  |        |  
|NET CASH FLOW FROM OPERATING
    ACTIVITIES                                       |  |                 | 1,109  |      |  |      | 3,783  |   |  |  | 2,069  |  
|                                                                                  |  |                 |        |      |  |      |        |   |  |  |        |  

F-77



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  NOTES TO THE CASH FLOW
STATEMENT  (continued)


|                                                                       |  |                 |      |      |  |      |      |   |  |  |      |  
|---------------------------------------------------------------------- |  | --------------- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                                       |  | 2003            |      | 2002 |  | 2001
|                                                                       |  |                 |      |      |  |     
|                                                                       |  |                
|                                                                       |  | (in  millions)
|Returns on investment and servicing of
    finance                     |  |                 |      |      |  |      |      |   |  |  |      |  
|Interest paid on subordinated liabilities                              |  |                 | (158 | )    |  |      | (157 | ) |  |  | (146 | )
|Preference dividends paid                                              |  |                 | (9   | )    |  |      | (17  | ) |  |  | (26  | )
|Dividends paid to minority shareholders in
    subsidiary undertakings |  |                 | (9   | )    |  |      | (9   | ) |  |  | (10  | )
|Issue expenses on outside interest 
    non equity                    |  |                 | (5   | )    |  |      |     |   |  |  | (7   | )
|                                                                       |  |                 |      |      |  |      |      |   |  |  |      |  
|                                                                       |  |                 | (181 | )    |  |      | (183 | ) |  |  | (189 | )
|                                                                       |  |                 |      |      |  |      |      |   |  |  |      |  

|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------ |  | --------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                             |  | 2003            |        | 2002 |  | 2001
|                                                             |  |                 |        |      |  |     
|                                                             |  |                
|                                                             |  | (in  millions)
|Capital expenditure and financial
    investment             |  |                 |        |      |  |      |        |   |  |  |        |  
|Net (purchases) of investment debt and equity
    securities |  |                 | (1,214 | )    |  |      | (2,231 | ) |  |  | (915   | )
|Purchase of tangible fixed assets                            |  |                 | (299   | )    |  |      | (331   | ) |  |  | (253   | )
|Sale of tangible fixed assets                                |  |                 | 146    |      |  |      | 135    |   |  |  | 41     |  
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                             |  |                 | (1,367 | )    |  |      | (2,427 | ) |  |  | (1,127 | )
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|Acquisitions and disposals                                   |  |                 |        |      |  |      |        |   |  |  |        |  
|Increase in investments in associated undertakings           |  |                 | (3     | )    |  |      | (5     | ) |  |  | (5     | )
|Sale of Associated undertaking                               |  |                 |       |      |  |      |       |   |  |  | 4      |  
|Acquisition of Group undertaking                             |  |                 | (184   | )    |  |      | (246   | ) |  |  | (227   | )
|Net cash balances of Group undertaking acquired              |  |                 | 10     |      |  |      | 7      |   |  |  |       |  
|Disposal of subsidiary undertaking                           |  |                 | 13     |      |  |      |       |   |  |  |       |  
|Costs of terminating joint venture                           |  |                 | (8     | )    |  |      |       |   |  |  |       |  
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                             |  |                 | (172   | )    |  |      | (244   | ) |  |  | (228   | )
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|Financing                                                    |  |                 |        |      |  |      |        |   |  |  |        |  
|Issue of capital stock (net of issue expenses)               |  |                 | 5      |      |  |      | 8      |   |  |  | 11     |  
|Repayment of subordinated liabilities                        |  |                 | (174   | )    |  |      |       |   |  |  | (98    | )
|Issue of subordinated liabilities                            |  |                 | 507    |      |  |      |       |   |  |  | 150    |  
|Issue of outside interest  non equity                       |  |                 |       |      |  |      |       |   |  |  | 600    |  
|Preference Stock buyback                                     |  |                 |       |      |  |      | (261   | ) |  |  |       |  
|Redemption of Bristol & West preference stock                |  |                 |       |      |  |      |       |   |  |  | (3     | )
|Ordinary Stock buyback                                       |  |                 | (133   | )    |  |      |       |   |  |  |       |  
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                             |  |                 | 205    |      |  |      | (253   | ) |  |  | 660    |  
|                                                             |  |                 |        |      |  |      |        |   |  |  |        |  

F-78



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  NOTES TO THE CASH FLOW
STATEMENT  (continued)


(ii) Analysis of the balances of cash as
shown in the Balance Sheet

|                          |  |                 |     |              |  |            |        |   |  |  |       |  
|------------------------- |  | --------------- | --- | ------------ |  | ---------- | ------ | - |  |  | ----- | -
|                          |  |                 |     | Loans and    |  |           
|                          |  | Cash and        |     | Advances to  |  |           
|                          |  | Balances at     |     | Banks        |  |           
|                          |  | Central         |     | Repayable on |  |           
|                          |  | Banks           |     | Demand       |  | Total Cash
|                          |  |                 |     |              |  |           
|                          |  |                
|                          |  | (in  millions)
|2003                      |  |                 |     |              |  |            |        |   |  |  |       |  
|At 1 April 2002           |  |                 | 569 |              |  |            | 1,863  |   |  |  | 2,432 |  
|Cash flow                 |  |                 | 115 |              |  |            | (1,050 | ) |  |  | (935  | )
|Foreign exchange movement |  |                 | (5  | )            |  |            | (68    | ) |  |  | (73   | )
|                          |  |                 |     |              |  |            |        |   |  |  |       |  
|At 31 March 2003          |  |                 | 679 |              |  |            | 745    |   |  |  | 1,424 |  
|                          |  |                 |     |              |  |            |        |   |  |  |       |  
|2002                      |  |                 |     |              |  |            |        |   |  |  |       |  
|At 1 April 2001           |  |                 | 256 |              |  |            | 1,914  |   |  |  | 2,170 |  
|Cash flow                 |  |                 | 313 |              |  |            | (51    | ) |  |  | 262   |  
|                          |  |                 |     |              |  |            |        |   |  |  |       |  
|At 31 March 2002          |  |                 | 569 |              |  |            | 1,863  |   |  |  | 2,432 |  
|                          |  |                 |     |              |  |            |        |   |  |  |       |  

(iii) Analysis of changes in
financing

|                                                |  |                  |       |              |  |            |       |   |  |  |    |  
|----------------------------------------------- |  | ---------------- | ----- | ------------ |  | ---------- | ----- | - |  |  | -- | -
|                                                |  | Capital Stock    |       |              |  | Minority  
|                                                |  | (including stock |       | Subordinated |  | Interest 
|                                                |  | premium)         |       | Liabilities  |  | Non Equity
|                                                |  |                  |       |              |  |           
|                                                |  |                 
|                                                |  | (in  millions) 
|2003                                            |  |                  |       |              |  |            |       |   |  |  |    |  
|At April 1, 2002                                |  |                  | 1,452 |              |  |            | 2,524 |   |  |  | 82 |  
|Effect of foreign exchange differences          |  |                  | (8    | )            |  |            | (150  | ) |  |  | (9 | )
|Cash flow                                       |  |                  | 5     |              |  |            | 328   |   |  |  |   |  
|Other non cash movements                        |  |                  |      |              |  |            | 1     |   |  |  |   |  
|                                                |  |                  |       |              |  |            |       |   |  |  |    |  
|At March 31, 2003                               |  |                  | 1,449 |              |  |            | 2,703 |   |  |  | 73 |  
|                                                |  |                  |       |              |  |            |       |   |  |  |    |  
|2002                                            |  |                  |       |              |  |            |       |   |  |  |    |  
|At April 1, 2001                                |  |                  | 1,417 |              |  |            | 2,510 |   |  |  | 81 |  
|Effect of foreign exchange differences          |  |                  |      |              |  |            | 13    |   |  |  | 1  |  
|Cash flow                                       |  |                  | 8     |              |  |            |      |   |  |  |   |  
|Stock alternative scheme issue                  |  |                  | 41    |              |  |            |      |   |  |  |   |  
|Capital movement on buyback of preference stock |  |                  | (14   | )            |  |            |      |   |  |  |   |  
|Other non cash movements                        |  |                  |      |              |  |            | 1     |   |  |  |   |  
|                                                |  |                  |       |              |  |            |       |   |  |  |    |  
|At March 31, 2002                               |  |                  | 1,452 |              |  |            | 2,524 |   |  |  | 82 |  
|                                                |  |                  |       |              |  |            |       |   |  |  |    |  

F-79



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  NOTES TO THE CASH FLOW
STATEMENT  (continued)


(iv) Iridian acquisition

|                       |  |    |     | 
|---------------------- |  | -- | --- | 
|                       |  | m
|                       |  |   
|Net assets acquired    |  |    | 6   | 
|Goodwill               |  |    | 186 | 
|                       |  |    |     | 
|                       |  |    | 192 | 
|                       |  |    |     | 
|Satisfied by:          |  |    |     | 
|Cash                   |  |    | 184 | 
|Deferred consideration |  |    | 8   | 
|                       |  |    |     | 
|                       |  |    | 192 | 
|                       |  |    |     | 

(v)  MX Financial Holdings Limited
acquisition

|                    |  |    |    | 
|------------------- |  | -- | -- | 
|                    |  | m
|                    |  |   
|Net assets acquired |  |    | 13 | 
|Goodwill            |  |    | 54 | 
|                    |  |    |    | 
|                    |  |    | 67 | 
|                    |  |    |    | 
|Satisfied by:       |  |    |    | 
|Cash                |  |    | 67 | 
|                    |  |    |    | 

(vi) Chase de Vere Acquisition

|                       |  |    |     | 
|---------------------- |  | -- | --- | 
|                       |  | m
|                       |  |   
|Net assets acquired    |  |    | 15  | 
|Goodwill               |  |    | 185 | 
|                       |  |    |     | 
|                       |  |    | 200 | 
|                       |  |    |     | 
|Satisfied by:          |  |    |     | 
|Cash                   |  |    | 185 | 
|Deferred consideration |  |    | 15  | 
|                       |  |    |     | 
|                       |  |    | 200 | 
|                       |  |    |     | 

(vii) Moneyextra Acquisition

|                    |  |    |    | 
|------------------- |  | -- | -- | 
|                    |  | m
|                    |  |   
|Net assets acquired |  |    |   | 
|Goodwill            |  |    | 42 | 
|                    |  |    |    | 
|                    |  |    | 42 | 
|                    |  |    |    | 
|Satisfied by:       |  |    |    | 
|Cash                |  |    | 42 | 
|                    |  |    |    | 

An analysis of net assets acquired is set out in
Note 3.

F-80



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

43  RELATED PARTY
TRANSACTIONS

(a)  Subsidiary, Associated
Undertakings and Joint Ventures

In accordance with FRS8, transactions or balances
between Group entities that have been eliminated on
consolidation are not reported.

One of the Groups subsidiaries Cashback
Limited is 49% owned by Fexco who had a balance outstanding at
March 31, 2003 of
0.1m (2002:
0.1m) for
processing transactions on behalf of Cashback Limited.

The Group provides and receives from its
associated undertakings and joint ventures certain banking and
financial services. The amount due from associated undertakings
and joint ventures as at March 31, 2003 was
38m (2002:
33m).

(b) Pension Funds

The Group provides a number of normal banking and
financial services for various pension funds operated by the
Group for the benefits of its employees (principally for the
Bank Staff Pension Fund), which are conducted on similar terms
to third party transactions and are not material to the Group.
Further details on pensions are set out in Note 35.

(c)  Directors

Directors emoluments and details of
transactions between Directors and the Group are set out in the
Remuneration Report in Note 41. In the year to
March 31, 2003, Donal Geaney, Director, was a partner in
The Common Street Partnership, the owner of New Century House,
Mayor Street Lower, IFSC, Dublin 1, which is leased
ultimately to Bank of Ireland for 10 years at an annual
rent of 1.49m
from April 30, 1999.

(d) Securitisation

RPS3, RPS4, RPS5, SS1 are considered to be
related parties of the Group and the Group has entered into both
an interest exchange agreement and a subordinated loan agreement
with RPS3, RPS4, RPS5. As at 31 March 2003 the net amount
due to RPS3 was
0.1m while in
2002 the net amount due from RPS3 was
0.1m, and
Liberator was
1.4m (2002:
0.3m). The net
amount due to RPS5 was
0.1m (2002:
0.1m) and the
amount due to SS1 was
0.2m (2002:
0.2m).

44  ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCY

|                                          |  |                 |        |      |  |  |        | 
|----------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                          |  |                
|                                          |  | At March 31,   
|                                          |  |                
|                                          |  | 2003            |        | 2002
|                                          |  |                 |        |     
|                                          |  |                
|                                          |  | (in  millions)
|Denominated in euro                       |  |                 | 42,687 |      |  |  | 38,313 | 
|Denominated in currencies other than euro |  |                 | 46,818 |      |  |  | 49,012 | 
|                                          |  |                 |        |      |  |  |        | 
|Total Assets                              |  |                 | 89,505 |      |  |  | 87,325 | 
|                                          |  |                 |        |      |  |  |        | 
|Denominated in euro                       |  |                 | 43,227 |      |  |  | 39,588 | 
|Denominated in currencies other than euro |  |                 | 46,278 |      |  |  | 47,737 | 
|                                          |  |                 |        |      |  |  |        | 
|Total Liabilities                         |  |                 | 89,505 |      |  |  | 87,325 | 
|                                          |  |                 |        |      |  |  |        | 

The difference between aggregate foreign currency
assets and aggregate foreign currency liabilities does not
provide any indication of the exposure to exchange risks.

F-81



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS

Summary of Significant Differences between
Irish and US Accounting Principles

The financial statements presented in this report
have been prepared in accordance with generally accepted
accounting principles in Ireland (Irish GAAP). Such principles
vary in certain significant respects from those generally
accepted accounting principles in the US (US GAAP). The
significant differences applicable to Bank of Ireland
Groups accounts are summarised below:

|                                                                                                                                                                                                                                        |  |                                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                              |  | US GAAP                                                                                                                                                          
|                                                                                                                                                                                                                                        |  |                                                                                                                                                                  
|Property Depreciation                                                                                                                                                                                                                   |  |                                                                                                                                                                  
|                                                                                                                                                                                                                                       
|Freehold and long leasehold property is
    maintained in a state of good repair and it is considered that
    residual values are such that depreciation is not significant,
    accordingly this property is not depreciated.         |  | Freehold and long leasehold property is
    depreciated over 50 years.                                                                                           
|                                                                                                                                                                                                                                       
|Revaluation of Property                                                                                                                                                                                                                 |  |                                                                                                                                                                  
|                                                                                                                                                                                                                                       
|Property is carried either at original cost or at
    subsequent valuation less depreciation calculated on the
    revalued amount where applicable. Revaluation surpluses and
    deficits are taken directly to stockholders equity. |  | Revaluation of property is not permitted in the
    financial statements.                                                                                        
|                                                                                                                                                                                                                                       
|Software Development Costs                                                                                                                                                                                                              |  |                                                                                                                                                                  
|                                                                                                                                                                                                                                       
|The Group capitalises costs incurred internally
    in developing computer software for internal use. Expenditure is
    amortised over its estimated useful life ranging between 5 and
    10 years.                                   |  | AICPA SOP 98-1 requires certain costs
    incurred in respect of software for internal use to be
    capitalised and subsequently amortised over its useful life.

F-82



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                              |  | US GAAP                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                              
|Goodwill                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill arising on acquisition of shares in
    group and associated undertakings, being the excess of cost over
    fair value of the Groups share of net tangible assets
    acquired is capitalised and amortised over its estimated useful
    economic life.                                                                                     |  | Prior to March 31, 2002, goodwill arising on
    acquisitions of subsidiary undertakings prior to June 30,
    2001 is capitalised and amortised to income over the period
    estimated to benefit. In the Groups case a period of
    20 years has been used. Goodwill is written off when judged
    to be irrecoverable.
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill arising on the acquisition of subsidiary
    undertakings prior to March 31, 1998 was written off
    directly to reserves in the year of acquisition.                                                                                                                                                                                         |  | Post April 1, 2002 goodwill on acquisitions
    is capitalised on the Balance Sheet and is subject to an annual
    review for impairment.                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill arising on acquisitions of subsidiary
    undertakings occurring after March 31, 1998 is capitalised
    as an asset on the balance sheet and amortised over its
    estimated useful economic life.                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill carried in the Group Balance Sheet is
    subject to impairment review when the carrying amount may not be
    recoverable and is written down by the amount of any impairment
    loss identified in the year.                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                       
|Stock Based Compensation                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                       
|Where shares are issued, or options granted, the
    charge made to the profit and loss account is the difference
    between the intrinsic value at the time the award is made and
    any contribution made by the employee.                                                                                                                          |  | Stock based compensation is accounted for in
    accordance with APB 25. Any differences between intrinsic value
    of the shares issued or options granted at the time the award is
    made and any contribution made by the employee is charged to the
    profit and loss account over the period to vesting.           
|                                                                                                                                                                                                                                                                                                                                                       
|Under the terms of the Groups revenue
    approved Save As You Earn (SAYE) schemes, employees have the
    option to purchase shares at a discount to the market price.
    Under UITF 17, such schemes are exempted from the requirements
    to charge this difference to the profit and loss account over
    the period of their savings contract. |  |                                                                                                                                                                                                                                                                                                                              

F-83



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Profits and losses on disposal are recognised
    when realised and included in dealing profits, except for those
    securities maintained for hedging purposes, which are amortised
    over the lives of the underlying transaction and included in net
    interest income.
    Securities may be classified as (i) investment carried at
    cost, less provision for any diminution in value and
    (ii) other securities, which are stated at fair value,
    except for those securities maintained for the purpose of
    hedging which are accounted for on the same basis as the item
    hedged.
    Changes in the fair value of securities marked to market are
    recognised in the profit and loss account as they arise. |  | Profits and losses on the sale of investments are
    included in operating income in the year in which they arise.
    Securities may be classified as (i) trading, which are
    carried at fair value with unrealised gains and losses included
    in earnings, (ii) held for sale, which are carried at fair
    value with unrealised gains and losses reported in a separate
    component of shareholders equity or (iii) held to
    maturity, which are carried at amortised cost.
    Trading securities are those securities held in the short term
    to earn a profit by trading or selling such securities.
    Securities held for sale are those securities which are neither
    classified as held to maturity or trading. The are intended for
    use as part of an asset / liability strategy, or that may be
    sold in response to changes in interest rates, changes in
    prepayment risks, the need to increase regulatory capital or
    other similar factors.
    Securities held to maturity are only those securities for which
    management has both the intent and ability to hold until
    maturity.

F-84



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                   |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Pensions                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                            
|Contributions to the Groups defined benefit
    schemes are charged to the profit and loss account so as to
    spread the expected cost of pensions calculated in accordance
    with the advice of qualified actuaries, on a systematic basis
    over the employees working lives. Variations from the regular
    cost are spread over the average remaining service life of
    relevant employees.    |  | The same basic actuarial method is used as under
    Irish GAAP, but under FAS87 certain assumptions differ, assets
    are assessed at fair value and liabilities are assessed at
    current settlement rates. Certain variations from regular cost
    are allocated in equal amounts over the average remaining
    service lives of current employees.
    Recognition of a liability when the accumulated benefit
    obligation exceeds the fair value of assets is also required.
    The pension related elements of voluntary leaving and voluntary
    early retirement programmes are generally expensed in the year
    in which they are awarded.
    The impact of this pronouncement has been included in the GAAP
    reconciliation in respect of the main Bank of Ireland and
    Bristol & West pension plans.
|                                                                                                                                                                                                                                                                                                                                                                                                            
|Long-term Assurance Policies                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                            
|Income from long term assurance business consists
    of surpluses attributable to stockholders from the long term
    fund which arise in the year plus increases in the present value
    of anticipated surplus transfers which are projected to arise
    from the long term fund in future years, and which are
    attributable to the business in force at the year end on a going
    concern basis. |  | The present value of anticipated surplus
    transfers which are projected to arise from the long term fund
    in future years, and which are attributable to the business in
    force at the year end on a going concern basis are not
    recognised by the Group under US GAAP. Unearned revenues and
    acquisition costs related to unit linked products are deferred
    and amortised in proportion to total estimated gross profits
    over the expected life of policyholders contracts.
    Unearned revenues are amounts assessed from policyholders
    that represent compensation for services to be provided in
    future periods. Acquisition costs consist of commissions and
    other costs which vary with and are primarily related to the
    production of revenues.                                
|                                                                                                                                                                                                                                                                                                                                                                                                            
|Acceptances                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                            
|Acceptances are not recorded on the balance sheet.                                                                                                                                                                                                                                                                                                                                                           |  | Acceptances and related customer liabilities are
    recorded on the balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-85



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Dividends Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Dividends declared after the period end are
    recorded in the period to which they relate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Dividends are recorded in the period in which
    they are declared.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Special Purpose Entites                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Depending on specified qualifying criteria there
    are three methods of accounting for securitised and loan
    transfer transactions: continued recognition, linked
    presentation and derecognition.
    The linked presentation method is adopted where there is no
    significant change in the Groups rights to benefits and
    the Groups exposure is limited to a fixed monetary
    ceiling. Under this method, only the net amount is consolidated,
    however on the face of the Group balance sheet, the related
    gross amounts are disclosed. |  | Prior to the introduction of SFAS No. 140,
    securitised transactions not qualified for derecognition were
    presented as gross amounts on the balance sheet.
    Under SFAS No. 140, transfers and servicing of financial
    assets are required to be recognised using a financial
    components approach that focuses on control. Under that approach
    after a transfer of financial assets, an entity recognises the
    financial and servicing assets it controls and the liabilities
    it has incurred and derecognises financial assets when control
    has been surrendered.
    In accordance with FIN 46, for variable interests obtained
    after January 31, 2003, the Group also consolidates any
    variable interest entities for which it holds a greater than 50%
    share of the expected losses or expected residual returns of
    that entity.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Finance lease receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Leasing income is recognised in proportion to the
    funds invested in the lease so as to give a constant rate of
    return over each period after taking account of taxation
    cashflows.                                                                                                                                                                                                                                                                                                                                                                        |  | Gross earnings are allocated to give rise to a
    level of return on the investment without taking account of tax
    payments and receipts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-86



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                                           |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Derivatives                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Where a derivative is documented and evidenced as
    reasonably expected to match or eliminate risk from a
    transaction, hedge accounting is applied. Profits or losses on
    the derivative are included in the relevant income or expense
    category in the profit and loss account.
    Derivatives which are not hedge accounted are recorded at fair
    value, with the change recorded in the profit and loss account. |  | FAS 133 requires all derivatives to be
    recorded at fair value. If certain conditions are met, then the
    derivative may be designated as a hedge. In many cases, Bank of
    Ireland match internal hedges with third party derivatives on an
    aggregate rather than an individual basis which largely offset
    the overall risk to the group. These hedges do not meet the
    criteria under FAS 133 to qualify as fair value, cash flow
    or foreign exchange hedges. For this reason, such contracts are
    restated at market value with changes in the fair value recorded
    in the income statement for the purposes of the US GAAP
    reconciliation.
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Loan Origination Fees                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Certain loan fees are recognised when received.                                                                                                                                                                                                                                                                                                                                                                                      |  | Loan origination fees net of direct loan
    origination costs are deferred and recognised as an adjustment
    to the yield on the related loan or facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Own Shares                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Own shares are holdings of Bank of Ireland Group
    listed shares reacquired on the open market. They are carried at
    par.                                                                                                                                                                                                                                                                                                       |  | ARB 43 requires shares purchased at balance sheet
    date to be held at cost and deducted from equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Restructuring                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|A provision for Group Transformation and
    restructuring costs is recognised in accordance with FRS12 when
    a constructive obligation to transfer economic benefit as a
    result of a past event exists at the balance sheet date.                                                                                                                                                                                            |  | Costs of the Group Transformation Programme are
    recognised when incurred.
    Costs of involuntary severance are recognised as incurred, save
    where the individuals in question are required to remain with
    the Group for periods in excess of their statutory notice
    period, in which case the costs are spread over this period.
    Provision for onerous leases is recognised only when the Group
    ceases using the rights conveyed by the lease contract.                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Prospective Accounting
    Developments                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The impact of recently issued pronouncements are
    detailed on pages 74 and 75.                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-87



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


Consolidated Net Income

|                                                                |         |                 |     |       |  |      |     |       |  |  |     |       | 
|--------------------------------------------------------------- | ------- | --------------- | --- | ----- |  | ---- | --- | ----- |  |  | --- | ----- | 
|                                                                |         | 2003            |     | 2002  |  | 2001
|                                                                |         |                 |     |       |  |     
|                                                                |         |                
|                                                                |         | (in  millions)
|Net income under Irish GAAP                                     |         |                 | 826 |       |  |      | 895 |       |  |  | 731 |      
|Depreciation                                                    |         |                 | (2  | )     |  |      | (3  | )     |  |  | (4  | )    
|Software development costs                                      |         |                 | 5   |       |  |      | 6   |       |  |  | 8   |      
|Goodwill                                                        |         |                 | 6   |       |  |      | (33 | )     |  |  | (35 | )    
|Pension costs                                                   |         |                 | (44 | )     |  |      | (58 | )     |  |  | 9   |      
|Long-term assurance policies                                    |         |                 | (39 | )     |  |      | (78 | )     |  |  | (82 | )    
|Group Transformation Programme                                  |         |                 | (23 | )     |  |      | (21 | )     |  |  | 55  |      
|Leasing                                                         |         |                 | (38 | )     |  |      | (7  | )     |  |  |    |      
|Stock based compensation                                        |         |                 | (3  | )     |  |      | (4  | )     |  |  | (4  | )    
|Derivatives                                                     |         |                 | 75  |       |  |      | (73 | )     |  |  |    |      
|Other                                                           |         |                 | 1   |       |  |      | (15 | )     |  |  | 4   |      
|Deferred tax effect on these adjustments                        |         |                 | 3   |       |  |      | 58  |       |  |  | 7   |      
|                                                                |         |                 |     |       |  |      |     |       |  |  |     |      
|                                                                |         |                 | 767 |       |  |      | 667 |       |  |  | 689 |      
|                                                                |         |                 |     |       |  |      |     |       |  |  |     |      
|Net income under US GAAP                                        |         |                 |     |       |  |      |     |       |  |  |     |      
|Earnings per unit of
    0.64 Ordinary
    Stock under US GAAP |         |                 |     |       |  |      |     |       |  |  |     |      
|                                                                | basic   |                 |     | 76.1c |  |      |     | 66.3c |  |  |     | 69.1c | 
|                                                                |         |                 |     |       |  |      |     |       |  |  |     |      
|                                                                | diluted |                 |     | 75.4c |  |      |     | 65.7c |  |  |     | 68.5c | 
|                                                                |         |                 |     |       |  |      |     |       |  |  |     |      

Summary of Significant Differences between
Irish and US Accounting Principles

Consolidated Total Stockholders
Funds

|                                                                                  |  |                 |       |      |  |  |       |  
|--------------------------------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | -
|                                                                                  |  | 2003            |       | 2002
|                                                                                  |  |                 |       |     
|                                                                                  |  |                
|                                                                                  |  | (in  millions)
|Total stockholders funds including non equity
    interest                        |  |                 | 4,195 |      |  |  | 4,200 |  
|Property less related depreciation                                                |  |                 | (347  | )    |  |  | (349  | )
|Software development costs                                                        |  |                 | (4    | )    |  |  | (9    | )
|Goodwill                                                                          |  |                 | 422   |      |  |  | 460   |  
|Debt securities  available for sale                                              |  |                 | 113   |      |  |  | 38    |  
|Pension costs                                                                     |  |                 | (12   | )    |  |  | 101   |  
|Long-term assurance policies                                                      |  |                 | (359  | )    |  |  | (370  | )
|Dividends                                                                         |  |                 | 238   |      |  |  | 216   |  
|Leasing                                                                           |  |                 | (45   | )    |  |  | (7    | )
|Group Transformation Programme                                                    |  |                 | 11    |      |  |  | 34    |  
|Derivatives                                                                       |  |                 | 2     |      |  |  | (73   | )
|Own shares                                                                        |  |                 | (35   | )    |  |  | (27   | )
|Other                                                                             |  |                 | (20   | )    |  |  | (19   | )
|Deferred taxation on these adjustments                                            |  |                 | 30    |      |  |  | 58    |  
|                                                                                  |  |                 |       |      |  |  |       |  
|Consolidated stockholders funds including
    non equity interests under US GAAP |  |                 | 4,189 |      |  |  | 4,253 |  
|                                                                                  |  |                 |       |      |  |  |       |  

F-88



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


Consolidated Total Assets

|                                     |  |                 |        |      |  |  |        |  
|------------------------------------ |  | --------------- | ------ | ---- |  |  | ------ | -
|                                     |  | 2003            |        | 2002
|                                     |  |                 |        |     
|                                     |  |                
|                                     |  | (in  millions)
|Total assets under Irish GAAP        |  |                 | 89,505 |      |  |  | 87,325 |  
|Property less related depreciation   |  |                 | (347   | )    |  |  | (349   | )
|Goodwill                             |  |                 | 449    |      |  |  | 499    |  
|Software development costs           |  |                 | (4     | )    |  |  | (9     | )
|Debt securities  available for sale |  |                 | 113    |      |  |  | 38     |  
|Pension costs                        |  |                 | (7     | )    |  |  | 106    |  
|Own shares                           |  |                 | (35    | )    |  |  | (27    | )
|Acceptances                          |  |                 | 81     |      |  |  | 86     |  
|Long-term assurance policies         |  |                 | (359   | )    |  |  | (370   | )
|Special purpose entities             |  |                 | 1,019  |      |  |  | 836    |  
|Derivatives                          |  |                 | 1,214  |      |  |  | 692    |  
|Other                                |  |                 | (76    | )    |  |  | (79    | )
|                                     |  |                 |        |      |  |  |        |  
|Total assets under US GAAP           |  |                 | 91,553 |      |  |  | 88,748 |  
|                                     |  |                 |        |      |  |  |        |  

Consolidated Total Liabilities and
Stockholders Funds

|                                                                                              |  |                 |        |      |  |  |        |  
|--------------------------------------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | -
|                                                                                              |  | 2003            |        | 2002
|                                                                                              |  |                 |        |     
|                                                                                              |  |                
|                                                                                              |  | (in  millions)
|Total liabilities and stockholders funds
    including non equity interests under Irish GAAP |  |                 | 89,505 |      |  |  | 87,325 |  
|Stockholders funds (US GAAP adjustment)                                                      |  |                 | (6     | )    |  |  | 53     |  
|Dividends                                                                                     |  |                 | (238   | )    |  |  | (216   | )
|Special purpose entities                                                                      |  |                 | 1,019  |      |  |  | 836    |  
|Acceptances                                                                                   |  |                 | 81     |      |  |  | 86     |  
|Leasing                                                                                       |  |                 | 45     |      |  |  | 7      |  
|Group Transformation Programme                                                                |  |                 | (11    | )    |  |  | (34    | )
|Derivatives                                                                                   |  |                 | 1,212  |      |  |  | 765    |  
|Deferred taxation on these adjustments                                                        |  |                 | (51    | )    |  |  | (81    | )
|Other                                                                                         |  |                 | (3     | )    |  |  | 7      |  
|                                                                                              |  |                 |        |      |  |  |        |  
|Total liabilities and stockholders funds
    including non equity interests under US GAAP    |  |                 | 91,553 |      |  |  | 88,748 |  
|                                                                                              |  |                 |        |      |  |  |        |  

Summary of Significant Differences between
Irish and US Accounting Principles

(1)  Goodwill

On April 1 2002, the Group implemented SFAS
141 Business Combinations and SFAS 142
Goodwill and other tangible assets. The Group
reviewed the carrying value of its goodwill as at April 1
2002 and considered that there was no impairment to be
recognised. From the date of implementation, goodwill is no
longer amortised. Due to significant changes in the operating
environments of certain subsidiaries, further impairment tests
were conducted based on expected future earnings and the value
of comparable businesses. A US GAAP impairment charge of
125.5m was
recognised in respect of Chase de Vere Investments plc and MX
Moneyextra Financial Services Ltd.

F-89



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The effect on Net Income of applying this
standard to previous periods would have been

|                      |  |              |     |      |  |  |     | 
|--------------------- |  | ------------ | --- | ---- |  |  | --- | 
|                      |  | 2002         |     | 2001
|                      |  |              |     |     
|                      |  |             
|                      |  | ( millions)
|Reported net income   |  |              | 667 |      |  |  | 689 | 
|Goodwill amortisation |  |              | 33  |      |  |  | 35  | 
|                      |  |              |     |      |  |  |     | 
|Net income            |  |              | 700 |      |  |  | 724 | 
|                      |  |              |     |      |  |  |     | 

The current carrying value of goodwill for US
GAAP purposes has been allocated as follows to the reportable
business segments of the Group:

|                             |  |                 |     | 
|---------------------------- |  | --------------- | --- | 
|                             |  | 2003           
|                             |  |                
|                             |  | (in  millions)
|Retail Republic of Ireland   |  |                 | 7   | 
|BOI Life                     |  |                 | 94  | 
|Wholesale Financial Services |  |                 | 8   | 
|UK Financial Services        |  |                 | 443 | 
|Asset Management Services    |  |                 | 163 | 
|Group and Central            |  |                 | 5   | 
|                             |  |                 |     | 
|                             |  |                 | 715 | 
|                             |  |                 |     | 

(2)  Pensions

Pensions accounting in the U.S. has to apply
to the provisions of SFAS No. 87 Employers
Accounting for Pensions. It differs from Irish GAAP with
regard to certain assumptions primarily with regard to asset
valuation and actuarial cost methods. The Group has adopted SFAS
No. 87 Employers Accounting for Pensions
as amended by SFAS 132 Employers Disclosures about
Pensions and Other Post-Retirement Benefits in preparing
its U.S. GAAP information.

The impact of this pronouncement has been
included in the GAAP reconciliation in respect of the main Bank
of Ireland Pension Plan and the Bristol & West Group
Pension Plan. In 2003, these plans make up approximately 87%,
(2002: 87%, 2001: 88%) of Bank of Ireland Groups plans in
terms of assets. The components of the pensions expense for
these plans which arise under SFAS No. 87 are estimated to
be as follows:

|                                     |  |                      |      |      |  |      |      |   |  |  |      |  
|------------------------------------ |  | -------------------- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                     |  |                     
|                                     |  | Year Ended March 31,
|                                     |  |                     
|                                     |  | 2003                 |      | 2002 |  | 2001
|                                     |  |                      |      |      |  |     
|                                     |  |                     
|                                     |  | (in  millions)     
|Service cost                         |  |                      | 74   |      |  |      | 72   |   |  |  | 61   |  
|Cost of special termination benefits |  |                      | 93   |      |  |      | 96   |   |  |  | 55   |  
|Interest cost                        |  |                      | 141  |      |  |      | 132  |   |  |  | 120  |  
|Expected return on plan assets       |  |                      | (208 | )    |  |      | (203 | ) |  |  | (207 | )
|Net amortization and deferral        |  |                      | (15  | )    |  |      | (16  | ) |  |  | (31  | )
|                                     |  |                      |      |      |  |      |      |   |  |  |      |  
|                                     |  |                      | 85   |      |  |      | 81   |   |  |  | (2   | )
|                                     |  |                      |      |      |  |      |      |   |  |  |      |  

F-90



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


A weighted average expected rate of return of
7.9% on the plan assets of both schemes was used in determining
the net periodic pension cost for the year ended March 31,
2003 (2002: 7% and 2001: 7%).

Actuarial assumptions used in determining the
projected benefit obligation at March 31, 2003 included a
weighted average discount rate of 5.5% (2002: 6% and 2001: 6%)
and a weighted average increase in future compensation expense
of 3% (2002: 3.1% and 2001: 3.5%). Pensions are further
discussed in Note 35.

During 2000, 2001 and 2002 the Group offered a
voluntary leaving and a voluntary retirement program in which
eligible participants in the Bank of Irelands main pension
plans received accelerated and enhanced benefits if they elected
to leave or retire under the programs. The voluntary retirement
program was accounted for under SFAS No. 88,
Employers Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for
Termination Benefits and a cost of
93 million
in 2003,
96 million
in 2002 and
55 million
in 2001 was recorded.

The main Bank of Ireland Pension Plans had
investments which included the following at March 31, 2003
and 2002:

|                                                                                    |  |                 |     |      |  |  |     | 
|----------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                                                                    |  |                
|                                                                                    |  | At March 31,   
|                                                                                    |  |                
|                                                                                    |  | 2003            |     | 2002
|                                                                                    |  |                 |     |     
|                                                                                    |  |                
|                                                                                    |  | (in  millions)
|Interest in property occupied by Bank of Ireland                                    |  |                 | 122 |      |  |  | 126 | 
|Bank of Ireland
    0.64 Ordinary
    Stock                                        |  |                 | 84  |      |  |  | 107 | 
|Bank of Ireland preference stock                                                    |  |                 | Nil |      |  |  | Nil | 
|Bank of Ireland 6.45% Subordinated Bonds
    10.02.2010                             |  |                 | Nil |      |  |  | Nil | 
|Bank of Ireland 7.4% Guaranteed Step-up Callable
    Perpetual Preferred Securities |  |                 | 2   |      |  |  | 2   | 
|Securities Lending with Davy Stockbrokers                                           |  |                 | 6   |      |  |  | Nil | 

There were 8,607,160 units (2002: 8,627,956
units) of the Banks Ordinary Stock, shares nil (2002: nil)
of the Banks Preference Shares,
nil (2002:
nil) Bank of
Ireland 6.45% Subordinated Bonds 10.02.2010 and
1,502,000 (2002:
1,502,000) Bank
of Ireland 7.4% Guaranteed Step up Callable Perpetual Preferred
Securities included in the Banks pension assets for the
year ended March 31, 2003. The total gross dividend paid in
cash on these investments was
2.7 million
(2002:
3.2 million).
In addition, the Group rents property from the pension fund. The
annual rent payable thereon, which is at arms length rates,
amounted to
6.8 million.

F-91



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The following is a reconciliation of benefit
obligation, the change in the plan assets during the year and an
analysis of the funded status of the plans during the three
years ended March 31, 2003.

|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|-------------------------------------------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                           |  | 2003            |       | 2002 |  | 2001
|                                                                           |  |                 |       |      |  |     
|                                                                           |  |                
|                                                                           |  | (in  millions)
|Change in projected benefit
    obligation                                 |  |                 |       |      |  |      |       |   |  |  |       |  
|Projected benefit obligation at April 1                                    |  |                 | 2,404 |      |  |      | 2,243 |   |  |  | 2,032 |  
|Exchange adjustments                                                       |  |                 | (23   | )    |  |      |      |   |  |  |      |  
|Service cost (net of members contributions)                                |  |                 | 74    |      |  |      | 72    |   |  |  | 61    |  
|Interest cost                                                              |  |                 | 141   |      |  |      | 132   |   |  |  | 120   |  
|Members contributions                                                      |  |                 | 10    |      |  |      | 9     |   |  |  | 7     |  
|Liability change                                                           |  |                 |      |      |  |      | (11   | ) |  |  | (5    | )
|Actuarial gain/(loss)                                                      |  |                 | 310   |      |  |      | (67   | ) |  |  | 34    |  
|Special termination benefits                                               |  |                 | 93    |      |  |      | 96    |   |  |  | 55    |  
|Benefits paid                                                              |  |                 | (59   | )    |  |      | (70   | ) |  |  | (61   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Projected benefit obligation at March 31                                   |  |                 | 2,950 |      |  |      | 2,404 |   |  |  | 2,243 |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Change in plan assets                                                      |  |                 |       |      |  |      |       |   |  |  |       |  
|Fair value of plan assets at April 1                                       |  |                 | 3,008 |      |  |      | 2,921 |   |  |  | 2,973 |  
|Exchange adjustments                                                       |  |                 | (23   | )    |  |      |      |   |  |  |      |  
|Actual return                                                              |  |                 | (674  | )    |  |      | 139   |   |  |  | (7    | )
|Employer contribution                                                      |  |                 | 13    |      |  |      | 10    |   |  |  | 8     |  
|Members contribution                                                       |  |                 | 10    |      |  |      | 9     |   |  |  | 7     |  
|Benefits paid                                                              |  |                 | (59   | )    |  |      | (71   | ) |  |  | (60   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Fair value of plan assets at March 31                                      |  |                 | 2,275 |      |  |      | 3,008 |   |  |  | 2,921 |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Change in funded status                                                    |  |                 |       |      |  |      |       |   |  |  |       |  
|Funded status at March 31                                                  |  |                 | (675  | )    |  |      | 604   |   |  |  | 678   |  
|Unamortised net loss/(gain)                                                |  |                 | 633   |      |  |      | (573  | ) |  |  | (575  | )
|Minimum Liability Obligation                                               |  |                 | (70   | )    |  |      |      |   |  |  |      |  
|Unamortised net asset at transition                                        |  |                 | (9    | )    |  |      | (10   | ) |  |  | (11   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Prepaid (accrued) pension cost recognised in
    balance sheet at year end |  |                 | (121  | )    |  |      | 21    |   |  |  | 92    |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  

(2)  Cashflow
Statements

The consolidated cash flow statement on
page F-10 has been completed in accordance with Financial
Reporting Standard 1 (revised) (FRS1) which was issued by the
U.K. Accounting Standards Board in 1996.

The objective and principles of FRS 1 are similar
to those set out in SFAS 95. The principal differences between
the standards relate to classification. Under FRS 1, the Group
presents its cash flows for (i) operating activities;
(ii) returns on investment and servicing of finance;
(iii) taxation; (iv) capital expenditure and financial
investment; (v) acquisitions and disposals;
(vi) equity dividends paid and (vii) financing. SFAS
95 requires only three categories of cash flow activity, namely
(i) operating; (ii) investing and
(iii) financing. In addition FRS 1 (revised 1996)
defines cash as cash and balances at central banks and loans and
advances to banks repayable on demand. SFAS 95 defines cash as
being inclusive of cash equivalents which are short term highly
liquid investments that are both readily convertible to known
amounts of cash and are so near maturity that they present
insignificant risk of changes in value because of changes in
interest rates.

F-92



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The classification of cash flows under FRS 1
generally differs from that under SFAS 95 as follows:
(i) returns on investment and servicing of finance and
taxation would be included as operating activities;
(ii) capital expenditure and financial investment,
acquisitions and disposals would be included as investing
activities; and (iii) equity dividends paid would be
included as a financing activity.

(4)  Deferred
Taxation

In accordance with SFAS No. 109,
Accounting for Income Taxes, the components of
deferred taxation in the balance sheet at March 31, 2003
and 2002 are as follows:

|                                                             |  |                 |     |            |  |  |     |  
|------------------------------------------------------------ |  | --------------- | --- | ---------- |  |  | --- | -
|                                                             |  |                
|                                                             |  | At March 31,   
|                                                             |  |                
|                                                             |  | 2003            |     | 2002      
|                                                             |  |                 |     |           
|                                                             |  |                 |     | (restated)
|                                                             |  |                
|                                                             |  | (in  millions)
|Deferred tax liabilities Accelerated capital
    allowances: |  |                 |     |            |  |  |     |  
| on finance leases                                          |  |                 | 108 |            |  |  | 125 |  
| on equipment used by the Group                             |  |                 | 8   |            |  |  | 11  |  
|                                                             |  |                 |     |            |  |  |     |  
|Total                                                        |  |                 | 116 |            |  |  | 136 |  
|Deferred tax assets Reserve for loan and lease
    loss      |  |                 | 36  |            |  |  | 33  |  
|Accruals and Reserves                                        |  |                 | 4   |            |  |  | 4   |  
|Minimum tax credits                                          |  |                 | 1   |            |  |  | 1   |  
|Other                                                        |  |                 | 26  |            |  |  | 14  |  
|                                                             |  |                 |     |            |  |  |     |  
|Total                                                        |  |                 | 67  |            |  |  | 52  |  
|Deferred tax asset valuation allowance                       |  |                 | (5  | )          |  |  | (5  | )
|                                                             |  |                 |     |            |  |  |     |  
|Net deferred tax assets                                      |  |                 | 62  |            |  |  | 47  |  
|                                                             |  |                 |     |            |  |  |     |  
|Net deferred tax liabilities                                 |  |                 | 54  |            |  |  | 89  |  
|                                                             |  |                 |     |            |  |  |     |  

(5)  Impaired Loans

Bank of Ireland has reviewed SFAS
Nos. 114 and 118 Accounting by Creditors for
Impairment of a Loan. SFAS No. 114 applies only to impaired
loans, the measurement of which is primarily based upon the
present value of expected future cash flows discounted at the
loans effective interest rate. In certain instances this
measurement may reflect the loans observable market value,
or the fair value of the collateral if the loan is collateral
dependent. Smaller balance homogeneous consumer loans that are
collectively evaluated for impairment, are outside the scope of
SFAS No. 114, as are debt securities and leases. The Group
has determined, using the net present value method, that it had
no material effect on the reconciliation of net income and
shareholders funds between Irish and U.S. GAAP.

Smaller balance homogenous loans are defined as
all loans, irrespective of balance size, in the Groups
credit card division, finance companies and its
UK residential mortgage company. The distinguishing feature
is that in each case, the Loan Loss Provision is generated
automatically based on arrears experience.

Within the Bank, a loan is automatically deemed
to be impaired when based on current information and events, it
is probable that the Bank will be unable to collect all amounts
due (principal and contractual interest), according to the terms
of the contractual agreement. Such loans are classified as
Credit Grade 6 (Provision Required) or Grade 7
(Write-Off). In addition, certain Credit Grade 5 loans
(Unacceptable Risk) where there is no

F-93



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


loan loss immediately identifiable but where
there is doubt regarding the collectability of principal and
interest out into the future are also classified as impaired.

All loans classified as Credit Grade 6
(Provision Required) or Grade 7 (Write-Off), and where the
loan balance was less than
300k/Stg£250k
as at March 31, 2003, were aggregated for evaluation
purposes. It is practice in Ireland and the United Kingdom to
delay write-off of debt until the realization of collateral or
alternative recovery action has been completed, or the required
full or partial write-off can be predicted with a high degree of
certainty. When management determines that a full or partial
write-off on a loan is appropriate, the amount of the write-off
is applied against the specific provision and the debt reduced
to its estimated realizable value. Amounts which are written off
on the Groups books must continue to be subject to the
same diligence in collection effort as is applied to other loan
balances. Interest on Credit Grade 6 (Provision Required)
and Grade 7 (Write-Off) loans is accounted for on a cash
receipts basis.

Under the Banks policies for interest
income recognition, the Bank records cash receipts on loans that
are impaired as a reduction to the principal balance.

At March 31, 2003, the Groups net
investment in impaired loans amounted to
89.1 million
(2002:
50.0 million)
of which
70.5 million
(2002:
34.9 million)
was after specific provisions of
104.3 million
(2002:
97.1 million).

The average level of such impaired lending during
the year was approximately
170.3 million
(2002:
145.3 million).

(6)  Stock Compensation
Plan

The Bank operates a number of stock option
schemes. Further details are set out in Note 33.

The Group has elected to follow APB 25 in
accounting for these schemes. Had a fair value basis of
accounting for these schemes been applied, as outlined in SFAS
No 123, based on fair values at the grant dates, proforma
net income and proforma basic earnings per share under
US GAAP would have been,
760 million
for March 31, 2003 (2002:
661 million
and 2001:
681 million)
and 75.4c (2002: 65.7c and 2001: 68.3c) respectively.

The following table summarises the number of
options outstanding under the Senior Executive Scheme and
weighted average exercise price:

|                                 |  |                      |           |          |  |        |         |          |  |  |           |  |  |  |         | 
|-------------------------------- |  | -------------------- | --------- | -------- |  | ------ | ------- | -------- |  |  | --------- |  |  |  | ------- | 
|                                 |  |                     
|                                 |  | Year Ended March 31,
|                                 |  |                     
|                                 |  |                      |           |         
|                                 |  | 2003                 |           | 2002    
|                                 |  |                      |           |         
|                                 |  |                      |           | Weighted |  |        |         | Weighted
|                                 |  |                      |           | Average  |  |        |         | Average 
|                                 |  |                      |           | exercise |  |        |         | exercise
|                                 |  | Number               |           | price    |  | Number |         | price   
|                                 |  |                      |           |          |  |        |         |         
|Outstanding at beginning of year |  |                      | 6,645,742 |          |  |        | 5.8828  |          |  |  | 8,180,804 |  |  |  | 4.6037  | 
|Granted in year                  |  |                      | 1,023,000 |          |  |        | 12.4638 |          |  |  | 986,000   |  |  |  | 10.9290 | 
|Exercised in year                |  |                      | 1,889,242 |          |  |        | 2.7302  |          |  |  | 2,446,062 |  |  |  | 3.528   | 
|Lapsed in year                   |  |                      | 45,000    |          |  |        | 9.6707  |          |  |  | 75,000    |  |  |  | 9.5045  | 
|                                 |  |                      |           |          |  |        |         |          |  |  |           |  |  |  |         | 
|Outstanding at end of year       |  |                      | 5,734,500 |          |  |        | 8.0657  |          |  |  | 6,645,742 |  |  |  | 5.8828  | 
|                                 |  |                      |           |          |  |        |         |          |  |  |           |  |  |  |         | 

F-94



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The following table summarises information about
the Executive Stock Options Scheme outstanding at March 31,
2003.

|                            |  |              |           |                  |  |              |            |  |  |  |         | 
|--------------------------- |  | ------------ | --------- | ---------------- |  | ------------ | ---------- |  |  |  | ------- | 
|                            |  | Number       |           | Weighted         |  | Number      
|                            |  | Outstanding  |           | Average          |  | Exercisable 
|                            |  | at March 31, |           | Remaining        |  | at March 31,
|                            |  | 2003         |           | Contractual Life |  | 2003        
|                            |  |              |           |                  |  |             
|Exercise price
    ( cent) |  |              |           |                  |  |              |            |  |  |  |         | 
|1.436                       |  |              | 10,000    |                  |  |              | 2 mths     |  |  |  | 10,000  | 
|1.670                       |  |              | 20,000    |                  |  |              | 1yr 2 mths |  |  |  | 20,000  | 
|2.111                       |  |              | 90,000    |                  |  |              | 2yr 2 mths |  |  |  | 90,000  | 
|2.819                       |  |              | 611,000   |                  |  |              | 3yr 3 mths |  |  |  | 611,000 | 
|3.241                       |  |              | 80,000    |                  |  |              | 3yr 8 mths |  |  |  | 80,000  | 
|4.529                       |  |              | 475,000   |                  |  |              | 4yr 3 mths |  |  |  | 475,000 | 
|5.753                       |  |              | 505,100   |                  |  |              | 4yr 8 mths |  |  |  | 505,100 | 
|8.264                       |  |              | 258,000   |                  |  |              | 5yr 2 mths |  |  |  | 258,000 | 
|8.933                       |  |              | 690,000   |                  |  |              | 6yr 4 mths |  |  |  | 690,000 | 
|8.430                       |  |              | 80,250    |                  |  |              | 6yr 8 mths |  |  |  | 80,250  | 
|6.960                       |  |              | 785,000   |                  |  |              | 7yr 2 mths |  |  |  |        | 
|9.150                       |  |              | 171,150   |                  |  |              | 7yr 8 mths |  |  |  |        | 
|11.050                      |  |              | 702,000   |                  |  |              | 8yr 2 mths |  |  |  |        | 
|10.540                      |  |              | 234,000   |                  |  |              | 8yr 8 mths |  |  |  |        | 
|12.500                      |  |              | 1,003,000 |                  |  |              | 9yr 3 mths |  |  |  |        | 
|10.650                      |  |              | 20,000    |                  |  |              | 9yr 9 mths |  |  |  |        | 

The Sharesave Scheme (SAYE Scheme)
was launched in February 2000 and as a result options over
15,527,008 units of Ordinary Stock (1.6% of the Issued Ordinary
Stock) were granted to participating employees at an option
price of 5.40,
which represented a 20% discount to the then market price. The
outstanding options under the Scheme, which stood at 12,470,190
at March 31, 2003 and 13,326,456 at March 31, 2002 and
14,530,120 at March 31, 2001 are exercisable, provided the
participants savings contracts are complete, between May
2003 and May 2007.

As at March 31, 2003 conditional awards
totalling 779,766 units of stock (2002: 644,825 and 2001:
460,817 units of stock) were outstanding to the current
participants of the Long Term Performance Stock Plan.

The significant weighted average assumptions used
to estimate the fair values of the options granted were a risk
free rate of return of 4.51% (2002: 4.54%, 2001: 5.05%),
expected volatility of 35.7% (2002: 35.65%, 2001: 33.5%) and a
dividend yield for the sector of 1.71% (2002: 1.78%,2001:
2.35%). An expected life of 5 years was used in the case of
the senior executive Stock Option Scheme. The expected life of
the Sharesave scheme options was expected to approximate the
period of the savings contracts.

(7)  Earnings per
share

Basic earnings per share (EPS) under
U.S. GAAP differs from Irish GAAP only to the extent that
income calculated under U.S. GAAP differs from that
calculated under Irish GAAP.

Diluted EPS measures the effect that existing
options would have on the Basic EPS if they were to be
exercised, by increasing the number of ordinary shares. Under
U.S. GAAP, the number of increased shares is reduced by the
number of shares that could be bought (using the average market
price in the year) with the

F-95



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


assumed exercise proceeds (actual proceeds
arising on exercise plus unamortised compensation costs, where
appropriate). Any options that are antidilutive are excluded
from this calculation. (An option is antidilutive when the
deemed proceeds is greater than the market price used in the
above calculation, there were no antidilutive options in the
current or prior year).

|                                                                        |  |        |     |               |  |        |        |           |  |               |       |        |  |  |     |  |  |  |        |  |  |  |       | 
|----------------------------------------------------------------------- |  | ------ | --- | ------------- |  | ------ | ------ | --------- |  | ------------- | ----- | ------ |  |  | --- |  |  |  | ------ |  |  |  | ----- | 
|                                                                        |  |        |     |              
|                                                                        |  | 2003   |     | 2002         
|                                                                        |  |        |     |              
|                                                                        |  |        |     | Per-share     |  |        |        | Per-share
|                                                                        |  | Income |     | Share No      |  | Amount |        | Income    |  | Share No      |       | Amount
|                                                                        |  |        |     |               |  |        |        |           |  |               |       |       
|                                                                        |  | m     |     | (in millions) |  | Cent   |        | m        |  | (in millions) |       | Cent  
|Basic EPS                                                               |  |        |     |               |  |        |        |           |  |               |       |        |  |  |     |  |  |  |        |  |  |  |       | 
|Approximate net income (US GAAP) available
    to ordinary stockholders |  |        | 767 |               |  |        | 1007.5 |           |  |               | 76.1c |        |  |  | 667 |  |  |  | 1005.6 |  |  |  | 66.3c | 
|Effect of dilutive securities employee share
    options                |  |        |     |               |  |        | 9.6    |           |  |               |       |        |  |  |     |  |  |  | 9.6    |  |  |  |       | 
|                                                                        |  |        |     |               |  |        |        |           |  |               |       |        |  |  |     |  |  |  |        |  |  |  |       | 
|Diluted EPS                                                             |  |        | 767 |               |  |        | 1017.1 |           |  |               | 75.4c |        |  |  | 667 |  |  |  | 1015.2 |  |  |  | 65.7c | 
|                                                                        |  |        |     |               |  |        |        |           |  |               |       |        |  |  |     |  |  |  |        |  |  |  |       | 

|                                                                        |  |        |     |               |  |        |         |  |  |  |       | 
|----------------------------------------------------------------------- |  | ------ | --- | ------------- |  | ------ | ------- |  |  |  | ----- | 
|                                                                        |  |       
|                                                                        |  | 2001  
|                                                                        |  |       
|                                                                        |  |        |     | Per-share    
|                                                                        |  | Income |     | Share No      |  | Amount
|                                                                        |  |        |     |               |  |       
|                                                                        |  | m     |     | (in millions) |  | Cent  
|Basic EPS                                                               |  |        |     |               |  |        |         |  |  |  |       | 
|Approximate net income (US GAAP) available to
    ordinary stockholders |  |        | 689 |               |  |        | 996.8   |  |  |  | 69.1c | 
|Effect of dilutive securities employee share
    options                |  |        |     |               |  |        | 8.9     |  |  |  |       | 
|                                                                        |  |        |     |               |  |        |         |  |  |  |       | 
|Diluted EPS                                                             |  |        | 689 |               |  |        | 1,005.7 |  |  |  | 68.5c | 
|                                                                        |  |        |     |               |  |        |         |  |  |  |       | 

Shares (2003: 1.3 million, 2002:
1.0 million, 2001: 1.2 million) were excluded from the
computation of diluted EPS above as their effect would have been
anti-dilutive.

(8)  Alternative Presentation of
Consolidated Statement of Income

The Groups share of profits of the life
assurance company Bank of Ireland Life has been included under
other operating income in the Consolidated Statements of Income.
The income statement of the life assurance businesses, if
consolidated under U.S. GAAP, would be consolidated within
the Group figures on a line by line basis.

F-96



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The following summary consolidated statements of
income illustrates this presentation.

|                                                                        |              |                 |       |            |  |  |       |   | 
|----------------------------------------------------------------------- | ------------ | --------------- | ----- | ---------- |  |  | ----- | - | 
|                                                                        |              |                
|                                                                        |              | At March 31,   
|                                                                        |              |                
|                                                                        |              | 2003            |       | 2002      
|                                                                        |              |                 |       |           
|                                                                        |              |                 |       | (restated)
|                                                                        |              |                
|                                                                        |              | (in  millions)
|Net interest income                                                     |              |                 | 1,729 |            |  |  | 1,578 |  
|Other income                                                            |              |                 | 1,272 |            |  |  | 1,306 |  
|                                                                        |              |                 |       |            |  |  |       |  
|Total income                                                            |              |                 | 3,001 |            |  |  | 2,884 |  
|Total operating expenses                                                |              |                 | 1,846 |            |  |  | 1,763 |  
|                                                                        |              |                 |       |            |  |  |       |  
|Operating profit                                                        |              |                 | 1,155 |            |  |  | 1,121 |  
|Income from associated undertakings                                     |              |                 | 22    |            |  |  | 1     |  
|                                                                        |              |                 |       |            |  |  |       |  
|Profit on ordinary activities before exceptional
    items              |              |                 | 1,177 |            |  |  | 1,122 |  
|Group Transformation Programme                                          |              |                 |      |            |  |  | (37   | )
|Exceptional item                                                        |              |                 | (164  | )          |  |  |      |  
|                                                                        |              |                 |       |            |  |  |       |  
|Profit before tax                                                       |              |                 | 1,013 |            |  |  | 1,085 |  
|Taxation on profit on ordinary activities                               |              |                 | 163   |            |  |  | 165   |  
|                                                                        |              |                 |       |            |  |  |       |  
|Profit on ordinary activities after tax                                 |              |                 | 850   |            |  |  | 920   |  
|Minority interest                                                       |              |                 |       |            |  |  |       |  
|                                                                        |  equity     |                 |       | 9          |  |  |       | 2 | 
|                                                                        |  non-equity |                 |       | 6          |  |  |       | 6 | 
|Non cumulative preference stock dividends                               |              |                 | 9     |            |  |  | 17    |  
|                                                                        |              |                 |       |            |  |  |       |  
|Profit for financial year attributable to holders
    of ordinary stock |              |                 | 826   |            |  |  | 895   |  
|                                                                        |              |                 |       |            |  |  |       |  

(9)  Alternative presentation of
the Consolidated Balance Sheet

The long-term assurance assets and liabilities of
the life assurance business have been classified under separate
headings in the consolidated Balance Sheet. Under U.S. GAAP
the Balance Sheet of the Life Assurance business would be
consolidated with Group figures.

F-97



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The following consolidated Balance Sheet
illustrates this presentation.

|                                             |  |                 |        |      |  |  |        | 
|-------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                             |  |                
|                                             |  | At March 31,   
|                                             |  |                
|                                             |  | 2003            |        | 2002
|                                             |  |                 |        |     
|                                             |  |                
|                                             |  | (in  millions)
|Assets:                                      |  |                 |        |      |  |  |        | 
|Cash and balances at Central Banks           |  |                 | 679    |      |  |  | 569    | 
|Items in the course of collection from banks |  |                 | 508    |      |  |  | 554    | 
|Central government and other eligible bills  |  |                 | 175    |      |  |  | 79     | 
|Loans and advances to banks                  |  |                 | 7,910  |      |  |  | 8,660  | 
|Loans and advances to customers              |  |                 | 56,887 |      |  |  | 56,577 | 
|Securitization and loan transfers            |  |                 | 794    |      |  |  | 1,106  | 
|Less: non-returnable amounts                 |  |                 | 667    |      |  |  | 964    | 
|                                             |  |                 |        |      |  |  |        | 
|                                             |  |                 | 127    |      |  |  | 142    | 
|Debt securities                              |  |                 | 13,763 |      |  |  | 12,483 | 
|Equity shares                                |  |                 | 3,109  |      |  |  | 3,344  | 
|Own Shares                                   |  |                 | 35     |      |  |  | 27     | 
|Interest in associated undertakings          |  |                 | 13     |      |  |  | 16     | 
|Interest in joint ventures                   |  |                 | 25     |      |  |  | 4      | 
|Intangible Fixed Assets                      |  |                 | 266    |      |  |  | 271    | 
|Tangible fixed assets                        |  |                 | 1,582  |      |  |  | 1,615  | 
|Other assets                                 |  |                 | 3,837  |      |  |  | 2,336  | 
|Prepayments and accrued income               |  |                 | 589    |      |  |  | 648    | 
|                                             |  |                 |        |      |  |  |        | 
|Total Assets                                 |  |                 | 89,505 |      |  |  | 87,325 | 
|                                             |  |                 |        |      |  |  |        | 

|                                                             |  |                 |        |            |  |  |        | 
|------------------------------------------------------------ |  | --------------- | ------ | ---------- |  |  | ------ | 
|                                                             |  |                
|                                                             |  | At March 31,   
|                                                             |  |                
|                                                             |  | 2003            |        | 2002      
|                                                             |  |                 |        |           
|                                                             |  |                 |        | (restated)
|                                                             |  |                
|                                                             |  | (in  millions)
|Liabilities:                                                 |  |                 |        |            |  |  |        | 
|Deposits by banks                                            |  |                 | 12,617 |            |  |  | 12,583 | 
|Customer accounts                                            |  |                 | 48,496 |            |  |  | 51,111 | 
|Debt securities in issue                                     |  |                 | 9,652  |            |  |  | 6,374  | 
|Items in the course of transmission to banks                 |  |                 | 136    |            |  |  | 152    | 
|Other liabilities                                            |  |                 | 10,557 |            |  |  | 9,072  | 
|Proposed dividends  equity                                  |  |                 | 238    |            |  |  | 216    | 
|Accruals and deferred income                                 |  |                 | 541    |            |  |  | 672    | 
|Provision for liabilities and charges                        |  |                 |        |            |  |  |        | 
| deferred taxation                                          |  |                 | 54     |            |  |  | 89     | 
| other provisions for liabilities and
    charges           |  |                 | 189    |            |  |  | 159    | 
|Subordinated liabilities                                     |  |                 | 2,703  |            |  |  | 2,524  | 
|Minority interest                                            |  |                 |        |            |  |  |        | 
| equity                                                     |  |                 | 54     |            |  |  | 91     | 
| non-equity                                                 |  |                 | 73     |            |  |  | 82     | 
|Called up capital stock                                      |  |                 | 679    |            |  |  | 679    | 
|Stock premium account                                        |  |                 | 770    |            |  |  | 773    | 
|Capital reserve                                              |  |                 | 436    |            |  |  | 397    | 
|Profit and loss account                                      |  |                 | 2,129  |            |  |  | 2,143  | 
|Revaluation reserve                                          |  |                 | 181    |            |  |  | 208    | 
|                                                             |  |                 |        |            |  |  |        | 
|Total stockholders funds including
    non-equity interests |  |                 | 4,195  |            |  |  | 4,200  | 
|                                                             |  |                 |        |            |  |  |        | 
|Total liabilities                                            |  |                 | 89,505 |            |  |  | 87,325 | 
|                                                             |  |                 |        |            |  |  |        | 

F-98



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


(10) Guarantees

An element of the Groups normal banking
business is to issue guarantees on behalf of its customers. In
almost all cases, the Group will hold collateral against
exposure, have a right of recourse to the customer or both. In
addition, the Group also issues guarantees on its own behalf.
The major categories of these guarantees are:

Financial Guarantees

These are given to banks and financial
institutions on behalf of customers to secure loans, overdrafts
and other banking facilities.

Included within this category are stock borrowing
indemnities. These relate to funds managed by the Group on
behalf of clients, which participate in stock lending
programmes. The Group indemnifies the clients against any losses
incurred by the clients resulting from borrower default.

Standby letters of credit

These are irrevocable commitments to pay a third
party, on behalf of our customers, the value of which on demand
is subject to certain criteria being complied with. Any amounts
paid are debited to the customer accounts. These contracts are
used when required in substitution of guarantees due to a
greater acceptability in the beneficiary country.

Other guarantees

This category includes various other guarantees
given by the bank on behalf of a customer.

Details are included in Note 39.

(11) Consolidation

The Group has certain sponsored entities that do
not meet the consolidation criteria of quasi-subsidiaries under
FRS 5 but nevertheless fall to be consolidated under US
GAAP. Total assets increase by
1,019 million
(2002:
836 million)

In January 2003, the FASB issued FIN 46.
This pronouncement modifies the framework for determining
consolidation of certain entities that meet the definition of a
variable interest entity. This is met where the
entity either does not have sufficient equity of the appropriate
nature to support its expected losses, or the third party equity
capital lacks certain characteristics which would be expected to
be present within a controlling financial interest.

The provisions of FIN 46 are immediately
effective for variable interest entities created after
January 31, 2003. The standard must be applied to all
entities beginning in the first fiscal year after June 15,
2003.

For those variable interest entities which are in
existence prior to January 31, 2003, and where the Group
has a significant variable interest or it is reasonably possible
that the Group would have to consolidate the entity on
application of FIN 46, a transitional disclosure is
required which quantifies the maximum exposure to loss as a
consequence of the Group involvement with the entity. The
maximum exposure which is managed within the Groups risk
management framework.

Where a maximum exposure to loss is quoted this
represents the Groups total exposure and includes both
drawn and undrawn lending facilities. The Groups exposure
is determined by changes in value of the variable

F-99



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



45  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


interests it holds within these entities, which
primarily comprise liquidity, credit enhancements, derivative
transactions and financing arrangements.

The following is a summary of the nature,
purpose, size and activities of those entities with which the
Group is currently involved, and which are expected to be
impacted by FIN 46:

A)  Securitisations



| |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Group has securitised some of its lending
    portfolios using entities established solely for that purpose.
    The funding of these entities has been provided by the Group.
    Total maximum exposure to loss for these entities is
    32m, total
    assets of these entities is
    908m, of which
    591m are already
    consolidated by the Group under US GAAP. Further details
    are outlined in Note 15.

B)  Conduit



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bank of Ireland provides investment advisory
    services and a liquidity facility to a company involved in a
    commercial paper conduit program. The company purchases publicly
    rated marketable investment securities with initial minimum
    ratings of Aa3/AA  by Moodys/S&P. The
    company funds the purchase of the securities by way of an
    uncommitted loan from a Delaware incorporated company (known as
    a multi-seller conduit) which in turn issues commercial paper to
    investors in the US and European commercial paper markets. A US
    bank administers the day-to-day operations of the company and
    the multi-seller conduit. The US bank is also responsible for
    arranging the issuance of the commercial paper by the
    multi-seller conduit. As of July 15, 2003, the commercial
    paper issued by the multi-seller conduit is rated P-1/A-1/F1 by
    Moodys/S&P/Fitch.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of March 31, 2003, the Group had an
    outstanding undrawn liquidity facility to the company amounting
    to 438.1m. Based
    on the company acquiring further high quality publicly rated
    marketable investment securities (with initial minimum ratings
    of Aa3/AA- by Moodys/S&P), the liquidity facility
    provided by the Group to the company could increase to a current
    maximum of US$1.03bn. The Groups maximum exposure to loss,
    in the highly unlikely event of non-performance of the entire
    portfolio of assets in the company, is represented by the
    contractual amount of the facility.



|   |                                                                                    
|-- | -----------------------------------------------------------------------------------
|46 | SFAS NO. 115 ACCOUNTING FOR CERTAIN
    INVESTMENTS IN DEBT AND EQUITY SECURITIES

The difference between Irish generally accepted
accounting principles (IR GAAP) and those applicable in the
U.S. (U.S. GAAP) for debt securities are outlined in
Note 45 above.

F-100



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|   |                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------
|46 | SFAS NO. 115 ACCOUNTING FOR CERTAIN
    INVESTMENTS IN DEBT AND EQUITY
    SECURITIES  (continued)

The book value and market value of the debt
securities are analyzed as follows:

|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 
|------------------ |  | --------------- | ------ | ------ |  | ----- | ------ | ------ |  |  | ------ |  |  |  | ------ | 
|                   |  |                
|                   |  | At March 31,   
|                   |  |                
|                   |  |                 |        |       
|                   |  | 2003            |        | 2002  
|                   |  |                 |        |       
|                   |  | Book            |        | Market |  | Book  |        | Market
|                   |  | Value           |        | Value  |  | Value |        | Value 
|                   |  |                 |        |        |  |       |        |       
|                   |  |                
|                   |  | (in  millions)
|Held to maturity   |  |                 | 3,227  |        |  |       | 3,216  |        |  |  | 3,087  |  |  |  | 3,106  | 
|Available for sale |  |                 | 5,522  |        |  |       | 5,635  |        |  |  | 5,265  |  |  |  | 5,303  | 
|Trading            |  |                 | 3,588  |        |  |       | 3,588  |        |  |  | 2,533  |  |  |  | 2,533  | 
|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 
|Total              |  |                 | 12,337 |        |  |       | 12,439 |        |  |  | 10,885 |  |  |  | 10,942 | 
|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 

The following table sets out the amortized cost
and market value of the available for sale investment portfolio
owned by the Group at March 31, 2003 and 2002.

|                                               |  |                                         |       |        |  |           |       |        |  |  |       |  |  |  |       | 
|---------------------------------------------- |  | --------------------------------------- | ----- | ------ |  | --------- | ----- | ------ |  |  | ----- |  |  |  | ----- | 
|                                               |  |                                        
|                                               |  | Available for Sale Investment Portfolio
|                                               |  |                                        
|                                               |  |                                         |       |       
|                                               |  | 2003                                    |       | 2002  
|                                               |  |                                         |       |       
|                                               |  | Amortized                               |       | Market |  | Amortized |       | Market
|                                               |  | Cost                                    |       | Value  |  | Cost      |       | Value 
|                                               |  |                                         |       |        |  |           |       |       
|                                               |  |                                        
|                                               |  | (in  millions)                        
|Irish government                               |  |                                         | 271   |        |  |           | 285   |        |  |  | 463   |  |  |  | 449   | 
|Other European government                      |  |                                         | 367   |        |  |           | 409   |        |  |  | 270   |  |  |  | 303   | 
|US Treasury and US Government agencies         |  |                                         |      |        |  |           |      |        |  |  |      |  |  |  |      | 
|Mortgage backed obligation of federal agencies |  |                                         |      |        |  |           |      |        |  |  |      |  |  |  |      | 
|Corporate bonds                                |  |                                         | 4,247 |        |  |           | 4,304 |        |  |  | 3,800 |  |  |  | 3,819 | 
|Other securities                               |  |                                         | 637   |        |  |           | 637   |        |  |  | 732   |  |  |  | 732   | 
|                                               |  |                                         |       |        |  |           |       |        |  |  |       |  |  |  |       | 
|Total                                          |  |                                         | 5,522 |        |  |           | 5,635 |        |  |  | 5,265 |  |  |  | 5,303 | 
|                                               |  |                                         |       |        |  |           |       |        |  |  |       |  |  |  |       | 

Proceeds from sales of available for sale
securities during the year ended March 31, 2003 were
710 million
(2002:
90 million).
Gross gains of
4 million
(2002:
2 million)
and gross losses of
nil (2002:
nil) were
realized on those sales. Realized gains and losses on available
for sale securities are generally computed using the specific
identification method.

The following table shows the maturity
distribution of the available for sale investment portfolio at
March 31, 2003 based upon amortized cost.

|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|----------------------------------------------- |  | --------------- | ----- | ---------- |  | ---------- | ----- | -------- |  | ----- | --- |  |  |  | --- |  |  |  | ----- | 
|                                                |  |                 |       | After One  |  | After Five |       |          |  |      
|                                                |  | In One          |       | Year       |  | Years      |       |          |  |      
|                                                |  | Year or         |       | Through    |  | Through    |       | After    |  |      
|                                                |  | Less            |       | Five Years |  | 10 Years   |       | 10 Years |  | Total
|                                                |  |                 |       |            |  |            |       |          |  |      
|                                                |  |                
|                                                |  | (in  millions)
|Irish government                                |  |                 |      |            |  |            |      |          |  |       |    |  |  |  | 271 |  |  |  | 271   | 
|Other European government                       |  |                 |      |            |  |            | 353   |          |  |       | 14  |  |  |  |    |  |  |  | 367   | 
|US Treasury and US Government agencies          |  |                 |      |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  |      | 
|Mortgage backed obligations of federal agencies |  |                 |      |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  |      | 
|Corporate bonds                                 |  |                 | 1,294 |            |  |            | 2,565 |          |  |       | 387 |  |  |  | 1   |  |  |  | 4,247 | 
|Other securities                                |  |                 | 637   |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  | 637   | 
|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|Total                                           |  |                 | 1,931 |            |  |            | 2,918 |          |  |       | 401 |  |  |  | 272 |  |  |  | 5,522 | 
|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 

F-101



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|   |                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------
|46 | SFAS NO. 115 ACCOUNTING FOR CERTAIN
    INVESTMENTS IN DEBT AND EQUITY
    SECURITIES  (continued)

The following table sets out the amortized cost
and market value of the held to maturity investment portfolio
owned by the Group at March 31, 2003 and 2002.

|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 
|---------------------------------------------- |  | ------------------------------------- | ----- | -------------- |  | --------- | ----- | ------ |  |  | ----- |  |  |  | ----- | 
|                                               |  |                                      
|                                               |  | Held to Maturity Investment Portfolio
|                                               |  |                                      
|                                               |  |                                       |       |               
|                                               |  | March 31, 2003                        |       | March 31, 2002
|                                               |  |                                       |       |               
|                                               |  | Amortized                             |       | Market         |  | Amortized |       | Market
|                                               |  | Cost                                  |       | Value          |  | Cost      |       | Value 
|                                               |  |                                       |       |                |  |           |       |       
|                                               |  |                                      
|                                               |  | (in  millions)                      
|Irish government                               |  |                                       |      |                |  |           |      |        |  |  |      |  |  |  |      | 
|Other European government                      |  |                                       | 1     |                |  |           | 1     |        |  |  |      |  |  |  |      | 
|U.S. treasury and U.S. government
    agencies |  |                                       |      |                |  |           |      |        |  |  |      |  |  |  |      | 
|Corporate bonds                                |  |                                       | 2,961 |                |  |           | 2,950 |        |  |  | 3,082 |  |  |  | 3,101 | 
|Other securities                               |  |                                       | 265   |                |  |           | 265   |        |  |  | 5     |  |  |  | 5     | 
|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 
|                                               |  |                                       | 3,227 |                |  |           | 3,216 |        |  |  | 3,087 |  |  |  | 3,106 | 
|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 

Proceeds from sales of held to maturity
securities during the year ended March 31, 2003 were
nil (2002:
nil). Gross
gains of nil
(2002: nil) and
gross losses of
nil (2002:
nil) were
realised on those sales.

The following table shows the maturity
distribution of the held to maturity investment portfolio of the
Group at March 31, 2003 based upon amortized cost.

|                                               |  |                                       |     |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|---------------------------------------------- |  | ------------------------------------- | --- | ---------- |  | ---------- | ----- | -------- |  | ----- | --- |  |  |  | --- |  |  |  | ----- | 
|                                               |  |                                      
|                                               |  | Maturity Distribution of             
|                                               |  | Held to Maturity Investment Portfolio
|                                               |  | At March 31, 2003                    
|                                               |  |                                      
|                                               |  |                                       |     | After One  |  | After Five |       |         
|                                               |  | In One                                |     | Year       |  | Years      |       |         
|                                               |  | Year or                               |     | Through    |  | Through    |       | After    |  |      
|                                               |  | Less                                  |     | Five Years |  | 10 Years   |       | 10 Years |  | Total
|                                               |  |                                       |     |            |  |            |       |          |  |      
|Irish government                               |  |                                       |    |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  |      | 
|Other European government                      |  |                                       |    |            |  |            | 1     |          |  |       |    |  |  |  |    |  |  |  | 1     | 
|U.S. treasury and U.S. government
    agencies |  |                                       |    |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  |      | 
|Corporate bonds                                |  |                                       | 259 |            |  |            | 1,631 |          |  |       | 937 |  |  |  | 134 |  |  |  | 2,961 | 
|Other securities                               |  |                                       |    |            |  |            | 242   |          |  |       | 23  |  |  |  |    |  |  |  | 265   | 
|                                               |  |                                       |     |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|Total                                          |  |                                       | 259 |            |  |            | 1,874 |          |  |       | 960 |  |  |  | 134 |  |  |  | 3,227 | 
|                                               |  |                                       |     |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 

47  COMPREHENSIVE INCOME

|                                      |                                                         |                 |     |      |   |      |     |    |  |  |     |     |  
|------------------------------------- | ------------------------------------------------------- | --------------- | --- | ---- | - | ---- | --- | -- |  |  | --- | --- | -
|                                      |                                                         |                
|                                      |                                                         | At March 31,   
|                                      |                                                         |                
|                                      |                                                         | 2003            |     | 2002 |   | 2001
|                                      |                                                         |                 |     |      |   |     
|                                      |                                                         |                
|                                      |                                                         | (in  millions)
|Net income in accordance with US GAAP |                                                         |                 | 767 |      |   |      | 667 |    |  |  | 689 |    
|Other comprehensive income net of tax |                                                         |                 |     |      |   |      |     |    |  |  |     |    
|                                      | Foreign currency translation adjustment                 |                 |     | (379 | ) |      |     | 20 |  |  |     | (68 | )
|                                      | Net movement on unrealized gains on debt
    securities |                 |     | 67   |   |      |     | 4  |  |  |     | 8   |  
|                                      | Pension additional benefit obligation                   |                 |     | (70  | ) |      |     |   |  |  |     |    |  
|                                      |                                                         |                 |     |      |   |      |     |    |  |  |     |    
|Comprehensive income                  |                                                         |                 | 385 |      |   |      | 691 |    |  |  | 629 |    
|                                      |                                                         |                 |     |      |   |      |     |    |  |  |     |    

F-102



---



##### Table of Contents



BANK OF IRELAND GROUP

SIGNATURES

The Registrant hereby certifies that it meets all
of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual
report on its behalf.



| |                                                    
| | ---------------------------------------------------
| | The Governor and Company of the Bank of
    Ireland
| | (Registrant)                                       
|
| | Date: July 23, 2003                                



| |     |                    
| | --- | -------------------
| | By: | /s/ MICHAEL D SODEN

| |                              
| | -----------------------------
| |                              
| | Name: Michael D Soden        
| | Title:  Group Chief Executive



| |     |                   
| | --- | ------------------
| | By: | /s/ JOHN ODONOVAN

| |                                      
| | -------------------------------------
| |                                      
| | Name: John ODonovan                 
| | Title:  Group Chief Financial Officer

F-103