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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, 2004


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, 2004:

Ordinary Stock (nominal value of
0.64 per unit):
943,334,507

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]



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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) |  |      | 10 | 
|2    |  | Offer Statistics &
    Expected Timetable (not applicable)               |  |      | 10 | 
|3    |  | Key
    Information                                                      |  |      | 10 | 
|     |  | Selected financial data                                                  |  |      | 10 | 
|     |  | Risk factors                                                             |  |      | 14 | 
|4    |  | Information on the
    Company                                           |  |      | 15 | 
|     |  | General                                                                  |  |      | 15 | 
|     |  | Recent developments                                                      |  |      | 15 | 
|     |  | Business Overview                                                        |  |      | 16 | 
|     |  | Strategy                                                                 |  |      | 16 | 
|     |  | Corporate structure                                                      |  |      | 17 | 
|     |  | Description of property                                                  |  |      | 21 | 
|     |  | Competition                                                              |  |      | 22 | 
|     |  | Supervision and
    Regulation                                           |  |      | 23 | 
|     |  | The Irish Economy                                                        |  |      | 27 | 
|5    |  | Operating & Financial
    Review and Prospects                           |  |      | 27 | 
|     |  | Critical accounting
    policies                                         |  |      | 28 | 
|     |  | Analysis of results of
    operations                                    |  |      | 33 | 
|     |  | Average Balance Sheet and
    Interest Rates                             |  |      | 45 | 
|     |  | Description of Assets &
    Liabilities                                  |  |      | 48 | 
|6    |  | Directors, Senior
    Management and Employees                           |  |      | 65 | 
|     |  | Directors and senior
    management                                      |  |      | 65 | 
|     |  | Remuneration of Directors
    and Officers                               |  |      | 68 | 
|     |  | Corporate Governance
    Statement                                       |  |      | 70 | 
|     |  | Court of Directors                                                       |  |      | 70 | 
|     |  | Court Committees                                                         |  |      | 71 | 
|     |  | Employees                                                                |  |      | 73 | 
|     |  | Stock options                                                            |  |      | 73 | 
|7    |  | Major Stockholders and
    Related Party Transactions                    |  |      | 75 | 
|     |  | Control of registrant                                                    |  |      | 75 | 
|     |  | Related party
    transactions                                           |  |      | 75 | 
|     |  | Description of US
    stockholders                                       |  |      | 75 | 
|     |  | Relations with
    stockholders                                          |  |      | 75 | 
|8    |  | Financial
    Information                                                |  |      | 76 | 
|     |  | Dividend policy                                                          |  |      | 76 | 
|     |  | Legal proceedings                                                        |  |      | 76 | 
|     |  | Prospective accounting
    changes                                       |  |      | 76 | 

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|             |  |                                                                                                     |  |      |     | 
|------------ |  | --------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|             |  |                                                                                                     |  | Page
|             |  |                                                                                                     |  |     
|9            |  | The Offer and
    Listing                                                                           |  |      | 80  | 
|             |  | Nature of trading market                                                                            |  |      | 80  | 
|10           |  | Additional
    Information                                                                          |  |      | 81  | 
|             |  | Charter and Bye-Laws                                                                                |  |      | 81  | 
|             |  | Exchange controls and other
    limitations affecting security holders                              |  |      | 85  | 
|             |  | Taxation                                                                                            |  |      | 85  | 
|             |  | Documents available through
    the SEC                                                             |  |      | 88  | 
|11           |  | Market Risk                                                                                         |  |      | 88  | 
|             |  | Analysis of financial
    condition                                                                 |  |      | 88  | 
|             |  | Risk management and
    control                                                                     |  |      | 91  | 
|12           |  | Description of Securities
    other than Equity Securities (not applicable)                         |  |      | 98  | 
|             |  | Part II                                                                                             |  |      |     | 
|13           |  | Defaults, Dividend
    Arrearages & Delinquencies (not applicable)                                  |  |      | 99  | 
|14           |  | Material Modifications to
    the Rights of Security Holders & Use of Proceeds
    (not applicable) |  |      | 99  | 
|15           |  | Controls and
    Procedures                                                                         |  |      | 99  | 
|16           |  | A. Audit Committee
    Financial Expert                                                             |  |      | 99  | 
|             |  | B. Code of
    Ethics                                                                               |  |      | 99  | 
|             |  | C. Principal Accountant
    Fees and Services                                                       |  |      | 99  | 
|             |  | D. Reserved                                                                                         |  |      | 99  | 
|             |  | E. Reserved                                                                                         |  |      | 99  | 
|             |  | Part III                                                                                            |  |      |     | 
|17           |  | Financial
    Statements                                                                            |  |      | 100 | 
|18           |  | Financial
    Statements                                                                            |  |      | 100 | 
|19           |  | Exhibits                                                                                            |  |      | 100 | 
|Exhibit 1.2 
|Exhibit 4.1 
|Exhibit 4.3 
|Exhibit 12.1
|Exhibit 12.2
|Exhibit 13.1
|Exhibit 13.2



4



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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 U.S. 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 ¢ are to
United States (U.S.) currency, and references to
STG£, GBP£ and pounds
sterling are to United Kingdom (UK) 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, 2004 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



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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 16, 2004, the Noon Buying Rate (as
defined below) was U.S.$1.2437 =
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,
|                                   |  |                     
|                                   |  | 2004                 |        | 2003 |  | 2002 |        | 2001 |  | 2000
|                                   |  |                      |        |      |  |      |        |      |  |     
|                                   |  |                     
|                                   |  | (dollars per )     
|Euro/dollar rates:                 |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|March 31                           |  |                      | 1.2292 |      |  |      | 1.0900 |      |  |      | 0.8717 |  |  |  | 0.8794 |  |  |  | 0.9574 | 
|Average(1)                         |  |                      | 1.1808 |      |  |      | 1.0033 |      |  |      | 0.8803 |  |  |  | 0.9069 |  |  |  | 1.0217 | 
|High                               |  |                      | 1.2848 |      |  |      | 1.1062 |      |  |      | 0.9535 |  |  |  | 0.9648 |  |  |  | 1.0842 | 
|Low                                |  |                      | 1.0621 |      |  |      | 0.8750 |      |  |      | 0.8370 |  |  |  | 0.8270 |  |  |  | 0.9328 | 
|March 31 rate used by the Group(2) |  |                      | 1.2224 |      |  |      | 1.0895 |      |  |      | 0.8724 |  |  |  | 0.8832 |  |  |  | 0.9553 | 
|Average rate used by the Group(2)  |  |                      | 1.1796 |      |  |      | 1.0051 |      |  |      | 0.8804 |  |  |  | 0.9053 |  |  |  | 1.0247 | 

The highest noon buying rate for each of the last
six months was: June 2004: 1.2320, May 2004: 1.2274, April 2004:
1.2358, March 2004: 1.2431, February 2004: 1.2848, January 2004:
1.2853.

The lowest noon buying rate for each of the last
six months was June 2004: 1.2006, May 2004:1.1801, April 2004:
1.1802, March 2004: 1.2088, February 2004: 1.2426, January 2004:
1.2389.

|                                   |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|---------------------------------- |  | -------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                   |  |                     
|                                   |  | Year ended March 31,
|                                   |  |                     
|                                   |  | 2004                 |        | 2003 |  | 2002 |        | 2001 |  | 2000
|                                   |  |                      |        |      |  |      |        |      |  |     
|                                   |  |                     
|                                   |  | (STG£ per )        
|Euro/sterling rates:               |  |                      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|March 31 rate used by the Group(2) |  |                      | 0.6659 |      |  |      | 0.6896 |      |  |      | 0.6130 |  |  |  | 0.6192 |  |  |  | 0.5985 | 
|Average rate used by the Group(2)  |  |                      | 0.6926 |      |  |      | 0.6460 |      |  |      | 0.6145 |  |  |  | 0.6145 |  |  |  | 0.6368 | 






|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(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, 2004,
    certain sterling and US dollar profits were hedged and
    translated at the following rates;

|                          |  |        |        |       |  |  |   | 
|------------------------- |  | ------ | ------ | ----- |  |  | - | 
|                          |  | /Stg£ |        | /US$
|                          |  |        |        |      
|Year ended March 31, 2004 |  |        |       |       |  |  |  | 
|Year ended March 31, 2003 |  |        |       |       |  |  |  | 
|Year ended March 31, 2002 |  |        | 0.6487 |       |  |  |  | 

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SUMMARY INFORMATION

Bank of Ireland Group

The Bank of Ireland Group is one of the largest
Irish financial services groups, with total assets of
106.4 billion
(US$130.1 billion) at March 31, 2004. Headquartered in
Dublin, the Group operates primarily throughout Ireland and in
parts of the United Kingdom.

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 261 full-time branches
and 930 ATMs at March 31, 2004, 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, 2004.

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 and the joint venture with the
UK Post Office. 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, 
|                                                   |  |                                     
|                                                   |  | 2004                                 |         | 2003          |  | 2002         
|                                                   |  |                                      |         |               |  |              
|                                                   |  |                                      |         | (restated)(5) |  | (restated)(5)
|                                                   |  |                                     
|                                                   |  | ( millions, except per unit amounts
|                                                   |  | and percentages)                    
|Profit on Ordinary Activities before
    taxation: |  |                                      |         |               |  |               |        |  |  |  |        | 
|Before exceptional items(1)                        |  |                                      | 1,267   |               |  |               | 1,177  |  |  |  | 1,122  | 
|After exceptional items(1)                         |  |                                      | 1,170   |               |  |               | 1,013  |  |  |  | 1,085  | 
|Profit after taxation                              |  |                                      | 962     |               |  |               | 850    |  |  |  | 920    | 
|Balance Sheet:                                     |  |                                      |         |               |  |               |        |  |  |  |        | 
|Total stockholders funds                          |  |                                      | 4,281   |               |  |               | 4,034  |  |  |  | 4,077  | 
|Total assets                                       |  |                                      | 106,431 |               |  |               | 89,303 |  |  |  | 87,092 | 
|Per unit of
    0.64 Ordinary
    Stock:          |  |                                      |         |               |  |               |        |  |  |  |        | 
|Earnings                                           |  |                                      | 97.2c   |               |  |               | 83.4c  |  |  |  | 90.4c  | 
|Diluted earnings                                   |  |                                      | 96.6c   |               |  |               | 82.6c  |  |  |  | 89.5c  | 
|Alternative earnings(2)                            |  |                                      | 106.7c  |               |  |               | 99.2c  |  |  |  | 93.4c  | 
|Dividends                                          |  |                                      | 41.4c   |               |  |               | 37.0c  |  |  |  | 33.0c  | 
|Ratios (excluding exceptional items)               |  |                                      |         |               |  |               |        |  |  |  |        | 
|Return on average total assets(1)(3)               |  |                                      | 1.1%    |               |  |               | 1.1%   |  |  |  | 1.1%   | 
|Return on average stockholders funds(1)(4)        |  |                                      | 23.7%   |               |  |               | 22.4%  |  |  |  | 24.0%  | 
|Capital Ratios:                                    |  |                                      |         |               |  |               |        |  |  |  |        | 
|Tier 1 Capital ratio                               |  |                                      | 7.2%    |               |  |               | 8.0%   |  |  |  | 7.6%   | 
|Total Capital ratio                                |  |                                      | 11.3%   |               |  |               | 11.1%  |  |  |  | 11.5%  | 




7



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|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(1) | In the year ending March 31, 2004, the
    exceptional items represent the following:



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the net proceeds of
    36 million
    on the sale of our share in the alliance between Bank of Ireland
    Securities Services and State Street Bank,                                                               
|
| |  | the write-off of the remainder of the goodwill
    associated with Chase de Vere of
    93 million
    together with some provisions of
    22 million
    for the impairment of certain assets in the IFA business,
|
| |  | additional costs of
    4 million
    incurred in relation to restructuring undertaken in previous
    years, and                                                                                                    
|
| |  | implementation costs of
    14 million
    associated with the UKFS Business Improvement Programme.                                                                                                                  



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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. (See Note 10
    to our Consolidated Financial Statements on page F-25).



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | 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 (net of tax) and goodwill amortisation (net of
    tax) and is not adjusted for the effect of all dilutive Ordinary
    Stock that potentially could be issued.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The calculation of basic earnings per unit is
    included in Note 13 to our Consolidated Financial Statements.
    Basic earnings per unit is calculated by dividing profit
    attributable to ordinary stockholders by the weighted average
    number of shares in issue excluding own shares held for the
    benefit of life assurance policyholders. The following table
    shows a reconciliation of the profit attributable to ordinary
    stockholders and to the alternative earnings and shows the
    calculation of alternative earnings per unit.

|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 
|---------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                                                                                                                             |  | 2004 |        | 2003       |  | 2002      
|                                                                                                                             |  |      |        |            |  |           
|                                                                                                                             |  |      |        | (restated) |  | (restated)
|Profit attributable to ordinary stockholders                                                                                 |  |      | 935    |            |  |            | 826    |  |  |  | 895    | 
|Exceptional items (see Note 10)                                                                                              |  |      | 96     |            |  |            | 153    |  |  |  | 30     | 
|Goodwill amortisation (see Note 22)                                                                                          |  |      | 15     |            |  |            | 20     |  |  |  | 14     | 
|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 
|Alternative earnings                                                                                                         |  |      | 1,046  |            |  |            | 999    |  |  |  | 939    | 
|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 
|Weighted average number of shares in issue
    excluding own shares held for the benefit of life assurance
    policyholders |  |      | 961m   |            |  |            | 991m   |  |  |  | 990m   | 
|Weighted average ordinary shares held for the
    benefit of life assurance policyholders                                    |  |      | 19m    |            |  |            | 17m    |  |  |  | 16m    | 
|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 
|Weighted average ordinary shares in issue
    including own shares for the benefit of life assurance
    policyholders       |  |      | 980m   |            |  |            | 1,008m |  |  |  | 1,006m | 
|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 
|Alternative earnings per unit                                                                                                |  |      | 106.7c |            |  |            | 99.2c  |  |  |  | 93.4c  | 
|                                                                                                                             |  |      |        |            |  |            |        |  |  |  |        | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Return on average total assets represents the
    profit attributable to the ordinary stockholders, before
    exceptional items and goodwill in the financial years ended
    March 31, 2004, 2003 and 2002, as a percentage of average
    total assets. The Groups management believes that the
    return on average total assets provide valuable information to
    readers of its financial statements because it enables the
    reader to focus more directly on the underlying performance of
    the Groups businesses and this measure also reflects an
    important way in which performance is monitored by the
    Groups management. However, while management believes this
    measure is useful in the evaluation of the Groups
    performance, it should not be viewed as a replacement for, but
    rather as complementary to, the most directly comparable GAAP
    measure, which is the return on average total assets
    representing the profit attributable to the ordinary
    stockholders after exceptional items and goodwill.

8



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|                                             |  |      |        |            |  |            |        |  |  |  |        | 
|-------------------------------------------- |  | ---- | ------ | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                                             |  | 2004 |        | 2003       |  | 2002      
|                                             |  |      |        |            |  |           
|                                             |  |      |        | (restated) |  | (restated)
|Profit attributable to ordinary stockholders |  |      | 935    |            |  |            | 826    |  |  |  | 895    | 
|Exceptional items                            |  |      | 96     |            |  |            | 153    |  |  |  | 30     | 
|Goodwill amortisation                        |  |      | 15     |            |  |            | 20     |  |  |  | 14     | 
|                                             |  |      |        |            |  |            |        |  |  |  |        | 
|                                             |  |      | 1,046  |            |  |            | 999    |  |  |  | 939    | 
|                                             |  |      |        |            |  |            |        |  |  |  |        | 
|Average total Assets                         |  |      | 97,623 |            |  |            | 89,054 |  |  |  | 82,952 | 
|                                             |  |      |        |            |  |            |        |  |  |  |        | 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Return on average stockholders funds
    represents profit attributable to the ordinary stockholders,
    before exceptional items and goodwill as outlined in
    Note (3) above, in the financial year ended March 31,
    2004, 2003 and 2002, as a percentage of average
    stockholders funds, excluding non-equity interests (2004:
    64.9 million,
    2003:
    66.8 million,
    2002:
    136.5 million.
    The Groups management believes that the return on average
    stockholders funds provides valuable information to
    readers of its financial statements because it enables the
    reader to focus more directly on the underlying performance of
    the Groups businesses and this measure also reflects an
    important way in which performance is monitored by the
    Groups management. However, while management believes this
    measure is useful in the evaluation of the Groups
    performance, it should not be viewed as a replacement for, but
    rather as complementary to, the most directly comparable GAAP
    measure, which is the return on average stockholders funds
    representing profit attributable to the ordinary stockholders,
    after exceptional items and goodwill.
|   
|(5) | Restated to take account of UITF Abstract 37
    Purchases and Sales of Own Shares, see Note 1
    Basis of Accounting and Accounting Policies to our
    Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

9



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##### 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, 2004,
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.

A change was undertaken to capitalise procurement
fees and amortise these costs in line with the actual product
life, which is being adopted on a prospective basis for sales
from April 1, 2003; the effect in the Group profit and loss
account is a gain of
22 million
in the year to March 31, 2004. The comparatives were not
restated as the amounts were not material.

UITF Abstract 37 Purchases and Sales
of Own Shares was issued on October 28, 2003 and is
effective for accounting periods ending on or after
December 23, 2003. Own Shares, previously shown
as asset are now included as a deduction from equity in arriving
at stockholders funds. As a consequence the financial
statements at March 31, 2003 have been restated leading to
a decrease in the opening balance of stockholders funds of
105m. No profits
or losses are recognised in respect of dealings in Bank of
Ireland shares. As permitted under Irish legislation, Bank of
Ireland Life, the principal life assurance subsidiary of the
group, holds for the benefit of its policyholders shares in Bank
of Ireland Group. However, under the UITF Abstract these shares
are required to be treated as though they were purchased by the
Group for its own benefit and treated as treasury shares.

As required by the UITF Abstract, the cost of the
shares at March 31, 2004 has been deducted from
stockholders funds. This deduction is presented as a
separate line on the balance sheet. As a consequence, the
related liabilities have been restated and no profit and loss
impact arises.

10



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##### Table of Contents



SELECTED CONSOLIDATED FINANCIAL DATA

|                                                                       |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|---------------------------------------------------------------------- |  | --------------------------------------------- | ------- | -------------------------------------------------------- |  | -------------- | ------- | -------------- |  | -------------- | ------ | -------------- |  |  | ------ | - |  |  | ------ | - |  |  | ------ | 
|                                                                       |  |                                              
|                                                                       |  | At and for the Financial Year Ended March 31,
|                                                                       |  |                                              
|                                                                       |  | 2004(1)                                       |         | 2004                                                     |  | 2003           |         | 2002           |  | 2001           |        | 2000          
|                                                                       |  |                                               |         |                                                          |  |                |         |                |  |                |        |               
|                                                                       |  |                                               |         |                                                          |  | (restated)(12) |         | (restated)(12) |  | (restated)(12) |        | (restated)(12)
|                                                                       |  |                                               |         |                                                         
|                                                                       |  |                                               |         | (in  millions, except per unit amounts and percentages)
|                                                                       |  | $m                                            |         |                                                         
|Income Statement Data                                                  |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Amounts in accordance with
    Irish GAAP:                             |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Interest receivable and similar income                                 |  |                                               | 4,463   |                                                          |  |                | 3,631   |                |  |                | 3,691  |                |  |  | 3,980  |   |  |  | 4,055  |   |  |  | 3,002  | 
|Interest payable and similar charges                                   |  |                                               | 2,320   |                                                          |  |                | 1,887   |                |  |                | 1,962  |                |  |  | 2,402  |   |  |  | 2,633  |   |  |  | 1,760  | 
|Net interest income                                                    |  |                                               | 2,144   |                                                          |  |                | 1,744   |                |  |                | 1,729  |                |  |  | 1,578  |   |  |  | 1,422  |   |  |  | 1,242  | 
|Provision for bad and doubtful debts                                   |  |                                               | 106     |                                                          |  |                | 86      |                |  |                | 100    |                |  |  | 102    |   |  |  | 72     |   |  |  | 56     | 
|Other income                                                           |  |                                               | 1,517   |                                                          |  |                | 1,234   |                |  |                | 1,188  |                |  |  | 1,227  |   |  |  | 1,115  |   |  |  | 900    | 
|Operating expenses                                                     |  |                                               | 2,033   |                                                          |  |                | 1,654   |                |  |                | 1,662  |                |  |  | 1,582  |   |  |  | 1,387  |   |  |  | 1,167  | 
|Income from associated undertakings and joint
    ventures             |  |                                               | 36      |                                                          |  |                | 29      |                |  |                | 22     |                |  |  | 1      |   |  |  | 7      |   |  |  | 1      | 
|Income from ordinary activities before
    exceptional items           |  |                                               | 1,557   |                                                          |  |                | 1,267   |                |  |                | 1,177  |                |  |  | 1,122  |   |  |  | 1,085  |   |  |  | 920    | 
|Exceptional items(3)                                                   |  |                                               | (119    | )                                                        |  |                | (97     | )              |  |                | (164   | )              |  |  | (37    | ) |  |  | (93    | ) |  |  |       | 
|Income before taxation                                                 |  |                                               | 1,438   |                                                          |  |                | 1,170   |                |  |                | 1,013  |                |  |  | 1,085  |   |  |  | 992    |   |  |  | 920    | 
|Taxation on income from ordinary activities                            |  |                                               | 256     |                                                          |  |                | 208     |                |  |                | 163    |                |  |  | 165    |   |  |  | 190    |   |  |  | 193    | 
|Deposit Interest Retention Tax                                         |  |                                               |        |                                                          |  |                |        |                |  |                |       |                |  |  |       |   |  |  | 35     |   |  |  |       | 
|Minority interests  equity                                            |  |                                               | 16      |                                                          |  |                | 13      |                |  |                | 9      |                |  |  | 2      |   |  |  | 3      |   |  |  | 3      | 
| non equity                                                           |  |                                               | 7       |                                                          |  |                | 6       |                |  |                | 6      |                |  |  | 6      |   |  |  | 7      |   |  |  | 6      | 
|Non-cumulative preference stock dividend                               |  |                                               | 10      |                                                          |  |                | 8       |                |  |                | 9      |                |  |  | 17     |   |  |  | 26     |   |  |  | 25     | 
|Income attributable to holders of ordinary stock                       |  |                                               | 1,149   |                                                          |  |                | 935     |                |  |                | 826    |                |  |  | 895    |   |  |  | 731    |   |  |  | 693    | 
|Per Unit of Ordinary Stock                                             |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Income attributable to holders of
    ordinary stock                   |  |                                               | 119.5c  |                                                          |  |                | 97.2c   |                |  |                | 83.4c  |                |  |  | 90.4c  |   |  |  | 74.6c  |   |  |  | 69.2c  | 
|Alternative income attributable to holders of
    ordinary stock(4)    |  |                                               | 131.2c  |                                                          |  |                | 106.7c  |                |  |                | 99.2c  |                |  |  | 93.4c  |   |  |  | 84.5c  |   |  |  | 68.4c  | 
|Dividends(2)                                                           |  |                                               | 50.9c   |                                                          |  |                | 41.4c   |                |  |                | 37.0c  |                |  |  | 33.0c  |   |  |  | 29.0c  |   |  |  | 23.5c  | 
|Amounts in accordance with
    U.S. GAAP:                              |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Net income attributable to holders of
    ordinary stock:              |  |                                               | 1,096   |                                                          |  |                | 892     |                |  |                | 767    |                |  |  | 667    |   |  |  | 689    |   |  |  | 628    | 
|Net income per unit of ordinary stock                                  |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Basic                                                                  |  |                                               | 114.1c  |                                                          |  |                | 92.8c   |                |  |                | 77.4c  |                |  |  | 67.3c  |   |  |  | 70.3c  |   |  |  | 62.7c  | 
|Diluted                                                                |  |                                               | 113.3c  |                                                          |  |                | 92.2c   |                |  |                | 76.7c  |                |  |  | 66.7c  |   |  |  | 69.7c  |   |  |  | 62.3c  | 
|Number of shares used in EPS calculation (in
    millions)             |  |                                               | 961     |                                                          |  |                | 961     |                |  |                | 991    |                |  |  | 990    |   |  |  | 980    |   |  |  | 1,002  | 
|Number of shares used in Alternative EPS
    calculation (in millions) |  |                                               | 980     |                                                          |  |                | 980     |                |  |                | 1,008  |                |  |  | 1,006  |   |  |  | 997    |   |  |  | 1,014  | 
|Balance Sheet Data                                                     |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Amounts in accordance with
    Irish GAAP:                             |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Total assets                                                           |  |                                               | 130,825 |                                                          |  |                | 106,431 |                |  |                | 89,303 |                |  |  | 87,092 |   |  |  | 78,695 |   |  |  | 67,857 | 
|Loans and advances to customers                                        |  |                                               | 83,020  |                                                          |  |                | 67,540  |                |  |                | 56,887 |                |  |  | 56,577 |   |  |  | 51,147 |   |  |  | 44,844 | 
|Loans and advances to banks                                            |  |                                               | 9,530   |                                                          |  |                | 7,753   |                |  |                | 7,480  |                |  |  | 8,385  |   |  |  | 8,115  |   |  |  | 6,972  | 
|Allowance for loan losses                                              |  |                                               | 580     |                                                          |  |                | 472     |                |  |                | 480    |                |  |  | 500    |   |  |  | 430    |   |  |  | 398    | 
|Deposits, short-term borrowings and
    other accounts                 |  |                                               | 103,710 |                                                          |  |                | 84,372  |                |  |                | 70,765 |                |  |  | 70,068 |   |  |  | 62,310 |   |  |  | 54,121 | 
|Dated capital notes                                                    |  |                                               | 2,777   |                                                          |  |                | 2,259   |                |  |                | 1,290  |                |  |  | 1,559  |   |  |  | 1,549  |   |  |  | 1,504  | 
|Undated capital notes                                                  |  |                                               | 1,749   |                                                          |  |                | 1,423   |                |  |                | 1,413  |                |  |  | 965    |   |  |  | 961    |   |  |  | 362    | 
|Minority interests  equity                                            |  |                                               | 66      |                                                          |  |                | 54      |                |  |                | 54     |                |  |  | 91     |   |  |  | 5      |   |  |  | 5      | 
| non equity                                                           |  |                                               | 93      |                                                          |  |                | 76      |                |  |                | 73     |                |  |  | 82     |   |  |  | 81     |   |  |  | 87     | 
|Called up capital stock                                                |  |                                               | 835     |                                                          |  |                | 679     |                |  |                | 679    |                |  |  | 679    |   |  |  | 691    |   |  |  | 690    | 
|Reserves                                                               |  |                                               | 4,428   |                                                          |  |                | 3,602   |                |  |                | 3,355  |                |  |  | 3,398  |   |  |  | 3,033  |   |  |  | 2,513  | 
|Total stockholders funds including
    non-equity interests           |  |                                               | 5,262   |                                                          |  |                | 4,281   |                |  |                | 4,034  |                |  |  | 4,077  |   |  |  | 3,724  |   |  |  | 3,203  | 
|Amounts in accordance with
    U.S. GAAP:                              |  |                                               |         |                                                          |  |                |         |                |  |                |        |                |  |  |        |   |  |  |        |   |  |  |        | 
|Stockholders equity                                                   |  |                                               | 5,308   |                                                          |  |                | 4,318   |                |  |                | 4,063  |                |  |  | 4,157  |   |  |  | 4,035  |   |  |  | 3,625  | 
|Total assets                                                           |  |                                               | 133,271 |                                                          |  |                | 108,421 |                |  |                | 91,386 |                |  |  | 88,542 |   |  |  | 79,903 |   |  |  | 68,506 | 

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|                                                                 |  |                                               |      |                |  |                |      |                |  |                |      |  |  |  |      |  |  |  |      | 
|---------------------------------------------------------------- |  | --------------------------------------------- | ---- | -------------- |  | -------------- | ---- | -------------- |  | -------------- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                                                 |  |                                              
|                                                                 |  | At and For the Financial Year Ended March 31,
|                                                                 |  |                                              
|                                                                 |  | 2004                                          |      | 2003           |  | 2002           |      | 2001           |  | 2000          
|                                                                 |  |                                               |      |                |  |                |      |                |  |               
|                                                                 |  |                                               |      | (restated)(12) |  | (restated)(12) |      | (restated)(12) |  | (restated)(12)
|                                                                 |  |                                              
|                                                                 |  | (in percentages)                             
|Other Financial Data                                             |  |                                               |      |                |  |                |      |                |  |                |      |  |  |  |      |  |  |  |      | 
|Return on average total assets(5)                                |  |                                               | 1.1  |                |  |                | 1.1  |                |  |                | 1.1  |  |  |  | 1.1  |  |  |  | 1.2  | 
|Return on average stockholders funds(6)                         |  |                                               | 23.7 |                |  |                | 22.4 |                |  |                | 24.0 |  |  |  | 24.8 |  |  |  | 24.7 | 
|Net interest margin(7)                                           |  |                                               | 2.2  |                |  |                | 2.3  |                |  |                | 2.3  |  |  |  | 2.3  |  |  |  | 2.5  | 
|Net interest margin, tax equivalent basis(8)                     |  |                                               | 2.2  |                |  |                | 2.4  |                |  |                | 2.3  |  |  |  | 2.4  |  |  |  | 2.6  | 
|Cost/income ratio(9)                                             |  |                                               | 54   |                |  |                | 56   |                |  |                | 56   |  |  |  | 54   |  |  |  | 54   | 
|Allowance for loan losses to total loans                         |  |                                               | 0.7  |                |  |                | 0.8  |                |  |                | 0.9  |  |  |  | 0.8  |  |  |  | 0.9  | 
|Provisions for bad and doubtful debts to average
    total loans |  |                                               | 0.1  |                |  |                | 0.2  |                |  |                | 0.2  |  |  |  | 0.2  |  |  |  | 0.1  | 
|Tier 1 capital ratio(10)                                         |  |                                               | 7.2  |                |  |                | 8.0  |                |  |                | 7.6  |  |  |  | 7.8  |  |  |  | 7.4  | 
|Total capital ratio(10)                                          |  |                                               | 11.3 |                |  |                | 11.1 |                |  |                | 11.5 |  |  |  | 12.4 |  |  |  | 11.8 | 
|Average stockholders equity to average
    total assets(11)     |  |                                               | 4.0  |                |  |                | 4.3  |                |  |                | 4.4  |  |  |  | 4.2  |  |  |  | 4.5  | 






|    |                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------
|(1) | Translated solely for convenience into dollars at
    1.00 = U.S.$
    1.2292, the Noon Buying Rate on March 31, 2004.     
|   
|(2) | See Item 8 Financial
    Information  Dividend Policy for details of
    dividends per unit of Ordinary Stock in dollars.
|   
|(3) | In the year ended March 31, 2004, the
    exceptional items represent the following:                                        



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the net proceeds of
    36 million
    on the sale of our share in the alliance between Bank of Ireland
    Securities Services and State Street Bank,                                                               
|
| |  | the write-off of the remainder of the goodwill
    associated with Chase de Vere of
    93 million
    together with some provisions of
    22 million
    for the impairment of certain assets in the IFA business.
|
| |  | additional costs of
    4 million
    incurred in relation to restructuring undertaken in previous
    years.                                                                                                        
|
| |  | implementation costs of
    14 million
    associated with the UKFS Business Improvement Programme.                                                                                                                  



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 (see Note 10
    to our Consolidated Financial Statements on page F-25). The
    exceptional items in the year to March 31, 2001 represent
    the charge for the Group Transformation Programme and the DIRT
    settlement.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 (2004:
    96 million,
    2003:
    153 million,
    2002:
    30 million,
    2001:
    104 million,
    2000: nil) and goodwill amortisation (2004:
    15 million,
    2003:
    20 million,
    2002:
    14 million,
    2001:
    7 million,
    2000: nil) and is not adjusted for the effect of all dilutive
    potential Ordinary Stock.  See Note (2) on
    page 7 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 and goodwill amortisation 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.                                                                                                                                                                                                                                                                                                                                       

12



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Return on average stockholders funds
    represents profit attributable to the ordinary stockholders,
    before exceptional items as outlined in Note (3) above as a
    percentage of average stockholders funds, excluding
    non-equity interests (2004:
    64.9 million,
    2003:
    66.8 million,
    2002:
    136.5 million,
    2001:
    212.8 million
    and 2000:
    206.1 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 which differ from normal market rates in
    return for tax relief arising from various incentives and
    reliefs. 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.

|                       |  |      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|---------------------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                       |  | 2004 |        | 2003 |  | 2002 |        | 2001 |  | 2000
|                       |  |      |        |      |  |      |        |      |  |     
|Net Interest Income    |  |      | 1,744  |      |  |      | 1,729  |      |  |      | 1,578  |  |  |  | 1,422  |  |  |  | 1,242  | 
|Grossing up            |  |      | 35     |      |  |      | 27     |      |  |      | 36     |  |  |  | 36     |  |  |  | 46     | 
|                       |  |      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|                       |  |      | 1,779  |      |  |      | 1,756  |      |  |      | 1,614  |  |  |  | 1,458  |  |  |  | 1,288  | 
|                       |  |      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Average Earning Assets |  |      | 80,672 |      |  |      | 73,810 |      |  |      | 69,904 |  |  |  | 61,279 |  |  |  | 50,489 | 
|                       |  |      |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 



The Groups management believes that net
interest margin provides valuable information to readers of its
financial statement because it enables the reader to focus more
directly on the underlying performance of the Groups
businesses and this measure also reflects an important way in
which performance is monitored by the Groups management.
However, while management believes this measure is useful in the
evaluation of the Groups performance, it should not be
viewed as a replacement for, but rather as complementary to, the
most directly comparable GAAP measure, which is net interest
margin as in Notes (7) above.



|    |                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9) | The cost/income ratio is determined by dividing
    the total expenses before goodwill amortisation of the Group by
    the total income of the Group including income from associates
    and joint ventures.

|                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|--------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                      |  | 2004 |       | 2003 |  | 2002 |       | 2001 |  | 2000
|                      |  |      |       |      |  |      |       |      |  |     
|Total costs           |  |      | 1,654 |      |  |      | 1,662 |      |  |      | 1,582 |  |  |  | 1,387 |  |  |  | 1,167 | 
|Goodwill amortisation |  |      | 19    |      |  |      | 23    |      |  |      | 15    |  |  |  | 7     |  |  |  |      | 
|                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                      |  |      | 1,635 |      |  |      | 1,639 |      |  |      | 1,567 |  |  |  | 1,380 |  |  |  | 1,167 | 
|                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total Income          |  |      | 3,007 |      |  |      | 2,939 |      |  |      | 2,806 |  |  |  | 2,544 |  |  |  | 2,143 | 
|                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

The Groups management believes that
cost/income ratio provides valuable information to readers of
its financial statements because it enables the reader to focus
more directly on the underlying performance of the Groups
businesses and this measure also reflects an important way in
which performance is monitored by the Groups management.
However, while management believes this measure is useful in the
evaluation of the Groups performance, it should not be
viewed as a replacement for, but rather as complementary to, the
most directly comparable GAAP measure, which is the cost/income
ratio determined by dividing the total expenses including
goodwill amortisation by the total income 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 IFSRA and
    satisfies capital adequacy requirements of the European Union.
|    
|(11) | Average stockholders equity includes
    non-equity interests.                                                                                                                                                                                    
|    
|(12) | Restated to take account of UITF Abstract 37
    Purchases and Sales of Own Shares, see Note 1
    Basis of Accounting and Accounting Policies to our
    Consolidated Financial Statements.                                                   

13



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##### Table of Contents






RISK FACTORS

Set out below are certain risk factors which
could affect the Group future results and financial position and
cause them to be materially different. 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 depends 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. The nature and impact of
these changes are unpredictable and outside the control of the
Bank. 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. In recent times there have been significant regulatory
changes in Ireland, the UK and the US which have resulted in
increased compliance responsibilities.

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

14



---



##### Table of Contents



depends significantly upon managements
response to the competitive environment. See
Item 4  Business Overview for
additional information.


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 the 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
106.4 billion
at March 31, 2004. The address of the principal executive
offices is Lower Baggot Street, Dublin 2
(Telephone +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 a wholly owned subsidiary
in 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
headquartered 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, 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 the management of J&E Davy
Holdings Limited.




RECENT DEVELOPMENTS



| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Brian J. Goggin was appointed Group Chief
    Executive on June 3, 2004, following the resignation of
    Michael D. Soden on May 29, 2004.                                                                                                                                                                                                                              
|
| |  | Sir Michael Hodgkinson, Declan McCourt and Terry
    Neill were co-opted to the Court as non-executive Directors
    since year-end.                                                                                                                                                                                                                                     
|
| |  | On June 25, 2004 the Group through its
    subsidiary, Bank of Ireland Asset Management (BIAM),
    acquired an additional 15% interest in Iridian Asset Management
    (Iridian) in accordance with the terms of the
    Iridian Purchase Agreement dated May 2002.                                                                                                 
|
| |  | First Rate Enterprises and FCEC (First Rate
    Enterprises U.S. business acquired in April 2003)
    have recently won a tender to offer Foreign Currency Services
    for an initial 12-month pilot period, commencing in June 2004,
    with Canada Post Corporation. The pilot programme is based in
    thirty post office branches in three major Canadian cities.
|
| |  | Restructure of the Retail Division.                                                                                                                                                                                                                                                                                                                                      

15



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##### Table of Contents



The restructure in Retail was designed to
provide enhanced focus on key market segments and to achieve
operational efficiencies.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Bank of Ireland completed the sale of its 50%
    shareholding in EuroConex Technologies Limited
    (EuroConex) to Nova EuroConex Holdings BV, a
    subsidiary of US Bancorp, on June 29, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | On July 5, 2004, Bank of Ireland announced
    the reorganisation of its mortgage business by means of a
    transfer of substantially all of its Irish residential mortgage
    portfolio (valued in excess of 9 billion euro) to a new
    wholly-owned subsidiary, Bank of Ireland Mortgage Bank. Bank of
    Ireland Mortgage Bank is the holder of a banking licence issued
    by the Central Bank and Financial Services Authority of Ireland
    (the Authority) on July 1, 2004, and is
    registered as a mortgage designated credit institution. It will
    henceforth originate the Irish residential mortgages formerly
    originated by Bank of Ireland. The transfer of the relevant
    mortgages was effected by means of an order of the Authority on
    July 2, 2004 pursuant to the Irish Asset Covered Securities
    Act, 2001 (the ACSA). The ACSA permits the
    establishment of a restricted activity bank that may issue
    securities secured in favour of certain preferred creditors
    (primarily the holders of asset covered securities issued by the
    bank) by means of a statutory preference on a ring-fenced pool
    of assets. It is currently intended that bond issuance by Bank
    of Ireland Mortgage Bank would occur in the near future.




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 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 261 full-time
branches and 930 ATMs at March 31, 2004, 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, 2004.

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, 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. During the year, the Group completed a Joint Venture
agreement with the UK Post Office to enable the Group to
distribute the Groups products through the Post Office
network.

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 13 years of
uninterrupted profit growth. The Group believes the strategy is
simple and well proven and will continue to deliver growth.

16



---



##### Table of Contents



The strategy is based on the twin principles of
growth and efficiency and has four distinct elements all of
which are performing strongly:



| |   |                           
| | - | --------------------------
| |  | Organic Growth,           
|
| |  | Portfolio Management,     
|
| |  | Capital Management, and   
|
| |  | 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; and                                                                                   
|
| |  | 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,
UK Post Office Joint Venture and Group and Central. The
Groups operations extend geographically throughout Ireland
and the United Kingdom. The Segmental Analysis note is shown in
Note 2, on pages F-17 to F-21 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, 2004 and
the total assets at March 31, 2004, 2003 and 2002. 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.

17



---



##### Table of Contents



|                                                             |  |                                        |       |   |  |               |     |   |  |               |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|------------------------------------------------------------ |  | -------------------------------------- | ----- | - |  | ------------- | --- | - |  | ------------- | ----- | - |  |  | --- | - |  |  | ----- | - |  |  | --- | -
|                                                             |  |                                       
|                                                             |  | For the Financial Year Ended March 31,
|                                                             |  |                                       
|                                                             |  | 2004                                   |       | % |  | 2003          |     | % |  | 2002          |       | %
|                                                             |  |                                        |       |   |  |               |     |   |  |               |       |  
|                                                             |  |                                        |       |   |  | (restated)(3) |     |   |  | (restated)(3) |       |  
|                                                             |  |                                       
|                                                             |  | (in  millions, except percentages)   
|Income Before Tax                                            |  |                                        |       |   |  |               |     |   |  |               |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Retail Republic of Ireland                                   |  |                                        | 419   |   |  |               | 33  |   |  |               | 390   |   |  |  | 33  |   |  |  | 336   |   |  |  | 30  |  
|Bank of Ireland Life                                         |  |                                        | 147   |   |  |               | 12  |   |  |               | 87    |   |  |  | 7   |   |  |  | 122   |   |  |  | 11  |  
|Wholesale Financial Services                                 |  |                                        | 371   |   |  |               | 29  |   |  |               | 367   |   |  |  | 31  |   |  |  | 334   |   |  |  | 30  |  
|UK Financial Services                                        |  |                                        | 373   |   |  |               | 29  |   |  |               | 359   |   |  |  | 31  |   |  |  | 324   |   |  |  | 29  |  
|Asset Management Services                                    |  |                                        | 125   |   |  |               | 10  |   |  |               | 113   |   |  |  | 10  |   |  |  | 126   |   |  |  | 11  |  
|UK Post Office Joint Venture                                 |  |                                        | (3    | ) |  |               |    |   |  |               |      |   |  |  |    |   |  |  |      |   |  |  |    |  
|Group and Central                                            |  |                                        | (115  | ) |  |               | (9  | ) |  |               | (85   | ) |  |  | (7  | ) |  |  | (64   | ) |  |  | (6  | )
|Tax equivalent adjustment(1)                                 |  |                                        | (50   | ) |  |               | (4  | ) |  |               | (54   | ) |  |  | (5  | ) |  |  | (56   | ) |  |  | (5  | )
|                                                             |  |                                        |       |   |  |               |     |   |  |               |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Income from ordinary activities before
    exceptional items |  |                                        | 1,267 |   |  |               | 100 |   |  |               | 1,177 |   |  |  | 100 |   |  |  | 1,122 |   |  |  | 100 |  
|Exceptional items                                            |  |                                        | (97   | ) |  |               |    |   |  |               | (164  | ) |  |  |    |   |  |  | (37   | ) |  |  |    |  
|                                                             |  |                                        |       |   |  |               |     |   |  |               |       |   |  |  |     |   |  |  |       |   |  |  |     |  
|Income before taxation                                       |  |                                        | 1,170 |   |  |               | 100 |   |  |               | 1,013 |   |  |  | 100 |   |  |  | 1,085 |   |  |  | 100 |  
|                                                             |  |                                        |       |   |  |               |     |   |  |               |       |   |  |  |     |   |  |  |       |   |  |  |     |  

|                             |  |                                     |         |   |  |               |     |   |  |               |         |   |  |  |     |  |  |  |         |  |  |  |     | 
|---------------------------- |  | ----------------------------------- | ------- | - |  | ------------- | --- | - |  | ------------- | ------- | - |  |  | --- |  |  |  | ------- |  |  |  | --- | 
|                             |  |                                    
|                             |  | At March 31,                       
|                             |  |                                    
|                             |  | 2004                                |         | % |  | 2003          |     | % |  | 2002          |         | %
|                             |  |                                     |         |   |  |               |     |   |  |               |         |  
|                             |  |                                     |         |   |  | (restated)(3) |     |   |  | (restated)(3) |         |  
|                             |  |                                    
|                             |  | (in  millions, except percentages)
|Assets                       |  |                                     |         |   |  |               |     |   |  |               |         |   |  |  |     |  |  |  |         |  |  |  |     | 
|Retail Republic of Ireland   |  |                                     | 36,324  |   |  |               | 23  |   |  |               | 29,261  |   |  |  | 23  |  |  |  | 24,768  |  |  |  | 21  | 
|Bank of Ireland Life         |  |                                     | 7,401   |   |  |               | 5   |   |  |               | 5,728   |   |  |  | 4   |  |  |  | 6,028   |  |  |  | 5   | 
|Wholesale Financial Services |  |                                     | 60,328  |   |  |               | 39  |   |  |               | 50,530  |   |  |  | 40  |  |  |  | 42,406  |  |  |  | 37  | 
|UK Financial Services        |  |                                     | 38,716  |   |  |               | 25  |   |  |               | 32,841  |   |  |  | 26  |  |  |  | 35,292  |  |  |  | 31  | 
|Asset Management Services    |  |                                     | 1,606   |   |  |               | 1   |   |  |               | 1,611   |   |  |  | 1   |  |  |  | 930     |  |  |  | 1   | 
|UK Post Office Joint Venture |  |                                     |        |   |  |               |    |   |  |               |        |   |  |  |    |  |  |  |        |  |  |  |    | 
|Group and Central            |  |                                     | 10,110  |   |  |               | 7   |   |  |               | 7,416   |   |  |  | 6   |  |  |  | 5,533   |  |  |  | 5   | 
|                             |  |                                     |         |   |  |               |     |   |  |               |         |   |  |  |     |  |  |  |         |  |  |  |     | 
|Total(2)                     |  |                                     | 154,485 |   |  |               | 100 |   |  |               | 127,387 |   |  |  | 100 |  |  |  | 114,957 |  |  |  | 100 | 
|                             |  |                                     |         |   |  |               |     |   |  |               |         |   |  |  |     |  |  |  |         |  |  |  |     | 






|    |                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Group undertakes tax based transactions at
    rates which are less than normal market rates in return for tax
    relief arising from various incentives and 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 2004:
    48,054 million
    (2003:
    38,084 million,
    2002:
    27,865 million).                                                                                                                                                                     
|   
|(3) | Restated to reflect the transfer of Private
    Banking to Retail Republic of Ireland from Wholesale Financial
    Services and Isle of Man changed from Wholesale Financial
    Services to UK Financial Services.                                                                                     

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
(ICS), Private Banking, instalment credit and
leasing facilities, as well as a direct telephone banking unit,
credit card operations and commercial finance/ factoring
businesses.

As at March 31, 2004, Branch Banking
Republic operated 261 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

18



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##### Table of Contents



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. In addition, ICS operates a mortgage servicing center
which processes the Banks mortgage portfolio as well as
its own.

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.

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 hours and it also operates a call centre
which deals with customer queries and processes transactions.

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, Global Markets (previously Treasury and
International Banking), Davy, First Rate Enterprises Limited and
IBI Corporate Finance Limited.

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 is headquartered in 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.

Global Markets is responsible for the
Groups liquidity and funding requirements and interest and
exchange rate risk management. In Dublin, Global Markets 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. Global Markets is also represented overseas in
Bristol, in the United Kingdom.

Davy 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).

First Rate Enterprises Limited (First
Rate) specialises in the provision of foreign exchange
services through a number of separate businesses. In Ireland,
First Rate Ireland operates through its own bureaux and agencies
in hotels and shops in key tourist locations. It also provides
foreign exchange services to An Post (the

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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 Travel Services operates a joint venture with the UK Post
Office supplying the UK Post Office with foreign exchange
currency and travellers cheques. In the U.S., Foreign Currency
Exchange Corp. (FCEC), acquired in April 2003,
operates its own retail outlets and provides Foreign Exchange
Services to banks and hotels across the U.S. In Canada, First
Rate/ FCEC have won a tender to offer foreign currency services
for an initial 12-month pilot period, commencing in June 2004,
with Canada Post Corporation.


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.

UK Financial Services

UK Financial Services (UKFS) brings
together all of the Groups significant activities in the
sterling area. 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 marketplace.

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
98 branches located mainly in the Southwest 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, an
independent financial advisor and provider of online services.
Chase de Vere Financial Solutions plc was formed on June 1,
2003 from the merger of Chase de Vere Investments and MX
Moneyextra Financial Solutions, 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 provides asset
management, custody and administration services to investors
globally. The division is comprised of Bank of Ireland Asset
Management (BIAM), Bank of Ireland Securities
Services (BOISS) and Iridian Asset Management. BIAM
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
57.5 billion
at March 31, 2004.

BOISS is the investment administration and
custodial arm of the group. It has offices in Dublins IFSC
and 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
134 billion
at March 31, 2004.

Iridian is a specialist U.S. domestic equity
manager, operating in the largest product segment of the
U.S. market. The Group acquired a 61% interest in Iridian
in September 2002 and a further 15% in June 2004 and

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can acquire the remaining 24% in future years,
see Recent Developments on page 15. Iridian had assets
under management of $9.8 billion at March 31, 2004.


Group and Central

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

UK Post Office Joint Venture

On March 19, 2004 Bank of Ireland UK
Holdings plc signed a contract to acquire a 50.01% holding in
the entity, Midasgrange Limited (trading as Post Office
Financial Services), to sell financial products through the Post
Office distribution network for a consideration of
149 million
(£100 million). The remaining 49.99% holding is owned
by Post Office Limited. The joint venture entity is being
managed jointly by both parties according to the shareholder
agreement and as such is currently being accounted for as a
joint venture using the gross equity method.

The acquisition gave rise to goodwill of
81 million
(£55 million) which has been capitalised and will be
written off to the profit and loss account over its useful
estimated life of 10 years. An amount of
0.2 million
(£0.2 million) was written off for the period through
to the year end.

An additional payment was made of
44 million
(Stg£29 million) to the UK Post Office for the use of
the Post Office Brand in connection with the business of the
joint venture. This is considered to be part of the goodwill
arising on the Groups investment and will be written off
to the profit and loss account over its useful estimated life of
10 years.

Material Subsidiaries

The principal group undertakings at
March 31, 2004 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, 2004 the Bank operated
325 full-time retail bank branches of which 261 were in
Ireland, 44 in Northern Ireland and 20 in Britain. Additionally,
the Bank has a representative office in Frankfurt, and wholly
owned subsidiary in 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.

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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 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 56,578 square metres
(609,000 square feet) net for central functions in Dublin.

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
buildings occupy approximately 35,000 square metres
(373,000 square feet) net floor space. It has a network of
98 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. The Head Office and administrative
buildings occupy approximately 4,900 square metres
(53,000 square feet) net floor space. It has a network of
18 operational branches.

Bank of Ireland Asset Management relocated its
Head Office in October 2003 to a new building of approximately
9,290 square metres (100,000 square feet) net floor space
held on a commercial lease which expires in 2028. The premises
are being shared with other Group units including Bank of
Ireland Private Banking and IBI Corporate Finance.




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, and the major insurance companies
which also operate nationwide branch networks.

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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 Central 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.

The architecture of IFSRA was completed with the
enactment in July 2004 of the Central Bank and Financial
Services Authority of Ireland Act, 2004. The Act enables IFSRA
to consider any contravention of a designated enactment or
designated statutory instrument, to call witnesses, demand
documentation, compel attendance and hold hearings in public in
respect of the alleged contravention. If contraventions are
substantiated, IFSRA may decide either to caution or reprimand a
financial services provider or any person connected with a
financial services provider, require the payment of a monetary
penalty, or impose a disqualification order on a natural person.
Fines of
5 million
can be imposed on bodies corporate or up to
500,000 on a
natural person. In the case of a natural person disqualified by
IFSRA no financial services provider may engage them in
employment thereafter. Decisions of IFSRA are appealable to the
Irish Financial Services Appeal Tribunal. The Act of 2004 also
establishes the Financial Services Ombudsman Council which is
empowered to deal with complaints by consumers by way of
mediation, investigation and adjudication. The Act also
establishes consultative panels, one representing consumer
interests and one representing the financial services industry.
Finally, in a significant enhancement of the corporate
governance and compliance environment, the Act imposes
additional responsibilities on financial services providers in
respect of directors compliance statements. The Companies
(Auditing & Accounting) Act, 2003 will (on commencement
of the relevant sections) require the directors of companies to
produce a compliance statement in respect of: all company law,
all tax law and any other statutory regime which would have a
significant impact on the financial statements of the company in
question. The Act of 2004 enables IFSRA to call upon a financial
services provider to produce a compliance statement in respect
of any designated enactment or designated statutory instrument.
The Act does, however, enable a financial services provider that
has prepared a directors compliance statement under the
Companies (Auditing & Accounting) Act, 2003 to rely on
that statement in connection with compliance with designated
enactments and designated statutory instruments under the new
financial services regulatory regime.

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 (Consoli-

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dated 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
Unions 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 holds a
license granted under the 1971 Act and no conditions have been
attached to it. 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 it business and undertakings
to Bank of Ireland and surrendered its license. In April 2004,
also by means of a scheme of transfer under Part III of the
1971 Act, the Investment Bank of Ireland transferred all of its
business and undertakings to Bank of Ireland and surrendered its
Banking Licence. In July 2004, a banking licence issued to Bank
of Ireland Mortgage Bank and, by means of a scheme under the
Asset Covered Securities Act, 2001 substantially all of Bank of
Irelands residential mortgage portfolio in Ireland was
transferred to Bank of Ireland Mortgage Bank. 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 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

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licensed bank, which controls directly or
indirectly not less than 20% of the total assets in Ireland of
all licensed banks.


The criteria for approval require the Minister to
be satisfied that an acquisition would be in the interests of
proper and orderly regulation of banking, and would be in the
public interest, particularly in the context of the continued
availability of financial services on a social and geographical
basis.

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 authorised
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 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 the lesser of
20,000 or 90% of
the sum lost.

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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 authorised 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, and enforces
certain aspects of the UKs anti money laundering regime.

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 two of the banks UK
incorporated subsidiaries. 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 scope of the FSMA is to be extended to retail mortgage
lending and general insurance intermediation; when this happens
other UK subsidiaries of the Bank may seek FSA authorisation.

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 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

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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 4.0 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 the calendar year
2003 was 132
billion and is estimated by the Government that it will be
140 billion
in the calendar year 2004. The Irish economy has expanded very
strongly over the past decade, with real GDP growth averaging
7.4% per annum between 1993 and 2003. 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 a fall in
business spending, and slower consumption growth. Public
consumption grew strongly, partially offsetting these effects,
particularly as this manifest itself as a strong increase in
public sector employment, which underpinned overall demand and
the housing market. Residential construction also expanded
strongly. The economy as a whole began to pick up momentum again
in the latter half of 2003, reflecting the global recovery.

Employment has held up well despite slower
economic growth, Consequently, Ireland has seen only a moderate
pickup in unemployment, with the rate increasing from a low of
3.6% in early 2001 to 4.9% by mid 2003, before declining
marginally again in 2004. Inflation is expected to average 2.2%
in 2004, against a broad 4%-6% range from 2000 to 2003.




Item 5     OPERATING
& FINANCIAL REVIEW AND PROSPECTS

Overview

In the year to March 31, 2004 the Group
reported profit on ordinary activities before tax and
exceptional items of
1,267 million,
an increase of 8% on the previous year. Alternative earnings per
share (which excludes goodwill amortisation and exceptional
items) of 106.7 cent increased by 8%. The Group paid a
final dividend of 26.6 cent, which, combined with the
interim dividend of 14.8 cent, represents a total dividend
of 41.4 cent, an increase of 4.4 cent or 12% year on
year.

Profit before taxation, at
1,170 million,
compares with
1,013 million
for the previous year and is after the exceptional charge of
97 million
arising from the write-off of the remainder of goodwill
associated with Chase de Vere, implementation costs associated
with restructuring plan in UKFS Division, offset by the net
proceeds from the sale of our share in the alliance with State
Street Bank.

Return on average stockholders equity,
excluding exceptional items was 24%, the eleventh consecutive
year in which the Group has achieved ROE in excess of 20%.

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In the year to March 31, 2003, the Group
reported profit on ordinary activities before tax and
exceptional item of
1,177 million,
an increase of 5% on the previous year. Profit after taxation
for this same period decreased by 7.6% to
850 million.
Total average earning assets increased by 5.6% to
73.8 billion.
The return on average total assets was 1% and return on average
stockholders funds was 22.4%.




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 2004
accounts are set out on pages F-12 to F-17.

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

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.

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, 2004, the bank held provisions
for bad and doubtful debts of
472 million
against total loans and advances of
68,012 million.
The Group considers that the provisions for bad and doubtful
debts at March 31, 2004 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 92 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.

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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
273 million
of unamortised goodwill at March 31, 2004
134 million
related to Iridian, which is being amortised over its estimated
useful life of 15 years and
125 million
related to Post Office Financial Services, which is being
amortised over its estimated useful life of 10 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 must 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 of such 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 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 of fair value is 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.
The models 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.

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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, 2004 unlisted
securities represented 23.1% 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 conducts 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.

Taxation

The taxation charge accounts for amounts due to
fiscal authorities in the various territories in which the Group
operates includes estimates based on a judgement of the
application of law and practice in certain cases to determine
the quantification of any liabilities arising. In arriving at
such estimates, management assesses the relative merits and
risks of tax treatments assumed, taking into account statutory,
judicial and regulatory guidance and, where appropriate,
external advice.

LIQUIDITY AND CAPITAL RESOURCES

The Groups overall liquidity policy and
control is the responsibility of the asset and liability
committee (ALCO) and is managed by Global Markets 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, 2004. 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 IFSRA 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.

A significant part of the liquidity of the
banking businesses arises from their ability to generate
customer deposits. A substantial proportion of the customer
deposit base is made up of current and savings accounts which,

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although repayable on demand, have traditionally
provided a stable source of funding. These customer deposits are
supplemented by the issue of subordinated loan capital and
wholesale funding sources in the capital markets, as well as
from direct customer contracts. Wholesale funding sources
include deposits taken on the inter-bank market, certificates of
deposit, sale and repurchase agreements, a Euro Medium Term Note
programme.


The ability to sell assets quickly is also an
important source of liquidity to BOI Groups banking
business. BOI Group holds sizeable balances of marketable
treasury and other eligible bills and debt securities which
could be disposed of to provide additional funding should the
need arise.

The following table sets out the amounts and
maturities of the Groups contractual cash obligations at
March 31, 2004.

|                         |  |          |       |            |  |           |       |       |  |  |       |  |  |  |        | 
|------------------------ |  | -------- | ----- | ---------- |  | --------- | ----- | ----- |  |  | ----- |  |  |  | ------ | 
|                         |  |          |       | Over one   |  |           |       |      
|                         |  |          |       | year but   |  |           |       |      
|                         |  | Within   |       | less than  |  | Over five |       |      
|                         |  | one year |       | five years |  | years     |       | Total
|                         |  |          |       |            |  |           |       |      
|                         |  | m       |       | m         |  | m        |       | m   
|Longterm debt  dated    |  |          | 150   |            |  |           |      |       |  |  | 2,109 |  |  |  | 2,259  | 
|Debt securities in issue |  |          | 9,040 |            |  |           | 3,877 |       |  |  |      |  |  |  | 12,917 | 
|Securitisation vehicles  |  |          | 728   |            |  |           |      |       |  |  |      |  |  |  | 728    | 
|Operating leases         |  |          | 54    |            |  |           | 203   |       |  |  | 656   |  |  |  | 913    | 
|Capital commitments      |  |          | 11    |            |  |           |      |       |  |  |      |  |  |  | 11     | 

Capital Resources

As at March 31, 2004, Bank of Ireland Group
had
1,423 million
of Undated Loan Capital and
2,259 million
of Dated Loan Capital, a total of
3,682 million
in aggregate subordinated liabilities. Of the Dated Loan Capital
2,109 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. The credit
ratings of Bank of Ireland Group at June 30, 2004 are as follows:

|                 |  |             |     | 
|---------------- |  | ----------- | --- | 
|                 |  | Senior Debt
|                 |  |            
|Moodys           |  |             | 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.

Off Balance Sheet Arrangements

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.

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 26, customer
accounts in Note 27 and debt securities in issue in
Note 28 to our Consolidated Financial Statements.

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Bank of Ireland Group uses SPVs in the
ordinary course of business, primarily to provide liquidity and
to facilitate customer transactions.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 16 and Note 18 to our
    Consolidated Financial Statements.                                                                                                                                                                                                                                                    
|
| |  | 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. The Bank does not sell its own assets to
    this company. 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, 2004, the Group had an
    outstanding undrawn liquidity facility to the company amounting
    to
    728 million.
    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$1.03 billion. 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.

|                                  |  |       |        | 
|--------------------------------- |  | ----- | ------ | 
|                                  |  | Total
|                                  |  |      
|                                  |  | m   
|Acceptances                       |  |       | 33     | 
|Guarantees                        |  |       | 1,291  | 
|Other contingent liabilities      |  |       | 494    | 
|                                  |  |       |        | 
|Total contingent liabilities      |  |       | 1,818  | 
|                                  |  |       |        | 
|Other commitments                 |  |       | 25,235 | 
|                                  |  |       |        | 
|Total contingents and commitments |  |       | 27,053 | 
|                                  |  |       |        | 

Lending commitments are agreements to lend to
customers in accordance with contractual provision; these are
either for a specified period or, as in the case of credit cards
and overdrafts, represent a revolving credit facility which can
be drawn down at any time, provide that the agreement has not
been terminated. The total amounts of unused commitments do not
necessarily represent future cash requirements, in that
commitments often expire without being drawn upon.

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ANALYSIS OF RESULTS OF OPERATIONS

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,                   
|                                                |  |                             
|                                                |  | 2004                         |       | 2003 |  | 2002
|                                                |  |                              |       |      |  |     
|                                                |  |                             
|                                                |  | (in  millions)             
|Net interest income                             |  |                              | 1,744 |      |  |      | 1,729 |   |  |  | 1,578 |  
|Other income(1)                                 |  |                              | 1,263 |      |  |      | 1,210 |   |  |  | 1,228 |  
|Operating expenses                              |  |                              | 1,654 |      |  |      | 1,662 |   |  |  | 1,582 |  
|Provision for loan losses                       |  |                              | 86    |      |  |      | 100   |   |  |  | 102   |  
|                                                |  |                              |       |      |  |      |       |   |  |  |       |  
|Income before exceptional items                 |  |                              | 1,267 |      |  |      | 1,177 |   |  |  | 1,122 |  
|Exceptional items(2)                            |  |                              | (97   | )    |  |      | (164  | ) |  |  | (37   | )
|                                                |  |                              |       |      |  |      |       |   |  |  |       |  
|Income from ordinary activities before taxation |  |                              | 1,170 |      |  |      | 1,013 |   |  |  | 1,085 |  
|                                                |  |                              |       |      |  |      |       |   |  |  |       |  






|    |                                                           
|--- | ----------------------------------------------------------
|(1) | Includes income from associated undertakings.             
|   
|(2) | Details on the exceptional items are given in
    Note 10.

Net Interest Income

The following table shows net interest income for
each of the three years ended March 31, 2004:

|                    |  |                              |       |      |  |      |       |  |  |  |       | 
|------------------- |  | ---------------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                    |  |                             
|                    |  | For the Financial Year Ended
|                    |  | March 31,                   
|                    |  |                             
|                    |  | 2004                         |       | 2003 |  | 2002
|                    |  |                              |       |      |  |     
|                    |  |                             
|                    |  | (in  millions)             
|Interest receivable |  |                              | 3,631 |      |  |      | 3,691 |  |  |  | 3,980 | 
|Interest payable    |  |                              | 1,887 |      |  |      | 1,962 |  |  |  | 2,402 | 
|                    |  |                              |       |      |  |      |       |  |  |  |       | 
|Net interest income |  |                              | 1,744 |      |  |      | 1,729 |  |  |  | 1,578 | 
|                    |  |                              |       |      |  |      |       |  |  |  |       | 

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, 2004, the level of interest earning
assets increased significantly, which offset the effect of the
decline the Groups net interest margin to 2.21% 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.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Financial Year ended March 31, 2004
    compared to financial year ended March 31,
    2003

Group net interest income increased by
15 million
or 1% to
1,744 million
reflecting strong growth in average earning assets in the year
which more than offset a decline in the Group net interest
margin of 17 basis points to 2.21% (2003: 2.38%).

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Average earning assets increased by 9% or
7 billion
to
81 billion
due to higher levels of average loans and advances to customers
in the Republic of Ireland and in the UK. On a constant currency
basis the increase in average earning assets was 13%.

The Group net interest margin declined by 17
basis points to 2.21%. The domestic net interest margin declined
by 22 basis points due to the lower interest rate environment,
higher levels of wholesale borrowing as a result of growth in
lending exceeding the growth in customer deposits and the
funding cost of the share buy-back programme. The foreign net
interest margin declined by 12 basis points primarily due to
tighter margins in our standard mortgage book in the UK and
higher levels of wholesale borrowing.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | 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.
The principal reason for the increase was 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 basis points
higher than the previous year, with the domestic margin
decreasing by 9 basis points to 2.65%  mainly
attributable to higher wholesale funding  and the
foreign net interest margin increasing by 20 basis points to
1.99%, mainly in UKFS.

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,
2004:

|                                                          |  |                        |     |      |  |      |     |  |  |  |     | 
|--------------------------------------------------------- |  | ---------------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                          |  |                       
|                                                          |  | For the Financial Year
|                                                          |  | Ended March 31,       
|                                                          |  |                       
|                                                          |  | 2004                   |     | 2003 |  | 2002
|                                                          |  |                        |     |      |  |     
|                                                          |  |                       
|                                                          |  | (percentages)         
|Gross yield(1)                                            |  |                        | 4.5 |      |  |      | 5.0 |  |  |  | 5.7 | 
|Interest spread(2)                                        |  |                        | 1.9 |      |  |      | 2.0 |  |  |  | 1.8 | 
|Net interest margin(3)                                    |  |                        | 2.2 |      |  |      | 2.3 |  |  |  | 2.3 | 
|Net interest margin, tax equivalent basis(4)              |  |                        | 2.2 |      |  |      | 2.4 |  |  |  | 2.3 | 
|Domestic net interest margin, tax equivalent
    basis(4) |  |                        | 2.4 |      |  |      | 2.7 |  |  |  | 2.7 | 
|Foreign net interest margin, tax equivalent
    basis(4)  |  |                        | 1.9 |      |  |      | 2.0 |  |  |  | 1.8 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 13).

Average Interest Earning Assets

|         |  |                        |      |      |  |      |      |  |  |  |      | 
|-------- |  | ---------------------- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|         |  |                       
|         |  | For the Financial Year
|         |  | Ended March 31,       
|         |  |                       
|         |  | 2004                   |      | 2003 |  | 2002
|         |  |                        |      |      |  |     
|         |  |                       
|         |  | (in  billions)       
|Group    |  |                        | 80.7 |      |  |      | 73.8 |  |  |  | 69.9 | 
|Domestic |  |                        | 47.9 |      |  |      | 42.8 |  |  |  | 38.4 | 
|Foreign  |  |                        | 32.8 |      |  |      | 31.0 |  |  |  | 31.5 | 

34



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##### Table of Contents



|                                 |                     |                        |      |      |  |      |      |      |  |  |      |      | 
|-------------------------------- | ------------------- | ---------------------- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | ---- | 
|                                 |                     |                       
|                                 |                     | For the Financial Year
|                                 |                     | Ended March 31,       
|                                 |                     |                       
|                                 |                     | 2004                   |      | 2003 |  | 2002
|                                 |                     |                        |      |      |  |     
|                                 |                     |                       
|                                 |                     | (percentages)         
|Ireland                          |                     |                        |      |      |  |      |      |      |  |  |      |     
|European interbank offered rate: |                     |                        |      |      |  |      |      |      |  |  |      |     
|                                 | One month Euribor   |                        |      | 2.05 |  |      |      | 2.61 |  |  |      | 3.36 | 
|                                 | Three month Euribor |                        |      | 1.99 |  |      |      | 2.56 |  |  |      | 3.45 | 
|United Kingdom                   |                     |                        |      |      |  |      |      |      |  |  |      |     
|London interbank offered rate:   |                     |                        |      |      |  |      |      |      |  |  |      |     
|                                 | One month           |                        |      | 4.19 |  |      |      | 3.71 |  |  |      | 4.02 | 
|                                 | Three month         |                        |      | 4.38 |  |      |      | 3.66 |  |  |      | 4.19 | 
|United States                    |                     |                        |      |      |  |      |      |      |  |  |      |     
|Prime Rate                       |                     |                        | 4.00 |      |  |      | 4.25 |      |  |  | 4.75 |     

Other Income

The following table sets forth other income for
each of the three years ended March 31, 2004.

|                                                           |  |                              |       |      |  |      |       |  |  |  |       | 
|---------------------------------------------------------- |  | ---------------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                                           |  |                             
|                                                           |  | For the Financial Year Ended
|                                                           |  | March 31,                   
|                                                           |  |                             
|                                                           |  | 2004                         |       | 2003 |  | 2002
|                                                           |  |                              |       |      |  |     
|                                                           |  |                             
|                                                           |  | (in  millions)             
|Dealing profits                                            |  |                              | 73    |      |  |      | 85    |  |  |  | 81    | 
|Contributions from life assurance business                 |  |                              | 177   |      |  |      | 116   |  |  |  | 152   | 
|Fees and commissions                                       |  |                              | 934   |      |  |      | 871   |  |  |  | 920   | 
|Other operating income                                     |  |                              | 50    |      |  |      | 116   |  |  |  | 74    | 
|                                                           |  |                              |       |      |  |      |       |  |  |  |       | 
|                                                           |  |                              | 1,234 |      |  |      | 1,188 |  |  |  | 1,227 | 
|Income from associated undertakings and joint
    ventures |  |                              | 29    |      |  |      | 22    |  |  |  | 1     | 
|                                                           |  |                              |       |      |  |      |       |  |  |  |       | 
|Total                                                      |  |                              | 1,263 |      |  |      | 1,210 |  |  |  | 1,228 | 
|                                                           |  |                              |       |      |  |      |       |  |  |  |       | 



| |                                                                    
| | -------------------------------------------------------------------
| | Financial year ended March 31, 2004
    compared to March 31, 2003.

Other income increased by
46 million
or 4% to
1,234 million
mainly due to the recovery of world stock markets which had a
positive effect on our Life business, and higher transaction
volumes in Retail Republic of Ireland. This was offset by lower
sales of equity products in UKFS, a weakening of sterling
against the euro and the net effect of acquisitions and
divestments.

Income from associated undertakings and joint
ventures increased by
7 million
to
29 million
and includes the profit from First Rate Travel Services and the
set up costs associated with our Financial Services Joint
Venture with the UK Post Office.



| |                                                                    
| | -------------------------------------------------------------------
| | 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 was
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.

35



---



##### Table of Contents



Operating Expenses

The following table sets forth operating expenses
for each of the three years ended March 31, 2004.

|                                               |  |                              |        |      |  |      |        |  |  |  |        | 
|---------------------------------------------- |  | ---------------------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                               |  |                             
|                                               |  | For the Financial Year Ended
|                                               |  | March 31,                   
|                                               |  |                             
|                                               |  | 2004                         |        | 2003 |  | 2002
|                                               |  |                              |        |      |  |     
|                                               |  |                             
|                                               |  | (in  millions)             
|Staff expenses                                 |  |                              | 965    |      |  |      | 955    |  |  |  | 923    | 
|Other administrative expenses                  |  |                              | 506    |      |  |      | 525    |  |  |  | 504    | 
|Depreciation and goodwill amortisation         |  |                              | 183    |      |  |      | 182    |  |  |  | 155    | 
|                                               |  |                              |        |      |  |      |        |  |  |  |        | 
|Total                                          |  |                              | 1,654  |      |  |      | 1,662  |  |  |  | 1,582  | 
|                                               |  |                              |        |      |  |      |        |  |  |  |        | 
|Average staff headcount (full time equivalent) |  |                              | 17,584 |      |  |      | 18,214 |  |  |  | 18,438 | 
|                                               |  |                              |        |      |  |      |        |  |  |  |        | 

Financial year ended March 31, 2004
compared to financial year ended March 31,
2003.

Operating expenses declined by
8 million
to
1,654 million.
An increase in staff costs of 1% was largely due to the higher
rates of pay offset by the benefit of rationalisation programmes
and the weakening of sterling against the euro. Other
administrative expenses including depreciation and goodwill
amortisation decreased by 3% reflecting the benefit of
rationalisation programmes, the weakening of sterling against
the euro and the net effect of acquisitions and divestments. The
Groups cost income ratio for the year was 54%.

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% was 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.

Provisions for Loan Losses

The following table sets forth the provisions for
loan losses for each of the three years ended March 31,
2004. 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,                   
|                                       |  |                             
|                                       |  | 2004                         |       | 2003 |  | 2002
|                                       |  |                              |       |      |  |     
|                                       |  |                             
|                                       |  | (in  millions)             
|Provision for bad and doubtful debts   |  |                              | 86    |      |  |      | 100   |  |  |  | 102   | 
|As a percentage of average total loans |  |                              | 0.14% |      |  |      | 0.18% |  |  |  | 0.19% | 

Financial year ended March 31, 2004
compared to financial year ended March 31,
2003.

The Groups Loan Loss charge in 2004 was
0.14% of the average loan book, compared to 0.18% in the
previous year. Balances under provision stood at
375 million
at March 31, 2004, compared to
320 million
for the corresponding period, representing a coverage ratio of
126%.

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 favourable economic conditions in the countries in
which the Group operates, principally Ireland, 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.

36



---



##### Table of Contents



The Group believes that the provision for loan
losses is adequate to cover its incurred losses.

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

The Groups Loan Loss charge in 2003 was
0.18% of the average loan book, compared to 0.19% in the
previous year. Balances under provision stood at
320 million
at March 31, 2003, compared to
331 million
for the corresponding period, representing a coverage ratio of
150%.

Exceptional Items

In the year ending March 31, 2004, the
exceptional items represent the following:



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the net proceeds of
    36 million
    on the sale of our share in the alliance between Bank of Ireland
    Securities Services and State Street Bank,                                                               
|
| |  | the write-off of the remainder of the goodwill
    associated with Chase de Vere of
    93 million
    together with some provisions of
    22 million
    for the impairment of certain assets in the IFA business.
|
| |  | additional costs of
    4 million
    incurred in relation to restructuring undertaken in previous
    years.                                                                                                        
|
| |  | implementation costs of
    14 million
    associated with the UKFS Business Improvement Programme.                                                                                                                  

The exceptional charge of
164 million
in the year to March 31, 2003 related 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).

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, 2004. 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,                                
|                                                                                                                      |  |                                    
|                                                                                                                      |  | 2004                                |       | 2003 |  | 2002
|                                                                                                                      |  |                                     |       |      |  |     
|                                                                                                                      |  |                                    
|                                                                                                                      |  | (in  millions, except percentages)
|Average statutory corporation tax rate(1)                                                                             |  |                                     | 12.5% |      |  |      | 15.125% |   |  |  | 19%   |  
|                                                                                                                      |  |                                     |       |      |  |      |         |   |  |  |       |  
|Profit on ordinary activities before tax
    multiplied by the weighted standard rate of Corporate tax in
    Ireland |  |                                     | 146   |      |  |      | 153     |   |  |  | 206   |  
|Effects of:                                                                                                           |  |                                     |       |      |  |      |         |   |  |  |       |  
|Expenses not deductible for tax purposes                                                                              |  |                                     | 8     |      |  |      | 5       |   |  |  | 7     |  
|Levy on certain financial institutions                                                                                |  |                                     | 26    |      |  |      | 7       |   |  |  |      |  
|Foreign earnings subject to different rates of tax                                                                    |  |                                     | 39    |      |  |      | 15      |   |  |  | 22    |  
|Non-deductible goodwill impairment                                                                                    |  |                                     | 30    |      |  |      | 33      |   |  |  |      |  
|Tax exempted income and income at a reduced Irish
    tax rate                                                        |  |                                     | (44   | )    |  |      | (63     | ) |  |  | (62   | )
|Capital allowances in excess of depreciation                                                                          |  |                                     | (5    | )    |  |      | (7      | ) |  |  | (8    | )
|Other deferred tax timing differences                                                                                 |  |                                     | (8    | )    |  |      | 18      |   |  |  | (6    | )
|Prior year adjustments                                                                                                |  |                                     | (6    | )    |  |      | 4       |   |  |  | (9    | )
|                                                                                                                      |  |                                     |       |      |  |      |         |   |  |  |       |  
|Current tax charge                                                                                                    |  |                                     | 186   |      |  |      | 165     |   |  |  | 150   |  
|                                                                                                                      |  |                                     |       |      |  |      |         |   |  |  |       |  
|Effective Tax Rates                                                                                                   |  |                                     | 17.8% |      |  |      | 16.1%   |   |  |  | 15.2% |  






|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(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.

37



---



##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The tax charge for the year, at an effective rate
    of 17.8% 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
    levy on certain financial institutions in the Republic of
    Ireland.

Financial year ended March 31, 2004
compared to financial year ended March 31,
2003

The effective tax rate increased from 16% to 18%
as a result, inter alia, of the levy on bank profits introduced
by the Irish Government in December 2002: the current year
includes a charge of
26 million
for this levy, the corresponding period last year included a
charge of
7 million.

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

The effective tax rate of 16% was slightly higher
than the corresponding year and was impacted by goodwill
impairment.

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, 2004. 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, 2004 and total assets by
business class as at the end of each year.

|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  
|------------------------------------------------------------ |  | ----------------------------------- | ------- | ------------- |  | ------------- | ------- | - |  |  | ------- | -
|                                                             |  |                                    
|                                                             |  | At and for the Financial Year Ended
|                                                             |  | March 31,                          
|                                                             |  |                                    
|                                                             |  | 2004                                |         | 2003          |  | 2002         
|                                                             |  |                                     |         |               |  |              
|                                                             |  |                                     |         | (restated)(3) |  | (restated)(3)
|                                                             |  |                                    
|                                                             |  | (in  millions)                    
|Income Before Tax                                            |  |                                     |         |               |  |               |         |   |  |  |         |  
|Retail Republic of Ireland                                   |  |                                     | 419     |               |  |               | 390     |   |  |  | 336     |  
|Bank of Ireland Life                                         |  |                                     | 147     |               |  |               | 87      |   |  |  | 122     |  
|Wholesale Financial Services                                 |  |                                     | 371     |               |  |               | 367     |   |  |  | 334     |  
|UK Financial Services                                        |  |                                     | 373     |               |  |               | 359     |   |  |  | 324     |  
|Asset Management Services                                    |  |                                     | 125     |               |  |               | 113     |   |  |  | 126     |  
|UK Post Office Joint Venture                                 |  |                                     | (3      | )             |  |               |        |   |  |  |        |  
|Group and Central                                            |  |                                     | (115    | )             |  |               | (85     | ) |  |  | (64     | )
|Tax-equivalent adjustment(1)                                 |  |                                     | (50     | )             |  |               | (54     | ) |  |  | (56     | )
|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  
|Income from ordinary activities before
    exceptional items |  |                                     | 1,267   |               |  |               | 1,177   |   |  |  | 1,122   |  
|Exceptional items                                            |  |                                     | (97     | )             |  |               | (164    | ) |  |  | (37     | )
|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  
|Income before taxation                                       |  |                                     | 1,170   |               |  |               | 1,013   |   |  |  | 1,085   |  
|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  
|Assets                                                       |  |                                     |         |               |  |               |         |   |  |  |         |  
|Retail Republic of Ireland                                   |  |                                     | 36,324  |               |  |               | 29,261  |   |  |  | 24,768  |  
|Bank of Ireland Life                                         |  |                                     | 7,401   |               |  |               | 5,728   |   |  |  | 6,028   |  
|Wholesale Financial Services                                 |  |                                     | 60,328  |               |  |               | 50,530  |   |  |  | 42,406  |  
|UK Financial Services                                        |  |                                     | 38,716  |               |  |               | 32,841  |   |  |  | 35,292  |  
|Asset Management Services                                    |  |                                     | 1,606   |               |  |               | 1,611   |   |  |  | 930     |  
|UK Post Office Joint Venture                                 |  |                                     |        |               |  |               |        |   |  |  |        |  
|Group and Central                                            |  |                                     | 10,110  |               |  |               | 7,416   |   |  |  | 5,533   |  
|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  
|Total(2)                                                     |  |                                     | 154,485 |               |  |               | 127,387 |   |  |  | 114,957 |  
|                                                             |  |                                     |         |               |  |               |         |   |  |  |         |  




38



---



##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Group undertakes tax based transactions at
    rates which differ from normal market rates in return for tax
    relief arising from various incentives and 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 2004:
    48,054 million
    (2003:
    38,084 million,
    2002:
    27,865 million).                                                                                                                                                                   
|   
|(3) | Private Banking changed to Retail Republic of
    Ireland from Wholesale Financial Services and Isle of Man
    changed from Wholesale Financial Services to UK Financial
    Services.                                                                                                               

Financial year ended March 31, 2004
compared to financial year ended March 31,
2003.

Retail Republic of Ireland

Pre-tax profits in Retail Banking in the Republic
increased by
29 million
or 7% to
419 million.
This was a strong domestic performance reflecting solid growth
in income, good cost control and satisfactory asset quality.

The Irish economy showed some recovery in the
year and our strong brand, franchise and distribution capability
in the domestic market continue to deliver increased sales of
Group products, market share gains and growth in customer
numbers.

Lending volumes rose by 20% with both mortgages
and other lending recording strong growth. The mortgage market
continued to be buoyant through the year and the Groups
market share increased further, continuing its leadership
position in this market, with average balances up 29% on last
year. Non-mortgage lending strengthened through the year and
year-end non-mortgage lending balances were higher by 13%, with
business lending up 16%.

Resources volumes performed well and recorded
year-end growth of over 7%.

Net interest margin declined 22 basis points due
to the continuation of interest rates at historically low levels
together with higher wholesale borrowings. The combination of
volume growth and margin trends resulted in net interest income
growth of 6%.

Non interest income rose by 6% with
branches fee income as well as insurance commissions being
important contributors to the growth.

The loan loss charge was similar to the previous
year, and as a percentage of advances was 5 basis points lower
at 23 basis points. The quality profile of the loan book
improved during the year.

Costs rose by 5%. Salary increases, higher
depreciation charges and information technology costs were
partly offset by cost reduction initiatives.

There was further expansion of the ATM network
with 296 new installations completed, bringing the total Network
to 930 outlets at year-end.

Bank of Ireland Life

Bank of Ireland Life, the Groups life and
pensions business, had a satisfactory year. Pre-tax profits
increased by 69% to
147 million,
boosted by the strong recovery in world equity markets.
Operating profits were
132 million
compared with
130 million
last year  this reflects the impact of a fall off in
new business sales following the closure of the government
sponsored savings scheme. Overall sales were down 12% while
sales excluding the government savings accounts were ahead by
19%.

39



---



##### Table of Contents



Bank of Ireland Life results are summarised
below:-

|                                                                             |                                |         |     |         |  |  |     |    |  
|---------------------------------------------------------------------------- | ------------------------------ | ------- | --- | ------- |  |  | --- | -- | -
|                                                                             |                                | 2003/04 |     | 2002/03
|                                                                             |                                |         |     |        
|                                                                             |                                | m      |     | m     
|New business contribution                                                    |                                |         | 51  |         |  |  | 55  |   
|Profit from existing business                                                |                                |         |     |         |  |  |     |   
|                                                                             |  expected return              |         |     | 54      |  |  |     | 56 |  
|                                                                             |  experience variances         |         |     | 14      |  |  |     | 11 |  
|                                                                             |  operating assumption changes |         |     | 5       |  |  |     | (2 | )
|Return on shareholder funds                                                  |                                |         | 8   |         |  |  | 10  |   
|                                                                             |                                |         |     |         |  |  |     |   
|Operating profit                                                             |                                |         | 132 |         |  |  | 130 |   
|Investment variance                                                          |                                |         | 26  |         |  |  | (49 | ) 
|Effect of economic assumption changes                                        |                                |         | 19  |         |  |  | 35  |   
|                                                                             |                                |         |     |         |  |  |     |   
|Sub-total                                                                    |                                |         | 177 |         |  |  | 116 |   
|Less: income adjustment for certain services
    provided by Group companies |                                |         | (30 | )       |  |  | (29 | ) 
|                                                                             |                                |         |     |         |  |  |     |   
|Profit before tax                                                            |                                |         | 147 |         |  |  | 87  |   
|                                                                             |                                |         |     |         |  |  |     |   

Bank of Ireland Life adopts a prudent approach in
setting the assumptions used in its embedded value basis and
this is reflected in the favourable experience variances, and
the contribution from changes in operating assumptions, during
the year.

The positive investment variance of
26 million
is based on the improvement in world equity markets, and the
consequent beneficial impact on the investment management fees
that Bank of Ireland Life will receive in future years.

The net benefit of changes in economic
assumptions is
19 million.
This reflects a benefit from the reduction in the discount rate
from 10% to 8% in line with the current low interest rate
environment, but offsetting this, the business now discounts the
solvency margin in accordance with the Association of British
Insurers guidelines and has also reduced the assumption in
respect of future growth in unit-linked assets.

Wholesale Financial Services

Pre-tax profits increased by 1% to
371 million,
a strong performance against last years record outturn
which benefited from falling interest rates and a number of
large one-off gains. Total income (including Share of Associates
and Joint Venture), increased by
18 million,
while costs increased by
8 million,
a 3% and 4% increase respectively.

The charge for loan losses was
31 million
compared with
25 million
in the previous year. Loan losses as a percentage of average
loans of 26 basis points were 6 basis points higher than last
year, reflecting some specific provisions, and higher general
provisioning on the international loan book. Asset quality is
strong and the loan book is well diversified.

Corporate Banking reported a slight reduction of
1% in pre-tax profits, a good underlying performance as last
years result benefited from some large one-off fees. Net
interest margin was higher, underpinned by wider lending margins
and continued growth in resource and international lending
volumes.

Global Markets performed strongly in challenging
market conditions but profits were down 2% mainly due to higher
levels of exceptional gains in the corresponding period last
year which benefited from falling interest rates.

First Rate Enterprises, the Groups
specialist foreign exchange subsidiary, had another growth year
helped by further strong results in its joint venture with the
UK Post Office, steady growth in Ireland and rapid expansion in
Foreign Currency Exchange Corp (FCEC), its US
business acquired in April 2003. First Rate/ FCEC has recently
won a tender to offer Foreign Currency Services for an initial
12-month pilot period, commencing in June 2004, with Canada Post
Corporation.

40



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Davy and IBI Corporate Finance reported very good
performances.

UK Financial Services

Pre-tax profits in UKFS increased from
359 million
to
373 million,
an increase of 4%.

(For ease of comparison the numbers below are
in local currency.)

Profit before goodwill, exceptional items and
taxation increased by 9% to £263 million. Income
growth exceeded cost growth by 2% which contributed to an
improvement in the cost income ratio from 56% to 55%.

Advances increased by 14% to
£22 billion; this reflected strong growth in both
residential mortgages and business banking. Resources are
broadly in line with last year as the division has not pursued
aggressive price-led recruitment of funds.

Net interest income increased by 3% due to strong
lending growth being partly offset by lower margins. The net
interest margin declined by 20 basis points. This mainly
reflected structural changes in the residential mortgage
portfolio arising from the run-off of older standard variable
rate loans which have been replaced by newer loans written at
tighter margins. In addition a greater reliance on wholesale
funding was necessary as advances growth exceeded resources
growth during the year.

Other income fell 4% reflecting weak demand
conditions for investment products. Total income rose 1%
compared to last year.

Operating costs reduced 1% mainly arising from a
restructure of Chase de Vere operations. The UKFS division
remains on track to deliver a further £30 million cost
reductions (in addition to the cost savings of
£15 million already achieved in Chase de Vere) over
the next two to three years with the objective of achieving a
cost income ratio in the mid to high 40s.

Residential mortgage arrears levels continue to
run at lower levels than the industry average (Council of
Mortgage Lenders). The charge for loan losses is lower by
£12 million compared with last year and reflects
strong asset quality.

Asset Management Services

Asset Management Services, which incorporates the
Groups asset management and securities services businesses
increased its profit before tax and goodwill amortisation by 13%
to
136 million,
and profit before tax by 11% to
125 million over
the same period last year.

The improvement was driven by the inclusion of a
full year contribution from Iridian and good revenue and cost
management in Bank of Ireland Asset Management
(BIAM). Average assets under management in BIAM grew
by 4% over last year.

The improvement in global equity markets during
the year has positively impacted on the value of assets under
management in BIAM and Iridian. Point in time assets under
management in BIAM at 31 March 2004 were
57.5 billion
compared to
42.7 billion
at 31 March 2003  a rise of 35%, whilst Iridian
assets under management increased by 17% to $9.8 billion.
BIAM continued its successful geographic expansion with
significant appointments particularly in the UK and Japan.

Bank of Ireland Securities Services
(BOISS), the custody and fund administration
business, continues to perform well. During the year BOISS
completed the sale of its share of the alliance it operated with
State Street. The profit of
36 million
on the sale is shown as an exceptional item and excluded from
alternative earnings per share.

Group & Central

Group and Central, which comprises earnings on
surplus capital, unallocated central and support costs and some
smaller business units had a net cost of
115 million,
compared to
85 million
in the previous year. The main drivers of this are, lower
earnings on surplus capital as a result of lower interest rates,
the interest cost of the

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##### Table of Contents



Stg£350 million Tier 1 issue in March
2003, the funding cost of the rolling share buy back programme
which has a negative impact on net interest income but is
accretive in EPS and Shareholder Value terms, and lower property
gains.


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, increased by
54 million
or 16% to
390 million.
Income increased by 7% and costs by 2%, with loan losses as a
percentage of advances slightly lower than the previous 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 the previous year and average growth
over the period of 11%. Lending volumes increased by 16%, with
particularly strong growth in residential mortgages. 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 the previous
year. Non-mortgage loan demand improved in the final quarter and
year-end balances were up 7%.

Net interest margin contracted by 14 basis
points, primarily as a result of the narrowing of deposit
margins in a 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
54 million
were
3 million
higher than the previous year. The loan loss charge as a
percentage of advances fell by 2 basis points to 28 basis
points. 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.

Bank of Ireland Life

Bank of Ireland Life had operating profits of
130 million
for the year compared with
129 million
in the previous year. 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.

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##### 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
reflected 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 was
35 million,
of which 22
million arose 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.

Wholesale Financial Services

Pre-tax profits increased by 10% to
367 million.
Total Income, including Share of Associates and Joint Ventures,
increased by
48 million
or 9% reflecting strong growth of 14% in other income and a more
modest 2% growth in net interest income. Cost performance was
good, with costs up 6% on the previous 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. Global Markets had a strong
trading performance as interest rates declined to low levels,
but profits were lower because of the high levels of one-off
trading gains in 2001/02. First Rate, reported further
substantial growth, underpinned by the success of its joint
venture with the UK Post Office.

Davy produced a good performance in difficult
market conditions while IBI Corporate Finance had an excellent
year.

The charge for loan losses was
25 million
compared with
22 million
the previous year. Loan losses were 20 basis points of average
loans, marginally up on the prior year. The Group believes that
the loan book remains well diversified, with good asset quality
and no undue risk concentrations.

UK Financial Services

UK Financial Services generated pre tax profits
of £232 million
(359 million),
an increase of 13%. The division contributed 31% of total Group
profits, illustrating the extent and significance of the
Groups operations in the UK.

Total income increased by £43 million
or 8% with net interest income increasing by 13% and other
income declining by 2%. The improvement in net interest income
reflects the further diversification of the residential

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##### Table of Contents



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 2%.


Asset quality remains strong with the loan loss
charge declining from 10 basis points to 7 basis points 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.

Asset Management Services

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

The total value of assets under management at
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 BOISS were steady with good levels of
new business.

Group & Central

Group & Central 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.

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##### 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, 2004. 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.

|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|--------------------------------------------------------- |  | --------------- | ------ | ---------- |  | --------------- | ----- | ------- |  | --------------- | --- | ---- |  | ------- | ------ | -------- |  | ---- | ----- |  |  |  | --- |  |  |  | ------ | - |  |  | ----- |  |  |  | --- | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                
|                                                          |  |                 |        | 2003       |  | 2002           
|                                                          |  | 2004            |        | (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                                          |  |                 | 7,385  |            |  |                 | 171   |         |  |                 | 2.3 |      |  |         | 6,835  |          |  |      | 196   |  |  |  | 2.9 |  |  |  | 6,064  |   |  |  | 270   |  |  |  | 4.5 | 
|Foreign offices                                           |  |                 | 755    |            |  |                 | 26    |         |  |                 | 3.4 |      |  |         | 406    |          |  |      | 12    |  |  |  | 2.9 |  |  |  | 1,230  |   |  |  | 44    |  |  |  | 3.6 | 
|Loans to customers(1)                                     |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 28,987 |            |  |                 | 1,394 |         |  |                 | 4.8 |      |  |         | 25,140 |          |  |      | 1,419 |  |  |  | 5.6 |  |  |  | 23,313 |   |  |  | 1,433 |  |  |  | 6.1 | 
|Foreign offices                                           |  |                 | 29,533 |            |  |                 | 1,494 |         |  |                 | 5.0 |      |  |         | 28,533 |          |  |      | 1,503 |  |  |  | 5.3 |  |  |  | 28,420 |   |  |  | 1,672 |  |  |  | 5.9 | 
|Central government and other
    eligible bills           |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 9      |            |  |                 |      |         |  |                 |    |      |  |         | 7      |          |  |      |      |  |  |  |    |  |  |  | 19     |   |  |  |      |  |  |  | 0.4 | 
|Foreign offices                                           |  |                 |       |            |  |                 |      |         |  |                 |    |      |  |         |       |          |  |      |      |  |  |  |    |  |  |  |       |   |  |  |      |  |  |  |    | 
|Debt Securities                                           |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 8,942  |            |  |                 | 268   |         |  |                 | 3.0 |      |  |         | 8,132  |          |  |      | 279   |  |  |  | 3.4 |  |  |  | 6,178  |   |  |  | 280   |  |  |  | 4.5 | 
|Foreign offices                                           |  |                 | 1,453  |            |  |                 | 63    |         |  |                 | 4.3 |      |  |         | 1,285  |          |  |      | 65    |  |  |  | 5.1 |  |  |  | 1,216  |   |  |  | 63    |  |  |  | 5.2 | 
|Instalment credit                                         |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 502    |            |  |                 | 35    |         |  |                 | 7.0 |      |  |         | 451    |          |  |      | 32    |  |  |  | 7.1 |  |  |  | 420    |   |  |  | 31    |  |  |  | 7.4 | 
|Foreign offices                                           |  |                 | 869    |            |  |                 | 61    |         |  |                 | 7.0 |      |  |         | 708    |          |  |      | 56    |  |  |  | 7.9 |  |  |  | 574    |   |  |  | 49    |  |  |  | 8.5 | 
|Finance lease receivables                                 |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 2,043  |            |  |                 | 114   |         |  |                 | 5.6 |      |  |         | 2,238  |          |  |      | 126   |  |  |  | 5.6 |  |  |  | 2,429  |   |  |  | 136   |  |  |  | 5.6 | 
|Foreign offices                                           |  |                 | 194    |            |  |                 | 5     |         |  |                 | 2.4 |      |  |         | 75     |          |  |      | 3     |  |  |  | 4.0 |  |  |  | 41     |   |  |  | 2     |  |  |  | 3.9 | 
|Total interest-earning assets                             |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Domestic offices                                          |  |                 | 47,868 |            |  |                 | 1,982 |         |  |                 | 4.1 |      |  |         | 42,803 |          |  |      | 2,052 |  |  |  | 4.8 |  |  |  | 38,423 |   |  |  | 2,150 |  |  |  | 5.6 | 
|Foreign offices                                           |  |                 | 32,804 |            |  |                 | 1,649 |         |  |                 | 5.0 |      |  |         | 31,007 |          |  |      | 1,639 |  |  |  | 5.3 |  |  |  | 31,481 |   |  |  | 1,830 |  |  |  | 5.8 | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|                                                          |  |                 | 80,672 |            |  |                 | 3,631 |         |  |                 | 4.5 |      |  |         | 73,810 |          |  |      | 3,691 |  |  |  | 5.0 |  |  |  | 69,904 |   |  |  | 3,980 |  |  |  | 5.7 | 
|Allowance for loan losses                                 |  |                 | (496   | )          |  |                 |       |         |  |                 |     |      |  |         | (485   | )        |  |      |       |  |  |  |     |  |  |  | (442   | ) |  |  |       |  |  |  |     | 
|Non interest earning assets(2)                            |  |                 | 17,447 |            |  |                 |       |         |  |                 |     |      |  |         | 15,729 |          |  |      |       |  |  |  |     |  |  |  | 13,490 |   |  |  |       |  |  |  |     | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Total Assets                                              |  |                 | 97,623 |            |  |                 | 3,631 |         |  |                 | 3.7 |      |  |         | 89,054 |          |  |      | 3,691 |  |  |  | 4.1 |  |  |  | 82,952 |   |  |  | 3,980 |  |  |  | 4.8 | 
|                                                          |  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |  |  |  |     |  |  |  |        |   |  |  |       |  |  |  |     | 
|Percentage of assets applicable
    to foreign activities |  |                 | 35.4%  |            |  |                 |       |         |  |                 |     |      |  |         | 36.60% |          |  |      |       |  |  |  |     |  |  |  | 39.3%  |   |  |  |       |  |  |  |     | 

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|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |     | 
|-------------------------------------------------------------- | ---------------- | --------------- | ------ | ---------- |  | --------------- | ----- | ------- |  | --------------- | --- | ---- |  | ------- | ------ | -------- |  | ---- | ----- | --- |  |  | --- | --- |  |  | ------ | ------ |  |  | ----- | --- |  |  | --- | --- | 
|                                                               |                  |                 |        |            |  |                 |       |         |  |                
|                                                               |                  |                 |        | 2003       |  | 2002           
|                                                               |                  | 2004            |        | (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                                               |                  |                 | 13,946 |            |  |                 | 388   |         |  |                 | 2.8 |      |  |         | 10,912 |          |  |      | 353   |     |  |  | 3.2 |     |  |  | 10,194 |        |  |  | 365   |     |  |  | 3.6 |    
|Foreign offices                                                |                  |                 | 1,028  |            |  |                 | 34    |         |  |                 | 3.3 |      |  |         | 1,144  |          |  |      | 38    |     |  |  | 3.3 |     |  |  | 1,225  |        |  |  | 52    |     |  |  | 4.2 |    
|Customer accounts                                              |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Demand deposits                                                |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 10,936     |  |                 |       | 124     |  |                 |     | 1.1  |  |         |        | 10,919   |  |      |       | 186 |  |  |     | 1.7 |  |  |        | 11,547 |  |  |       | 280 |  |  |     | 2.4 | 
|                                                               | Foreign offices  |                 |        | 8,449      |  |                 |       | 240     |  |                 |     | 2.8  |  |         |        | 9,628    |  |      |       | 266 |  |  |     | 2.8 |  |  |        | 9,692  |  |  |       | 392 |  |  |     | 4.0 | 
|Term deposits                                                  |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 9,640      |  |                 |       | 73      |  |                 |     | 0.8  |  |         |        | 7,559    |  |      |       | 87  |  |  |     | 1.2 |  |  |        | 5,532  |  |  |       | 167 |  |  |     | 3.0 | 
|                                                               | Foreign offices  |                 |        | 9,893      |  |                 |       | 504     |  |                 |     | 5.1  |  |         |        | 10,488   |  |      |       | 487 |  |  |     | 4.6 |  |  |        | 12,101 |  |  |       | 587 |  |  |     | 4.9 | 
|Other deposits                                                 |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 550        |  |                 |       | 39      |  |                 |     | 7.1  |  |         |        | 1,322    |  |      |       | 54  |  |  |     | 4.1 |  |  |        | 1,637  |  |  |       | 96  |  |  |     | 5.9 | 
|                                                               | Foreign offices  |                 |        | 14         |  |                 |       | 1       |  |                 |     | 5.0  |  |         |        | 24       |  |      |       | 1   |  |  |     | 4.2 |  |  |        | 32     |  |  |       | 2   |  |  |     | 5.0 | 
|Interest bearing current accounts                              |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               | Domestic offices |                 |        | 850        |  |                 |       | 8       |  |                 |     | 1.0  |  |         |        | 750      |  |      |       | 11  |  |  |     | 1.5 |  |  |        | 643    |  |  |       | 13  |  |  |     | 2.0 | 
|                                                               | Foreign offices  |                 |        | 2,312      |  |                 |       | 61      |  |                 |     | 2.6  |  |         |        | 2,013    |  |      |       | 52  |  |  |     | 2.6 |  |  |        | 1,604  |  |  |       | 50  |  |  |     | 3.1 | 
|Debt securities in issue                                       |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 8,049  |            |  |                 | 131   |         |  |                 | 1.6 |      |  |         | 6,233  |          |  |      | 168   |     |  |  | 2.7 |     |  |  | 2,972  |        |  |  | 131   |     |  |  | 4.4 |    
|Foreign offices                                                |                  |                 | 3,037  |            |  |                 | 107   |         |  |                 | 3.5 |      |  |         | 2,559  |          |  |      | 103   |     |  |  | 4.0 |     |  |  | 2,315  |        |  |  | 113   |     |  |  | 4.9 |    
|Subordinated liabilities                                       |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 1,566  |            |  |                 | 75    |         |  |                 | 4.8 |      |  |         | 1,431  |          |  |      | 82    |     |  |  | 5.7 |     |  |  | 1,589  |        |  |  | 81    |     |  |  | 5.1 |    
|Foreign offices                                                |                  |                 | 1,382  |            |  |                 | 102   |         |  |                 | 7.4 |      |  |         | 928    |          |  |      | 74    |     |  |  | 8.0 |     |  |  | 894    |        |  |  | 73    |     |  |  | 8.2 |    
|Total interest bearing liabilities                             |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Domestic offices                                               |                  |                 | 45,537 |            |  |                 | 838   |         |  |                 | 1.8 |      |  |         | 39,126 |          |  |      | 941   |     |  |  | 2.4 |     |  |  | 34,114 |        |  |  | 1,133 |     |  |  | 3.3 |    
|Foreign offices                                                |                  |                 | 26,115 |            |  |                 | 1,049 |         |  |                 | 4.0 |      |  |         | 26,784 |          |  |      | 1,021 |     |  |  | 3.8 |     |  |  | 27,863 |        |  |  | 1,269 |     |  |  | 4.6 |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|                                                               |                  |                 | 71,652 |            |  |                 | 1,887 |         |  |                 | 2.6 |      |  |         | 65,910 |          |  |      | 1,962 |     |  |  | 3.0 |     |  |  | 61,977 |        |  |  | 2,402 |     |  |  | 3.9 |    
|Non interest bearing liabilities                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Current accounts                                               |                  |                 | 7,426  |            |  |                 |       |         |  |                 |     |      |  |         | 6,547  |          |  |      |       |     |  |  |     |     |  |  | 5,785  |        |  |  |       |     |  |  |     |    
|Other non interest bearing
    liabilities(2)                  |                  |                 | 14,153 |            |  |                 |       |         |  |                 |     |      |  |         | 12,261 |          |  |      |       |     |  |  |     |     |  |  | 11,260 |        |  |  |       |     |  |  |     |    
|Stockholders equity including non equity
    interests         |                  |                 | 4,392  |            |  |                 |       |         |  |                 |     |      |  |         | 4,336  |          |  |      |       |     |  |  |     |     |  |  | 3,930  |        |  |  |       |     |  |  |     |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Total liabilities and stockholders
    equity                 |                  |                 | 97,623 |            |  |                 | 1,887 |         |  |                 | 1.9 |      |  |         | 89,054 |          |  |      | 1,962 |     |  |  | 2.2 |     |  |  | 82,952 |        |  |  | 2,402 |     |  |  | 2.9 |    
|                                                               |                  |                 |        |            |  |                 |       |         |  |                 |     |      |  |         |        |          |  |      |       |     |  |  |     |     |  |  |        |        |  |  |       |     |  |  |     |    
|Percentage of liabilities applicable to
    foreign activities |                  |                 | 35.4%  |            |  |                 |       |         |  |                 |     |      |  |         | 36.60% |          |  |      |       |     |  |  |     |     |  |  | 39.3%  |        |  |  |       |     |  |  |     |    






|    |                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Loans to customers include non-accrual loans and
    loans classified as problem loans and are based on the location
    of the lender.                                                                                                   
|   
|(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.

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Change in Net Interest Income 
Volume and Rate Analysis

The following table allocates changes in net
interest income between volume and rate for 2004 compared to
2003 and for 2003 compared to 2002. 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.

|                                                |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|----------------------------------------------- |  | ------------------------------------ | --- | -------------- |  | ------ | ---- | ------- |  | ------- | --- | ------ |  |  | --- | - |  |  | ---- | - |  |  | ---- | -
|                                                |  |                                      |     |               
|                                                |  | 2004 over 2003                       |     | 2003 over 2002
|                                                |  |                                      |     |               
|                                                |  |                                     
|                                                |  | 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                                |  |                                      | 15  |                |  |        | (40  | )       |  |         | (25 | )      |  |  | 31  |   |  |  | (105 | ) |  |  | (74  | )
|Foreign offices                                 |  |                                      | 12  |                |  |        | 2    |         |  |         | 14  |        |  |  | (25 | ) |  |  | (7   | ) |  |  | (32  | )
|Loans to customers                              |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 201 |                |  |        | (226 | )       |  |         | (25 | )      |  |  | 108 |   |  |  | (122 | ) |  |  | (14  | )
|Foreign offices                                 |  |                                      | 52  |                |  |        | (61  | )       |  |         | (9  | )      |  |  | 7   |   |  |  | (176 | ) |  |  | (169 | )
|Central government and other eligible
    bills |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      |    |                |  |        |     |         |  |         |    |        |  |  |    |   |  |  |     |   |  |  |     |  
|Foreign offices                                 |  |                                      |    |                |  |        |     |         |  |         |    |        |  |  |    |   |  |  |     |   |  |  |     |  
|Debt securities                                 |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 26  |                |  |        | (37  | )       |  |         | (11 | )      |  |  | 76  |   |  |  | (77  | ) |  |  | (1   | )
|Foreign offices                                 |  |                                      | 8   |                |  |        | (10  | )       |  |         | (2  | )      |  |  | 4   |   |  |  | (2   | ) |  |  | 2    |  
|Instalment credit                               |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | 4   |                |  |        | (1   | )       |  |         | 3   |        |  |  | 2   |   |  |  | (1   | ) |  |  | 1    |  
|Foreign offices                                 |  |                                      | 12  |                |  |        | (7   | )       |  |         | 5   |        |  |  | 11  |   |  |  | (4   | ) |  |  | 7    |  
|Finance lease receivables                       |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                                |  |                                      | (11 | )              |  |        | (1   | )       |  |         | (12 | )      |  |  | (11 | ) |  |  | 1    |   |  |  | (10  | )
|Foreign offices                                 |  |                                      | 3   |                |  |        | (1   | )       |  |         | 2   |        |  |  | 1   |   |  |  |     |   |  |  | 1    |  
|                                                |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Total interest income                           |  |                                      | 322 |                |  |        | (382 | )       |  |         | (60 | )      |  |  | 204 |   |  |  | (493 | ) |  |  | (289 | )
|                                                |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  

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|                                  |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|--------------------------------- |  | ------------------------------------ | --- | -------------- |  | ------ | ---- | ------- |  | ------- | --- | ------ |  |  | --- | - |  |  | ---- | - |  |  | ---- | -
|                                  |  |                                      |     |                |  |        |      |        
|                                  |  |                                      |     | 2003 over 2002
|                                  |  | 2004 over 2003                       |     | (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                  |  |                                      | 89  |                |  |        | (54  | )       |  |         | 35  |        |  |  | 25  |   |  |  | (37  | ) |  |  | (12  | )
|Foreign offices                   |  |                                      | (4  | )              |  |        |     |         |  |         | (4  | )      |  |  | (3  | ) |  |  | (11  | ) |  |  | (14  | )
|Customer accounts                 |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Demand deposits                   |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      |    |                |  |        | (62  | )       |  |         | (62 | )      |  |  | (15 | ) |  |  | (79  | ) |  |  | (94  | )
|Foreign offices                   |  |                                      | (33 | )              |  |        | 7    |         |  |         | (26 | )      |  |  | (3  | ) |  |  | (123 | ) |  |  | (126 | )
|Term deposits                     |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 20  |                |  |        | (34  | )       |  |         | (14 | )      |  |  | 47  |   |  |  | (127 | ) |  |  | (80  | )
|Foreign offices                   |  |                                      | (29 | )              |  |        | 46   |         |  |         | 17  |        |  |  | (76 | ) |  |  | (24  | ) |  |  | (100 | )
|Other deposits                    |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | (42 | )              |  |        | 27   |         |  |         | (15 | )      |  |  | (16 | ) |  |  | (26  | ) |  |  | (42  | )
|Foreign offices                   |  |                                      | (1  | )              |  |        | 1    |         |  |         |    |        |  |  |    |   |  |  | (1   | ) |  |  | (1   | )
|Interest bearing current accounts |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 1   |                |  |        | (4   | )       |  |         | (3  | )      |  |  | 2   |   |  |  | (4   | ) |  |  | (2   | )
|Foreign offices                   |  |                                      | 8   |                |  |        | 1    |         |  |         | 9   |        |  |  | 11  |   |  |  | (9   | ) |  |  | 2    |  
|Debt securities in issue          |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 41  |                |  |        | (78  | )       |  |         | (37 | )      |  |  | 103 |   |  |  | (66  | ) |  |  | 37   |  
|Foreign offices                   |  |                                      | 18  |                |  |        | (14  | )       |  |         | 4   |        |  |  | 11  |   |  |  | (21  | ) |  |  | (10  | )
|Subordinated liabilities          |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Domestic offices                  |  |                                      | 7   |                |  |        | (14  | )       |  |         | (7  | )      |  |  | (9  | ) |  |  | 10   |   |  |  | 1    |  
|Foreign offices                   |  |                                      | 34  |                |  |        | (6   | )       |  |         | 28  |        |  |  | 3   |   |  |  | (2   | ) |  |  | 1    |  
|                                  |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Total interest bearing expense    |  |                                      | 109 |                |  |        | (184 | )       |  |         | (75 | )      |  |  | 80  |   |  |  | (520 | ) |  |  | (440 | )
|                                  |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  
|Net interest income               |  |                                      | 213 |                |  |        | (198 | )       |  |         | 15  |        |  |  | 124 |   |  |  | 27   |   |  |  | 151  |  
|                                  |  |                                      |     |                |  |        |      |         |  |         |     |        |  |  |     |   |  |  |      |   |  |  |      |  




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, 2004 residential mortgages
accounted for 53% of the Groups total loan portfolio. 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
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

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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.

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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,
2004.

|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | - |  |  | ------ | -
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2004            |        | 2003 |  | 2002 |        | 2001 |  | 2000
|                                |  |                 |        |      |  |      |        |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Agriculture                     |  |                 | 1,026  |      |  |      | 963    |      |  |      | 1,044  |   |  |  | 977    |   |  |  | 873    |  
|Energy                          |  |                 | 474    |      |  |      | 639    |      |  |      | 693    |   |  |  | 651    |   |  |  | 406    |  
|Manufacturing                   |  |                 | 3,427  |      |  |      | 3,832  |      |  |      | 3,837  |   |  |  | 3,450  |   |  |  | 2,974  |  
|Construction and property       |  |                 | 3,168  |      |  |      | 2,412  |      |  |      | 1,862  |   |  |  | 2,187  |   |  |  | 1,561  |  
|Distribution                    |  |                 | 1,266  |      |  |      | 1,283  |      |  |      | 1,164  |   |  |  | 1,192  |   |  |  | 1,245  |  
|Transport                       |  |                 | 901    |      |  |      | 436    |      |  |      | 871    |   |  |  | 491    |   |  |  | 507    |  
|Financial                       |  |                 | 1,380  |      |  |      | 834    |      |  |      | 1,962  |   |  |  | 2,123  |   |  |  | 1,548  |  
|Business and other services     |  |                 | 5,613  |      |  |      | 4,002  |      |  |      | 3,706  |   |  |  | 3,044  |   |  |  | 2,175  |  
|Personal                        |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
| residential mortgages         |  |                 | 12,017 |      |  |      | 9,612  |      |  |      | 7,531  |   |  |  | 5,923  |   |  |  | 5,031  |  
| other lending                 |  |                 | 4,998  |      |  |      | 4,900  |      |  |      | 4,038  |   |  |  | 3,780  |   |  |  | 3,108  |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 | 34,270 |      |  |      | 28,913 |      |  |      | 26,708 |   |  |  | 23,818 |   |  |  | 19,428 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|United Kingdom                  |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Agriculture                     |  |                 | 69     |      |  |      | 58     |      |  |      | 55     |   |  |  | 53     |   |  |  | 60     |  
|Energy                          |  |                 | 63     |      |  |      | 158    |      |  |      | 142    |   |  |  | 91     |   |  |  | 45     |  
|Manufacturing                   |  |                 | 1,275  |      |  |      | 721    |      |  |      | 593    |   |  |  | 568    |   |  |  | 458    |  
|Construction and property       |  |                 | 2,572  |      |  |      | 1,984  |      |  |      | 2,091  |   |  |  | 1,650  |   |  |  | 1,457  |  
|Distribution                    |  |                 | 203    |      |  |      | 224    |      |  |      | 226    |   |  |  | 211    |   |  |  | 242    |  
|Transport                       |  |                 | 337    |      |  |      | 249    |      |  |      | 63     |   |  |  | 71     |   |  |  | 85     |  
|Financial                       |  |                 | 173    |      |  |      | 96     |      |  |      | 153    |   |  |  | 171    |   |  |  | 116    |  
|Business and other services     |  |                 | 1,375  |      |  |      | 1,250  |      |  |      | 1,094  |   |  |  | 994    |   |  |  | 706    |  
|Commercial mortgages            |  |                 | 2,130  |      |  |      | 1,855  |      |  |      | 1,989  |   |  |  | 1,719  |   |  |  | 1,566  |  
|Personal                        |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
| residential mortgages         |  |                 | 24,073 |      |  |      | 20,863 |      |  |      | 22,933 |   |  |  | 21,362 |   |  |  | 20,428 |  
| other lending                 |  |                 | 1,472  |      |  |      | 995    |      |  |      | 1,008  |   |  |  | 841    |   |  |  | 625    |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 | 33,742 |      |  |      | 28,453 |      |  |      | 30,347 |   |  |  | 27,731 |   |  |  | 25,788 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|United States                   |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Commercial loans                |  |                 |       |      |  |      | 1      |      |  |      | 22     |   |  |  | 28     |   |  |  | 26     |  
|Real estate loans, construction |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Real estate loans, mortgage     |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Consumer loans                  |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Bank card loans                 |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Leasing                         |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Other loans                     |  |                 |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|                                |  |                 |       |      |  |      | 1      |      |  |      | 22     |   |  |  | 28     |   |  |  | 26     |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Group total loan portfolio      |  |                 | 68,012 |      |  |      | 57,367 |      |  |      | 57,077 |   |  |  | 51,577 |   |  |  | 45,242 |  
|Allowance for loan losses       |  |                 | (472   | )    |  |      | (480   | )    |  |      | (500   | ) |  |  | (430   | ) |  |  | (398   | )
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  
|Total                           |  |                 | 67,540 |      |  |      | 56,887 |      |  |      | 56,577 |   |  |  | 51,147 |   |  |  | 44,844 |  
|                                |  |                 |        |      |  |      |        |      |  |      |        |   |  |  |        |   |  |  |        |  

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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,
2004.

|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------- |  | ------------ | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                |  |             
|                                |  | At March 31,
|                                |  |             
|                                |  | 2004         |       | 2003 |  | 2002 |       | 2001 |  | 2000
|                                |  |              |       |      |  |      |       |      |  |     
|                                |  | %            |       | %    |  | %    |       | %    |  | %   
|Ireland                         |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |              | 1.5   |      |  |      | 1.7   |      |  |      | 1.8   |  |  |  | 1.9   |  |  |  | 1.9   | 
|Energy                          |  |              | 0.7   |      |  |      | 1.1   |      |  |      | 1.2   |  |  |  | 1.3   |  |  |  | 0.9   | 
|Manufacturing                   |  |              | 5.0   |      |  |      | 6.7   |      |  |      | 6.7   |  |  |  | 6.7   |  |  |  | 6.6   | 
|Construction and property       |  |              | 4.7   |      |  |      | 4.2   |      |  |      | 3.3   |  |  |  | 4.2   |  |  |  | 3.4   | 
|Distribution                    |  |              | 1.9   |      |  |      | 2.2   |      |  |      | 2.0   |  |  |  | 2.3   |  |  |  | 2.8   | 
|Transport                       |  |              | 1.3   |      |  |      | 0.8   |      |  |      | 1.5   |  |  |  | 1.0   |  |  |  | 1.1   | 
|Financial                       |  |              | 2.0   |      |  |      | 1.4   |      |  |      | 3.5   |  |  |  | 4.1   |  |  |  | 3.4   | 
|Business and other services     |  |              | 8.3   |      |  |      | 7.0   |      |  |      | 6.5   |  |  |  | 5.9   |  |  |  | 4.8   | 
|Personal                        |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| residential mortgages         |  |              | 17.7  |      |  |      | 16.8  |      |  |      | 13.2  |  |  |  | 11.5  |  |  |  | 11.1  | 
| other lending                 |  |              | 7.3   |      |  |      | 8.5   |      |  |      | 7.1   |  |  |  | 7.3   |  |  |  | 6.9   | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              | 50.4  |      |  |      | 50.4  |      |  |      | 46.8  |  |  |  | 46.2  |  |  |  | 42.9  | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United Kingdom                  |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |              | 0.1   |      |  |      | 0.1   |      |  |      | 0.1   |  |  |  | 0.1   |  |  |  | 0.1   | 
|Energy                          |  |              | 0.1   |      |  |      | 0.3   |      |  |      | 0.2   |  |  |  | 0.2   |  |  |  | 0.1   | 
|Manufacturing                   |  |              | 1.9   |      |  |      | 1.3   |      |  |      | 1.0   |  |  |  | 1.1   |  |  |  | 1.0   | 
|Construction and property       |  |              | 3.7   |      |  |      | 3.4   |      |  |      | 3.7   |  |  |  | 3.2   |  |  |  | 3.2   | 
|Distribution                    |  |              | 0.3   |      |  |      | 0.4   |      |  |      | 0.4   |  |  |  | 0.4   |  |  |  | 0.5   | 
|Transport                       |  |              | 0.5   |      |  |      | 0.4   |      |  |      | 0.1   |  |  |  | 0.1   |  |  |  | 0.2   | 
|Financial                       |  |              | 0.3   |      |  |      | 0.2   |      |  |      | 0.3   |  |  |  | 0.3   |  |  |  | 0.3   | 
|Business and other services     |  |              | 2.0   |      |  |      | 2.2   |      |  |      | 1.9   |  |  |  | 1.9   |  |  |  | 1.6   | 
|Commercial mortgages            |  |              | 3.1   |      |  |      | 3.2   |      |  |      | 3.5   |  |  |  | 3.4   |  |  |  | 3.5   | 
|Personal                        |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| residential mortgages         |  |              | 35.4  |      |  |      | 36.4  |      |  |      | 40.2  |  |  |  | 41.4  |  |  |  | 45.1  | 
| other lending                 |  |              | 2.2   |      |  |      | 1.7   |      |  |      | 1.8   |  |  |  | 1.6   |  |  |  | 1.4   | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              | 49.6  |      |  |      | 49.6  |      |  |      | 53.2  |  |  |  | 53.7  |  |  |  | 57.0  | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United States                   |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Commercial loans                |  |              |      |      |  |      |      |      |  |      |      |  |  |  | 0.1   |  |  |  | 0.1   | 
|Real estate loans, construction |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, mortgage     |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Consumer loans                  |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Bank card loans                 |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Leasing                         |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Other loans                     |  |              |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |              |      |      |  |      |      |      |  |      |      |  |  |  | 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 analyse loans by maturity
and interest rate sensitivity. Overdrafts, which represent a
significant proportion of the portfolio, are classified as
repayable within one year. Approximately 12.2% of the Bank of
Ireland Groups loan portfolio at March 31, 2004 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

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the full life of the loan. The interest rate
exposure is managed by Global Markets within agreed policy
parameters. See Item 11 Market Risk.


|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|----------------------- |  | -------------------- | ----- | ---------- |  | ------- | ------ | ----- |  |  | ------ |  |  |  | ------ | 
|                        |  |                     
|                        |  | As at March 31, 2004
|                        |  |                     
|                        |  |                      |       | After      |  |        
|                        |  |                      |       | 1 year but |  |        
|                        |  | Within               |       | within     |  | After   |        |      
|                        |  | 1 year               |       | 5 years    |  | 5 years |        | Total
|                        |  |                      |       |            |  |         |        |      
|                        |  |                     
|                        |  | (in  millions)     
|Ireland                 |  |                      | 7,165 |            |  |         | 11,225 |       |  |  | 15,880 |  |  |  | 34,270 | 
|United Kingdom          |  |                      | 2,815 |            |  |         | 5,070  |       |  |  | 25,857 |  |  |  | 33,742 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Total loans by maturity |  |                      | 9,980 |            |  |         | 16,295 |       |  |  | 41,737 |  |  |  | 68,012 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Fixed rate              |  |                      | 1,609 |            |  |         | 4,009  |       |  |  | 2,690  |  |  |  | 8,308  | 
|Variable rate           |  |                      | 8,371 |            |  |         | 12,286 |       |  |  | 39,047 |  |  |  | 59,704 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Total loans by maturity |  |                      | 9,980 |            |  |         | 16,295 |       |  |  | 41,737 |  |  |  | 68,012 | 
|                        |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 

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The following tables set forth an analysis of
loans by maturity within each classification as at
March 31, 2004.

|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|--------------------------- |  | -------------------- | ----- | ---------- |  | ------- | ------ | ----- |  |  | ------ |  |  |  | ------ | 
|                            |  |                     
|                            |  | As at March 31, 2004
|                            |  |                     
|                            |  |                      |       | After      |  |        
|                            |  |                      |       | 1 year but |  |        
|                            |  | Within               |       | within     |  | After   |        |      
|                            |  | 1 year               |       | 5 years    |  | 5 years |        | Total
|                            |  |                      |       |            |  |         |        |      
|                            |  |                     
|                            |  | (in  millions)     
|Ireland                     |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Agriculture                 |  |                      | 415   |            |  |         | 312    |       |  |  | 299    |  |  |  | 1,026  | 
|Energy                      |  |                      | 105   |            |  |         | 214    |       |  |  | 155    |  |  |  | 474    | 
|Manufacturing               |  |                      | 843   |            |  |         | 1,802  |       |  |  | 782    |  |  |  | 3,427  | 
|Construction and property   |  |                      | 998   |            |  |         | 1,298  |       |  |  | 872    |  |  |  | 3,168  | 
|Distribution                |  |                      | 508   |            |  |         | 443    |       |  |  | 315    |  |  |  | 1,266  | 
|Transport                   |  |                      | 241   |            |  |         | 364    |       |  |  | 296    |  |  |  | 901    | 
|Financial                   |  |                      | 379   |            |  |         | 938    |       |  |  | 63     |  |  |  | 1,380  | 
|Business and other services |  |                      | 1,397 |            |  |         | 1,670  |       |  |  | 2,546  |  |  |  | 5,613  | 
|Personal                    |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
| residential mortgages     |  |                      | 507   |            |  |         | 2,211  |       |  |  | 9,299  |  |  |  | 12,017 | 
| other lending             |  |                      | 1,772 |            |  |         | 1,973  |       |  |  | 1,253  |  |  |  | 4,998  | 
|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|                            |  |                      | 7,165 |            |  |         | 11,225 |       |  |  | 15,880 |  |  |  | 34,270 | 
|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|United Kingdom              |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Agriculture                 |  |                      | 33    |            |  |         | 24     |       |  |  | 12     |  |  |  | 69     | 
|Energy                      |  |                      | 21    |            |  |         | 30     |       |  |  | 12     |  |  |  | 63     | 
|Manufacturing               |  |                      | 402   |            |  |         | 688    |       |  |  | 185    |  |  |  | 1,275  | 
|Construction and property   |  |                      | 652   |            |  |         | 1,028  |       |  |  | 892    |  |  |  | 2,572  | 
|Distribution                |  |                      | 73    |            |  |         | 70     |       |  |  | 60     |  |  |  | 203    | 
|Transport                   |  |                      | 63    |            |  |         | 239    |       |  |  | 35     |  |  |  | 337    | 
|Financial                   |  |                      | 42    |            |  |         | 74     |       |  |  | 57     |  |  |  | 173    | 
|Business and other services |  |                      | 288   |            |  |         | 532    |       |  |  | 555    |  |  |  | 1,375  | 
|Commercial Mortgages        |  |                      | 78    |            |  |         | 660    |       |  |  | 1,392  |  |  |  | 2,130  | 
|Personal                    |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
| residential mortgages     |  |                      | 245   |            |  |         | 1,328  |       |  |  | 22,500 |  |  |  | 24,073 | 
| other lending             |  |                      | 918   |            |  |         | 397    |       |  |  | 157    |  |  |  | 1,472  | 
|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|                            |  |                      | 2,815 |            |  |         | 5,070  |       |  |  | 25,857 |  |  |  | 33,742 | 
|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 
|Group total loan portfolio  |  |                      | 9,980 |            |  |         | 16,295 |       |  |  | 41,737 |  |  |  | 68,012 | 
|                            |  |                      |       |            |  |         |        |       |  |  |        |  |  |  |        | 

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 basis points 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, brought about
by membership of the single currency.

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

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.

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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
398 million
to
472 million,
representing 0.88% and 0.69%, respectively, of total loans.

The ratio of loan loss allowances to loans
accounted for on a non-accrual basis has increased from 112% in
2000 to 126% in 2004. 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.

The following table presents information
regarding the movement in the allowance for loan losses in each
of the five years ended March 31, 2004.

|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|------------------------------------------------ |  | ------------------------------ | ------ | ------- |  | -------- | ----- | ------- |  | -------- | ----- | ------- |  |  | ----- | - |  |  | ----- | - |  |  | ----- | 
|                                                 |  |                               
|                                                 |  | Financial year ended March 31,
|                                                 |  |                               
|                                                 |  |                                |        |         |  |         
|                                                 |  | 2004                           |        | 2003    |  | 2002    
|                                                 |  |                                |        |         |  |         
|                                                 |  | Specific                       |        | General |  | Specific |       | General |  | Specific |       | General
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |        
|                                                 |  |                               
|                                                 |  | (in  millions)               
|Allowance at beginning of year                   |  |                                | 169.5  |         |  |          | 310.2 |         |  |          | 158.8 |         |  |  | 341.4 |   |  |  | 123.2 |   |  |  | 307.2 | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Total allowance                                  |  | 479.7                          |        | 500.2   |  | 430.4   
|                                                 |  |                                |        |         |  |         
|Exchange adjustments                             |  |                                | 1.3    |         |  |          | 5.9   |         |  |          | (7.7  | )       |  |  | (22.4 | ) |  |  | 1.4   |   |  |  | 2.2   | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Other adjustments:                               |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Acquisitions/ Mergers                            |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|Disposals                                        |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|Transfers: general to specific                   |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|                                                 |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Recovery of amounts previously charged off:      |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | 12.3   |         |  |          |      |         |  |          | 4.1   |         |  |  |      |   |  |  | 14.4  |   |  |  |      | 
|United Kingdom                                   |  |                                | 0.7    |         |  |          |      |         |  |          | 1.5   |         |  |  |      |   |  |  | 4.7   |   |  |  |      | 
|United States                                    |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Total recovery of amounts previously charged off |  |                                | 13.0   |         |  |          |      |         |  |          | 5.6   |         |  |  |      |   |  |  | 19.1  |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Amounts charged off:                             |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | (105.3 | )       |  |          |      |         |  |          | (77.4 | )       |  |  |      |   |  |  | (39.0 | ) |  |  |      | 
|United Kingdom                                   |  |                                | (9.3   | )       |  |          |      |         |  |          | (19.0 | )       |  |  |      |   |  |  | (16.1 | ) |  |  |      | 
|United States                                    |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Total amounts charged off                        |  |                                | (114.6 | )       |  |          |      |         |  |          | (96.4 | )       |  |  |      |   |  |  | (55.1 | ) |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Provision for loan losses charged to income:     |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | 113.0  |         |  |          | (29.7 | )       |  |          | 102.5 |         |  |  | (25.2 | ) |  |  | 62.1  |   |  |  | 9.6   | 
|United Kingdom                                   |  |                                | 8.6    |         |  |          | (5.4  | )       |  |          | 6.7   |         |  |  | 16.4  |   |  |  | 8.1   |   |  |  | 22.4  | 
|United States                                    |  |                                |       |         |  |          |      |         |  |          |      |         |  |  |      |   |  |  |      |   |  |  |      | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|                                                 |  |                                | 121.6  |         |  |          | (35.1 | )       |  |          | 109.2 |         |  |  | (8.8  | ) |  |  | 70.2  |   |  |  | 32.0  | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Allowance at end of year                         |  |                                | 190.8  |         |  |          | 281.0 |         |  |          | 169.5 |         |  |  | 310.2 |   |  |  | 158.8 |   |  |  | 341.4 | 
|                                                 |  |                                |        |         |  |          |       |         |  |          |       |         |  |  |       |   |  |  |       |   |  |  |       | 
|Total allowance                                  |  | 471.8                          |        | 479.7   |  | 500.2   
|                                                 |  |                                |        |         |  |         

54



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##### Table of Contents



Movement in the Allowance for Loan
Losses

|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|------------------------------------------------ |  | ------------------------------ | ----- | ------- |  | -------- | ----- | ------- |  |  | ----- | - |  |  | ----- | 
|                                                 |  |                               
|                                                 |  | Financial year ended March 31,
|                                                 |  |                               
|                                                 |  |                                |       |        
|                                                 |  | 2001                           |       | 2000   
|                                                 |  |                                |       |        
|                                                 |  | Specific                       |       | General |  | Specific |       | General
|                                                 |  |                                |       |         |  |          |       |        
|                                                 |  |                               
|                                                 |  | (in  millions)               
|Allowance at beginning of year                   |  |                                | 114.5 |         |  |          | 283.1 |         |  |  | 122.9 |   |  |  | 236.2 | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Total allowance                                  |  | 397.6                          |       | 359.1  
|                                                 |  |                                |       |        
|Exchange adjustments                             |  |                                | (1.5  | )       |  |          | (5.5  | )       |  |  | 6.5   |   |  |  | 15.9  | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Other adjustments:                               |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Acquisitions/ Mergers                            |  |                                |      |         |  |          | (0.5  | )       |  |  |      |   |  |  |      | 
|Disposals                                        |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      | 
|Transfers: general to specific                   |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|                                                 |  |                                |      |         |  |          | (0.5  | )       |  |  |      |   |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Recovery of amounts previously charged off:      |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | 9.6   |         |  |          |      |         |  |  | 9.9   |   |  |  |      | 
|United Kingdom                                   |  |                                | 7.1   |         |  |          |      |         |  |  | 7.8   |   |  |  |      | 
|United States                                    |  |                                |      |         |  |          |      |         |  |  |      |   |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Total recovery of amounts previously charged off |  |                                | 16.7  |         |  |          |      |         |  |  | 17.7  |   |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Amounts charged off:                             |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | (29.1 | )       |  |          |      |         |  |  | (26.3 | ) |  |  |      | 
|United Kingdom                                   |  |                                | (19.6 | )       |  |          |      |         |  |  | (20.8 | ) |  |  |      | 
|United States                                    |  |                                |      |         |  |          |      |         |  |  | (10.4 | ) |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Total amounts charged off                        |  |                                | (48.7 | )       |  |          |      |         |  |  | (57.5 | ) |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Provision for loan losses charged to income:     |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Ireland                                          |  |                                | 28.1  |         |  |          | 30.3  |         |  |  | 22.9  |   |  |  | 13.2  | 
|United Kingdom                                   |  |                                | 14.1  |         |  |          | (0.2  | )       |  |  | 2.9   |   |  |  | 17.8  | 
|United States                                    |  |                                |      |         |  |          |      |         |  |  | (0.9  | ) |  |  |      | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|                                                 |  |                                | 42.2  |         |  |          | 30.1  |         |  |  | 24.9  |   |  |  | 31.0  | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Allowance at end of year                         |  |                                | 123.2 |         |  |          | 307.2 |         |  |  | 114.5 |   |  |  | 283.1 | 
|                                                 |  |                                |       |         |  |          |       |         |  |  |       |   |  |  |       | 
|Total allowance                                  |  | 430.4                          |       | 397.6  
|                                                 |  |                                |       |        

55



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##### 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, 2004.

|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ------ | ----------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                                                                              |  |                                       
|                                                                                                              |  | For the Financial Year Ended March 31,
|                                                                                                              |  |                                       
|                                                                                                              |  | 2004                                   |        | 2003                          |  | 2002 |        | 2001 |  | 2000
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |     
|                                                                                                              |  |                                       
|                                                                                                              |  | (in                                   |        | millions, except percentages)
|                                                                                                              |  | %                                      |        | %                             |  | %    |        | %    |  | %   
|Allowance at end of year as a percentage of total
    loans to customers at end of year:                      |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Ireland                                                                                                       |  |                                        | 0.92   |                               |  |      | 1.12   |      |  |      | 1.02   |  |  |  | 0.92   |  |  |  | 0.89   | 
|United Kingdom                                                                                                |  |                                        | 0.46   |                               |  |      | 0.54   |      |  |      | 0.75   |  |  |  | 0.76   |  |  |  | 0.87   | 
|United States                                                                                                 |  |                                        |       |                               |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.69   |                               |  |      | 0.84   |      |  |      | 0.88   |  |  |  | 0.83   |  |  |  | 0.88   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Specific                                                                                                      |  |                                        | 0.28   |                               |  |      | 0.30   |      |  |      | 0.28   |  |  |  | 0.23   |  |  |  | 0.25   | 
|General                                                                                                       |  |                                        | 0.41   |                               |  |      | 0.54   |      |  |      | 0.60   |  |  |  | 0.60   |  |  |  | 0.63   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.69   |                               |  |      | 0.84   |      |  |      | 0.88   |  |  |  | 0.83   |  |  |  | 0.88   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Allowance at end of year as a percentage of loans
    accounted for on a non-accrual basis at end of year:(1) |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Ireland                                                                                                       |  |                                        | 98.0   |                               |  |      | 121.3  |      |  |      | 126.5  |  |  |  | 142.7  |  |  |  | 119.3  | 
|United Kingdom                                                                                                |  |                                        | 293.2  |                               |  |      | 300.5  |      |  |      | 197.9  |  |  |  | 131.2  |  |  |  | 107.2  | 
|United States                                                                                                 |  |                                        |       |                               |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 125.7  |                               |  |      | 150.1  |      |  |      | 151.3  |  |  |  | 136.7  |  |  |  | 112.1  | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Average loans to customers(2)                                                                                 |  |                                        | 62,129 |                               |  |      | 57,145 |      |  |      | 55,197 |  |  |  | 49,049 |  |  |  | 40,136 | 
|Provisions charged to income as a percentage of
    average loans to customers:                               |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Specific                                                                                                      |  |                                        | 0.20   |                               |  |      | 0.20   |      |  |      | 0.13   |  |  |  | 0.09   |  |  |  | 0.06   | 
|General                                                                                                       |  |                                        | (0.06  | )                             |  |      | (0.02  | )    |  |      | 0.06   |  |  |  | 0.06   |  |  |  | 0.08   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total                                                                                                         |  |                                        | 0.14   |                               |  |      | 0.18   |      |  |      | 0.19   |  |  |  | 0.15   |  |  |  | 0.14   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Net loans charged off as a percentage of average
    loans to customers                                       |  |                                        | 0.16   |                               |  |      | 0.16   |      |  |      | 0.07   |  |  |  | 0.07   |  |  |  | 0.10   | 
|                                                                                                              |  |                                        |        |                               |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.                                                                                                                                                                                                                                                                                                                                                                                                                                                     

56



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##### Table of Contents



The following table provides information
regarding loans charged off for each of the five years ended
March 31, 2004.

|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|------------------------------- |  | --------------- | ----- | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2004            |       | 2003 |  | 2002 |      | 2001 |  | 2000
|                                |  |                 |       |      |  |      |      |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 3.3   |      |  |      | 2.9  |      |  |      | 1.7  |  |  |  | 2.5  |  |  |  | 2.1  | 
|Energy                          |  |                 | 15.4  |      |  |      | 5.0  |      |  |      |     |  |  |  |     |  |  |  | 1.8  | 
|Manufacturing                   |  |                 | 5.2   |      |  |      | 21.9 |      |  |      | 12.8 |  |  |  | 0.2  |  |  |  | 1.0  | 
|Construction and property       |  |                 | 4.3   |      |  |      | 1.8  |      |  |      | 0.8  |  |  |  | 0.6  |  |  |  | 0.5  | 
|Distribution                    |  |                 | 1.6   |      |  |      | 2.1  |      |  |      | 1.3  |  |  |  | 1.6  |  |  |  | 1.5  | 
|Transport                       |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Financial                       |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 22.1  |      |  |      | 14.5 |      |  |      | 5.7  |  |  |  | 5.4  |  |  |  | 5.0  | 
|Personal                        |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 0.1  | 
| Other lending                 |  |                 | 53.4  |      |  |      | 29.2 |      |  |      | 16.7 |  |  |  | 18.8 |  |  |  | 14.3 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 105.3 |      |  |      | 77.4 |      |  |      | 39.0 |  |  |  | 29.1 |  |  |  | 26.3 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United Kingdom                  |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 0.1   |      |  |      | 0.1  |      |  |      | 0.1  |  |  |  | 0.1  |  |  |  | 0.1  | 
|Manufacturing                   |  |                 | 0.6   |      |  |      | 7.6  |      |  |      | 0.9  |  |  |  | 0.8  |  |  |  | 0.9  | 
|Construction and property       |  |                 | 0.5   |      |  |      | 1.1  |      |  |      | 0.4  |  |  |  | 6.1  |  |  |  | 0.2  | 
|Distribution                    |  |                 | 0.5   |      |  |      | 0.3  |      |  |      | 4.5  |  |  |  | 0.2  |  |  |  | 0.4  | 
|Transport                       |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Financial                       |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 1.2   |      |  |      | 2.7  |      |  |      | 1.2  |  |  |  | 1.5  |  |  |  | 1.4  | 
|Commercial mortgages            |  |                 | 1.4   |      |  |      | 2.2  |      |  |      |     |  |  |  |     |  |  |  | 2.9  | 
|Personal                        |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 | 0.6   |      |  |      | 0.2  |      |  |      | 3.8  |  |  |  | 6.4  |  |  |  | 12.5 | 
| Other lending                 |  |                 | 4.4   |      |  |      | 4.8  |      |  |      | 5.2  |  |  |  | 4.5  |  |  |  | 2.4  | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 9.3   |      |  |      | 19.0 |      |  |      | 16.1 |  |  |  | 19.6 |  |  |  | 20.8 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|United States                   |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Commercial loans                |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, construction |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, mortgage     |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Leases including consumer loans |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 10.4 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |      |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  | 10.4 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Group total                     |  |                 | 114.6 |      |  |      | 96.4 |      |  |      | 55.1 |  |  |  | 48.7 |  |  |  | 57.5 | 
|                                |  |                 |       |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 

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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, 2004.

|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|------------------------------- |  | --------------- | ---- | ---- |  | ---- | --- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2004            |      | 2003 |  | 2002 |     | 2001 |  | 2000
|                                |  |                 |      |      |  |      |     |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|Agriculture                     |  |                 | 0.5  |      |  |      | 0.2 |      |  |      | 1.2  |  |  |  | 0.8  |  |  |  | 0.9  | 
|Manufacturing                   |  |                 | 3.5  |      |  |      | 1.3 |      |  |      | 0.1  |  |  |  | 1.0  |  |  |  | 1.5  | 
|Construction and property       |  |                 | 0.3  |      |  |      | 0.1 |      |  |      | 0.3  |  |  |  | 0.2  |  |  |  | 0.2  | 
|Distribution                    |  |                 | 0.3  |      |  |      | 0.1 |      |  |      | 0.8  |  |  |  | 0.5  |  |  |  | 0.8  | 
|Transport                       |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Financial                       |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 3.1  |      |  |      | 0.6 |      |  |      | 2.7  |  |  |  | 1.9  |  |  |  | 0.9  | 
|Personal                        |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
| Other lending                 |  |                 | 4.6  |      |  |      | 1.8 |      |  |      | 9.3  |  |  |  | 5.2  |  |  |  | 5.6  | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 12.3 |      |  |      | 4.1 |      |  |      | 14.4 |  |  |  | 9.6  |  |  |  | 9.9  | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|United Kingdom                  |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|Manufacturing                   |  |                 | 0.3  |      |  |      | 0.1 |      |  |      | 0.2  |  |  |  | 0.3  |  |  |  | 0.1  | 
|Construction and property       |  |                 |     |      |  |      |    |      |  |      | 1.5  |  |  |  | 1.1  |  |  |  | 0.2  | 
|Distribution                    |  |                 |     |      |  |      | 0.4 |      |  |      | 0.1  |  |  |  | 0.2  |  |  |  | 0.1  | 
|Transport                       |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Financial                       |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Business and Other Services     |  |                 | 0.1  |      |  |      | 0.1 |      |  |      | 1.1  |  |  |  | 0.5  |  |  |  | 0.2  | 
|Commercial mortgages            |  |                 | 0.1  |      |  |      | 0.4 |      |  |      |     |  |  |  |     |  |  |  | 2.9  | 
|Personal                        |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
| Residential Mortgages         |  |                 |     |      |  |      |    |      |  |      | 1.5  |  |  |  | 4.2  |  |  |  | 3.5  | 
| Other lending                 |  |                 | 0.2  |      |  |      | 0.5 |      |  |      | 0.3  |  |  |  | 0.8  |  |  |  | 0.8  | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 | 0.7  |      |  |      | 1.5 |      |  |      | 4.7  |  |  |  | 7.1  |  |  |  | 7.8  | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|United States                   |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|Commercial loans                |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, construction |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Real estate loans, mortgage     |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|Leases including consumer loans |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |     |      |  |      |    |      |  |      |     |  |  |  |     |  |  |  |     | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 
|Group total                     |  |                 | 13.0 |      |  |      | 5.6 |      |  |      | 19.1 |  |  |  | 16.7 |  |  |  | 17.7 | 
|                                |  |                 |      |      |  |      |     |      |  |      |      |  |  |  |      |  |  |  |      | 

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The following table presents an analysis of
allowances for loan losses at March 31, for each of the five
years ended March 31, 2004.

|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2004            |       | 2003 |  | 2002 |       | 2001 |  | 2000
|                                |  |                 |       |      |  |      |       |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Ireland                         |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |                 | 13.1  |      |  |      | 11.2  |      |  |      | 10.8  |  |  |  | 10.7  |  |  |  | 12.3  | 
|Energy                          |  |                 | 11.1  |      |  |      | 5.9   |      |  |      | 0.1   |  |  |  |      |  |  |  |      | 
|Manufacturing                   |  |                 | 6.3   |      |  |      | 9.6   |      |  |      | 20.7  |  |  |  | 11.0  |  |  |  | 3.6   | 
|Construction and property       |  |                 | 8.3   |      |  |      | 12.9  |      |  |      | 4.3   |  |  |  | 2.3   |  |  |  | 2.5   | 
|Distribution                    |  |                 | 8.3   |      |  |      | 7.0   |      |  |      | 7.6   |  |  |  | 4.1   |  |  |  | 4.1   | 
|Transport                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Financial                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Business and Other Services     |  |                 | 60.7  |      |  |      | 28.9  |      |  |      | 13.6  |  |  |  | 9.0   |  |  |  | 9.8   | 
|Personal                        |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| Residential Mortgages         |  |                 | 0.9   |      |  |      | 0.6   |      |  |      | 0.5   |  |  |  | 0.4   |  |  |  | 0.4   | 
| Other lending                 |  |                 | 58.7  |      |  |      | 71.2  |      |  |      | 63.4  |  |  |  | 45.5  |  |  |  | 43.6  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 | 167.4 |      |  |      | 147.3 |      |  |      | 121.0 |  |  |  | 83.0  |  |  |  | 76.3  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United Kingdom                  |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Agriculture                     |  |                 | 0.1   |      |  |      | 0.1   |      |  |      | 0.1   |  |  |  | 0.2   |  |  |  | 0.3   | 
|Manufacturing                   |  |                 | 4.1   |      |  |      | 4.2   |      |  |      | 12.9  |  |  |  | 12.2  |  |  |  | 12.0  | 
|Construction and property       |  |                 | 1.9   |      |  |      | 2.4   |      |  |      | 3.5   |  |  |  | 3.6   |  |  |  | 1.5   | 
|Distribution                    |  |                 | 0.6   |      |  |      | 0.5   |      |  |      | 1.4   |  |  |  | 0.7   |  |  |  | 0.6   | 
|Transport                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Financial                       |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Business and Other Services     |  |                 | 5.0   |      |  |      | 4.7   |      |  |      | 7.7   |  |  |  | 8.1   |  |  |  | 2.6   | 
|Commercial mortgages            |  |                 | 1.8   |      |  |      | 1.1   |      |  |      |      |  |  |  |      |  |  |  | 6.2   | 
|Personal                        |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| Residential Mortgages         |  |                 | 0.2   |      |  |      | 0.3   |      |  |      | 2.9   |  |  |  | 5.0   |  |  |  | 8.3   | 
| Other lending                 |  |                 | 9.7   |      |  |      | 8.9   |      |  |      | 9.3   |  |  |  | 10.4  |  |  |  | 6.7   | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 | 23.4  |      |  |      | 22.2  |      |  |      | 37.8  |  |  |  | 40.2  |  |  |  | 38.2  | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|United States                   |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Commercial loans                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, construction |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Real estate loans, mortgage     |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|Leases (including consumer)     |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                |  |                 |      |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total specific allowance        |  |                 | 190.8 |      |  |      | 169.5 |      |  |      | 158.8 |  |  |  | 123.2 |  |  |  | 114.5 | 
|Total general allowance         |  |                 | 281.0 |      |  |      | 310.2 |      |  |      | 341.4 |  |  |  | 307.2 |  |  |  | 283.1 | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total group allowance           |  |                 | 471.8 |      |  |      | 479.7 |      |  |      | 500.2 |  |  |  | 430.4 |  |  |  | 397.6 | 
|                                |  |                 |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

Risk Elements in Lending

The U.S. Securities and Exchange Commission
requires potential credit risk elements in lending to be
analysed 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).

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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,   
|                                                                                                          |  |                
|                                                                                                          |  | 2004            |     | 2003 |  | 2002 |     | 2001 |  | 2000
|                                                                                                          |  |                 |     |      |  |      |     |      |  |     
|                                                                                                          |  |                
|                                                                                                          |  | (in  millions)
|Loans accounted for on a non-accrual
    basis                                                            |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Ireland(1)                                                                                                |  |                 | 322 |      |  |      | 268 |      |  |      | 216 |  |  |  | 154 |  |  |  | 145 | 
|United Kingdom(1)                                                                                         |  |                 | 53  |      |  |      | 51  |      |  |      | 115 |  |  |  | 161 |  |  |  | 210 | 
|United States                                                                                             |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Total                                                                                                     |  |                 | 375 |      |  |      | 319 |      |  |      | 331 |  |  |  | 315 |  |  |  | 355 | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Accruing loans which are contractually past
    due 90 days or more as to principal or
    interest(2)(3) |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Ireland                                                                                                   |  |                 | 216 |      |  |      | 228 |      |  |      | 167 |  |  |  | 128 |  |  |  | 109 | 
|United Kingdom                                                                                            |  |                 | 132 |      |  |      | 160 |      |  |      | 200 |  |  |  | 181 |  |  |  | 240 | 
|United States                                                                                             |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Total                                                                                                     |  |                 | 348 |      |  |      | 388 |      |  |      | 367 |  |  |  | 309 |  |  |  | 349 | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|Restructured loans not included above                                                                     |  |                 |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|                                                                                                          |  |                 |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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
    179 million
    (2003:
    141 million)
    and the provisions thereon amounted to
    99 million
    (2003:
    88 million).
    The amount of interest in suspense in 2004 was
    5 million
    (2003:
    4 million).
|   
|(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, 2004:
    84.6 million
    in Ireland and
    107 million
    in the United Kingdom) which are secured and, typically in the
    UK, 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
76.3 million
at March 31, 2004.

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.

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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, 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, 2004 |  |                                     |       |              |  |                |   |       |  |                  |     |  |  |  |       |  |  |  |      | 
|United Kingdom       |  |                                     | 1,195 |              |  |                | 7 |       |  |                  | 428 |  |  |  | 1,630 |  |  |  | 1.5% | 
|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% | 






|    |                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Assets, consisting of total assets as reported in
    the consolidated balance sheet plus acceptances were
    106.5 billion
    at March 31, 2004 (March 31, 2003:
    89.4 billion,
    March 31, 2002:
    87.2 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
879 million
at March 31, 2004,
739 million
at March 31, 2003 and
868 million at
March 31, 2002. The country concerned in 2004 was Germany
(2003: Cayman Islands, 2002: Germany).

As at March 31, 2004, 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, 2004,
2003 and 2002.

|                                           |  |                 |        |      |  |      |        |  |  |  |        | 
|------------------------------------------ |  | --------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                           |  |                
|                                           |  | At March 31,   
|                                           |  |                
|                                           |  | 2004            |        | 2003 |  | 2002
|                                           |  |                 |        |      |  |     
|                                           |  |                
|                                           |  | (in  millions)
|Irish Government                           |  |                 | 3,416  |      |  |      | 2,937  |  |  |  | 2,104  | 
|Other European government                  |  |                 | 1,590  |      |  |      | 704    |  |  |  | 505    | 
|U.S. Treasury and U.S. government agencies |  |                 | 49     |      |  |      |       |  |  |  | 3      | 
|Collateralized mortgage obligations        |  |                 |       |      |  |      |       |  |  |  | 3      | 
|Corporate bonds                            |  |                 | 9,446  |      |  |      | 7,428  |  |  |  | 7,147  | 
|Other securities                           |  |                 | 1,175  |      |  |      | 1,268  |  |  |  | 1,123  | 
|                                           |  |                 |        |      |  |      |        |  |  |  |        | 
|                                           |  |                 | 15,676 |      |  |      | 12,337 |  |  |  | 10,885 | 
|                                           |  |                 |        |      |  |      |        |  |  |  |        | 

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, 2004 was
3.4 billion
(2003:
2.9 billion;
2002:
2.1 billion).

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The following table categorizes the Groups
investment debt securities, excluding trading securities, by
maturity and weighted average yield at March 31, 2004.

|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 
|------------------------------------ |  | ----------------------------------- | ----- | ----------------- |  | ------------------ | ---- | -------------- |  | ----- | ----- | ------- |  | ----- | ---- | ------- |  |  | ----- |  |  |  | ---- |  |  |  | --- |  |  |  | ---- | 
|                                     |  |                                    
|                                     |  | At March 31, 2004                  
|                                     |  |                                    
|                                     |  |                                     |       |                   |  |                    |      |               
|                                     |  |                                     |       | 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                     |  |                                     |      |                   |  |                    |     |                |  |       |      |         |  |       |     |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|Other European government            |  |                                     | 507   |                   |  |                    | 0.44 |                |  |       | 324   |         |  |       | 0.14 |         |  |  |       |  |  |  |      |  |  |  |    |  |  |  |     | 
|US Treasury & US government agencies |  |                                     |      |                   |  |                    |     |                |  |       | 49    |         |  |       | 0.01 |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|Collateralised mortgage obligations  |  |                                     |      |                   |  |                    |     |                |  |       |      |         |  |       |     |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|Corporate bonds                      |  |                                     | 2,812 |                   |  |                    | 3.31 |                |  |       | 4,624 |         |  |       | 5.81 |         |  |  | 1,568 |  |  |  | 2.36 |  |  |  | 231 |  |  |  | 1.89 | 
|Other                                |  |                                     | 709   |                   |  |                    | 0.53 |                |  |       | 329   |         |  |       | 2.19 |         |  |  |      |  |  |  |     |  |  |  |    |  |  |  |     | 
|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 
|Total book value                     |  |                                     | 4,028 |                   |  |                    |      |                |  |       | 5,326 |         |  |       |      |         |  |  | 1,568 |  |  |  |      |  |  |  | 231 |  |  |  |      | 
|                                     |  |                                     |       |                   |  |                    |      |                |  |       |       |         |  |       |      |         |  |  |       |  |  |  |      |  |  |  |     |  |  |  |      | 

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 analyses 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,   
|                                              |  |                
|                                              |  | 2004            |       | 2003 |  | 2002
|                                              |  |                 |       |      |  |     
|                                              |  |                
|                                              |  | (in  millions)
|Placings with banks repayable within 30 days: |  |                 |       |      |  |      |       |  |  |  |       | 
|Domestic                                      |  |                 | 1,722 |      |  |      | 3,288 |  |  |  | 3,741 | 
|Foreign                                       |  |                 | 407   |      |  |      | 253   |  |  |  | 1,563 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 2,129 |      |  |      | 3,541 |  |  |  | 5,304 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Placings with banks repayable beyond 30 days: |  |                 |       |      |  |      |       |  |  |  |       | 
|Domestic                                      |  |                 | 4,751 |      |  |      | 3,800 |  |  |  | 3,024 | 
|Foreign                                       |  |                 | 873   |      |  |      | 139   |  |  |  | 57    | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 5,624 |      |  |      | 3,939 |  |  |  | 3,081 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 
|Total                                         |  |                 | 7,753 |      |  |      | 7,480 |  |  |  | 8,385 | 
|                                              |  |                 |       |      |  |      |       |  |  |  |       | 

62



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LIABILITIES

Deposits

The following tables analyse average deposits by
customers based on the location of the branches in which the
deposits are recorded for each of the three years ended
March 31, 2004.

|                         |  |                 |        |      |  |      |        |  |  |  |        | 
|------------------------ |  | --------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                         |  | 2004            |        | 2003 |  | 2002
|                         |  |                 |        |      |  |     
|                         |  |                
|                         |  | (in  millions)
|Branches in Ireland      |  |                 | 28,082 |      |  |      | 25,022 |  |  |  | 22,814 | 
|Branches outside Ireland |  |                 | 21,424 |      |  |      | 22,882 |  |  |  | 24,090 | 
|                         |  |                 |        |      |  |      |        |  |  |  |        | 
|Total                    |  |                 | 49,506 |      |  |      | 47,904 |  |  |  | 46,904 | 
|                         |  |                 |        |      |  |      |        |  |  |  |        | 

|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|------------------------ |  | ------------- | --- | --------------- |  | ------------- | ------ | --------------- |  | ------------- | --- | --------------- |  |  | ------ |  |  |  | --- |  |  |  | ------ | 
|                         |  | Average       |     |                 |  | Average       |        |                 |  | Average       |     |                
|                         |  | Interest Rate |     |                 |  | Interest Rate |        |                 |  | Interest Rate |     |                
|                         |  | during 2004   |     | 2004            |  | during 2003   |        | 2003            |  | during 2002   |     | 2002           
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                
|                         |  | %             |     | (in  millions) |  | %             |        | (in  millions) |  | %             |     | (in  millions)
|Branches in Ireland      |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Current accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Interest bearing         |  |               | 1.0 |                 |  |               | 850    |                 |  |               | 1.5 |                 |  |  | 750    |  |  |  | 2.0 |  |  |  | 643    | 
|Non-interest bearing     |  |               |    |                 |  |               | 6,656  |                 |  |               |    |                 |  |  | 5,794  |  |  |  |    |  |  |  | 5,092  | 
|Deposit accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Demand                   |  |               | 1.1 |                 |  |               | 10,936 |                 |  |               | 1.7 |                 |  |  | 10,919 |  |  |  | 2.4 |  |  |  | 11,547 | 
|Time                     |  |               | 0.8 |                 |  |               | 9,640  |                 |  |               | 1.2 |                 |  |  | 7,559  |  |  |  | 3.0 |  |  |  | 5,532  | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|                         |  |               |     |                 |  |               | 28,082 |                 |  |               |     |                 |  |  | 25,022 |  |  |  |     |  |  |  | 22,814 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Branches outside Ireland |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Current accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Interest bearing         |  |               | 2.6 |                 |  |               | 2,312  |                 |  |               | 2.6 |                 |  |  | 2,013  |  |  |  | 3.1 |  |  |  | 1,604  | 
|Non-interest bearing     |  |               |    |                 |  |               | 770    |                 |  |               |    |                 |  |  | 753    |  |  |  |    |  |  |  | 693    | 
|Deposit accounts:        |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Demand                   |  |               | 2.8 |                 |  |               | 8,449  |                 |  |               | 2.8 |                 |  |  | 9,628  |  |  |  | 4.0 |  |  |  | 9,692  | 
|Time                     |  |               | 5.1 |                 |  |               | 9,893  |                 |  |               | 4.6 |                 |  |  | 10,488 |  |  |  | 4.9 |  |  |  | 12,101 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|                         |  |               |     |                 |  |               | 21,424 |                 |  |               |     |                 |  |  | 22,882 |  |  |  |     |  |  |  | 24,090 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 
|Total                    |  |               |     |                 |  |               | 49,506 |                 |  |               |     |                 |  |  | 47,904 |  |  |  |     |  |  |  | 46,904 | 
|                         |  |               |     |                 |  |               |        |                 |  |               |     |                 |  |  |        |  |  |  |     |  |  |  |        | 

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.

63



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##### 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, 2004
|                        |  |                  
|                        |  | 0-3               |        | 3-6    |  | 6-12   |       | Over 12
|                        |  | months            |        | months |  | months |       | months 
|                        |  |                   |        |        |  |        |       |        
|                        |  |                  
|                        |  | (in  millions)  
|Time deposits           |  |                   |        |        |  |        |       |         |  |  |     |  |  |  |       | 
|Domestic branches       |  |                   | 4,713  |        |  |        | 288   |         |  |  | 204 |  |  |  | 1,644 | 
|Foreign branches        |  |                   | 5,230  |        |  |        | 612   |         |  |  | 167 |  |  |  | 172   | 
|Certificates of deposit |  |                   |        |        |  |        |       |         |  |  |     |  |  |  |       | 
|Domestic branches       |  |                   |       |        |  |        |      |         |  |  |    |  |  |  |      | 
|Foreign branches        |  |                   | 1,818  |        |  |        | 824   |         |  |  |    |  |  |  | 1     | 
|                        |  |                   |        |        |  |        |       |         |  |  |     |  |  |  |       | 
|                        |  |                   | 11,761 |        |  |        | 1,724 |         |  |  | 371 |  |  |  | 1,817 | 
|                        |  |                   |        |        |  |        |       |         |  |  |     |  |  |  |       | 

Non-resident deposits held in domestic branches
at March 31, 2004 accounted for approximately 3.6% 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, 2004.

|                          |             |                                     |        |      |  |      |        |      |  |  |        |      | 
|------------------------- | ----------- | ----------------------------------- | ------ | ---- |  | ---- | ------ | ---- |  |  | ------ | ---- | 
|                          |             |                                    
|                          |             | At March 31,                       
|                          |             |                                    
|                          |             | 2004                                |        | 2003 |  | 2002
|                          |             |                                     |        |      |  |     
|                          |             |                                    
|                          |             | (in  millions, except percentages)
|Debt securities in issue  |             |                                     |        |      |  |      |        |      |  |  |        |     
|End of year outstandings  |             |                                     | 12,917 |      |  |      | 9,652  |      |  |  | 6,374  |     
|Highest month-end balance |             |                                     | 13,022 |      |  |      | 10,411 |      |  |  | 6,374  |     
|Average balance           |             |                                     | 11,086 |      |  |      | 8,792  |      |  |  | 5,287  |     
|Average rate of interest  |             |                                     |        |      |  |      |        |      |  |  |        |     
|                          | At year-end |                                     |        | 1.9% |  |      |        | 2.7% |  |  |        | 3.8% | 
|                          | During year |                                     |        | 2.1% |  |      |        | 3.1% |  |  |        | 4.6% | 
|Deposits by banks         |             |                                     |        |      |  |      |        |      |  |  |        |     
|End of year outstandings  |             |                                     | 14,068 |      |  |      | 10,149 |      |  |  | 11,900 |     
|Highest month-end balance |             |                                     | 14,521 |      |  |      | 13,771 |      |  |  | 14,764 |     
|Average balance           |             |                                     | 14,974 |      |  |      | 12,056 |      |  |  | 11,419 |     
|Average rate of interest  |             |                                     |        |      |  |      |        |      |  |  |        |     
|                          | At year-end |                                     |        | 2.7% |  |      |        | 2.7% |  |  |        | 4.2% | 
|                          | During year |                                     |        | 2.7% |  |      |        | 3.2% |  |  |        | 3.7% | 

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.

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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 16, 2004 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     |  |     | 67 |               |  | Governor                                                |  |  | 1990 | 
|Richard Burrows        |  |     | 58 |               |  | Deputy Governor                                         |  |  | 2000 | 
|Brian J Goggin [2004]  |  |     | 52 |               |  | Group Chief Executive                                   |  |  | 2000 | 
|John ODonovan [2001]  |  |     | 52 |               |  | Group Chief Financial Officer                           |  |  | 2002 | 
|Roy E Bailie           |  |     | 61 |               |  | Non-Executive Director                                  |  |  | 1999 | 
|David J Dilger         |  |     | 47 |               |  | Non-Executive Director                                  |  |  | 2003 | 
|Donal J Geaney         |  |     | 53 |               |  | Non-Executive Director                                  |  |  | 2000 | 
|Sir Michael Hodgkinson |  |     | 60 |               |  | Non-Executive Director                                  |  |  | 2004 | 
|Maurice A Keane        |  |     | 63 |               |  | Non-Executive Director                                  |  |  | 1983 | 
|Raymond MacSharry      |  |     | 66 |               |  | Non-Executive Director                                  |  |  | 1993 | 
|Declan McCourt         |  |     | 58 |               |  | Non-Executive Director                                  |  |  | 2004 | 
|George M Magan         |  |     | 58 |               |  | Non-Executive Director                                  |  |  | 2003 | 
|Caroline A Marland     |  |     | 58 |               |  | Non-Executive Director                                  |  |  | 2001 | 
|Thomas J Moran         |  |     | 51 |               |  | Non-Executive Director                                  |  |  | 2001 | 
|Terence Neill          |  |     | 58 |               |  | Non-Executive Director                                  |  |  | 2004 | 
|Denis OBrien          |  |     | 46 |               |  | Non-Executive Director                                  |  |  | 2000 | 
|Mary P Redmond         |  |     | 53 |               |  | Non-Executive Director                                  |  |  | 1994 | 
|Executive Officers     |  |     |    |               |  |                                                         |  |  |      | 
|John G Collins         |  |     | 57 |               |  | Group Chief Development Officer                         |  |  |      | 
|Des Crowley            |  |     | 44 |               |  | Chief Executive, Retail Financial Services,
    Ireland |  |  |      | 
|Denis Donovan          |  |     | 50 |               |  | Chief Executive, Wholesale Financial Services           |  |  |      | 
|Roy Keenan             |  |     | 57 |               |  | Chief Executive, UK Financial Services                  |  |  |      | 
|Cyril Dunne            |  |     | 44 |               |  | Group Chief Information Officer                         |  |  |      | 
|John Clifford          |  |     | 54 |               |  | Group Secretary                                         |  |  |      | 
|Michael Grealy         |  |     | 44 |               |  | Head of Group HR                                        |  |  |      | 
|Ronan Murphy           |  |     | 52 |               |  | Head of Group Risk Management                           |  |  |      | 

Non-Executive Officers

Laurence G CrowleyB Comm, FCA

Governor


Appointed to the Court in 1990 and Deputy
Governor from 1995 to 1997. Appointed Governor following the
2000 Annual General Court. He is Chairman of PJ Carroll & Co
Ltd. and a director of Elan Corporation plc, Hardwicke Ltd and
OFlaherty Holdings Ltd. Former Executive Chairman of the
Michael Smurfit Graduate School of Business at University
College, Dublin.

(Age 67)

65



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##### Table of Contents



Richard BurrowsFCA

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 58)

Executive Directors

Brian J GogginM
Sc (Mgt), FCCA

Group Chief Executive


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 in April 2003. Appointed to
the Court in 2000. Appointed Group Chief Executive on
June 3, 2004. A director of Gowan Group Ltd.

(Age 52)

John ODonovanB Comm, FCA

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/ Company Secretary of Aer Lingus.

(Age 52)

Non-Executive Directors

Roy E Bailie, OBE

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

(Age 61)

David J DilgerBA, FCA

Appointed to the Court in July 2003. 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.

(Age 47)

Donal J GeaneyBBS, FCA

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 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 53)

66



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##### Table of Contents



Sir Michael Hodgkinson

Appointed to the Court in May 2004. Joined
British Airports Authority plc in 1992 as Group Airports
Director and was appointed Chief Executive in 1999. Chairman of
Post Office Ltd and First Choice Holidays plc. Former Managing
Director of Land Rover and Range Rover Ltd and former Chief
Executive  European Food Division, Grand Metropolitan
Group plc.

(Age 60)

Maurice A KeaneM
Econ Sc, B Comm

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, BUPA Ireland Ltd and University College Dublin Foundation
Ltd. A director of DCC plc and AXIS Capital Holdings Ltd.

(Age 63)

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. Former Chairman of Eircom plc and Green Property
plc and a former director of Jefferson Smurfit Group plc.

(Age 66)

Declan McCourtBL
MA

Appointed to the Court in April 2004. Chief
Executive and part owner of OHM Group, Dublin, a passenger and
commercial vehicles distribution business. Chairman of the Mater
Hospital Foundation and of the Development Council of the
University College Dublin Law School. A Director of Fyffes plc
and the Dublin Docklands Development Authority.

(Age 58)

George MaganFCA

Appointed to the Court in July 2003. Former
director of Morgan Grenfell before co-founding and becoming
Chairman of J.O. Hambro Magan, a merchant bank. When this 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 58)

Caroline A Marland

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

(Age 58)

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Thomas J MoranB
Sc

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 51)

Terry NeillM
Econ Sc, MA

Appointed to the Court in April 2004. A member of
the Boards of CRH plc, Trinity Foundation and the Ingram
Partnership. Chairman on AMT-Sybex and Meridea Oy. A member of
the Governing Body, and chairman of the Finance Committee, of
the London Business School and Chairman of Camerata Ireland.
Formerly a Senior Partner in Accenture and was chairman of its
global Board.

(Age 58)

Denis OBrienMBA, BA

Appointed to the Court in 2000. Former Chairman
of ESAT Telecom Group plc. Chairman of Communicorp Group Ltd,
the 2003 Special Olympics World Summer Games and the Governing
Body National College of Ireland. A director of Digicel Ltd,
Oakhill plc, Aergo Capital Ltd, Frontline 
International Foundation for the Protection of Human Rights and
a number of other companies.

(Age 46)

Mary P RedmondBCL, LLM, PhD

Appointed to the Court in 1994 and appointed
Deputy Governor from 2000 to September 2002. A consultant
Solicitor in Employment Law at Arthur Cox and a former director
of Jefferson Smurfit Group plc. Founder of the Irish Hospice
Foundation and of The Wheel, the Community and Voluntary Sector
network.

(Age 53)

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, (21 persons), then in
office, for the financial year ended March 31, 2004 was
8.7 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, 2004, to
provide pension benefits for these Directors and Executive
Officers amounted to
0.2 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 42 to our 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.

68



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##### Table of Contents



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 UK 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 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 3.5% of basic
remuneration for the financial year ended March 31, 2004.
As at March 31, 2004, 0.35% 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
assess whether 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, 2004 was
60 million
of which
36 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
(9 persons), on normal commercial terms to the Bank of
Ireland Group amounted to
24 million
at March 31, 2004. 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
341,404 at
March 31, 2004. 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.

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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 2003/2004. There were many developments in
corporate governance in 2003 including the publication in July
2003 of The Combined Code on Corporate Governance
which applies for reporting years beginning on or after
November 1, 2003, the rules issued by the US Securities and
Exchange Commission to implement the Sarbanes-Oxley Act of 2002
and the Companies (Auditing and Accounting) Act 2003 in Ireland.
The new Code came into effect for Bank of Ireland at the
beginning of the current year on April 1, 2004 and the
Directors will be reporting on compliance with it during
2004/2005 in the 2004/2005 Annual Report.




COURT OF DIRECTORS

The following statements indicate how the Court
of Directors has applied the principles contained in the 1998
Code during the year under review:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | It is the practice that the Court of Directors
    comprises a significant majority of non-executive Directors and
    as at July 1, 2004, the Court comprised 17 Directors, 15 of
    whom were non-executive Directors.                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | 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 66 to 69).                    
|
| |  | Richard Burrows, as Deputy Governor, is the
    Senior Independent Director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | All non-executive Directors are appointed for an
    initial three-year term but may be asked to stay for a further
    term of three years assuming satisfactory performance. Where a
    Director is invited to remain beyond six years, his/her
    performance will be subject to particularly rigorous review.                                                                                                                                                                                                                                                                                           
|
| |  | All Directors retire by rotation at least every
    three years and if eligible may offer themselves for re-election
    subject to satisfactory performance evaluation.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | 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
    undertake an induction programme, including visits to Group
    businesses and briefings 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 a
    comprehensive letter of appointment detailing their
    responsibilities as Directors, the term of their appointment and
    the expected time commitment for the role.                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | 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.                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Nine scheduled meetings of the Court were held
    during the year ended March 31, 2004. 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 review corporate strategy on a
    regular basis as well as the operations and performance of
    business units. Additionally, the Court has a schedule of
    matters specifically reserved for its decision.                                                                                                                                                                                                                                                                                                             

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| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Agenda and papers which provide the Directors
    with relevant information to enable them to fully consider
    agenda items in advance are circulated prior to each meeting.
|
| |  | The Court periodically reviews and appraises its
    own performance and effectiveness.                                                                                       



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Governor conducts one to one discussions each
    year with each Director to assess his/her performance and that
    of the Court and Committees in general; following collective
    discussions with the non-executive Directors on issues which
    arise in these one to one discussions, the Governor presents his
    overall findings to the Court for its consideration and action
    as required.
|
| |  | The non-executive Directors, led by the Senior
    Independent Director, meet without the Governor present at least
    annually to appraise the Governors performance, having
    taken the views of the Executive Directors into account. They
    may also meet on such other occasions as are deemed appropriate.                                                                                         



| |   |                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 on corporate
    governance, compliance and internal controls directly and
    through the Group Audit Committee and the Group Nomination and
    Governance Committee.                                                                                                                                                           
|
| |  | The Directors have access to the advice and
    services of the Group Secretary, who is responsible for advising
    the Court on all governance issues and for ensuring that the
    Court complies with agreed procedures and regulations. The
    Directors also have access to independent professional advice,
    at the Groups expense, if and when required.
|
| |  | A written code of ethics has been adopted
    applicable to all staff including the Chief Executive, Chief
    Financial Officer, Principal Accounting Officer or Controller or
    persons performing such functions. The code is available to any
    person without charge upon request to the Group Secretary.                                                   
|
| |  | On July 15, 2004, Bank of Ireland Group
    launched its Good Faith Reporting Policy which
    provides a structured approach to employees for reporting
    instances of suspected wrongdoing in the Group, and provides
    certain assurances to an employee who makes a report in good
    faith.                                                              




COURT COMMITTEES

The Court delegates responsibility for a range of
specific issues, as set out below, to different committees,
whose terms of reference are reviewed periodically. In all cases
the Court is kept fully informed of the activities of each
committee through formal reports and minutes thereby providing
it with an opportunity to have its views taken into account.

The terms of reference of the Committees of the
Court are available on the Banks website
www.bankofireland.ie.

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 and the Group Chief Internal
Auditor to review the Groups internal controls including
financial controls. In particular, the Committee reviews 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. The Group Audit Committee is also charged
with the responsibility of reviewing the independence and
objectivity of the external auditors and the effectiveness of
the services provided by them. The Committee conducts an annual
review of the procedures and processes by which non-audit
services are provided by the external auditors in order to
ensure, among other things, that auditor objectivity and
independence are not compromised.

The external auditors and the Group Chief
Internal Auditor have full and unrestricted access to the Group
Audit Committee as well as to the Group Chief Executive and the
Governor. The external auditors and the Group Chief Internal
Auditor attend meetings of the Group Audit Committee and the
Committee meets separately at least annually with the Group
Chief Internal Auditor and the external auditors, in both cases
without management

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present. The Court has determined that David
Dilger is the audit committee financial expert as required by
S.407 of the Sarbanes Oxley Act of 2002.


During the year, the Committee adopted a
comprehensive policy on the provision of non-audit services to
the Group. This policy provides for the pre-approval of all
non-audit services as well as the prohibition on the provision
of certain other named services by the Groups auditor,
PricewaterhouseCoopers. Management seeks annual pre-approval for
certain categories of services which may be rendered by
PricewaterhouseCoopers, along with budgets attaching to each
category, which cannot be exceeded without the prior approval of
the Committee. Any assignment outside of the approved categories
or which would cause fees to exceed the agreed budget must be
pre-approved by any one non-executive member of the Audit
Committee and notified to the Audit Committee for ratification
at its next meeting. Management reports quarterly to the Audit
Committee the amount of fees actually incurred in respect of
each category of service. It is Group policy to subject all
major consultancy assignments to a competitive tender process.

The Committee met on seven occasions during the
year ended March 31, 2004.

Group Remuneration
Committee The Group
Remuneration Committee comprises non-executive Directors only.
The Committee met on six occasions during the year ended
March 31, 2004.

Group Nomination and Governance
Committee The Group
Nomination and Governance Committee comprises non-executive
Directors only. It is responsible for leading the process for
Court and key subsidiary Board appointments and renewals. The
Committee regularly reviews succession plans for the Court and
key subsidiary Boards in the context of the Groups
strategy and the skills, knowledge and experience of current
Directors and makes recommendations to the Court with regard to
any changes it considers desirable.

In addition the Committee monitors developments
in corporate governance, assesses the implications for the Group
and advises the Court accordingly. It is also charged with
overseeing the Groups Corporate Responsibility Programme.
The Committee was previously known as the Group Nominations
Committee.

The Committee met four times during the year
ended March 31, 2004.

COURT SUB-COMMITTEES

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.

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.

Committees of the Court at July 1,
2004

|                        |  |                               |  |                              
|----------------------- |  | ----------------------------- |  | -----------------------------
|                        |  |                               |  | Group Nomination & Governance
|Group Audit Committee   |  | Group Remuneration Committee  |  | Committee                    
|                        |  |                               |  |                              
|Roy E Bailie (Chairman) |  | Laurence G Crowley (Chairman) |  | Laurence G Crowley (Chairman)
|David Dilger            |  | Richard Burrows               |  | Richard Burrows              
|George Magan            |  | Donal J Geaney                |  | David Dilger                 
|Declan McCourt          |  | Declan McCourt                |  | Sir Michael Hodgkinson       
|Thomas J Moran          |  | Thomas J Moran                |  | Caroline Marland             
|Terry Neill             |  | Terry Neill                   |  | Denis OBrien                
|                        |  | Denis OBrien                 |  | Mary P Redmond               

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##### Table of Contents



Sub-Committees of the Court

|                              |  |                                        |  | 
|----------------------------- |  | -------------------------------------- |  | 
|Group Risk Policy Committee   |  | Group Investment Committee             |  | 
|                              |  |                                        |  | 
|Ronan Murphy (Chairman)       |  | Brian Goggin (Chairman) (Court member)
|John Clifford                 |  | John Clifford                          |  | 
|John G Collins                |  | John G Collins                         |  | 
|Des Crowley                   |  | Des Crowley                            |  | 
|Denis Donovan                 |  | Denis Donovan                          |  | 
|Brian Goggin (Court member)   |  | Cyril Dunne                            |  | 
|Roy Keenan                    |  | Roy Keenan                             |  | 
|Vincent Mulvey                |  | John ODonovan (Court member)          |  | 
|Malachy Murphy                |  |                                        |  | 
|John ODonovan (Court member) |  |                                        |  | 




EMPLOYEES

For the year ended March 31, 2004 the Group
employed 17,584 staff on an average full-time equivalent basis
(see Note 9 to our Consolidated Financial Statements on page
F-24). The decrease in staff over the previous years
figure (18,214) is mainly due to a consolidation of UK functions
and the sale of Active Business Services. The Group employed
18,438 staff on average in 2002.

The Bank continues to operate an Employee Stock
Issue scheme under which Group employees may be granted
allocation of shares depending on Group performance.




STOCK OPTIONS

Under the terms of the senior executive Stock
Option Scheme 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.

As at July 1, 2004 options were outstanding
over 6,451,750 units of stock representing 0.67% of the total
Ordinary Stock then in issue.

Such options are exercisable as follows:

|                        |  |                |           |                 |  |  |                       | 
|----------------------- |  | -------------- | --------- | --------------- |  |  | --------------------- | 
|                        |  | Number         |           |                
|                        |  | Outstanding at |           |                
|Exercise price ( cent) |  | July 1, 2004   |           | Exercise Period
|                        |  |                |           |                
|2.111                   |  |                | 80,000    |                 |  |  | May 1998  May 2005   | 
|2.819                   |  |                | 506,000   |                 |  |  | June 1999  June 2006 | 
|3.241                   |  |                | 80,000    |                 |  |  | Nov 1999  Nov 2006   | 
|4.529                   |  |                | 360,000   |                 |  |  | June 2000  June 2007 | 
|5.753                   |  |                | 243,850   |                 |  |  | Nov 2000  Nov 2007   | 
|8.264                   |  |                | 204,000   |                 |  |  | May 2001  May 2008   | 
|8.933                   |  |                | 534,000   |                 |  |  | July 2002  July 2009 | 
|8.430                   |  |                | 80,250    |                 |  |  | Nov 2002  Nov 2009   | 
|6.960                   |  |                | 632,000   |                 |  |  | May 2003  May 2010   | 
|9.150                   |  |                | 123,650   |                 |  |  | Nov 2003  Nov 2010   | 
|11.050                  |  |                | 687,000   |                 |  |  | May 2004  May 2011   | 
|10.540                  |  |                | 234,000   |                 |  |  | Nov 2004  Nov 2011   | 
|12.500                  |  |                | 926,000   |                 |  |  | June 2005  June 2012 | 
|10.65                   |  |                | 20,000    |                 |  |  | Dec 2005  Dec 2012   | 
|10.77                   |  |                | 1,620,000 |                 |  |  | June 2006  June 2013 | 
|10.54                   |  |                | 121,000   |                 |  |  | Dec 2006  Dec 2013   | 

73



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As at July 1, 2004, executive Directors and
Executive Officers as a group held options under the above
scheme over a total of 1,064,650 units, representing 0.11% 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 34 to our Consolidated Financial Statements, the
interests of the Directors and Group Secretary in office at
July 1, 2004, 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 July 1, 2004
|             |  | Beneficial        
|             |  |                   
|DIRECTORS    |  |                    |           | 
|R E Bailie   |  |                    | 3,561     | 
|R Burrows    |  |                    | 46,226    | 
|L G Crowley  |  |                    | 37,698    | 
|D J Dilger   |  |                    | 2,345     | 
|D J Geaney   |  |                    | 17,889    | 
|B J Goggin   |  |                    | 332,970   | 
|M Hodgkinson |  |                    | 2,000     | 
|M A Keane    |  |                    | 1,191,487 | 
|R MacSharry  |  |                    | 1,775     | 
|G M Magan    |  |                    | 1,245     | 
|C A Marland  |  |                    | 1,526     | 
|D McCourt    |  |                    | 5,022     | 
|T J Moran    |  |                    | 1,541     | 
|T V Neill    |  |                    | 83,648    | 
|D OBrien    |  |                    | 301,526   | 
|J ODonovan  |  |                    | 29,207    | 
|M P Redmond  |  |                    | 2,698     | 
|SECRETARY    |  |                    |           | 
|J B Clifford |  |                    | 57,528    | 

As at July 1, 2004, Directors and Executive
Officers of the Bank as a group beneficially held 0.26%
(2.5 million units) of the Banks Issued Ordinary
Stock.

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, excluding options
granted under the Group Sharesave Scheme, 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. A further
offer under the scheme was made in December 2003 and options to
purchase Ordinary Stock were granted to participating employees
in the Republic of Ireland at an option price of
7.84 which
represented a 25% discount on the then market price and to
participating employees in the UK at an option price of
8.37 which
represented a 20% discount to the then market price. As at
March 31, 2004 there were outstanding

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options under the Scheme over 16,770,743 units of
Ordinary Stock (1.74% of the Issued Ordinary Stock). These
options are ordinarily exercisable, provided the
participants savings contracts are complete, between May
2005 and February 2009. See Note 34 to our Consolidated
Financial Statements.





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 April 21, 2004 the Bank had received
notification of the following substantial interests in its
issued Ordinary Stock:

|                                          |  |            |            |   |  |  |     | 
|----------------------------------------- |  | ---------- | ---------- | - |  |  | --- | 
|NAME                                      |  | Units Held |            | %
|                                          |  |            |            |  
|Bank of Ireland Asset Management Limited* |  |            | 64,754,390 |   |  |  | 6.7 | 






|  |                                                                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | 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.

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




RELATED PARTY TRANSACTIONS

Refer to Note 42 and Note 44 of our
Consolidated Financial Statements. Also see Interest of
Management in Certain Transactions and Indebtedness
of Directors and Executive Officers on page 69.




DESCRIPTION OF US STOCKHOLDERS

At March 31, 2004, 757,272 units of Ordinary
Stock were held by 412 stockholders with registered addresses in
the U.S. and 5,614,409 ADSs were held by 225 registered holders
with addresses in the U.S. The combined shareholdings of these
holders comprise approximately 0.68% of the total number of
units of Ordinary Stock in issue at March 31, 2004 (being
943,334,507 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.




RELATIONS WITH STOCKHOLDERS

Communications with stockholders are given high
priority. The Directors are kept informed on investor issues
through regular reports from Group Investor Relations and
feedback from our brokers and investment bankers. The Group
seeks to provide through its Annual Report a balanced, clear
assessment of the Groups performance and prospects. It
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 as they are made, so
that information is available to all stockholders. 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 including full year and
half year results presentations.

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.

The Groups policy is to make constructive
use of the Annual General Court and all stockholders are
encouraged to participate. The notice of this meeting issues 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

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has been determined at the meeting on a show of
hands, the Chairman indicates to the meeting the proportion of
proxy votes for, against and abstaining from 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.





Item 8     FINANCIAL
INFORMATION

See pages F-1 through F-107.




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,
    2004 |  |                |       |                   |  |  |       | 
|July 16, 2004                           |  |                | 26.60 |                   |  |  | 33.08 | 
|January 6, 2004                         |  |                | 14.80 |                   |  |  | 18.90 | 
|Financial Year ended March 31,
    2003 |  |                |       |                   |  |  |       | 
|July 18, 2003                           |  |                | 23.80 |                   |  |  | 26.75 | 
|January 7, 2003                         |  |                | 13.20 |                   |  |  | 13.75 | 
|Financial Year ended March 31,
    2002 |  |                |       |                   |  |  |       | 
|July 19, 2002                           |  |                | 21.40 |                   |  |  | 21.73 | 
|January 8, 2002                         |  |                | 11.60 |                   |  |  | 10.35 | 
|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  | 






|    |                                                                
|--- | ---------------------------------------------------------------
|(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 2003/2004 is covered
2.6 times compared to 2.7 times in the previous year.




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 Financial Reporting
Standards

By regulation, the European Union
(EU) has agreed that listed companies must use
International Financial Reporting Standards (IFRS)
adopted for use in the EU in the preparation of consolidated
accounts. The objective is to improve financial reporting and
enhance its transparency within the EU. Bank of Ireland will be
required to prepare financial statements in accordance with IFRS
from 1 April 2005.

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In the light of the EU decision, the
International Accounting Standards Board (IASB) has
put in place a platform of standards that must be applied by all
first time adopters of IFRS as of 1 January 2005, and in
addition have announced its intention to avoid mandatory
accounting changes between 2004 and 2006. A number of new or
revised standards have recently been finalised in March 2004.
These include, IAS 32 Financial Instruments:

Disclosure and Presentation and IAS 39
Financial Instruments: Recognition and Measurement.
As of June 30, 2004 neither IAS 32 nor  AS 39 has
yet been endorsed by the European Commission and the
International Accounting Standards Board (IASB) is
still considering possible amendments to IAS 39.


During 2003, the Group initiated a programme to
change its accounting policies and practices to be IFRS
compliant by 2005. A dedicated project team has been assembled
and separate work streams have been established for each
difference in accounting that will require significant effort to
implement. The programme is advancing according to plan.

Although existing Irish GAAP is similar in many
ways to IFRS, there are a number of significant differences from
the Groups accounting policies. Currently it is not
possible to quantify the impact of these differences due to both
the nature and complexity of the standards themselves and the
level of uncertainty surrounding their adoption. Additionally,
regulators have not yet issued guidance in respect of regulatory
capital treatment. The summary below outlines the major
differences for the Group in respect of recognition and
measurement of the IFRS standards that were in place as at
March 31, 2004, including IAS 32 and IAS 39.

Loan impairment

The accounting policy for loan losses under Irish
GAAP is set out in Note 1 to our Consolidated Financial
Statements. IFRS requires impairment losses on financial assets
carried at amortised cost to be measured as the difference
between the assets carrying amount and the present value
of the estimated future cash flows discounted at the assets
original effective interest rate. Impairment must be assessed
individually for individually significant assets, but can be
assessed collectively for other assets.

Effective interest rate and lending
fees

Under Irish GAAP, 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. IFRS
requires origination fees to be deferred and recognised as an
adjustment to the effective interest rate on the related
financial asset. The effective interest rate is the rate that
discounts estimated future cash flows over an instruments
expected life to its net carrying value. Under IFRS, the
carrying value of the financial instrument held at amortised
cost is calculated using the effective interest rate method.

Financial Instruments: financial
assets

Under Irish GAAP, loans are measured at cost less
provision for bad and doubtful debt, derivatives held for
trading are carried at fair value, hedging derivatives are
accounted for in accordance with the item being hedged and
securities are classified as being held as investment
securities, or held for trading purposes. Investment debt
securities are stated at cost less provision for any permanent
diminution in value. Premiums and discounts on dated securities
are amortised to interest income over the period to maturity.
Trading securities are carried at fair value. Under IFRS,
financial assets are classified as either held-to-maturity,
available for sale, held for trading, designated at fair value
through profit and loss, or loans and receivables. Financial
assets classified as held-to-maturity or as loans and
receivables are carried at amortised cost. Other financial
assets are measured at fair value.

Life Assurance Operations

Under Irish GAAP, the Group accounts for the
value of the shareholders interest in long term assurance
business using the embedded value method of accounting, thus
recognising the discounted value of future profits on the
writing of new business. Under IFRS 4, Insurance
contracts (which was published as at March 31, 2004),
all contracts that do not meet the definition of an insurance
contract are no longer permitted to recognise the discounted
value of future profits on the writing of new business, thus on
applying IFRS 4 this amount will be

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reversed out and recognised in future periods.
Thus contracts, which are largely investment in nature, should
be accounted for in accordance with IAS 39 as a financial
instrument. In light of this standard the Group are currently
reviewing their product portfolio.


Pensions

Under Irish GAAP, the cost of defined benefit
pension schemes is determined by independent professionally
qualified actuaries using the projected unit credit method of
funding and recognised on a systematic basis over the
employees service lives. Scheme liabilities are discounted
at a long-term stable discount rate. Under IFRS, scheme
liabilities are discounted at a market rate on high quality
corporate bonds. Actuarial gains and losses must be amortised,
on a straight line basis over the expected average remaining
working lives of employees, to income or expense if they amount
cumulatively to more than 10% of the present value of scheme
liabilities or 10% of the fair value of scheme assets.

Derivatives and hedging

Under Irish GAAP, Derivatives held for hedging
purposes are accounted for on the same basis as underlying
assets and liabilities. IFRS requires derivatives to be
recognised at fair value, with changes in the valuation
impacting the profit and loss account, (except for cash flow
hedges where valuation changes are recorded in equity),
potentially resulting in significant earnings volatility. Hedge
accounting is much more restrictive under IAS 39 than at
present under Irish GAAP. Certain conditions must be met for a
relationship to qualify for hedge accounting. These include
designation, documentation and prospective and actual hedge
effectiveness. The IAS implementation team is currently
considering a number of alternative IAS 39 compliant
strategies with a view to limiting the impact to earnings and
equity and the volatility arising from application of
IAS 39.

Share based payments

Under Irish GAAP the grant of options under the
Groups Stock Option Schemes and Sharesave Scheme does not
give rise to an expense in the profit and loss account. Under
IFRS the granting of any stock or options to employees will give
rise to a charge in the profit and loss account over the vesting
period of the stock options. This standard applies to all equity
settled stock based payments granted after November 7, 2002
that have not yet vested at the effective date of IFRS.

Goodwill

Under Irish GAAP goodwill arising on acquisitions
of subsidiary undertakings occurring after March 31, 1998
are capitalised as assets on the balance sheet and amortised on
a straight-line basis over their 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. Under IFRS goodwill
should not be amortised but should be tested annually for
impairment.

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.

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Financial Reporting Standard 20,
Share-based Payment (FRS
20)

In April 2004, the ASB issued Financial Reporting
Standard 20  Share-Based Payment which would apply to
all entities and all types of share based payment transactions
including all employee share option plans. This standard
requires 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. As the Group
operates a number of share based schemes, implementation of this
standard would result in a charge to the profit and loss
account. For further details see Note 34 to our
Consolidated Financial Statements.

Financial Reporting Standard 21
Events after the Balance Sheet Date (FRS
21)

In May 2004 the ASB issued Financial Reporting
Standard 21  Events after the Balance Sheet Date
which is applicable for the year ended March 31, 2006. This
standard prescribes when an entity should adjust its financial
statement for events after the balance sheet date and details
the disclosures required in connection with events occurring
after the balance sheet date.

Consolidation of Variable Interest
Entities

FIN 46 was issued in January 2003 and revised in
December 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.

SFAS 132: Employers disclosures about
pensions and other post-retirement benefits

In December 2003, the FASB issued No. 132
(revised 2003) Employers Disclosures about Pensions and
Other Post-Retirement Benefits. SFAS No. 132 revises
employers disclosures about pension plans and other
post-retirement benefits by requiring additional disclosures
such as descriptions of the types of plan assets, investment
strategies, measurement dates, plan obligations, cash flows and
components of net periodic benefit costs recognised during
interim periods. The statement does not change the measurement
or recognition of the plans.

SFAS 150: Accounting for certain financial
instruments with characteristics of both liability and
equity

In May 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity. This
Statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of
both liabilities and equity. It requires that certain
obligations that could be settled by issuance of an
entitys equity but lack other characteristics of equity be
reported as liabilities. Some provisions of this Statement are
consistent with the FASBs proposal to revise the
definition of liabilities in DASB Concepts Statement No. 6,
Elements of Financial Statements. This Statement was
effective beginning July 1, 2003. On November 7, 2003,
FASB Staff Position (FSP) FAS 150-3 was issued deferring
the effective date for the measurement provisions of
paragraphs 9 and 10 of FAS 150, as they apply to
mandatorily redeemable non-controlling interests (e.g., minority
interests in finite-lived entities). The FSP indicated, however,
that the disclosure requirements of FAS 150 continue to
apply. The Group does not anticipate that the adoption of
FAS 150 will have a material impact on the consolidated
financial statements.

SOP 03-3: Accounting for Certain Loans or
Debt Securities Acquired in a Transfer

The SOP addresses accounting for differences
between the contractual cash flows and cash flows expected to be
collected from an investors initial investment in loans or
debt securities acquired in a transfer if those differences are
attributable to credit quality. This SOP is effective for loans
acquired in accounting periods

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beginning after December 15, 2004. The Group
is currently assessing the impact of this SOP on its U.S. GAAP
reconciliations.





Item 9     THE
OFFER AND LISTING



NATURE OF TRADING MARKET

As at July 1, 2004 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 July 1, 2004, there were 965,936,121
units of Ordinary Stock of
0.64 each issued
and outstanding. As at July 1, 2004, 1,876,090 units of
Sterling Preference Stock and 3,026,598 units of Euro Preference
Stock were in issue.

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

At July 1, 2004, 67 companies were quoted on
the Irish Stock Exchange. These companies had a combined market
capitalization of more than
168,919 million
at that date. The 11 companies with the largest market
capitalizations accounted for over 87% 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.

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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 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 |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|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 | 
|2004                          |  |                | 11.85 |              |  |      | 9.80  |     |  |  | 60.20 |  |  |  | 42.60 | 
|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 | 
|Financial year 2003/2004      |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|First quarter                 |  |                | 11.60 |              |  |      | 9.80  |     |  |  | 53.55 |  |  |  | 42.60 | 
|Second quarter                |  |                | 11.20 |              |  |      | 10.07 |     |  |  | 51.46 |  |  |  | 45.70 | 
|Third quarter                 |  |                | 10.82 |              |  |      | 10.18 |     |  |  | 54.94 |  |  |  | 48.28 | 
|Fourth quarter                |  |                | 11.85 |              |  |      | 10.15 |     |  |  | 60.20 |  |  |  | 49.89 | 
|Month ended                   |  |                |       |              |  |      |       |     |  |  |       |  |  |  |       | 
|January 2004                  |  |                | 11.85 |              |  |      | 10.90 |     |  |  | 60.20 |  |  |  | 55.38 | 
|February 2004                 |  |                | 11.47 |              |  |      | 10.53 |     |  |  | 58.20 |  |  |  | 53.34 | 
|March 2004                    |  |                | 10.69 |              |  |      | 10.15 |     |  |  | 53.63 |  |  |  | 49.89 | 
|April 2004                    |  |                | 10.78 |              |  |      | 10.11 |     |  |  | 52.44 |  |  |  | 48.96 | 
|May 2004                      |  |                | 10.17 |              |  |      | 9.70  |     |  |  | 49.86 |  |  |  | 47.12 | 
|June 2004                     |  |                | 10.98 |              |  |      | 10.19 |     |  |  | 53.84 |  |  |  | 49.95 | 

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.

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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 respect of
any proposal in which he or any person connected with him has a
material interest of making this determination. 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;
|
| | (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; and                                                                                               
|
| | (f) | regarding any proposal to purchase and maintain
    insurance against any liability incurred by Directors and
    Officers of the Bank.                                                                                                                                 

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 on
Corporate Governance, 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 subject to satisfactory performance evaluation.



|   |                                               
|-- | ----------------------------------------------
|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.

82



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| |              
| | -------------
| | 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 stockholder 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, orby at 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 10 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
determination 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 ratato 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, 2004 there were in issue 1,876,090
units of Non-Cumulative Sterling Preference Stock and 3,026,598
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 seand 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.

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|   |                            
|-- | ---------------------------
|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.



|   |                                               
|-- | ----------------------------------------------
|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 85, 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.



|   |                                                                
|-- | ---------------------------------------------------------------
|9. | Long Term Incentive Plan and Executive Stock
    Option Schemes



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At the Annual General Court held on July 7,
    2004 stockholders approved the establishment of a new Long Term
    Incentive Plan and a new Executive Stock Option Scheme. The
    adoption of these proposals will not affect conditional awards
    and options already granted under the current schemes, but no
    new awards will be made under the current schemes. The Bank of
    Ireland Group Long Term Incentive Plan  2004 will
    focus on the Banks total shareholder return
    (TSR) relative to a group of 17 leading
    European financial services businesses. TSR takes into account
    both the Banks stock price performance and dividend
    payments to stockholders. The Bank of Ireland Group Executive
    Stock Option Scheme  2004 will focus on alternative
    earnings per share (Alternative EPS) growth. Both
    schemes, which are median based and competitive, but not
    excessive relative to other leading financial services
    businesses in Europe, are intended to provide incentives for
    eligible management that are aligned with stockholders
    interests and to ensure that the Group can continue to recruit,
    retain and motivate high quality executives. The schemes are
    also designed to ensure that a substantial proportion of
    executives remuneration is linked to the Banks long
    term performance. In order to achieve these aims the potential
    awards under the new schemes are higher than under the existing
    schemes, but these awards are dependent on the achievement of
    performance targets which are more

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | demanding than under the existing schemes. Under
    the new Executive Stock Option Scheme, executives may be granted
    options to purchase stock up to one times salary each year, but
    these options will only be exercisable if the Banks
    Alternative EPS growth over three years exceeds the increase in
    the Consumer Price Index by at least 5% per annum compound.
    Under the new Long Term Incentive Plan, senior executives may
    receive conditional awards of stock worth up to one times salary
    each year (or up to 1.5 times salary in the case of a Group
    Chief Executive) but these awards will vest in full only if the
    Banks total shareholder return over three years is ranked
    first or second relative to a group of 17 leading European
    financial services businesses. No awards will vest if the
    Banks total shareholder return is below the median
    relative to these companies or if the average return on equity
    (ROE) is less than 20% per annum.



|    |                                                 
|--- | ------------------------------------------------
|10. | Directors and Officers Liability
    Insurance



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At the Annual General Court held on July 7,
    2004 the stockholders approved a new Bye-Law to enable the Bank
    to purchase directors and officers liability
    insurance. Until the enactment of the Companies
    (Auditing & Accounting) Act, 2003 doubts had subsisted
    concerning the purchase by a company of insurance against the
    liabilities of directors and officers. Section 56 of the
    Act has introduced into Irish law a provision permitting
    companies to purchase and maintain insurance against
    directors and officers liability. The new Bye-Law
    enables the Bank to purchase such liability insurance and makes
    it clear that directors shall be entitled to vote and be counted
    in the quorum in respect of any resolution concerning the
    purchase of such insurance.




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;
Burma/ Myanmar; the Democratic Republic of Congo and Sudan, 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
U.S. Holders (as defined below), or as in the case of Irish
taxation, to Eligible U.S. Holders (also 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 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 U.S. holders 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,

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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%. There are a number
of exceptions available from DWT. 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.

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) may apply to a deposit
of Ordinary Stock with the depository in exchange for ADSs
and withdrawals of Ordinary Stock if deposit and withdrawal are
done as a conveyance on sale or in contemplation of sale.
Following a lengthy consultative process the Irish Revenue
Commissioners have indicated that they will shortly publish
guidelines on the application of stamp duty. It is understood
that these will provide for stamp duty to be charged only on a
prospective basis and that no retrospective liability arises for
historic conversions of Ordinary Stock to ADSs.

United States Federal Income
Taxation

Dividends.Under
U.S. Federal income tax law, the gross amount of any
dividend (including any related applicable DWT) paid 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

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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. The Internal Revenue Service recently
announced that it will permit taxpayers to apply a proposed
legislative change to this holding period requirement as if such
change were already effective. This legislative technical
correction would change the minimum required holding
period, retroactive to January 1, 2003, to more than
60 days during the 121-day period beginning 60 days
before the ex-dividend date. 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 ADSs 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.

Back-up Withholding Tax.Dividend payments (or other taxable
distributions) in respect of Ordinary Stock or ADSs made within
the United States to a non-corporate U.S. person, and
back-up withholding will apply to such payments if
the holder or beneficial owner fails to provide an accurate
taxpayer identification number in the manner required by United
States law and applicable regulations, if there has been
notification from the Internal Revenue Service of a failure by
the holder or beneficial owner to report all interest or
dividends required to be shown on its Federal income tax returns
or, in certain circumstances, if the holder or beneficial owner
fails to comply with applicable certification requirements.
Certain corporations and persons that are not United States

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persons may be required to establish their
exemption from information reporting and backup withholding by
certifying their status on Internal Revenue Service
Forms W-8 or W-9.


Amounts withheld under the backup withholding
rules may be credited against a holders tax liability, and
a holder may obtain a refund of any excess amounts withheld
under the backup withholding rules by filing the appropriate
claim for refund with the United States Internal Revenue Service.

United States and Irish Estate and Gift
Taxation

Irish gift and inheritance tax, Capital
Acquisitions Tax (CAT), 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. CAT is charged
on amounts exceeding the relevant thresholds at a rate of 20%.

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. However, 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. 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. The Convention does not apply to Irish gift tax.

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 room and its 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, 2004, 2003 and 2002.

|                        |  |                 |       |            |  |            |       |  |  |  |       | 
|----------------------- |  | --------------- | ----- | ---------- |  | ---------- | ----- |  |  |  | ----- | 
|                        |  |                
|                        |  | At March 31,   
|                        |  |                
|                        |  | 2004            |       | 2003       |  | 2002      
|                        |  |                 |       |            |  |           
|                        |  |                 |       | (restated) |  | (restated)
|                        |  |                
|                        |  | (in  millions)
|Stockholders funds     |  |                 |       |            |  |            |       |  |  |  |       | 
|Equity                  |  |                 | 4,215 |            |  |            | 3,969 |  |  |  | 4,009 | 
|Non-equity              |  |                 | 66    |            |  |            | 65    |  |  |  | 68    | 
|Minority interests      |  |                 |       |            |  |            |       |  |  |  |       | 
| equity                |  |                 | 54    |            |  |            | 54    |  |  |  | 91    | 
| non-equity            |  |                 | 76    |            |  |            | 73    |  |  |  | 82    | 
|Undated capital notes   |  |                 | 1,423 |            |  |            | 1,413 |  |  |  | 965   | 
|Dated capital notes     |  |                 | 2,259 |            |  |            | 1,290 |  |  |  | 1,559 | 
|                        |  |                 |       |            |  |            |       |  |  |  |       | 
|Total capital resources |  |                 | 8,093 |            |  |            | 6,864 |  |  |  | 6,774 | 
|                        |  |                 |       |            |  |            |       |  |  |  |       | 

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In the year ended March 31, 2004 total Group
Capital Resources increased by
1,229 million
to
8,093 million
following retentions of
473 million,
cost of Ordinary Stock Buyback of
377 million,
a reissue of Treasury stock under employee stock schemes of
25 million,
a revaluation of property of
59 million, a
redemption of subordinated floating-rate notes of
290 million,
issues of fixed- and floating-rate subordinated notes of
1,249 million,
favourable translation differences of
85 million
and other miscellaneous movements of
5 million
(positive).

In the year ended March 31, 2003 total Group
Capital Resources increased by
90 million to
6,864 million,
reflecting retentions of
411 million,
cost of Ordinary Stock Buyback of
124 million,
an increase in own shares held of
38 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.

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.

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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, 2004.

|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|---------------------- |  | ----------------------------------- | ------ | ---------- |  | ---------- | ------ | - |  |  | ------ | -
|                       |  |                                    
|                       |  | For the Financial Year Ended       
|                       |  | March 31,                          
|                       |  |                                    
|                       |  | 2004                                |        | 2003       |  | 2002      
|                       |  |                                     |        |            |  |           
|                       |  |                                    
|                       |  | (in  millions, except percentages)
|                       |  |                                     |        | (restated) |  | (restated)
|Adjusted Capital Base  |  |                                     |        |            |  |            |        |   |  |  |        |  
|Tier 1                 |  |                                     | 4,569  |            |  |            | 4,377  |   |  |  | 4,026  |  
|Tier 2                 |  |                                     | 3,552  |            |  |            | 2,442  |   |  |  | 2,724  |  
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|                       |  |                                     | 8,121  |            |  |            | 6,819  |   |  |  | 6,750  |  
|Supervisory Deductions |  |                                     | 934    |            |  |            | 752    |   |  |  | 646    |  
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|Total Capital          |  |                                     | 7,187  |            |  |            | 6,067  |   |  |  | 6,104  |  
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|Risk Weighted Assets   |  |                                     |        |            |  |            |        |   |  |  |        |  
|Banking book           |  |                                     | 60,634 |            |  |            | 52,546 |   |  |  | 51,510 |  
|Trading book           |  |                                     | 2,727  |            |  |            | 2,046  |   |  |  | 1,440  |  
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|Total                  |  |                                     | 63,361 |            |  |            | 54,592 |   |  |  | 52,950 |  
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|Capital Ratios         |  |                                     |        |            |  |            |        |   |  |  |        |  
|Tier 1 capital         |  |                                     | 7.2    | %          |  |            | 8.0    | % |  |  | 7.6    | %
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  
|Total capital          |  |                                     | 11.3   | %          |  |            | 11.1   | % |  |  | 11.5   | %
|                       |  |                                     |        |            |  |            |        |   |  |  |        |  

In the year to March 31, 2004 the
Tier 1 Capital Ratio decreased from 8.0% to 7.2% and the
Total Capital Ratio increased from 11.1% to 11.3%. These changes
in the Tier 1 ratio arose from the buyback of ordinary
stock, risk weighted asset growth, partly offset by retained
earnings. The increase in the Total Capital ratio reflects the
factors impacting on the Tier 1 ratio, the redemption of
£200 million subordinated floating rate notes and the
issue of
600 million
subordinated floating rate and
650 million
subordinated fixed/floating rate notes.

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£350 million 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$175 million Subordinated Floating Rate Notes and the
impact of the rise in risk-weighted assets.

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 buyback
programme and 4.8% of Group stock has been purchased to
March 31, 2004, improving the Return on Equity by 1.5% in
2003/04.

Capital ratios remain strong with Tier 1 and
Total Capital at 7.2% and 11.3% respectively. The Tier 1 ratio
has reduced towards our target range of 6.5% to 7%, while the
Total Capital ratio is slightly above our 10.5% target due to
the raising of
1,250 million
of subordinated capital which included an element of pre-funding
to take advantage of favourable market pricing.

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.

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RISK MANAGEMENT AND CONTROL

The Group, in the normal course of business, is
exposed to a number of classes of risk, the most significant of
which are credit risk, market risk, liquidity risk, operational
risk and regulatory/compliance risk.

The Court of Directors is responsible for
approving high level policy and providing strategic direction in
relation to the nature and scale of risk that the Group is
permitted to assume to achieve its corporate objectives.

The Group Risk Policy Committee
(GRPC) is the most senior executive committee with
responsibility for risk management. Its membership includes
executive Directors and it is formally constituted as a
sub-committee of the Court. The GRPC exercises authority
delegated by the Court to approve business initiatives which
have material implications for the level or composition of risk,
consistent with overall policy and direction provided by the
Court. In addition to considering specific risk issues, the GRPC
is responsible for reviewing overall Group risk on a portfolio
basis.

The GRPC, in turn, delegates specific
responsibility for oversight of the major classes of risk to the
following committees, which are accountable to the GRPC:



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

Risk within the Group is subject to independent
oversight and analysis by four centrally-based risk management
functions reporting to the Head of Group Risk Management: Group
Credit, Group Market Risk, Group Operational Risk and Group
Regulatory Risk & Compliance. In addition, Group Finance,
Group Credit Review and Group Internal Audit are critical
control functions.

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 measurement. Such systems have been in place
for corporate and larger commercial lending since 1997. During
the current year the Group has developed similar systems for its
residential mortgage and consumer lending portfolios and for
Retail Business lending in Ireland.

In addition to providing a solid basis for Basel
2 compliance, a key objective of these initiatives is to allow
the Group to maximise business benefits through the integration
of credit risk measurement systems into effective loan pricing
for risk, economic capital allocation and strategic loan
portfolio management. These systems also guide loan underwriting
and risk selection decisions and 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.

Discretionary Authorities

The Group has a credit risk management system
which operates through a hierarchy of exposure discretions which
are related to internal loan ratings. All exposures above
certain levels require the approval of the Group Credit
Committee, which is a sub-committee of the Group Risk Policy
Committee. Exposures below Group Credit Committees
discretion are approved according to a system of tiered
discretions.

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.

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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.

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 Court on the
recommendation of the Group Risk Policy Committee. 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 Court on the recommendation of the Group Risk Policy
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.

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

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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 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 Court of Directors and the
Group Risk Policy Committee. This policy sets out the nature of
risk which can be taken, the types of financial instruments
which can be used to increase or reduce risk and the way in
which risk is measured and controlled.

The Court approves an overall Value at Risk
(VaR) limit, which is a quantification of the
Groups appetite for market risk. The Group Asset and
Liability Committee (ALCO) approves VaR limits for
Bank of Ireland Global Markets (BoIGM) and Davy
Stockbrokers. In addition, ALCO approves risk limits for the
retail business units which are intended to facilitate efficient
hedging within these units. Market risk limits are rigorously
enforced and compliance is monitored by ALCO.

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TRADING BOOK

In line with regulatory and accounting
conventions, the Groups Trading Book consists of
BoIGMs mark-to-market interest rate and foreign exchange
books, as well as risk positions arising from Davy
Stockbrokerss market making and broking activities in
securities and equities. In the year ended March 31, 2004,
Trading Book risk arose predominately from positions in
securities, interest rate swaps, interest rate futures, foreign
exchange and, in Davys case, equities.

A Value at Risk (VaR) approach is used to measure
and limit market risk in BoIGM and Davy. (In BoIGM this covers
both Trading and Banking Book risk. In Davy Stockbrokers all
market risk comes within the Trading Book.) 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% (one-tailed). 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.

VaR is measured using 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 major 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,
2004, the Groups average Trading Book VaR amounted to
1.9m. Its lowest
Trading Book VaR was
1.0m and its
peak was
3.3 million.
At March 31, 2004, Trading Book VaR was
2.3m. The
corresponding figures for the year ended March 31, 2003
were an average Trading Book VaR of
1.7 million,
a minimum VaR of
0.8 million,
a peak of
3.0 million
and a year-end level of
1.4 million.

Interest rate risk in BoIGM was the predominant
source of Trading Book VaR in 2003 / 2004. The average VaR for
this component of risk in the year ended March 31, 2004 was
1.1 million
and the corresponding figure for the previous year was
0.9 million.

BANKING BOOK

The Groups Banking book consists of its
retail and corporate deposit and loan books, as well as
BoIGMs interbank money market books and its holdings of
accrual-accounted securities.

For risk measurement and control purposes, VaR is
applied to BoIGMs Banking Book risk. In the other Group
businesses, sensitivity analysis is used to measure and control
interest rate risk. This involves calculating exposure in net
present value (NPV) terms to a 1% parallel shift of
the yield curve. This is supplemented by estimates of maturity
mismatch exposure using a methodology which provides estimates
of exposure to non-parallel shifts in the yield curve.

In calculating exposures, undated liabilities and
assets (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 four 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 gains in NPV terms of
12.8 million
and
5.6 million,
respectively.

The table in Note 38 to our Consolidated
Financial Statements provides an indication of the repricing
mismatch in the Non-Trading Books at March 31, 2004.

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DERIVATIVES

A derivative is a financial contract whose value
is linked to movements in interest rates, exchange rates, equity
prices or the prices of securities that are subject to default
risk.

Derivative markets are an efficient mechanism for
the transfer of risk. The Group uses derivatives to manage the
market risks that arise naturally in its retail and wholesale
banking activities. In addition, it transacts in derivatives
with its business and corporate clients for the purpose of
assisting these clients in managing their exposure to changes in
interest and foreign exchange rates. Finally, the Group takes
proprietary trading risk in derivative markets (in addition to
taking exposure in money and securities markets).

The Group, from time to time, uses credit
derivatives to provide default protection on specific credit
exposures. Since the commencement of the current financial year
(2004/05) the Group has also taken positions in credit
derivatives in its Trading Book.

Further details can be found in Note 37 and
the accounting policy is set out in Note 1.9 to our
Consolidated Financial Statements.

Policy

The Groups participation in derivatives
markets is subject to policy approved by the Court of Directors
and, at a more detailed level, by the Group Risk Policy
Committee. The Group makes a clear distinction between
derivatives which must be transacted on a perfectly hedged
basis, deal by deal, and those whose risks can be managed within
broader interest-rate or foreign exchange books. Since these
broader books can be structured to assume some degree of
proprietary risk, derivative positions held within them will not
necessarily be exactly hedged.

Market risk can only be assumed in clearly
defined categories of derivative which are traded in
well-established, liquid markets, supported by industry-standard
conventions and documentation and valued in accordance with
generally accepted methods. Positions can only be taken in
instruments which the business can settle, administer and value,
and where the risks can be accurately measured and reflected
within exposure against limits.

Bank of Ireland Global Markets
(BoIGM) and Davy Stockbrokers are the only Group
businesses permitted to transact on the Groups behalf in
derivative markets.

BoIGM is permitted to take risk in non-option
derivatives, such as interest rate futures, bond futures, FRAs,
interest-rate swaps, forward foreign exchange and currency
swaps. In addition, it is permitted to take exposure in the most
widely traded option markets, principally options on futures,
caps, floors, swap options (swaptions) and conventional
currency options

Davy is permitted to use fixed-interest
derivatives to manage the risks arising on its bond positions.

Transactions in other, more complex derivatives
are almost entirely on a perfectly-matched, back-to-back basis.
This category consists predominantly of equity index
derivatives, used for the purposes of constructing retail
savings products whose performance is linked to equity markets.

Collateral Agreements

BoIGM has executed Collateral Support Agreements
(CSAs) with its principal interbank derivatives
counterparties and, as a result, a very high proportion of its
total interbank derivatives book is covered by CSAs. The purpose
of a CSA is to limit the potential cost of replacing derivative
contracts at market prices in the event of default by the
original counterparty. Under the terms of a CSA, if the
aggregate market value of a set of derivative contracts between
the two parties exceeds an agreed threshold figure, the party
which would be exposed to loss in the event of default receives
a deposit of cash or eligible securities equal to the excess
aggregate value over the threshold. In BoIGMs case,
valuations are agreed and collateral is exchanged on a weekly
basis.

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It is a requirement of policy that BoIGM must be
able to value all derivative contracts that are subject to a CSA
or obtain valuations from independent third parties. This is to
ensure that the correct collateral is exchanged and the CSA
provides the appropriate measure of protection against loss.

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.

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.
|Management of the investment of reserves and
    other non-interest bearing liabilities |  | Sensitivity to changes in interest rates.   |  | Interest rate swaps.              

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

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STRUCTURAL FOREIGN EXCHANGE

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. Doing so will ensure
that capital ratios are not excessively exposed to changes in
exchange rates.

At March 31, 2004, the Groups
structural foreign exchange position was as follows:

|                             |  |           |       |           |  |  |       | 
|---------------------------- |  | --------- | ----- | --------- |  |  | ----- | 
|                             |  | March 31, |       | March 31,
|                             |  | 2004      |       | 2003     
|                             |  | m        |       | m       
|                             |  |           |       |          
|GBP                          |  |           | 2,582 |           |  |  | 2,405 | 
|USD                          |  |           | 233   |           |  |  | 248   | 
|                             |  |           |       |           |  |  |       | 
|Total structural FX position |  |           | 2,815 |           |  |  | 2,653 | 
|                             |  |           |       |           |  |  |       | 

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

At year end the currency composition of capital
and risk-weighted assets was broadly in line and, as a result,
exchange rate movements can be expected to have a non-material
impact on capital ratios. Such movements will have an impact on
reserves.

LIQUIDITY RISK

Liquidity risk is the risk that a bank will
experience difficulty in financing its assets and meeting its
contractual payment obligations, or will only be able to do so
at substantially above the prevailing market cost of funds.
Liquidity distress is almost invariably associated with a severe
deterioration in financial performance, but it can also result
from unexpected, major adverse events or systemic difficulties.

The Group complies with a number of liquidity
limits and minimum requirements set by policy and intended to
maintain a prudent liability profile at all times. These include
measures designed to ensure that the Groups wholesale
funding is diversified across instruments and markets and
balanced in its maturity structure.

In addition, the Group measures the projected
short-term cash-flow mismatch arising from the refinancing of
its existing wholesale book and potential net new funding. This
measure of potential recourse to wholesale markets must be
covered in part by holdings of liquid assets.

The Group also complies with prudential liquidity
requirements set by IFSRA and, in respect of its UK operations,
by the FSA.

OPERATIONAL RISK

The Basel Committee on Banking Supervision
defines Operational Risk for regulatory and supervisory purposes
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.

97



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##### Table of Contents



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 Risk Policy Committee, the Group Audit
Committee and the Group Operational Risk Committee, 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.

REGULATORY RISK &
COMPLIANCE

Regulatory compliance risk arises from a failure
to comply with the laws, regulations or codes applicable to the
financial services industry in the jurisdictions within which
the Group operates. Non-compliance has adverse reputational
implications and may lead to fines, public reprimands, enforced
suspension of operations or, in extreme cases, withdrawal of
authorisation to operate. The Group is subject to extensive
supervisory and regulatory regimes principally in the Republic
of Ireland and the UK. Effective management of regulatory
compliance risk is the primary responsibility of business
management to conduct business in accordance with applicable
regulations and with an awareness of compliance risk.

The Group is in the process of upgrading its risk
and compliance framework to oversee and enhance pre-existing
compliance functions. This will be led by a recently appointed
Head of Regulatory Risk and Compliance and reflects the more
challenging operational and regulatory environment in which all
financial service companies now operate. This role will embrace
a number of key areas including legal compliance, tax
compliance, anti money laundering, health & safety and
regulator relations. The Head of Regulatory Risk and Compliance
is responsible for formulating and communicating a risk control
framework for the management of regulatory & compliance risk
and for monitoring a reporting framework to assist business
management in discharging its responsibilities.




Item 12     DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

98



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##### 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 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 as of the end of the period
covered by this report. Disclosure controls and procedures 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



Item 16A     Audit
Committee Financial Expert

The Court has determined that David Dilger is an
audit committee financial expert, as defined for disclosure
purposes in Item 16A of the Form 20-F.




Item 16B     Code
of Ethics

A written code of ethics has been adopted
applicable to all staff including the Group Chief Executive,
Group Chief Financial Officer and persons performing the
functions of the principal accounting officer or controller. The
code is available to any person without charge upon request to
the Group Secretary. Requests should be submitted in writing to
Bank of Ireland, Lower Baggot Street, Dublin 2, Ireland,
Attention: Group Secretary.




Item 16C     Principal
Accountant Fees and Services

During the year, the audit committee adopted a
comprehensive policy on the provision of non-audit services to
the Group. This policy provides for the pre-approval of all
non-audit services as well as the prohibition on the provision
of certain other named services by the Groups auditor,
PricewaterhouseCoopers. Management seeks annual pre-approval for
certain categories of services which may be rendered by
PricewaterhouseCoopers, along with budgets attaching to each
category, which cannot be exceeded without the prior approval of
the Committee. Any assignment outside of the approved categories
or which would cause fees to exceed the agreed budget must be
pre-approved by any one non-executive member of the Audit
Committee and notified to the Audit Committee for ratification
at its next meeting. Management reports quarterly to the Audit
Committee the amount of fees actually incurred in respect of
each category of service. It is Group policy to subject all
major consultancy assignments to a competitive tender process
(see Note 8 to our Consolidated Financial Statements on
page F-23).




Item 16D     Exemptions
from the Listing Standard for Audit Committees

Not applicable.




Item 16E     Purchase
of Equity Securities by the Issuer and Affiliated
Purchasers

Not yet applicable.

99



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PART III



Item 17     FINANCIAL
STATEMENTS

(Not responded to as Item 18 complied with)




Item 18     FINANCIAL
STATEMENTS

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-11 | 
|Notes to the Consolidated Financial Statements                |  |      | F-12 | 

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).
|4.3  |  |  |  | Rules of the Bank of Ireland Group Long Term
    Incentive Plan 2004 and Executive Stock Option Scheme 2004.                                                                                                                                                                    
|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.                                                                                                                                                                      

100



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##### Table of Contents



BANK OF IRELAND GROUP

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

Year Ended March 31, 2004

|                                                              |  |      |      | 
|------------------------------------------------------------- |  | ---- | ---- | 
|                                                              |  | 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-11 | 
|Notes on the Financial
    Statements                         |  |      | F-12 | 

F-1



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##### Table of Contents



BANK OF IRELAND GROUP



STATEMENT OF DIRECTORS
RESPONSIBILITIES


The following statement, which should be read in
conjunction with the Report of the Independent Registered Public
Accounting Firm 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-107, 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 which enable them to ensure that the accounts are
prepared in accordance with accounting standards generally
accepted in Ireland and to comply with Irish law including the
Companies Acts, 1963 to 2003, and the European Communities
(Credit Institutions: Accounts) Regulations, 1992. They also
have general responsibility for taking such steps as are
reasonably available to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.

F-2



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BANK OF IRELAND GROUP



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM


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, 2004 and 2003,
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, 2004. 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 the
standards of the Public Company Accounting Oversight Board
(United States). 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
referred to above 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, 2004 and 2003,
and the results of their operations and their cash flows for
each of the three years in the period ended March 31, 2004,
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 of America.
Information relating to the nature and effect of such
differences is presented in Note 46 to the consolidated accounts.

PRICEWATERHOUSECOOPERS

Chartered Accountants and Registered Auditors


Dublin


Ireland


May 12, 2004


F-3



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##### Table of Contents



BANK OF IRELAND GROUP



CONSOLIDATED STATEMENT OF INCOME


|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|----------------------------------------------------------------------- |  | ----- | -- | -------------------- |  | ----- | ----- | ----- |  |  | ----- | - |  |  | ----- | -
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | Year ended March 31,
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | 2004                 |  | 2003  |       | 2002 
|                                                                        |  |       |    | Group                |  | Group |       | Group
|                                                                        |  | Notes |    | Total                |  | Total |       | Total
|                                                                        |  |       |    |                      |  |       |       |      
|                                                                        |  |       |    |                     
|                                                                        |  |       |    | (in  millions)     
|INTEREST RECEIVABLE                                                     |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|Interest receivable and similar income arising
    from debt securities |  |       |    |                      |  |       | 331   |       |  |  | 344   |   |  |  | 343   |  
|Other interest receivable and similar income                            |  |       | 5  |                      |  |       | 3,300 |       |  |  | 3,347 |   |  |  | 3,637 |  
|INTEREST PAYABLE                                                        |  |       | 6  |                      |  |       | 1,887 |       |  |  | 1,962 |   |  |  | 2,402 |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|NET INTEREST INCOME                                                     |  |       |    |                      |  |       | 1,744 |       |  |  | 1,729 |   |  |  | 1,578 |  
|Fees and commissions receivable                                         |  |       |    |                      |  |       | 1,134 |       |  |  | 1,011 |   |  |  | 1,061 |  
|Fees and commissions payable                                            |  |       |    |                      |  |       | (200  | )     |  |  | (140  | ) |  |  | (141  | )
|Dealing profits                                                         |  |       | 37 |                      |  |       | 73    |       |  |  | 85    |   |  |  | 81    |  
|Contribution from life assurance business                               |  |       |    |                      |  |       | 177   |       |  |  | 116   |   |  |  | 152   |  
|Other operating income                                                  |  |       | 7  |                      |  |       | 50    |       |  |  | 116   |   |  |  | 74    |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|TOTAL OPERATING INCOME                                                  |  |       |    |                      |  |       | 2,978 |       |  |  | 2,917 |   |  |  | 2,805 |  
|Administrative expenses                                                 |  |       | 8  |                      |  |       | 1,471 |       |  |  | 1,480 |   |  |  | 1,427 |  
|Depreciation and amortisation                                           |  |       | 8  |                      |  |       | 183   |       |  |  | 182   |   |  |  | 155   |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|OPERATING PROFIT BEFORE PROVISIONS                                      |  |       |    |                      |  |       | 1,324 |       |  |  | 1,255 |   |  |  | 1,223 |  
|Provision for bad and doubtful debts                                    |  |       | 17 |                      |  |       | 86    |       |  |  | 100   |   |  |  | 102   |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|OPERATING PROFIT                                                        |  |       |    |                      |  |       | 1,238 |       |  |  | 1,155 |   |  |  | 1,121 |  
|Income from associated undertakings and joint
    ventures              |  |       |    |                      |  |       | 29    |       |  |  | 22    |   |  |  | 1     |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|PROFIT ON ORDINARY ACTIVITIES BEFORE
    EXCEPTIONAL ITEMS              |  |       |    |                      |  |       | 1,267 |       |  |  | 1,177 |   |  |  | 1,122 |  
|Exceptional items                                                       |  |       | 10 |                      |  |       | (97   | )     |  |  | (164  | ) |  |  | (37   | )
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|PROFIT BEFORE TAXATION                                                  |  |       |    |                      |  |       | 1,170 |       |  |  | 1,013 |   |  |  | 1,085 |  
|Taxation                                                                |  |       | 11 |                      |  |       | (208  | )     |  |  | (163  | ) |  |  | (165  | )
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  
|PROFIT AFTER TAXATION                                                   |  |       |    |                      |  |       | 962   |       |  |  | 850   |   |  |  | 920   |  
|                                                                        |  |       |    |                      |  |       |       |       |  |  |       |   |  |  |       |  

The notes on pages F-12 to
F-107

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,
|                                                                     |  |       |    |                     
|                                                                     |  |       |    | 2004                 |  | 2003  |       | 2002 
|                                                                     |  |       |    | Group                |  | Group |       | Group
|                                                                     |  | Notes |    | Total                |  | Total |       | Total
|                                                                     |  |       |    |                      |  |       |       |      
|                                                                     |  |       |    |                     
|                                                                     |  |       |    | (in  millions)     
|PROFIT FOR THE FINANCIAL YEAR                                        |  |       |    |                      |  |       | 962   |       |  |  | 850   |  |  |  | 920   | 
|Minority interests: equity                                           |  |       |    |                      |  |       | 13    |       |  |  | 9     |  |  |  | 2     | 
|: non equity                                                         |  |       |    |                      |  |       | 6     |       |  |  | 6     |  |  |  | 6     | 
|Non-cumulative preference stock dividends                            |  |       | 12 |                      |  |       | 8     |       |  |  | 9     |  |  |  | 17    | 
|                                                                     |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 
|PROFIT ATTRIBUTABLE TO THE                                           |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 
|ORDINARY STOCKHOLDERS                                                |  |       |    |                      |  |       | 935   |       |  |  | 826   |  |  |  | 895   | 
|Transfer to capital reserve                                          |  |       | 35 |                      |  |       | 62    |       |  |  | 44    |  |  |  | 73    | 
|Ordinary dividends                                                   |  |       | 12 |                      |  |       | 400   |       |  |  | 371   |  |  |  | 333   | 
|                                                                     |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 
|PROFIT RETAINED FOR THE YEAR                                         |  |       |    |                      |  |       | 473   |       |  |  | 411   |  |  |  | 489   | 
|                                                                     |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 
|Earnings per unit of
    0.64 Ordinary
    Stock (restated)         |  |       | 13 |                      |  |       | 97.2c |       |  |  | 83.4c |  |  |  | 90.4c | 
|                                                                     |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 
|Diluted Earnings per unit of
    0.64 Ordinary
    Stock (restated) |  |       | 13 |                      |  |       | 96.6c |       |  |  | 82.6c |  |  |  | 89.5c | 
|                                                                     |  |       |    |                      |  |       |       |       |  |  |       |  |  |  |       | 

The notes on pages F-12 to F-107

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 |    | 2004            |  | 2003      
|                                                                   |  |       |    |                 |  |           
|                                                                   |  |       |    |                 |  | (restated)
|                                                                   |  |       |    |                
|                                                                   |  |       |    | (in  millions)
|ASSETS                                                             |  |       |    |                 |  |            |         |   |  |  |        |  
|Cash and balances at central banks                                 |  |       |    |                 |  |            | 1,397   |   |  |  | 679    |  
|Items in the course of collection from other banks                 |  |       |    |                 |  |            | 584     |   |  |  | 508    |  
|Central government and other eligible bills                        |  |       | 14 |                 |  |            | 211     |   |  |  | 175    |  
|Loans and advances to banks                                        |  |       | 15 |                 |  |            | 7,753   |   |  |  | 7,480  |  
|Loans and advances to customers                                    |  |       | 16 |                 |  |            | 67,540  |   |  |  | 56,887 |  
|Securitisation and loan transfers                                  |  |       |    |                 |  |            | 593     |   |  |  | 794    |  
|Less: non returnable amounts                                       |  |       |    |                 |  |            | (504    | ) |  |  | (667   | )
|                                                                   |  |       |    |                 |  |            | 89      |   |  |  | 127    |  
|Debt securities                                                    |  |       | 18 |                 |  |            | 15,676  |   |  |  | 12,337 |  
|Securitisation                                                     |  |       |    |                 |  |            | 243     |   |  |  |       |  
|Less: non returnable amounts                                       |  |       |    |                 |  |            | (224    | ) |  |  |       |  
|                                                                   |  |       |    |                 |  |            | 19      |   |  |  |       |  
|Equity shares                                                      |  |       | 19 |                 |  |            | 64      |   |  |  | 38     |  
|Interests in associated undertakings                               |  |       | 20 |                 |  |            | 14      |   |  |  | 13     |  
|Interest in joint ventures                                         |  |       |    |                 |  |            |         |   |  |  |        |  
| share of gross assets                                            |  |       |    |                 |  |            | 190     |   |  |  | 63     |  
| share of gross liabilities                                       |  |       |    |                 |  |            | (73     | ) |  |  | (38    | )
| goodwill                                                         |  |       |    |                 |  |            | 126     |   |  |  |       |  
|                                                                   |  |       | 21 |                 |  |            | 243     |   |  |  | 25     |  
|Intangible fixed assets                                            |  |       | 22 |                 |  |            | 147     |   |  |  | 266    |  
|Tangible fixed assets                                              |  |       | 23 |                 |  |            | 1,268   |   |  |  | 1,209  |  
|Other assets                                                       |  |       | 24 |                 |  |            | 3,767   |   |  |  | 3,841  |  
|Prepayments and accrued income                                     |  |       |    |                 |  |            | 690     |   |  |  | 543    |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|                                                                   |  |       |    |                 |  |            | 99,462  |   |  |  | 84,128 |  
|Life assurance assets attributable to
    policyholders            |  |       | 25 |                 |  |            | 6,969   |   |  |  | 5,175  |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|                                                                   |  |       |    |                 |  |            | 106,431 |   |  |  | 89,303 |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|LIABILITIES                                                        |  |       |    |                 |  |            |         |   |  |  |        |  
|Deposits by banks                                                  |  |       | 26 |                 |  |            | 17,060  |   |  |  | 12,617 |  
|Customer accounts                                                  |  |       | 27 |                 |  |            | 54,395  |   |  |  | 48,496 |  
|Debt securities in issue                                           |  |       | 28 |                 |  |            | 12,917  |   |  |  | 9,652  |  
|Items in the course of transmission to other banks                 |  |       |    |                 |  |            | 230     |   |  |  | 136    |  
|Other liabilities                                                  |  |       | 29 |                 |  |            | 5,676   |   |  |  | 5,453  |  
|Accruals and deferred income                                       |  |       |    |                 |  |            | 621     |   |  |  | 541    |  
|Provisions for liabilities and charges                             |  |       |    |                 |  |            |         |   |  |  |        |  
| deferred taxation                                                |  |       | 30 |                 |  |            | 66      |   |  |  | 54     |  
| other                                                            |  |       | 31 |                 |  |            | 221     |   |  |  | 189    |  
|Subordinated liabilities                                           |  |       | 32 |                 |  |            | 3,682   |   |  |  | 2,703  |  
|Minority interests                                                 |  |       |    |                 |  |            |         |   |  |  |        |  
| equity                                                           |  |       |    |                 |  |            | 54      |   |  |  | 54     |  
| non equity                                                       |  |       | 33 |                 |  |            | 76      |   |  |  | 73     |  
|Called up capital stock                                            |  |       | 34 |                 |  |            | 679     |   |  |  | 679    |  
|Stock premium account                                              |  |       | 35 |                 |  |            | 767     |   |  |  | 765    |  
|Capital reserve                                                    |  |       | 35 |                 |  |            | 498     |   |  |  | 436    |  
|Profit and loss account                                            |  |       | 35 |                 |  |            | 2,281   |   |  |  | 2,099  |  
|Revaluation reserve                                                |  |       | 35 |                 |  |            | 239     |   |  |  | 181    |  
|Stockholders funds including non equity
    interests             |  |       |    |                 |  |            | 4,464   |   |  |  | 4,160  |  
|Own shares held for the benefit of life assurance
    policyholder |  |       |    |                 |  |            | (183    | ) |  |  | (126   | )
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|                                                                   |  |       |    |                 |  |            | 4,281   |   |  |  | 4,034  |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|Life assurance liabilities attributable to
    policyholders       |  |       | 25 |                 |  |            | 7,152   |   |  |  | 5,301  |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  
|                                                                   |  |       |    |                 |  |            | 106,431 |   |  |  | 89,303 |  
|                                                                   |  |       |    |                 |  |            |         |   |  |  |        |  

The notes on pages F-12 to F-107

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 |    | 2004            |  | 2003
|                                                         |  |       |    |                 |  |     
|                                                         |  |       |    |                
|                                                         |  |       |    | (in  millions)
|Contingent liabilities                                   |  |       |    |                 |  |      |        |  |  |  |        | 
|Acceptances and endorsements                             |  |       |    |                 |  |      | 33     |  |  |  | 81     | 
|Guarantees and assets pledged as collateral
    security |  |       |    |                 |  |      | 1,291  |  |  |  | 1,172  | 
|Other contingent liabilities                             |  |       |    |                 |  |      | 494    |  |  |  | 508    | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 
|                                                         |  |       | 40 |                 |  |      | 1,818  |  |  |  | 1,761  | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 
|Commitments                                              |  |       | 40 |                 |  |      | 25,235 |  |  |  | 19,050 | 
|                                                         |  |       |    |                 |  |      |        |  |  |  |        | 

The notes on pages F-12 to F-107

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 |        | 2004            |  | 2003       |       | 2002      
|                                                                                    |  |       |        |                 |  |            |       |           
|                                                                                    |  |       |        |                 |  | (restated) |       | (restated)
|                                                                                    |  |       |        |                
|                                                                                    |  |       |        | (in  millions)
|At April 1                                                                          |  |       |        |                 |  |            | 4,034 |            |  |  | 4,077 |   |  |  | 3,830 |  
|Prior Year Adjustments arising from
    implementation of UITF 37                   |  |       |        |                 |  |            |      |            |  |  |      |   |  |  | (105  | )
|Profit attributable to the ordinary stockholders                                    |  |       |        |                 |  |            | 935   |            |  |  | 826   |   |  |  | 895   |  
|Dividends                                                                           |  |       | 12     |                 |  |            | (400  | )          |  |  | (371  | ) |  |  | (333  | )
|                                                                                    |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  
|                                                                                    |  |       |        |                 |  |            | 4,569 |            |  |  | 4,532 |   |  |  | 4,287 |  
|Revaluation of property                                                             |  |       |        |                 |  |            | 59    |            |  |  |      |   |  |  |      |  
|Other recognised gains/(losses)                                                     |  |       |        |                 |  |            | 62    |            |  |  | (346  | ) |  |  | 21    |  
|Re-issue of treasury stock under employee stock
    schemes                         |  |       | 34, 35 |                 |  |            | 25    |            |  |  | 6     |   |  |  | 48    |  
|Ordinary stock buyback and held as Treasury stock                                   |  |       | 34, 35 |                 |  |            | (377  | )          |  |  | (133  | ) |  |  | (259  | )
|Goodwill written back on disposal of subsidiary                                     |  |       |        |                 |  |            |      |            |  |  | 5     |   |  |  |      |  
|Movement in cost of own shares held for benefit
    of Life Assurance policyholders |  |       |        |                 |  |            | (57   | )          |  |  | (30   | ) |  |  | (20   | )
|                                                                                    |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  
|At March 31                                                                         |  |       |        |                 |  |            | 4,281 |            |  |  | 4,034 |   |  |  | 4,077 |  
|                                                                                    |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  
|Stockholders funds:                                                                |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  
|Equity                                                                              |  |       |        |                 |  |            | 4,215 |            |  |  | 3,969 |   |  |  | 4,009 |  
|Non equity                                                                          |  |       |        |                 |  |            | 66    |            |  |  | 65    |   |  |  | 68    |  
|                                                                                    |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  
|                                                                                    |  |       |        |                 |  |            | 4,281 |            |  |  | 4,034 |   |  |  | 4,077 |  
|                                                                                    |  |       |        |                 |  |            |       |            |  |  |       |   |  |  |       |  

STATEMENT OF TOTAL RECOGNISED GAINS AND
LOSSES

|                                                 |  |       |        |                 |  |      |       |      |  |  |      |   |  |  |     |  
|------------------------------------------------ |  | ----- | ------ | --------------- |  | ---- | ----- | ---- |  |  | ---- | - |  |  | --- | -
|                                                 |  | Notes |        | 2004            |  | 2003 |       | 2002
|                                                 |  |       |        |                 |  |      |       |     
|                                                 |  |       |        |                
|                                                 |  |       |        | (in  millions)
|Profit attributable to the ordinary stockholders |  |       |        |                 |  |      | 935   |      |  |  | 826  |   |  |  | 895 |  
|Exchange adjustments                             |  |       | 34, 35 |                 |  |      | 62    |      |  |  | (346 | ) |  |  | 23  |  
|Revaluation of property                          |  |       |        |                 |  |      | 59    |      |  |  |     |   |  |  |    |  
|Tax effect of disposal of revalued property      |  |       |        |                 |  |      |      |      |  |  |     |   |  |  | (2  | )
|                                                 |  |       |        |                 |  |      |       |      |  |  |      |   |  |  |     |  
|Total recognised gains for the year              |  |       |        |                 |  |      | 1,056 |      |  |  | 480  |   |  |  | 916 |  
|Prior year adjustments                           |  |       |        |                 |  |      |      |      |  |  |     |   |  |  | 32  |  
|                                                 |  |       |        |                 |  |      |       |      |  |  |      |   |  |  |     |  
|Total recognised gains since last annual report  |  |       |        |                 |  |      | 1,056 |      |  |  | 480  |   |  |  | 948 |  
|                                                 |  |       |        |                 |  |      |       |      |  |  |      |   |  |  |     |  

The notes on pages F-12 to
F-107

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 |    | 2004                 |  | 2003       |     | 2002      
|                                          |  |       |    |                      |  |            |     |           
|                                          |  |       |    |                      |  | (restated) |     | (restated)
|                                          |  |       |    |                     
|                                          |  |       |    | (in  millions)     
|Preference stock                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At April 1                                |  |       |    |                      |  |            | 7   |            |  |  | 7   |   |  |  | 21  |  
|Exchange adjustments                      |  |       |    |                      |  |            |    |            |  |  |    |   |  |  |    |  
|Preference stock buyback                  |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | (14 | )
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At March 31                               |  |       | 34 |                      |  |            | 7   |            |  |  | 7   |   |  |  | 7   |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|Ordinary stock                            |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At April 1                                |  |       |    |                      |  |            | 672 |            |  |  | 672 |   |  |  | 670 |  
|Stock alternative scheme issue            |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | 2   |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At March 31                               |  |       | 34 |                      |  |            | 672 |            |  |  | 672 |   |  |  | 672 |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|Stock premium                             |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At April 1                                |  |       |    |                      |  |            | 765 |            |  |  | 773 |   |  |  | 726 |  
|Premium on issue of capital stock         |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | 7   |  
|Premium on stock alternative scheme issue |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | 39  |  
|Exchange adjustments                      |  |       |    |                      |  |            | 2   |            |  |  | (8  | ) |  |  | 1   |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At March 31                               |  |       | 35 |                      |  |            | 767 |            |  |  | 765 |   |  |  | 773 |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|Capital reserve                           |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At April 1                                |  |       |    |                      |  |            | 436 |            |  |  | 397 |   |  |  | 311 |  
|Exchange adjustments                      |  |       |    |                      |  |            |    |            |  |  | (5  | ) |  |  |    |  
|Transfer from revenue reserves            |  |       |    |                      |  |            | 62  |            |  |  | 44  |   |  |  | 73  |  
|Capital Redemption Reserve Fund           |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | 14  |  
|Transfer to revenue reserves              |  |       |    |                      |  |            |    |            |  |  |    |   |  |  | (1  | )
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  
|At March 31                               |  |       | 35 |                      |  |            | 498 |            |  |  | 436 |   |  |  | 397 |  
|                                          |  |       |    |                      |  |            |     |            |  |  |     |   |  |  |     |  

The notes on pages F-12 to
F-107

form an integral part of these consolidated
financial statements


F-9



---



##### Table of Contents



BANK OF IRELAND GROUP


CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS EQUITY  (Continued)

|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|--------------------------------------------------------- |  | ----- | -- | -------------------- |  | ---------- | ----- | ---------- |  |  | ----- | - |  |  | ----- | -
|                                                          |  |       |    |                     
|                                                          |  |       |    | Year ended March 31,
|                                                          |  |       |    |                     
|                                                          |  | Notes |    | 2004                 |  | 2003       |       | 2002      
|                                                          |  |       |    |                      |  |            |       |           
|                                                          |  |       |    |                      |  | (restated) |       | (restated)
|                                                          |  |       |    |                     
|                                                          |  |       |    | (in  millions)     
|Profit and loss account                                   |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|At April 1                                                |  |       |    |                      |  |            | 2,099 |            |  |  | 2,116 |   |  |  | 1,850 |  
|Prior year adjustment                                     |  |       |    |                      |  |            |      |            |  |  |      |   |  |  | (29   | )
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|                                                          |  |       |    |                      |  |            | 2,099 |            |  |  | 2,116 |   |  |  | 1,821 |  
|Profit attributable to the ordinary stockholders          |  |       |    |                      |  |            | 935   |            |  |  | 826   |   |  |  | 895   |  
|Transfer to Capital Reserve                               |  |       |    |                      |  |            | (62   | )          |  |  | (44   | ) |  |  | (87   | )
|Ordinary dividends                                        |  |       |    |                      |  |            | (400  | )          |  |  | (371  | ) |  |  | (333  | )
|Transfer from capital reserve                             |  |       |    |                      |  |            |      |            |  |  |      |   |  |  | 1     |  
|Ordinary stock buyback                                    |  |       |    |                      |  |            | (377  | )          |  |  | (133  | ) |  |  | 2     |  
|Exchange adjustments                                      |  |       |    |                      |  |            | 60    |            |  |  | (328  | ) |  |  | 21    |  
|Preference stock buyback                                  |  |       |    |                      |  |            |      |            |  |  |      |   |  |  | (247  | )
|Transfer from revaluation reserve                         |  |       |    |                      |  |            | 2     |            |  |  | 22    |   |  |  | 45    |  
|Tax effect of disposal of revalued property               |  |       |    |                      |  |            |      |            |  |  |      |   |  |  | (2    | )
|Goodwill written back on disposal of subsidiary           |  |       |    |                      |  |            |      |            |  |  | 5     |   |  |  |      |  
|Reissue of treasury stock under employee stock
    scheme |  |       |    |                      |  |            | 25    |            |  |  | 6     |   |  |  |      |  
|Purchase of stock by subsidiaries                         |  |       |    |                      |  |            | (1    | )          |  |  |      |   |  |  |      |  
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|At March 31                                               |  |       | 35 |                      |  |            | 2,281 |            |  |  | 2,099 |   |  |  | 2,116 |  
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|Revaluation reserve                                       |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|At April 1                                                |  |       |    |                      |  |            | 181   |            |  |  | 208   |   |  |  | 252   |  
|Revaluation of property                                   |  |       |    |                      |  |            | 59    |            |  |  |      |   |  |  |      |  
|Exchange adjustments                                      |  |       |    |                      |  |            | 1     |            |  |  | (5    | ) |  |  | 1     |  
|Transfer to revenue reserve on sale of property           |  |       |    |                      |  |            | (2    | )          |  |  | (22   | ) |  |  | (45   | )
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|At March 31                                               |  |       | 35 |                      |  |            | 239   |            |  |  | 181   |   |  |  | 208   |  
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  
|                                                          |  |       |    |                      |  |            | 4,464 |            |  |  | 4,160 |   |  |  | 4,173 |  
|                                                          |  |       |    |                      |  |            |       |            |  |  |       |   |  |  |       |  

The notes on pages F-12 to
F-107

form an integral part of these consolidated
financial statements


F-10



---



##### Table of Contents



BANK OF IRELAND GROUP

CONSOLIDATED CASH FLOW STATEMENT

|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  
|---------------------------------------------- |  | ----- | -- | -------------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                               |  |       |    |                     
|                                               |  |       |    | Year ended March 31,
|                                               |  |       |    |                     
|                                               |  | Notes |    | 2004                 |  | 2003 |        | 2002
|                                               |  |       |    |                      |  |      |        |     
|                                               |  |       |    |                     
|                                               |  |       |    | (in  millions)     
|Net cash flow from operating
    activities    |  |       | 43 |                      |  |      | 3,664  |      |  |  | 1,109  |   |  |  | 3,783  |  
|Dividend received from associated undertaking  |  |       |    |                      |  |      | 7      |      |  |  |       |   |  |  | 10     |  
|Returns on investment and servicing of finance |  |       | 43 |                      |  |      | (190   | )    |  |  | (181   | ) |  |  | (183   | )
|Taxation                                       |  |       |    |                      |  |      | (201   | )    |  |  | (180   | ) |  |  | (153   | )
|Capital expenditure and financial investment   |  |       | 43 |                      |  |      | (2,875 | )    |  |  | (1,367 | ) |  |  | (2,427 | )
|Acquisitions and disposals                     |  |       | 43 |                      |  |      | (179   | )    |  |  | (172   | ) |  |  | (244   | )
|Equity dividends paid                          |  |       |    |                      |  |      | (381   | )    |  |  | (349   | ) |  |  | (271   | )
|Financing                                      |  |       | 43 |                      |  |      | 609    |      |  |  | 205    |   |  |  | (253   | )
|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  
|(Decrease)/ Increase in cash in the
    year   |  |       |    |                      |  |      | 454    |      |  |  | (935   | ) |  |  | 262    |  
|                                               |  |       |    |                      |  |      |        |      |  |  |        |   |  |  |        |  

The notes on pages F-12 to F-107

form an integral part of these consolidated
financial statements


F-11



---



##### 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 2003 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 36.

1.2 Change in Accounting Policy

A change was undertaken to capitalise procurement
fees and amortise these costs in line with the actual product
life, which is being adopted on a prospective basis for sales
from 1 April 2003; the effect in the Group profit and loss
account is a gain of
22m in the year
to March 31 2004. The comparatives were not restated as the
amounts were not material.

UITF Abstract 37 Purchases and Sales of Own
Shares was issued on October 28, 2003 and is effective for
accounting periods ending on or after December 23, 2003.
Own Shares, previously shown as asset are now
included as a deduction from equity in arriving at
stockholders funds. As a consequence the financial
statements at March 31, 2003 and 2002 have been restated
leading to a decrease in the opening balance of
stockholders funds. No profits or losses are recognised in
respect of dealings in Bank of Ireland shares. As permitted
under Irish legislation, Bank of Ireland Life the principal life
assurance subsidiary of the Group, holds for the benefit of its
policyholders shares in Bank of Ireland Group. However, under
the UITF Abstract these shares are required to be treated as
though they were purchased by the company for its own benefit
and treated as treasury shares.

As required by the UITF Abstract, the cost of the
shares at March 31, 2004 has been deducted from
stockholders funds. This deduction is presented as a
separate line on the balance sheet. As a consequence, the
related liabilities have been restated and no profit and loss
impact arises.

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

F-12



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


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:

|       |  |                |        |                |  |                |        |         |  |         |   |       |  |         |        |         |  |       |        |  |  |  |   |  |  |  |        |  |  |  |        |  |  |  |        | 
|------ |  | -------------- | ------ | -------------- |  | -------------- | ------ | ------- |  | ------- | - | ----- |  | ------- | ------ | ------- |  | ----- | ------ |  |  |  | - |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|       |  |                |        |                |  |               
|       |  | March 31, 2004 |        | March 31, 2003 |  | March 31, 2002
|       |  |                |        |                |  |               
|       |  | Closing        |        | Average        |  | Hedge          |        | Closing |  | Average |   | Hedge |  | Closing |        | Average |  | Hedge
|       |  |                |        |                |  |                |        |         |  |         |   |       |  |         |        |         |  |      
|/US$  |  |                | 1.2224 |                |  |                | 1.1796 |         |  |         |  |       |  |         | 1.0895 |         |  |       | 1.0051 |  |  |  |  |  |  |  | 0.8724 |  |  |  | 0.8804 |  |  |  |       | 
|/Stg£ |  |                | 0.6659 |                |  |                | 0.6926 |         |  |         |  |       |  |         | 0.6896 |         |  |       | 0.6460 |  |  |  |  |  |  |  | 0.6130 |  |  |  | 0.6145 |  |  |  | 0.6847 | 

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. When an investment security is sold prior to maturity,
profits and losses are recognised when realised and included in
other operating income.

Other Securities

Other securities and other equity shares 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.

F-13



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


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 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.

F-14



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


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.

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.

F-15



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


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 and unamortised goodwill arising on the
acquisition of the interest 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.

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 March 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 25, 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. Own shares held for
the benefit of policyholders are accounted for in accordance
with UITF 37 as described in Note 1.2. Investments
held within the long-term business funds are set out in Note 25.
Property is valued at open market value as determined by
independent professional advisors every year, while securities
are valued at mid-market value.

F-16



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



1   BASIS OF ACCOUNTING AND
ACCOUNTING POLICIES  (continued)


1.19 Stock Based Compensation

Where shares are awarded, 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. Where conditional awards
are dependent on performance criteria, the cost is spread over
the performance period.

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.



|  |                   
|- | ------------------
|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 seven business classes. The analysis of results by
business class is based on management accounts information. The
analysis for 2003 and 2002 has been restated to account for
Private Banking changing to Retail Republic of Ireland from
Wholesale Financial Services and Isle of Man changing from
Wholesale Financial Services to UK Financial Services. Net
assets are included below in order to comply with SSAP 25
and reflect the adjustment as outlined in UITF 37 and
described in Note 1.2.

The segmental allocation of liabilities
necessitates the allocation of capital on a risk related basis
which is in some cases necessarily subjective. 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.

(a)  Geographical segment

|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|------------------------------- |  | ----------- | ------ | ------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------- | -
|                                |  |            
|                                |  | 2004       
|                                |  |            
|                                |  | Republic of |        | United  |  | Rest of |        |      
|                                |  | Ireland     |        | Kingdom |  | World   |        | Total
|                                |  |             |        |         |  |         |        |      
|                                |  | m          |        | m      |  | m      |        | m   
|Turnover                        |  |             | 2,658  |         |  |         | 2,283  |       |  |  | 153   |  |  |  | 5,094   |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before exceptional items |  |             | 936    |         |  |         | 340    |       |  |  | 41    |  |  |  | 1,317   |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Exceptional items               |  |             |        |         |  |         |        |       |  |  |       |  |  |  | (97     | )
|Grossing up(1)                  |  |             |        |         |  |         |        |       |  |  |       |  |  |  | (50     | )
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before taxation          |  |             |        |         |  |         |        |       |  |  |       |  |  |  | 1,170   |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Net assets                      |  |             | 2,422  |         |  |         | 1,399  |       |  |  | 460   |  |  |  | 4,281   |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Total assets(2)                 |  |             | 91,249 |         |  |         | 52,158 |       |  |  | 2,410 |  |  |  | 145,817 |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  

F-17



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



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

|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|------------------------------- |  | ----------- | ------ | ------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------- | -
|                                |  |            
|                                |  | 2003       
|                                |  | (restated) 
|                                |  |            
|                                |  | Republic of |        | United  |  | Rest of |        |      
|                                |  | Ireland     |        | Kingdom |  | World   |        | Total
|                                |  |             |        |         |  |         |        |      
|                                |  | m          |        | m      |  | m      |        | m   
|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                      |  |             | 2,212  |         |  |         | 1,448  |       |  |  | 374   |  |  |  | 4,034   |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  
|Total assets(2)                 |  |             | 71,035 |         |  |         | 38,941 |       |  |  | 2,224 |  |  |  | 112,200 |  
|                                |  |             |        |         |  |         |        |       |  |  |       |  |  |  |         |  

|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  
|------------------------------ |  | ----------- | ------ | --------------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | ------- | -
|                               |  |            
|                               |  | 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   |  
|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  
|Exceptional item               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  | (37     | )
|Grossing up(1)                 |  |             |        |                 |  |         |        |       |  |  |       |  |  |  | (56     | )
|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  
|Profit before taxation         |  |             |        |                 |  |         |        |       |  |  |       |  |  |  | 1,085   |  
|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  
|Net assets                     |  |             | 2,295  |                 |  |         | 1,618  |       |  |  | 164   |  |  |  | 4,077   |  
|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  
|Total assets(2)                |  |             | 63,234 |                 |  |         | 42,819 |       |  |  | 2,185 |  |  |  | 108,238 |  
|                               |  |             |        |                 |  |         |        |       |  |  |       |  |  |  |         |  

F-18



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



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

(b) Business class

|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|---------------------------------------------------------- |  | ----------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------------- |  | ------- | ------ | ----- |  |  | ----- |  |  |  | -- | - |  |  | ------ | - |  |  | ------- | -
|                                                           |  |            
|                                                           |  | 2004       
|                                                           |  |            
|                                                           |  | Retail      |        | BOI  |  | Wholesale |       | UK        |  | Asset      |        | UK            |  | Group   |        |      
|                                                           |  | Republic of |        | Life |  | Financial |       | Financial |  | Management |        | Post Office   |  | and     |        |      
|                                                           |  | Ireland     |        | m   |  | Services  |       | Services  |  | Services   |        | Joint Venture |  | Central |        | Total
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |      
|                                                           |  | m          |        | m   |  | m        |       | m        |  | m         |        | m            |  | m      |        | m   
|Net interest income                                        |  |             | 909    |      |  |           |      |           |  |            | 292    |               |  |         | 601    |       |  |  | 3     |  |  |  |   |   |  |  | (26    | ) |  |  | 1,779   |  
|Other income                                               |  |             | 289    |      |  |           | 147   |           |  |            | 298    |               |  |         | 246    |       |  |  | 258   |  |  |  |   |   |  |  | 11     |   |  |  | 1,249   |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Total operating income                                     |  |             | 1,198  |      |  |           | 147   |           |  |            | 590    |               |  |         | 847    |       |  |  | 261   |  |  |  |   |   |  |  | (15    | ) |  |  | 3,028   |  
|Administrative expenses                                    |  |             | 724    |      |  |           |      |           |  |            | 221    |               |  |         | 472    |       |  |  | 136   |  |  |  |   |   |  |  | 101    |   |  |  | 1,654   |  
|Provision for bad and doubtful debts                       |  |             | 53     |      |  |           |      |           |  |            | 31     |               |  |         | 2      |       |  |  |      |  |  |  |   |   |  |  |       |   |  |  | 86      |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Operating Profit                                           |  |             | 421    |      |  |           | 147   |           |  |            | 338    |               |  |         | 373    |       |  |  | 125   |  |  |  |   |   |  |  | (116   | ) |  |  | 1,288   |  
|Income from associated undertakings and joint
    ventures |  |             | (2     | )    |  |           |      |           |  |            | 33     |               |  |         |       |       |  |  |      |  |  |  | (3 | ) |  |  | 1      |   |  |  | 29      |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Profit before exceptional items                            |  |             | 419    |      |  |           | 147   |           |  |            | 371    |               |  |         | 373    |       |  |  | 125   |  |  |  | (3 | ) |  |  | (115   | ) |  |  | 1,317   |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Exceptional items                                          |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  | (97     | )
|Grossing up(1)                                             |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  | (50     | )
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Profit before taxation                                     |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  | 1,170   |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Net assets                                                 |  |             | 1,210  |      |  |           | 95    |           |  |            | 697    |               |  |         | 1,483  |       |  |  | 369   |  |  |  |   |   |  |  | 427    |   |  |  | 4,281   |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Total assets(2)                                            |  |             | 36,324 |      |  |           | 7,401 |           |  |            | 60,328 |               |  |         | 38,716 |       |  |  | 1,606 |  |  |  |   |   |  |  | 10,110 |   |  |  | 154,485 |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  
|Total Risk Weighted Assets                                 |  |             | 18,922 |      |  |           |      |           |  |            | 20,893 |               |  |         | 22,828 |       |  |  | 149   |  |  |  |   |   |  |  | 569    |   |  |  | 63,361  |  
|                                                           |  |             |        |      |  |           |       |           |  |            |        |               |  |         |        |       |  |  |       |  |  |  |    |   |  |  |        |   |  |  |         |  

F-19



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



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

|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|---------------------------------------------------------- |  | ---------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------------ |  | ------- | ------ | ----- |  |  | ----- |  |  |  | - |  |  |  | ----- | - |  |  | ------- | -
|                                                           |  |           
|                                                           |  | 2003      
|                                                           |  | (restated)
|                                                           |  |           
|                                                           |  | Retail     |        |      |  | Wholesale |       | UK        |  | Asset      |        | UK Post      |  | Group   |        |      
|                                                           |  | Republic   |        | BOI  |  | Financial |       | Financial |  | Management |        | Office Joint |  | and     |        |      
|                                                           |  | of Ireland |        | Life |  | Services  |       | Services  |  | Services   |        | Venture      |  | Central |        | Total
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |      
|                                                           |  | m         |        | m   |  | m        |       | m        |  | m         |        | m           |  | m      |        | m   
|Net interest income                                        |  |            | 861    |      |  |           |      |           |  |            | 261    |              |  |         | 628    |       |  |  | 5     |  |  |  |  |  |  |  | 1     |   |  |  | 1,756   |  
|Other income                                               |  |            | 272    |      |  |           | 87    |           |  |            | 317    |              |  |         | 275    |       |  |  | 233   |  |  |  |  |  |  |  | 31    |   |  |  | 1,215   |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Total operating income                                     |  |            | 1,133  |      |  |           | 87    |           |  |            | 578    |              |  |         | 903    |       |  |  | 238   |  |  |  |  |  |  |  | 32    |   |  |  | 2,971   |  
|Administrative expenses                                    |  |            | 687    |      |  |           |      |           |  |            | 213    |              |  |         | 523    |       |  |  | 125   |  |  |  |  |  |  |  | 114   |   |  |  | 1,662   |  
|Provision for bad and doubtful debts                       |  |            | 54     |      |  |           |      |           |  |            | 25     |              |  |         | 21     |       |  |  |      |  |  |  |  |  |  |  |      |   |  |  | 100     |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Operating Profit                                           |  |            | 392    |      |  |           | 87    |           |  |            | 340    |              |  |         | 359    |       |  |  | 113   |  |  |  |  |  |  |  | (82   | ) |  |  | 1,209   |  
|Income from associated undertakings and joint
    ventures |  |            | (2     | )    |  |           |      |           |  |            | 27     |              |  |         |       |       |  |  |      |  |  |  |  |  |  |  | (3    | ) |  |  | 22      |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Profit before exceptional item                             |  |            | 390    |      |  |           | 87    |           |  |            | 367    |              |  |         | 359    |       |  |  | 113   |  |  |  |  |  |  |  | (85   | ) |  |  | 1,231   |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Exceptional items                                          |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  | (164    | )
|Grossing up(1)                                             |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  | (54     | )
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Profit before taxation                                     |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  | 1,013   |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Net assets                                                 |  |            | 1,092  |      |  |           | 88    |           |  |            | 562    |              |  |         | 1,481  |       |  |  | 344   |  |  |  |  |  |  |  | 467   |   |  |  | 4,034   |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Total assets(2)                                            |  |            | 29,261 |      |  |           | 5,728 |           |  |            | 50,530 |              |  |         | 32,841 |       |  |  | 1,611 |  |  |  |  |  |  |  | 7,416 |   |  |  | 127,387 |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  
|Total Risk Weighted Assets                                 |  |            | 15,564 |      |  |           |      |           |  |            | 18,986 |              |  |         | 19,512 |       |  |  | 143   |  |  |  |  |  |  |  | 422   |   |  |  | 54,627  |  
|                                                           |  |            |        |      |  |           |       |           |  |            |        |              |  |         |        |       |  |  |       |  |  |  |   |  |  |  |       |   |  |  |         |  

|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|---------------------------------------------------------- |  | --------------- | ------ | ---- |  | --------- | ----- | --------- |  | ---------- | ------ | ------- |  | ----- | ------ |  |  |  | --- |  |  |  | ----- | - |  |  | ------- | -
|                                                           |  |                
|                                                           |  | 2002           
|                                                           |  | (restated)     
|                                                           |  |                
|                                                           |  | Retail          |        |      |  | Wholesale |       | UK        |  | Asset      |        | Group   |  |      
|                                                           |  | Republic of     |        | BOI  |  | Financial |       | Financial |  | Management |        | and     |  |      
|                                                           |  | Ireland         |        | Life |  | Services  |       | Services  |  | Services   |        | Central |  | Total
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |      
|                                                           |  |                
|                                                           |  | (in  millions)
|Net interest income                                        |  |                 | 805    |      |  |           |      |           |  |            | 256    |         |  |       | 569    |  |  |  | 4   |  |  |  | (20   | ) |  |  | 1,614   |  
|Other income                                               |  |                 | 257    |      |  |           | 122   |           |  |            | 294    |         |  |       | 288    |  |  |  | 224 |  |  |  | 62    |   |  |  | 1,247   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total operating income                                     |  |                 | 1,062  |      |  |           | 122   |           |  |            | 550    |         |  |       | 857    |  |  |  | 228 |  |  |  | 42    |   |  |  | 2,861   |  
|Administrative expenses                                    |  |                 | 675    |      |  |           |      |           |  |            | 201    |         |  |       | 503    |  |  |  | 102 |  |  |  | 101   |   |  |  | 1,582   |  
|Provision for bad and doubtful debts                       |  |                 | 51     |      |  |           |      |           |  |            | 22     |         |  |       | 30     |  |  |  |    |  |  |  | (1    | ) |  |  | 102     |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Operating profit                                           |  |                 | 336    |      |  |           | 122   |           |  |            | 327    |         |  |       | 324    |  |  |  | 126 |  |  |  | (58   | ) |  |  | 1,177   |  
|Income from associated undertakings and joint
    ventures |  |                 |       |      |  |           |      |           |  |            | 7      |         |  |       |       |  |  |  |    |  |  |  | (6    | ) |  |  | 1       |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Profit before exceptional item                             |  |                 | 336    |      |  |           | 122   |           |  |            | 334    |         |  |       | 324    |  |  |  | 126 |  |  |  | (64   | ) |  |  | 1,178   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Group Transformation Programme                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | (37     | )
|Grossing up(1)                                             |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | (56     | )
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Profit before taxation                                     |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  | 1,085   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Net assets                                                 |  |                 | 935    |      |  |           | 82    |           |  |            | 475    |         |  |       | 1,634  |  |  |  | 123 |  |  |  | 828   |   |  |  | 4,077   |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total assets(2)                                            |  |                 | 24,768 |      |  |           | 6,028 |           |  |            | 42,406 |         |  |       | 35,292 |  |  |  | 930 |  |  |  | 5,533 |   |  |  | 114,957 |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  
|Total Risk Weighted Assets                                 |  |                 | 13,119 |      |  |           |      |           |  |            | 18,675 |         |  |       | 20,394 |  |  |  | 563 |  |  |  | 226   |   |  |  | 52,977  |  
|                                                           |  |                 |        |      |  |           |       |           |  |            |        |         |  |       |        |  |  |  |     |  |  |  |       |   |  |  |         |  




F-20



---



##### 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 differ from normal market rates in return for tax
    relief arising from various incentives and 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
    39,386m (2003:
    22,897m, 2002:
    21,036m) in
    geographic segments and
    48,054m (2003:
    38,084m, 2002:
    27,865m) in
    business class.                                                                                           

3             ACQUISITION 
CURRENT YEAR

On April 3, 2003, Bank of Ireland announced
that its wholly owned subsidiary, First Rate
Acquisitions Inc. acquired a 100% interest in Foreign
Currency Exchange Corp (FCEC) for a
consideration of US$11.4m
(10.7m).

As analysed below, the acquisition gave rise to
goodwill of US$8.6m
(8.0m), which
has been capitalised and will be written off to the profit and
loss account over its useful estimated life of 20 years.

|                              |  |      |      |    |  |  |      |  
|----------------------------- |  | ---- | ---- | -- |  |  | ---- | -
|                              |  | US$m |      | m
|                              |  |      |      |   
|Debtors                       |  |      | 1.5  |    |  |  | 1.4  |  
|Cash at Bank and in Hand      |  |      | 3.7  |    |  |  | 3.5  |  
|Tangible Fixed Assets         |  |      | 0.4  |    |  |  | 0.4  |  
|Creditors Due Within One Year |  |      | (2.1 | )  |  |  | (2.0 | )
|Other Liabilities             |  |      | (0.1 | )  |  |  | (0.1 | )
|                              |  |      |      |    |  |  |      |  
|Net Assets Acquired           |  |      | 3.4  |    |  |  | 3.2  |  
|Goodwill                      |  |      | 8.6  |    |  |  | 8.0  |  
|                              |  |      |      |    |  |  |      |  
|                              |  |      | 12.0 |    |  |  | 11.2 |  
|                              |  |      |      |    |  |  |      |  
|Consideration                 |  |      | 11.4 |    |  |  | 10.7 |  
|Costs of Acquisition          |  |      | 0.6  |    |  |  | 0.5  |  
|                              |  |      |      |    |  |  |      |  
|                              |  |      | 12.0 |    |  |  | 11.2 |  
|                              |  |      |      |    |  |  |      |  

There were no fair value adjustments to the
Balance Sheet of FCEC at April 2, 2003.

The profit before tax for FCEC for the period
January 1, 2003 to April 2, 2003 was US$0
(0) (year ended
December 31, 2002: US$0.3m
(0.3m)).

A summarised profit and loss account for the
period from April 3, 2003 to March 31, 2004 is as
follows:

|                                                                             |  |      |      |    |  |  |      |  
|---------------------------------------------------------------------------- |  | ---- | ---- | -- |  |  | ---- | -
|                                                                             |  | US$m |      | m
|                                                                             |  |      |      |   
|Income                                                                       |  |      | 4.6  |    |  |  | 3.9  |  
|Operating Expenses including exceptional items
    and goodwill amortisation |  |      | (5.0 | )  |  |  | (4.2 | )
|                                                                             |  |      |      |    |  |  |      |  
|Operating (loss) including exceptional items
    and goodwill amortisation   |  |      | (0.4 | )  |  |  | (0.3 | )
|                                                                             |  |      |      |    |  |  |      |  

4   ACQUISITION 
PRIOR YEAR

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.

F-21



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



4   ACQUISITION 
PRIOR YEAR     (continued)


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).

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.

5   OTHER INTEREST RECEIVABLE
AND SIMILAR INCOME

|                                |  |                      |       |      |  |      |       |  |  |  |       | 
|------------------------------- |  | -------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                |  |                     
|                                |  | Year ended March 31,
|                                |  |                     
|                                |  | 2004                 |       | 2003 |  | 2002
|                                |  |                      |       |      |  |     
|                                |  |                     
|                                |  | (in  millions)     
|Loans and advances to banks     |  |                      | 227   |      |  |      | 208   |  |  |  | 314   | 
|Loans and advances to customers |  |                      | 2,858 |      |  |      | 2,922 |  |  |  | 3,105 | 
|Finance leasing                 |  |                      | 119   |      |  |      | 129   |  |  |  | 138   | 
|Instalment credit               |  |                      | 96    |      |  |      | 88    |  |  |  | 80    | 
|                                |  |                      |       |      |  |      |       |  |  |  |       | 
|                                |  |                      | 3,300 |      |  |      | 3,347 |  |  |  | 3,637 | 
|                                |  |                      |       |      |  |      |       |  |  |  |       | 

6   INTEREST PAYABLE

|                                     |  |                      |       |      |  |      |       |  |  |  |       | 
|------------------------------------ |  | -------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                     |  |                     
|                                     |  | Year ended March 31,
|                                     |  |                     
|                                     |  | 2004                 |       | 2003 |  | 2002
|                                     |  |                      |       |      |  |     
|                                     |  |                     
|                                     |  | (in  millions)     
|Interest on subordinated liabilities |  |                      | 177   |      |  |      | 156   |  |  |  | 154   | 
|Other interest payable               |  |                      | 1,710 |      |  |      | 1,806 |  |  |  | 2,248 | 
|                                     |  |                      |       |      |  |      |       |  |  |  |       | 
|                                     |  |                      | 1,887 |      |  |      | 1,962 |  |  |  | 2,402 | 
|                                     |  |                      |       |      |  |      |       |  |  |  |       | 

F-22



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

7   OTHER OPERATING
INCOME

|                                            |  |      |    |                      |  |      |    |      |  |  |     |  |  |  |    | 
|------------------------------------------- |  | ---- | -- | -------------------- |  | ---- | -- | ---- |  |  | --- |  |  |  | -- | 
|                                            |  |      |    |                     
|                                            |  |      |    | Year ended March 31,
|                                            |  |      |    |                     
|                                            |  | Note |    | 2004                 |  | 2003 |    | 2002
|                                            |  |      |    |                      |  |      |    |     
|                                            |  |      |    |                     
|                                            |  |      |    | (in  millions)     
|Profit on disposal of investment securities |  |      |    |                      |  |      | (2 | )    |  |  | 5   |  |  |  | 2  | 
|Profit on disposal of tangible fixed assets |  |      |    |                      |  |      | 20 |      |  |  | 37  |  |  |  | 22 | 
|Profit on disposal of leases                |  |      |    |                      |  |      |   |      |  |  | 21  |  |  |  |   | 
|Securitisation servicing fees               |  |      | 16 |                      |  |      | 6  |      |  |  | 9   |  |  |  | 11 | 
|Other income                                |  |      |    |                      |  |      | 26 |      |  |  | 44  |  |  |  | 39 | 
|                                            |  |      |    |                      |  |      |    |      |  |  |     |  |  |  |    | 
|                                            |  |      |    |                      |  |      | 50 |      |  |  | 116 |  |  |  | 74 | 
|                                            |  |      |    |                      |  |      |    |      |  |  |     |  |  |  |    | 

8   OPERATING
EXPENSES

|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|----------------------------------------------------------- |  | ---- | -- | -------------------- |  | ---- | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                                                            |  |      |    |                     
|                                                            |  |      |    | Year ended March 31,
|                                                            |  |      |    |                     
|                                                            |  | Note |    | 2004                 |  | 2003 |       | 2002
|                                                            |  |      |    |                      |  |      |       |     
|                                                            |  |      |    |                     
|                                                            |  |      |    | (in  millions)     
|Staff Costs:                                                |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| wages and salaries                                        |  |      |    |                      |  |      | 817   |      |  |  | 821   |  |  |  | 802   | 
| social security costs                                     |  |      |    |                      |  |      | 72    |      |  |  | 67    |  |  |  | 72    | 
| pension costs                                             |  |      |    |                      |  |      | 60    |      |  |  | 57    |  |  |  | 39    | 
| staff stock issue                                         |  |      |    |                      |  |      | 13    |      |  |  | 9     |  |  |  | 8     | 
| severance packages                                        |  |      |    |                      |  |      | 3     |      |  |  | 1     |  |  |  | 2     | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|                                                            |  |      |    |                      |  |      | 965   |      |  |  | 955   |  |  |  | 923   | 
|Operating lease rentals:                                    |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| property                                                  |  |      |    |                      |  |      | 46    |      |  |  | 34    |  |  |  | 20    | 
| equipment                                                 |  |      |    |                      |  |      | 2     |      |  |  | 1     |  |  |  | 1     | 
|Other administrative expenses                               |  |      |    |                      |  |      | 458   |      |  |  | 490   |  |  |  | 483   | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total administrative expenses                               |  |      |    |                      |  |      | 1,471 |      |  |  | 1,480 |  |  |  | 1,427 | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Depreciation and amortisation:                              |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
| freehold and leasehold property                           |  |      | 23 |                      |  |      | 18    |      |  |  | 18    |  |  |  | 15    | 
| computer and other equipment                              |  |      | 23 |                      |  |      | 146   |      |  |  | 141   |  |  |  | 125   | 
| amortisation of goodwill                                  |  |      | 22 |                      |  |      | 19    |      |  |  | 23    |  |  |  | 15    | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total depreciation and amortisation                         |  |      |    |                      |  |      | 183   |      |  |  | 182   |  |  |  | 155   | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Total operating expenses                                    |  |      |    |                      |  |      | 1,654 |      |  |  | 1,662 |  |  |  | 1,582 | 
|                                                            |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 
|Details of Directors remuneration are set
    out Note 42. |  |      |    |                      |  |      |       |      |  |  |       |  |  |  |       | 

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 2004
the charge represents 2.5% of eligible employees basic
salary (2003: 2%, 2002: 2%).

F-23



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



8   OPERATING
EXPENSES     (continued)


Auditors remuneration (including
VAT)

|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|------------------------------------ |  | ----- | ---- | --------------- |  | ----------- | --- | ----- |  | ----- | --- | ----- |  |  | --- |  |  |  | --- |  |  |  | ---- | 
|                                     |  |       |      |                 |  |             |     |      
|                                     |  |       |      | 2004            |  | 2003        |     | 2002 
|                                     |  |       |      |                 |  |             |     |      
|                                     |  | Notes |      | ROI             |  | Overseas(i) |     | Total |  | Total |     | Total
|                                     |  |       |      |                 |  |             |     |       |  |       |     |      
|                                     |  |       |      |                
|                                     |  |       |      | (in  millions)
|Audit and assurance services         |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|Statutory audit (including expenses) |  |       |      |                 |  |             | 1.7 |       |  |       | 1.1 |       |  |  | 2.8 |  |  |  | 2.2 |  |  |  | 2.0  | 
|Other audit and assurance services   |  |       | (ii  | )               |  |             | 1.4 |       |  |       | 0.3 |       |  |  | 1.7 |  |  |  | 2.7 |  |  |  | 1.7  | 
|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|                                     |  |       |      |                 |  |             | 3.1 |       |  |       | 1.4 |       |  |  | 4.5 |  |  |  | 4.9 |  |  |  | 3.7  | 
|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|Other services                       |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|Transaction services                 |  |       | (iii | )               |  |             |    |       |  |       |    |       |  |  |    |  |  |  | 0.9 |  |  |  | 0.7  | 
|Taxation services                    |  |       |      |                 |  |             | 1.7 |       |  |       | 2.1 |       |  |  | 3.8 |  |  |  | 2.8 |  |  |  | 2.5  | 
|Consultancy                          |  |       |      |                 |  |             |    |       |  |       |    |       |  |  |    |  |  |  | 0.5 |  |  |  | 8.3  | 
|Other services                       |  |       |      |                 |  |             | 0.7 |       |  |       | 0.1 |       |  |  | 0.8 |  |  |  | 0.0 |  |  |  | 0.2  | 
|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|                                     |  |       |      |                 |  |             | 2.4 |       |  |       | 2.2 |       |  |  | 4.6 |  |  |  | 4.2 |  |  |  | 11.7 | 
|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 
|Total                                |  |       |      |                 |  |             | 5.5 |       |  |       | 3.6 |       |  |  | 9.1 |  |  |  | 9.1 |  |  |  | 15.4 | 
|                                     |  |       |      |                 |  |             |     |       |  |       |     |       |  |  |     |  |  |  |     |  |  |  |      | 

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)  | 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.
|
| | (iii) | Transaction services costs relate primarily to
    financial due diligence and other assignments.                                                                                 

It is Group policy to subject all major
consultancy assignments to a competitive tender process.

9   EMPLOYEE
INFORMATION

In the year ended March 31, 2004 the average
full time equivalents was 17,584 (2003: 18,214, 2002: 18,438),
categorised as follows in line with the business classes as
stated in Note 2.

|                             |  |      |        |            |  |            |        |  |  |  |        | 
|---------------------------- |  | ---- | ------ | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                             |  | 2004 |        | 2003       |  | 2002      
|                             |  |      |        |            |  |           
|                             |  |      |        | (restated) |  | (restated)
|Retail Republic of Ireland   |  |      | 7,813  |            |  |            | 7,806  |  |  |  | 8,004  | 
|BOI Life                     |  |      | 1,066  |            |  |            | 1,111  |  |  |  | 1,097  | 
|Wholesale Financial Services |  |      | 1,349  |            |  |            | 1,234  |  |  |  | 1,294  | 
|UK Financial Services        |  |      | 5,298  |            |  |            | 5,633  |  |  |  | 5,436  | 
|Asset Management Services    |  |      | 652    |            |  |            | 673    |  |  |  | 662    | 
|UK Post Office Joint Venture |  |      | 10     |            |  |            |       |  |  |  |       | 
|Group and Central            |  |      | 1,396  |            |  |            | 1,757  |  |  |  | 1,945  | 
|                             |  |      |        |            |  |            |        |  |  |  |        | 
|                             |  |      | 17,584 |            |  |            | 18,214 |  |  |  | 18,438 | 
|                             |  |      |        |            |  |            |        |  |  |  |        | 

The staff costs in Note 8 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.

F-24



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

10  EXCEPTIONAL ITEMS

In the year ending March 31, 2004, the
exceptional items represent the following:



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the net proceeds of
    36 million
    on the sale of our share in the alliance between Bank of Ireland
    Securities Services and State Street Bank,                                                               
|
| |  | the write-off of the remainder of the goodwill
    associated with Chase de Vere of
    93 million
    together with some provisions of
    22 million
    for the impairment of certain assets in the IFA business.
|
| |  | additional costs of
    4 million
    incurred in relation to restructuring undertaken in previous
    years.                                                                                                        
|
| |  | implementation costs of
    14 million
    associated with the UKFS Business Improvement Programme.                                                                                                                  

In the year ending March 31, 2003 the
exceptional items represented the following:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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
    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.                                                                                                                                                                                                                             

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

F-25



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

11  TAXATION

|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |     |  
|------------------------------------------------------- | ------------------------------------------------------------- | --------------- | --- | ---- | - | ---- | --- | --- | - |  | --- | --- | -
|                                                        |                                                               | 2004            |     | 2003 |   | 2002
|                                                        |                                                               |                 |     |      |   |     
|                                                        |                                                               |                
|                                                        |                                                               | (in  millions)
|The Group                                               |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|Current Tax                                             |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|Irish Corporation tax                                   |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        | Current year                                                  |                 |     | 141  |   |      |     | 108 |   |  |     | 129 |  
|                                                        | Prior years                                                   |                 |     | 8    |   |      |     | 17  |   |  |     |    |  
|Double taxation relief                                  |                                                               |                 | (19 | )    |   |      | (16 | )   |   |  | (20 | )  
|Foreign tax                                             |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        | Current year                                                  |                 |     | 70   |   |      |     | 69  |   |  |     | 50  |  
|                                                        | Prior years                                                   |                 |     | (14  | ) |      |     | (13 | ) |  |     | (9  | )
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        |                                                               |                 | 186 |      |   |      | 165 |     |   |  | 150 |    
|Deferred taxation                                       |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        | Origination and reversal of timing
    differences  Domestic |                 |     | 6    |   |      |     | (5  | ) |  |     | 7   |  
|                                                        |  Foreign                                                     |                 |     | 7    |   |      |     | (6  | ) |  |     | 7   |  
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        |                                                               |                 | 13  |      |   |      | (11 | )   |   |  | 14  |    
|Share of associated undertakings and joint
    ventures |                                                               |                 | 9   |      |   |      | 9   |     |   |  | 1   |    
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |    
|                                                        |                                                               |                 | 208 |      |   |      | 163 |     |   |  | 165 |    
|                                                        |                                                               |                 |     |      |   |      |     |     |   |  |     |    

The tax charge for the year, at an effective rate
of 17.8% 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
levy on certain financial institutions in the Republic of
Ireland.

|                                                   |  |                 |    |      |  |      |     |   |  |  |    |  
|-------------------------------------------------- |  | --------------- | -- | ---- |  | ---- | --- | - |  |  | -- | -
|                                                   |  | 2004            |    | 2003 |  | 2002
|                                                   |  |                 |    |      |  |     
|                                                   |  |                
|                                                   |  | (in  millions)
|The deferred taxation (credit)/charge arises from: |  |                 |    |      |  |      |     |   |  |  |    |  
|Leased assets                                      |  |                 | (2 | )    |  |      | 9   |   |  |  | 12 |  
|Own assets                                         |  |                 | 7  |      |  |      | (2  | ) |  |  | (4 | )
|Short term timing differences                      |  |                 | 8  |      |  |      | (18 | ) |  |  | 6  |  
|                                                   |  |                 |    |      |  |      |     |   |  |  |    |  
|                                                   |  |                 | 13 |      |  |      | (11 | ) |  |  | 14 |  
|                                                   |  |                 |    |      |  |      |     |   |  |  |    |  

F-26



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



11  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, 2004, 2003 and 2002 is shown as follows:

|                                                                                                                                                          |  |                 |     |      |  |      |     |   |  |  |     |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                                                                                                                          |  | 2004            |     | 2003 |  | 2002
|                                                                                                                                                          |  |                 |     |      |  |     
|                                                                                                                                                          |  |                
|                                                                                                                                                          |  | (in  millions)
|Profit on ordinary activities before tax
    multiplied by the weighted standard rate of Corporate tax in
    Ireland of 12.5% (2003: 15.125%, 2002: 19%) |  |                 | 146 |      |  |      | 153 |   |  |  | 206 |  
|Effects of:                                                                                                                                               |  |                 |     |      |  |      |     |   |  |  |     |  
|Expenses not deductible for tax purposes                                                                                                                  |  |                 | 8   |      |  |      | 5   |   |  |  | 7   |  
|Levy on certain financial institutions                                                                                                                    |  |                 | 26  |      |  |      | 7   |   |  |  |    |  
|Foreign earnings subject to different rates of tax                                                                                                        |  |                 | 39  |      |  |      | 15  |   |  |  | 22  |  
|Non-deductible goodwill impairment                                                                                                                        |  |                 | 30  |      |  |      | 33  |   |  |  |    |  
|Tax exempted income and income at a reduced Irish
    tax rate                                                                                            |  |                 | (44 | )    |  |      | (63 | ) |  |  | (62 | )
|Capital allowances in excess of depreciation                                                                                                              |  |                 | (5  | )    |  |      | (7  | ) |  |  | (8  | )
|Other deferred tax timing differences                                                                                                                     |  |                 | (8  | )    |  |      | 18  |   |  |  | (6  | )
|Other prior year adjustments                                                                                                                              |  |                 | (6  | )    |  |      | 4   |   |  |  | (9  | )
|                                                                                                                                                          |  |                 |     |      |  |      |     |   |  |  |     |  
|Current tax charge                                                                                                                                        |  |                 | 186 |      |  |      | 165 |   |  |  | 150 |  
|                                                                                                                                                          |  |                 |     |      |  |      |     |   |  |  |     |  

12  DIVIDENDS

|                                                  |  |                      |     |      |  |      |     |  |  |  |     | 
|------------------------------------------------- |  | -------------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                  |  |                     
|                                                  |  | Year ended March, 31
|                                                  |  |                     
|                                                  |  | 2004                 |     | 2003 |  | 2002
|                                                  |  |                      |     |      |  |     
|                                                  |  |                     
|                                                  |  | (in  millions)     
|Equity Stock:                                     |  |                      |     |      |  |      |     |  |  |  |     | 
|2004                                              |  |                      |     |      |  |      |     |  |  |  |     | 
|On units of
    0.64 Ordinary
    Stock in issue |  |                      |     |      |  |      |     |  |  |  |     | 
|Interim dividend 14.8c                            |  |                      | 143 |      |  |      |     |  |  |  |     | 
|Proposed final dividend 26.6c                     |  |                      | 257 |      |  |      |     |  |  |  |     | 
|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 | 
|                                                  |  |                      |     |      |  |      |     |  |  |  |     | 
|                                                  |  |                      | 400 |      |  |      | 371 |  |  |  | 333 | 
|                                                  |  |                      |     |      |  |      |     |  |  |  |     | 

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. All Treasury
Stock, excluding Bank of Ireland stock purchased by Bank of
Ireland Life, does not rank for dividend. 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.

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---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



12  DIVIDENDS  (continued)


|                                                                                   |  |                      |   |      |  |      |   |  |  |  |    | 
|---------------------------------------------------------------------------------- |  | -------------------- | - | ---- |  | ---- | - |  |  |  | -- | 
|                                                                                   |  |                     
|                                                                                   |  | Year ended March 31,
|                                                                                   |  |                     
|                                                                                   |  | 2004                 |   | 2003 |  | 2002
|                                                                                   |  |                      |   |      |  |     
|                                                                                   |  |                     
|                                                                                   |  | (in  millions)     
|Non Equity Stock:                                                                  |  |                      |   |      |  |      |   |  |  |  |    | 
|2004                                                                               |  |                      |   |      |  |      |   |  |  |  |    | 
|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      |  |                      | 3 |      |  |      |   |  |  |  |    | 
|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  | 
|                                                                                   |  |                      |   |      |  |      |   |  |  |  |    | 
|                                                                                   |  |                      | 8 |      |  |      | 9 |  |  |  | 17 | 
|                                                                                   |  |                      |   |      |  |      |   |  |  |  |    | 

Dividend payments on Non Cumulative Preference
Stock are accrued.

13  EARNINGS PER UNIT OF
0.64 ORDINARY
STOCK

a)  Basic

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 excluding Treasury stock and own shares held for the
benefit of life assurance policyholders.

|                                             |  |      |       |            |  |            |       |  |  |  |       | 
|-------------------------------------------- |  | ---- | ----- | ---------- |  | ---------- | ----- |  |  |  | ----- | 
|                                             |  | 2004 |       | 2003       |  | 2002      
|                                             |  |      |       |            |  |           
|                                             |  |      |       | (restated) |  | (restated)
|Profit attributable to Ordinary Stockholders |  |      | 935m |            |  |            | 826m |  |  |  | 895m | 
|Weighted average number of shares in issue   |  |      | 961m  |            |  |            | 991m  |  |  |  | 990m  | 
|Basic earnings per share                     |  |      | 97.2c |            |  |            | 83.4c |  |  |  | 90.4c | 

b)  Diluted

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 excluding own shares held for the benefit of life
assurance policyholders adjusted for the effect of all dilutive
potential Ordinary Stock.

|                                                |  |      |       |            |  |            |        |  |  |  |        | 
|----------------------------------------------- |  | ---- | ----- | ---------- |  | ---------- | ------ |  |  |  | ------ | 
|                                                |  | 2004 |       | 2003       |  | 2002      
|                                                |  |      |       |            |  |           
|                                                |  |      |       | (restated) |  | (restated)
|Profit attributable to Ordinary Stockholders    |  |      | 935m |            |  |            | 826m  |  |  |  | 895m  | 
|Average number of shares in issue               |  |      | 961m  |            |  |            | 991m   |  |  |  | 990m   | 
|Effect of all dilutive potential Ordinary Stock |  |      | 7m    |            |  |            | 10m    |  |  |  | 10m    | 
|                                                |  |      |       |            |  |            |        |  |  |  |        | 
|                                                |  |      | 968m  |            |  |            | 1,001m |  |  |  | 1,000m | 
|                                                |  |      |       |            |  |            |        |  |  |  |        | 
|Diluted earnings per share                      |  |      | 96.6c |            |  |            | 82.6c  |  |  |  | 89.5c  | 

F-28



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

14  CENTRAL GOVERNMENT AND OTHER
ELIGIBLE BILLS

|                                              |  |                 |     |      |  |  |     | 
|--------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                              |  |                
|                                              |  | At March 31,   
|                                              |  |                
|                                              |  | 2004            |     | 2003
|                                              |  |                 |     |     
|                                              |  |                
|                                              |  | (in  millions)
|Investment securities                         |  |                 |     |      |  |  |     | 
| government bills and similar
    securities |  |                 | 7   |      |  |  | 7   | 
|Other securities                              |  |                 |     |      |  |  |     | 
| government bills and similar
    securities |  |                 | 204 |      |  |  | 168 | 
|                                              |  |                 |     |      |  |  |     | 
|                                              |  |                 | 211 |      |  |  | 175 | 
|                                              |  |                 |     |      |  |  |     | 

15  LOANS AND ADVANCES TO
BANKS

|                                                            |  |                 |       |      |  |  |       | 
|----------------------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                                            |  |                
|                                                            |  | At March 31,   
|                                                            |  |                
|                                                            |  | 2004            |       | 2003
|                                                            |  |                 |       |     
|                                                            |  |                
|                                                            |  | (in  millions)
|Funds placed with Central Bank of Ireland                   |  |                 | 114   |      |  |  | 111   | 
|Funds placed with other central banks                       |  |                 | 47    |      |  |  | 39    | 
|Funds placed with other banks                               |  |                 | 7,592 |      |  |  | 7,330 | 
|                                                            |  |                 |       |      |  |  |       | 
|                                                            |  |                 | 7,753 |      |  |  | 7,480 | 
|                                                            |  |                 |       |      |  |  |       | 
|Repayable on demand                                         |  |                 | 482   |      |  |  | 745   | 
|Other loans and advances to banks by remaining
    maturity |  |                 |       |      |  |  |       | 
| 3 months or less                                          |  |                 | 3,627 |      |  |  | 5,629 | 
| 1 year or less but over
    3 months                      |  |                 | 2,826 |      |  |  | 1,046 | 
| 5 years or less but over
    1 year                       |  |                 | 787   |      |  |  | 35    | 
| over 5 years                                              |  |                 | 31    |      |  |  | 25    | 
|                                                            |  |                 |       |      |  |  |       | 
|                                                            |  |                 | 7,753 |      |  |  | 7,480 | 
|                                                            |  |                 |       |      |  |  |       | 

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

F-29



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

16  LOANS AND ADVANCES TO
CUSTOMERS

(a)  Loans and advances to
customers

|                                                                |  |                 |        |      |  |  |        |  
|--------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | -
|                                                                |  |                
|                                                                |  | At March 31,   
|                                                                |  |                
|                                                                |  | 2004            |        | 2003
|                                                                |  |                 |        |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Loans and advances to customers                                 |  |                 | 63,876 |      |  |  | 53,946 |  
|Loans and advances to customers 
    finance leases            |  |                 | 2,593  |      |  |  | 2,226  |  
|Hire purchase receivables                                       |  |                 | 1,543  |      |  |  | 1,195  |  
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 68,012 |      |  |  | 57,367 |  
|Provision for bad and doubtful debts                            |  |                 | (472   | )    |  |  | (480   | )
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 67,540 |      |  |  | 56,887 |  
|                                                                |  |                 |        |      |  |  |        |  
|Repayable on demand                                             |  |                 | 2,413  |      |  |  | 2,458  |  
|Other loans and advances to customers by
    remaining maturity |  |                 |        |      |  |  |        |  
| 3 months or less                                              |  |                 | 2,142  |      |  |  | 2,373  |  
| 1 year or less but over 3 months                              |  |                 | 5,425  |      |  |  | 4,036  |  
| 5 years or less but over 1 year                               |  |                 | 16,295 |      |  |  | 12,537 |  
| over 5 years                                                  |  |                 | 41,737 |      |  |  | 35,963 |  
|                                                                |  |                 |        |      |  |  |        |  
|                                                                |  |                 | 68,012 |      |  |  | 57,367 |  
|                                                                |  |                 |        |      |  |  |        |  

The loans accounted for on a non-accrual basis at
March 31 amounted to
179m (2003:
141m) and the
provisions thereon amounted to
99m (2003:
88m).



|    |                                  
|--- | ---------------------------------
|(b) | Securitisation and loan transfers

The Group has sold the following pools of
mortgages.

|     |  |                                                   |  |       |           |           |  |                 |             |       |  |  |              |  |  |  |     | 
|---- |  | ------------------------------------------------- |  | ----- | --------- | --------- |  | --------------- | ----------- | ----- |  |  | ------------ |  |  |  | --- | 
|     |  |                                                   |  |       |           |           |  | Presentation in |             |      
|Year |  | Securitisations                                   |  | Notes |           | Mortgages |  | accounts        |             | Value
|     |  |                                                   |  |       |           |           |  |                 |             |      
|     |  |                                                   |  |       |           |           |  |                 |             | m   
|1993 |  | Private placements with UK financial Institutions |  |       | (ii)      |           |  |                 | Residential |       |  |  | Consolidated |  |  |  | 150 | 
|1993 |  | Residential Property Securities No. 3 plc (RPS3)  |  |       | (i),(ii)  |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 375 | 
|1994 |  | Residential Property Securities No. 4 plc (RPS4)  |  |       | (i),(iii) |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 751 | 
|1997 |  | Residential Property Securities No. 5 plc (RPS5)  |  |       | (i),(iii) |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 451 | 
|2000 |  | Liberator Securities No. 1 plc                    |  |       | (iv)      |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 500 | 
|2000 |  | Shipshape Residential Mortgages No. 1 plc (SS1)   |  |       | (v)       |           |  |                 | Residential |       |  |  | Linked       |  |  |  | 451 | 

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. 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-30



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



16  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 Act 1985 and are
    registered and operate in the UK.
|     
|(ii)  | On June 27, 2003 the Group exercised its
    option to repurchase the remaining mortgages outstanding on
    Residential Property Securities no. 3 plc. The balances on
    these mortgages had reduced to £25m at the time of
    repurchase. On November 28, 2003 the Group exercised its
    option to repurchase the remaining mortgages outstanding on the
    private placement of £100m made in 1993. The balances on
    these mortgages had reduced to £10m at the time of
    repurchase.                                                                                                                                                                                                                                                                 
|     
|(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 2003 and is registered and operates in
    the Republic of Ireland.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     
|(v)   | 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
period to March 31, 2004 for RPS3, RPS4, RPS5, Liberator
Securities No 1 and SS1 is set out below:

|                                |  |                 |     |      |  |      |     |   |  |  |     |  
|------------------------------- |  | --------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                |  |                
|                                |  | At March 31,   
|                                |  |                
|                                |  | 2004            |     | 2003 |  | 2002
|                                |  |                 |     |      |  |     
|                                |  |                
|                                |  | (in  millions)
|Interest receivable             |  |                 | 32  |      |  |      | 51  |   |  |  | 77  |  
|Interest payable                |  |                 | (25 | )    |  |      | (41 | ) |  |  | (67 | )
|Fee income                      |  |                 | 1   |      |  |      | 1   |   |  |  | 2   |  
|Deposit income                  |  |                 |    |      |  |      | 1   |   |  |  | 4   |  
|Operating expenses              |  |                 | (2  | )    |  |      | (3  | ) |  |  | (5  | )
|                                |  |                 |     |      |  |      |     |   |  |  |     |  
|Profit for the financial period |  |                 | 6   |      |  |      | 9   |   |  |  | 11  |  
|                                |  |                 |     |      |  |      |     |   |  |  |     |  



|    |                                             
|--- | --------------------------------------------
|(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%
(2003: 53%) of the total loans and advances to customers, 35%
(2003: 33%) of the loans and advances in the Republic of Ireland
and 71% (2003: 73%) in the United Kingdom.

F-31



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



16  LOANS AND ADVANCES TO
CUSTOMERS  (continued)


(d) Leasing and hire purchase

|                                        |                                   |                 |       |       |  |  |       |       | 
|--------------------------------------- | --------------------------------- | --------------- | ----- | ----- |  |  | ----- | ----- | 
|                                        |                                   |                
|                                        |                                   | At March 31,   
|                                        |                                   |                
|                                        |                                   | 2004            |       | 2003 
|                                        |                                   |                 |       |      
|                                        |                                   |                
|                                        |                                   | (in  millions)
|Amount receivable by remaining maturity |                                   |                 |       |       |  |  |       |      
|                                        |  within 1 year                   |                 |       | 1,331 |  |  |       | 948   | 
|                                        |  5 years or less but over 1 year |                 |       | 1,885 |  |  |       | 1,430 | 
|                                        |  over 5 years                    |                 |       | 920   |  |  |       | 1,043 | 
|                                        |                                   |                 |       |       |  |  |       |      
|                                        |                                   |                 | 4,136 |       |  |  | 3,421 |      
|                                        |                                   |                 |       |       |  |  |       |      

The cost of assets acquired for finance leases
and hire purchase contracts, net of grants received or
receivable, amounted to
2,382m (2003:
1,029m).

Aggregate amounts receivable including capital
repayments during the year in respect of finance leases and hire
purchase contracts amounted to
1,135m (2003:
1,183m).

17  PROVISION FOR BAD AND DOUBTFUL
DEBTS

|                                                                                    |  |                      |      |      |  |      |     |   |  |  |     |  
|----------------------------------------------------------------------------------- |  | -------------------- | ---- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                                                    |  |                     
|                                                                                    |  | Year ended March 31,
|                                                                                    |  |                     
|                                                                                    |  | 2004                 |      | 2003 |  | 2002
|                                                                                    |  |                      |      |      |  |     
|                                                                                    |  |                     
|                                                                                    |  | (in  millions)     
|At April 1,                                                                         |  |                      | 480  |      |  |      | 500 |   |  |  | 430 |  
|Exchange adjustments                                                                |  |                      | 7    |      |  |      | (30 | ) |  |  | 4   |  
|Charge against profits                                                              |  |                      | 86   |      |  |      | 100 |   |  |  | 102 |  
|Amounts written off                                                                 |  |                      | (114 | )    |  |      | (96 | ) |  |  | (55 | )
|Recoveries                                                                          |  |                      | 13   |      |  |      | 6   |   |  |  | 19  |  
|                                                                                    |  |                      |      |      |  |      |     |   |  |  |     |  
|At March 31,                                                                        |  |                      | 472  |      |  |      | 480 |   |  |  | 500 |  
|                                                                                    |  |                      |      |      |  |      |     |   |  |  |     |  
|All of which relates to loans and advances to
    customers Provisions at March 31, |  |                      |      |      |  |      |     |   |  |  |     |  
| specific                                                                          |  |                      | 191  |      |  |      | 170 |   |  |  | 159 |  
| general                                                                           |  |                      | 281  |      |  |      | 310 |   |  |  | 341 |  
|                                                                                    |  |                      |      |      |  |      |     |   |  |  |     |  
|                                                                                    |  |                      | 472  |      |  |      | 480 |   |  |  | 500 |  
|                                                                                    |  |                      |      |      |  |      |     |   |  |  |     |  

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
180m (2003:
175m) and a non
designated element, for prudential purposes of
101m (2003:
135m). The
non-designated element is available for offset, in certain
pre-defined circumstances, against specific loan losses as they
crystallise.

F-32



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

18  DEBT SECURITIES

|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|------------------------------------------------------- |  | ----------------- | ------ | ---------- |  | ---------- | --- | ----- |  |  | --- | - |  |  | ------ | 
|                                                        |  |                  
|                                                        |  | At March 31, 2004
|                                                        |  |                  
|                                                        |  |                   |        | Gross      |  | Gross      |     |      
|                                                        |  | Book              |        | Unrealised |  | Unrealised |     | Fair 
|                                                        |  | Value             |        | Gains      |  | Losses     |     | Value
|                                                        |  |                   |        |            |  |            |     |      
|                                                        |  | m                |        | m         |  | m         |     | m   
|The Group                                               |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Issued by Public Bodies                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 881    |            |  |            | 34  |       |  |  |    |   |  |  | 915    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| government securities                                 |  |                   | 4,174  |            |  |            |     |       |  |  |     |   |  |  | 4,174  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 4,174  |            |  |            |     |       |  |  |     |   |  |  | 4,174  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Issued by Other Issuers                                 |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Investment securities                                   |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society certificates of
    deposit |  |                   | 811    |            |  |            |    |       |  |  |    |   |  |  | 811    | 
| other debt securities                                 |  |                   | 9,461  |            |  |            | 92  |       |  |  | (46 | ) |  |  | 9,507  | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 10,272 |            |  |            | 92  |       |  |  | (46 | ) |  |  | 10,318 | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|Other securities                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
| bank and building society certificates of
    deposit |  |                   |       |            |  |            |     |       |  |  |     |   |  |  |       | 
| other debt securities                                 |  |                   | 349    |            |  |            |     |       |  |  |     |   |  |  | 349    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 349    |            |  |            |     |       |  |  |     |   |  |  | 349    | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|                                                        |  |                   | 15,676 |            |  |            | 126 |       |  |  | (46 | ) |  |  | 15,756 | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 

F-33



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



18  DEBT
SECURITIES  (continued)


|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 
|------------------------------------------------------- |  | ----------------- | ------ | ---------- |  | ---------- | --- | ----- |  |  | --- | - |  |  | ------ | 
|                                                        |  |                  
|                                                        |  | 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 | 
|                                                        |  |                   |        |            |  |            |     |       |  |  |     |   |  |  |        | 

|                                                                |  |                 |        |      |  |  |       | 
|--------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ----- | 
|                                                                |  |                
|                                                                |  | Year ended     
|                                                                |  | March 31,      
|                                                                |  |                
|                                                                |  | 2004            |        | 2003
|                                                                |  |                 |        |     
|                                                                |  |                
|                                                                |  | (in  millions)
|Investment securities                                           |  |                 |        |      |  |  |       | 
| listed                                                        |  |                 | 7,703  |      |  |  | 7,316 | 
| unlisted                                                      |  |                 | 3,450  |      |  |  | 1,324 | 
|                                                                |  |                 |        |      |  |  |       | 
|                                                                |  |                 | 11,153 |      |  |  | 8,640 | 
|                                                                |  |                 |        |      |  |  |       | 
|Other securities                                                |  |                 |        |      |  |  |       | 
| listed                                                        |  |                 | 4,349  |      |  |  | 3,330 | 
| unlisted                                                      |  |                 | 174    |      |  |  | 367   | 
|                                                                |  |                 |        |      |  |  |       | 
|                                                                |  |                 | 4,523  |      |  |  | 3,697 | 
|                                                                |  |                 |        |      |  |  |       | 
|Unamortised premiums and discounts on investment
    securities |  |                 | 13     |      |  |  | 7     | 
|                                                                |  |                 |        |      |  |  |       | 

Income from listed and unlisted investments
amounted to 331m
(2003: 344m,
2002: 343m).

F-34



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



18  DEBT
SECURITIES  (continued)


|                                 |  |      |        |           |  |          |     |   |  |  |        |  
|-------------------------------- |  | ---- | ------ | --------- |  | -------- | --- | - |  |  | ------ | -
|                                 |  |      |        | Discount/ |  | Carrying
|Investment securities movements |  | Cost |        | (Premium) |  | Value   
|                                 |  |      |        |           |  |         
|                                 |  | m   |        | m        |  | m      
|At 1 April 2003                  |  |      | 8,685  |           |  |          | (45 | ) |  |  | 8,640  |  
|Exchange adjustments             |  |      | (195   | )         |  |          |    |   |  |  | (195   | )
|Acquisitions                     |  |      | 6,507  |           |  |          |    |   |  |  | 6,507  |  
|Disposals and redemptions        |  |      | (3,785 | )         |  |          |    |   |  |  | (3,785 | )
|Amortisation                     |  |      |       |           |  |          | (14 | ) |  |  | (14    | )
|                                 |  |      |        |           |  |          |     |   |  |  |        |  
|At 31 March 2004                 |  |      | 11,212 |           |  |          | (59 | ) |  |  | 11,153 |  
|                                 |  |      |        |           |  |          |     |   |  |  |        |  

|                                |  |                 |        |      |  |  |        | 
|------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                |  |                
|                                |  | Year ended     
|                                |  | March 31,      
|                                |  |                
|                                |  | 2004            |        | 2003
|                                |  |                 |        |     
|                                |  |                
|                                |  | (in  millions)
|Analysed by remaining maturity: |  |                 |        |      |  |  |        | 
|Due within one year             |  |                 | 4,371  |      |  |  | 2,601  | 
|Due one year and over           |  |                 | 11,305 |      |  |  | 9,736  | 
|                                |  |                 |        |      |  |  |        | 
|                                |  |                 | 15,676 |      |  |  | 12,337 | 
|                                |  |                 |        |      |  |  |        | 

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
2,489m (2003:
3,182m).

Debt securities with a market value of
6,460m (2003:
4,165m) were
pledged as collateral to cover settlement risk for
securities transactions.

Securitisation

The Group has sold a pool of leveraged
acquisition finance loan assets to Partholon CDO 1 plc
(Partholon), which is incorporated under the Irish
Companies Acts, 1963 to 2003 and is registered and operates in
the Republic of Ireland. Partholon has issued a series of loan
notes to finance this purchase. The Group holds 25% of the
subordinated loan notes but does not own, directly or
indirectly, any of the share capital of Partholon, which is
owned by a charitable trust. The Group also holds
5m of AAA-rated
loan notes in Partholon, which it intends to hold until maturity.

Under the terms of separate agreements the Group
manages the assets of Partholon, including identification of
additional assets for acquisition, for which it receives fees.

The market value at the date of sale of the
assets sold to Partholon was
243m and they
are disclosed by way of linked presentation on the Bank Balance
Sheet and Group Balance Sheet. The Group is not obliged, nor
intends to support any losses in respect of the assets of
Partholon. Repayment of the loan notes issued by Partholon will
be made solely from the cashflows generated by its pool of
assets. This is clearly stated in the agreements with the
holders of the loan notes. The proceeds generated by the
acquired assets will be used to pay interest and capital on the
loan notes and any other administrative expenses and taxation.

F-35



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



18  DEBT
SECURITIES  (continued)


|                                  |  |           |     | 
|--------------------------------- |  | --------- | --- | 
|                                  |  | The Group
|                                  |  |          
|                                  |  | m       
|Securitisation and loan transfers |  |           | 243 | 
|Less: non-returnable amounts      |  |           | 224 | 
|                                  |  |           |     | 
|                                  |  |           | 19  | 
|                                  |  |           |     | 

19  EQUITY SHARES

|                             |  |                 |    |      |  |  |    | 
|---------------------------- |  | --------------- | -- | ---- |  |  | -- | 
|                             |  |                
|                             |  | Year ended     
|                             |  | March 31,      
|                             |  |                
|                             |  | 2004            |    | 2003
|                             |  |                 |    |     
|                             |  |                
|                             |  | (in  millions)
|At April 1                   |  |                 | 38 |      |  |  | 19 | 
|Net movement during the year |  |                 | 26 |      |  |  | 19 | 
|                             |  |                 |    |      |  |  |    | 
|At March 31                  |  |                 | 64 |      |  |  | 38 | 
|                             |  |                 |    |      |  |  |    | 

20  INTERESTS IN ASSOCIATED
UNDERTAKINGS

|                           |  |                 |    |      |  |  |    |  
|-------------------------- |  | --------------- | -- | ---- |  |  | -- | -
|                           |  |                
|                           |  | Year ended     
|                           |  | March 31,      
|                           |  |                
|                           |  | 2004            |    | 2003
|                           |  |                 |    |     
|                           |  |                
|                           |  | (in  millions)
|At April 1                 |  |                 | 13 |      |  |  | 16 |  
|Increase in investments    |  |                 | 4  |      |  |  | 3  |  
|Decrease in investments    |  |                 | (1 | )    |  |  |   |  
|Retained profits           |  |                 | (2 | )    |  |  | (2 | )
|Transfer to Joint Ventures |  |                 |   |      |  |  | (4 | )
|                           |  |                 |    |      |  |  |    |  
|At March 31                |  |                 | 14 |      |  |  | 13 |  
|                           |  |                 |    |      |  |  |    |  

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.

21  INTEREST IN JOINT
VENTURES

|                                            |  |                 |     |      |  |  |    |  
|------------------------------------------- |  | --------------- | --- | ---- |  |  | -- | -
|                                            |  |                
|                                            |  | Year ended     
|                                            |  | March 31,      
|                                            |  |                
|                                            |  | 2004            |     | 2003
|                                            |  |                 |     |     
|                                            |  |                
|                                            |  | (in  millions)
|At April 1                                  |  |                 | 25  |      |  |  | 4  |  
|Acquisitions                                |  |                 | 156 |      |  |  | 2  |  
|Payment for Post Office Joint Venture Brand |  |                 | 44  |      |  |  |   |  
|Retained profits/losses                     |  |                 | 15  |      |  |  | 16 |  
|Exchange adjustments                        |  |                 | 3   |      |  |  | (1 | )
|Transfer from Associated undertakings       |  |                 |    |      |  |  | 4  |  
|                                            |  |                 |     |      |  |  |    |  
|At March 31                                 |  |                 | 243 |      |  |  | 25 |  
|                                            |  |                 |     |      |  |  |    |  

F-36



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



21  INTEREST IN JOINT
VENTURES  (continued)


On March 19, 2004 Bank of Ireland UK
Holdings plc signed the contract to acquire a 50.01% holding in
the entity, Midasgrange Limited (trading as Post Office
Financial Services), to sell financial products through the Post
Office distribution network for a consideration of
149m
(£100m). The remaining 49.99% holding is owned by Post
Office Limited. The joint venture equity is being managed
jointly by both parties according to the shareholder agreement
and as such is currently being accounted for as a joint venture
using the gross equity method.

As analysed below the acquisition gave rise to
goodwill of 81m
(£55m) which has been capitalised and will be written off
to the profit and loss account over its useful estimated life of
10 years. An amount of
0.2m
(£0.2m) was written off for the period through to the year
end.

An additional payment was made of
44m
(Stg£29m) to the UK Post Office for the use of the Post
Office Brand in connection with the business of the joint
venture. This is considered to be part of the goodwill arising
on the Groups investment and will be written off to the
profit and loss account over its useful estimated life of
10 years.

|                             |  |      |     |      |  |  |     | 
|---------------------------- |  | ---- | --- | ---- |  |  | --- | 
|Share of net assets acquired |  | 2004 |     | 2004
|                             |  |      |     |     
|                             |  | £m   |     | £m  
|Cash at bank and in hand     |  |      | 75  |      |  |  | 50  | 
|Goodwill                     |  |      | 81  |      |  |  | 55  | 
|                             |  |      |     |      |  |  |     | 
|                             |  |      | 156 |      |  |  | 105 | 
|                             |  |      |     |      |  |  |     | 
|Consideration                |  |      | 149 |      |  |  | 100 | 
|Costs of Acquisition         |  |      | 7   |      |  |  | 5   | 
|                             |  |      |     |      |  |  |     | 
|                             |  |      | 156 |      |  |  | 105 | 
|                             |  |      |     |      |  |  |     | 

There were no fair value adjustments to the
balance sheet of Midasgrange Limited (trading as Post Office
Financial Services) on March 18, 2004.

22  INTANGIBLE FIXED
ASSETS

|                                                 |  |                 |     |      |  |  |     |  
|------------------------------------------------ |  | --------------- | --- | ---- |  |  | --- | -
|                                                 |  |                
|                                                 |  | The Group      
|                                                 |  |                
|                                                 |  | 2004            |     | 2003
|                                                 |  |                 |     |     
|                                                 |  |                
|                                                 |  | (in  millions)
|Cost                                             |  |                 |     |      |  |  |     |  
|At April 1                                       |  |                 | 423 |      |  |  | 293 |  
|Goodwill arising on acquisitions during the year |  |                 | 11  |      |  |  | 186 |  
|Exchange adjustments                             |  |                 | (10 | )    |  |  | (48 | )
|Goodwill written back on disposals               |  |                 |    |      |  |  | (8  | )
|                                                 |  |                 |     |      |  |  |     |  
|At March 31                                      |  |                 | 424 |      |  |  | 423 |  
|                                                 |  |                 |     |      |  |  |     |  
|Amortisation                                     |  |                 |     |      |  |  |     |  
|At April 1                                       |  |                 | 157 |      |  |  | 22  |  
|Charge for year                                  |  |                 | 19  |      |  |  | 23  |  
|Impairment                                       |  |                 | 93  |      |  |  | 124 |  
|Exchange adjustments                             |  |                 | 8   |      |  |  | (12 | )
|                                                 |  |                 |     |      |  |  |     |  
|At March 31                                      |  |                 | 277 |      |  |  | 157 |  
|                                                 |  |                 |     |      |  |  |     |  
|Net Book Value                                   |  |                 | 147 |      |  |  | 266 |  
|                                                 |  |                 |     |      |  |  |     |  

F-37



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



22  INTANGIBLE FIXED
ASSETS  (continued)


The details relating to recent acquisitions are
set out in Note 3.

23  TANGIBLE FIXED ASSETS

The Group

|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|--------------------------------------------- |  | --------- | --- | --------- |  | --------- | -- | --------- |  | ------- | --- | ------------- |  | ----- | ----- | - |  |  | -- | - |  |  | ---- | - |  |  | ----- | -
|                                              |  |           |     |           |  |           |    |           |  |         |     | Payments      |  |      
|                                              |  |           |     | Leases of |  | Leases of |    |           |  |         |     | on account    |  |      
|                                              |  | Freehold  |     | 50 years  |  | less than |    | Computer  |  | Finance |     | and assets in |  |      
|                                              |  | land and  |     | or more   |  | 50 years  |    | and other |  | lease   |     | the course of |  |      
|                                              |  | buildings |     | unexpired |  | unexpired |    | equipment |  | assets  |     | construction  |  | Total
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |      
|                                              |  | m        |     | m        |  | m        |    | m        |  | m      |     | m            |  | m   
|Cost or valuation                             |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At April 1, 2003                              |  |           | 509 |           |  |           | 24 |           |  |         | 89  |               |  |       | 1,186 |   |  |  | 12 |   |  |  | 186  |   |  |  | 2,006 |  
|Exchange adjustments                          |  |           | 4   |           |  |           |   |           |  |         |    |               |  |       | 9     |   |  |  |   |   |  |  |     |   |  |  | 13    |  
|Additions                                     |  |           | 9   |           |  |           |   |           |  |         | 20  |               |  |       | 104   |   |  |  |   |   |  |  | 82   |   |  |  | 215   |  
|Disposals                                     |  |           | (33 | )         |  |           |   |           |  |         | (10 | )             |  |       | (99   | ) |  |  | (2 | ) |  |  |     |   |  |  | (144  | )
|Reclassifications                             |  |           | 2   |           |  |           | (2 | )         |  |         |    |               |  |       | 172   |   |  |  |   |   |  |  | (172 | ) |  |  |      |  
|Revaluations                                  |  |           | 42  |           |  |           | (3 | )         |  |         | (18 | )             |  |       |      |   |  |  |   |   |  |  |     |   |  |  | 21    |  
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At March 31, 2004                             |  |           | 533 |           |  |           | 19 |           |  |         | 81  |               |  |       | 1,372 |   |  |  | 10 |   |  |  | 96   |   |  |  | 2,111 |  
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|Accumulated depreciation and
    amortisation |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At April 1, 2003                              |  |           | 13  |           |  |           |   |           |  |         | 18  |               |  |       | 758   |   |  |  | 8  |   |  |  |     |   |  |  | 797   |  
|Exchange adjustments                          |  |           |    |           |  |           |   |           |  |         |    |               |  |       | 10    |   |  |  |   |   |  |  |     |   |  |  | 10    |  
|Disposals                                     |  |           | (3  | )         |  |           |   |           |  |         | (1  | )             |  |       | (84   | ) |  |  | (2 | ) |  |  |     |   |  |  | (90   | )
|Charge for year                               |  |           | 9   |           |  |           |   |           |  |         | 9   |               |  |       | 146   |   |  |  |   |   |  |  |     |   |  |  | 164   |  
|Revaluations                                  |  |           | (19 | )         |  |           |   |           |  |         | (19 | )             |  |       |      |   |  |  |   |   |  |  |     |   |  |  | (38   | )
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At March 31, 2004                             |  |           |    |           |  |           |   |           |  |         | 7   |               |  |       | 830   |   |  |  | 6  |   |  |  |     |   |  |  | 843   |  
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|Net book value                                |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At March 31, 2004                             |  |           | 533 |           |  |           | 19 |           |  |         | 74  |               |  |       | 542   |   |  |  | 4  |   |  |  | 96   |   |  |  | 1,268 |  
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  
|At March 31, 2003                             |  |           | 496 |           |  |           | 24 |           |  |         | 71  |               |  |       | 428   |   |  |  | 4  |   |  |  | 186  |   |  |  | 1,209 |  
|                                              |  |           |     |           |  |           |    |           |  |         |     |               |  |       |       |   |  |  |    |   |  |  |      |   |  |  |       |  

Property and Equipment

A revaluation of all Group property 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.

A revaluation on fixed assets was carried out for
the year end March 31, 2004 by external valuers Jones Lang
LaSalle and the Banks professionally qualified staff, in
line with the Group policy to have an interim revaluation in
year 3.

F-38



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



23  TANGIBLE FIXED
ASSETS  (continued)


As at March 31, 2004 on a historical cost
basis the cost of group property would have been included at
412m (2003:
426m) less
accumulated depreciation
104m (2003:
86m). The Group
occupies properties with a net book value of
597m (2003:
559m) in the
course of carrying out its own activities.

In the year to March 31, 2004 salary and
other costs of
67m (2003:
116m) 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,      
|                             |  |                
|                             |  | 2004            |    | 2003
|                             |  |                 |    |     
|                             |  |                
|                             |  | (in  millions)
|Tangible fixed assets leased |  |                 | 27 |      |  |  | 31 | 
|                             |  |                 |    |      |  |  |    | 

|                                                     |  |                 |    |      |  |  |    | 
|---------------------------------------------------- |  | --------------- | -- | ---- |  |  | -- | 
|                                                     |  |                
|                                                     |  | Year ended     
|                                                     |  | March 31,      
|                                                     |  |                
|                                                     |  | 2004            |    | 2003
|                                                     |  |                 |    |     
|                                                     |  |                
|                                                     |  | (in  millions)
|Future capital expenditure                           |  |                 |    |      |  |  |    | 
| contracted but not provided in the
    accounts    |  |                 | 11 |      |  |  | 14 | 
|                                                     |  |                 |    |      |  |  |    | 
| authorised by the Directors but not
    contracted |  |                 | 4  |      |  |  | 7  | 
|                                                     |  |                 |    |      |  |  |    | 

Rentals payable in 2004 under non-cancellable
operating leases amounted to
54m (2003:
53m). Of this
amount 1m (2003:
6m) relates to
leases expiring within one year,
14m (2003:
7m) relates to
leases expiring in two to five years and
39m (2003:
40m) relates to
leases expiring after five years, split between property
54m and
equipment nil.

Minimum future rentals under non cancellable
operating leases are as follows:

|                    |  |         |     |            |  |  |   | 
|------------------- |  | ------- | --- | ---------- |  |  | - | 
|Year ended 31 March |  | Payable |     | Receivable
|                    |  |         |     |           
|                    |  | m      |     | m        
|2005                |  |         | 54  |            |  |  | 3 | 
|2006                |  |         | 53  |            |  |  | 3 | 
|2007                |  |         | 52  |            |  |  | 3 | 
|2008                |  |         | 52  |            |  |  | 3 | 
|2009                |  |         | 46  |            |  |  | 2 | 
|Thereafter          |  |         | 656 |            |  |  | 8 | 

The obligations under finance leases amount to
2.8m (2003:
3.7m) of which
0.7m (2003:
0.6m) is due
within one year,
2.1m (2003:
3.1m) is due
after more than one year but within five years and nil (2003:
nil) is due after five years.

F-39



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

24  OTHER ASSETS

|                                             |  |                 |       |      |  |  |       | 
|-------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                             |  |                
|                                             |  | Year ended     
|                                             |  | March 31,      
|                                             |  |                
|                                             |  | 2004            |       | 2003
|                                             |  |                 |       |     
|                                             |  |                
|                                             |  | (in  millions)
|Sundry debtors                               |  |                 | 1,492 |      |  |  | 1,373 | 
|Foreign exchange and interest rate contracts |  |                 | 1,663 |      |  |  | 1,897 | 
|Value of life assurance business in force    |  |                 | 573   |      |  |  | 494   | 
|Other                                        |  |                 | 39    |      |  |  | 77    | 
|                                             |  |                 |       |      |  |  |       | 
|                                             |  |                 | 3,767 |      |  |  | 3,841 | 
|                                             |  |                 |       |      |  |  |       | 

25  LIFE ASSURANCE
BUSINESS

The net assets attributable to stockholders from
the life assurance business are analysed as follows:

|                                                                        |  |                 |     |      |  |  |     | 
|----------------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                                                        |  | 2004            |     | 2003
|                                                                        |  |                 |     |     
|                                                                        |  |                
|                                                                        |  | (in  millions)
|Long term assurance business                                            |  |                 |     |      |  |  |     | 
|Net tangible assets of life companies including
    surplus             |  |                 | 329 |      |  |  | 254 | 
|Value of life assurance business in force                               |  |                 | 573 |      |  |  | 494 | 
|                                                                        |  |                 |     |      |  |  |     | 
|                                                                        |  |                 | 902 |      |  |  | 748 | 
|                                                                        |  |                 |     |      |  |  |     | 
|Increase in net tangible assets of life companies
    including surplus |  |                 | 75  |      |  |  | 48  | 
|Increase in value of life assurance business in
    force               |  |                 | 79  |      |  |  | 51  | 
|                                                                        |  |                 |     |      |  |  |     | 
|Profit after tax                                                        |  |                 | 154 |      |  |  | 99  | 
|                                                                        |  |                 |     |      |  |  |     | 

The net assets above of
902m is before
payment of a dividend of
50m to the
Governor and Company of the Bank of Ireland and other capital
movements (2)m
in relation to property revaluation

The life assurance assets attributable to
policyholders consist of:

|                                                                                     |  |                 |       |      |  |  |       |  
|------------------------------------------------------------------------------------ |  | --------------- | ----- | ---- |  |  | ----- | -
|                                                                                     |  | 2004            |       | 2003
|                                                                                     |  |                 |       |     
|                                                                                     |  |                
|                                                                                     |  | (in  millions)
|Property                                                                             |  |                 | 430   |      |  |  | 373   |  
|Fixed interest securities                                                            |  |                 | 1,378 |      |  |  | 1,426 |  
|Other securities                                                                     |  |                 | 4,578 |      |  |  | 3,071 |  
|Bank balances and cash                                                               |  |                 | 574   |      |  |  | 430   |  
|Income receivable                                                                    |  |                 | 49    |      |  |  | 46    |  
|Other assets                                                                         |  |                 | 200   |      |  |  | 36    |  
|Other liabilities                                                                    |  |                 | (13   | )    |  |  | (40   | )
|                                                                                     |  |                 |       |      |  |  |       |  
|                                                                                     |  |                 | 7,196 |      |  |  | 5,342 |  
|Less Bank of Ireland shares held for the benefit
    of policyholders (see Note 1.2) |  |                 | (227  | )    |  |  | (167  | )
|                                                                                     |  |                 |       |      |  |  |       |  
|                                                                                     |  |                 | 6,969 |      |  |  | 5,175 |  
|                                                                                     |  |                 |       |      |  |  |       |  

F-40



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



25  LIFE ASSURANCE
BUSINESS  (continued)


Value of in-force business

The principal assumptions used in the calculation
of shareholders value of in-force business are:

|                                         |                             |      |       |      |  |  |       |      | 
|---------------------------------------- | --------------------------- | ---- | ----- | ---- |  |  | ----- | ---- | 
|                                         |                             | 2004 |       | 2003
|                                         |                             |      |       |     
|Risk adjusted discount rate (net of tax) |                             |      | 8%    |      |  |  | 10%   |     
|Investment returns on unit linked assets |                             |      | 6.0%  |      |  |  | 6.5%  |     
|                                         |  Equities and property     |      |       | 7.0% |  |  |       | 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 discounted.

Achieved Profits:

The profit, derived using the Achieved Profits
method and shown in the Operating Review, 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.                                                                                                                                                       
|
| |  | Changes in economic assumptions expected to be
    non-recurring.                                                                                                                                                                                                                                                                                                  

F-41



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



25  LIFE ASSURANCE
BUSINESS  (continued)


Premium Income Analysis

The table below sets out the levels of gross
premiums and new business written for 2004 and 2003.

|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|---------------------------------------------- |  | ---------- | --- | -------- |  | --------- | --- | ----- |  |  | -- |  |  |  | ----- | 
|                                               |  |            |     |          |  |          
|                                               |  | Individual |     |          |  |          
|                                               |  |            |     | Group    |  |          
|                                               |  | Life       |     | Pensions |  | Contracts |     | Total
|                                               |  |            |     |          |  |           |     |      
|                                               |  | m         |     | m       |  | m        |     | m   
|Gross Premiums Written 
    2004              |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |            | 408 |          |  |           | 297 |       |  |  | 14 |  |  |  | 719   | 
|Single premiums                                |  |            | 393 |          |  |           | 280 |       |  |  | 46 |  |  |  | 719   | 
|Non-life single premiums                       |  |            | 155 |          |  |           | 0   |       |  |  | 0  |  |  |  | 155   | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross premiums written                   |  |            | 956 |          |  |           | 577 |       |  |  | 60 |  |  |  | 1,593 | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross Premiums Written 
    2003              |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |            | 426 |          |  |           | 262 |       |  |  | 26 |  |  |  | 714   | 
|Single premiums                                |  |            | 307 |          |  |           | 211 |       |  |  | 42 |  |  |  | 560   | 
|Non-life single premiums                       |  |            | 239 |          |  |           | 0   |       |  |  | 0  |  |  |  | 239   | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross premiums written                   |  |            | 972 |          |  |           | 473 |       |  |  | 68 |  |  |  | 1,513 | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross New Business Premiums
    Written  2004 |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |            | 52  |          |  |           | 124 |       |  |  | 0  |  |  |  | 176   | 
|Single premiums                                |  |            | 393 |          |  |           | 280 |       |  |  | 46 |  |  |  | 719   | 
|Non-life single premiums                       |  |            | 155 |          |  |           | 0   |       |  |  | 0  |  |  |  | 155   | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross new business written               |  |            | 600 |          |  |           | 404 |       |  |  | 46 |  |  |  | 1,050 | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Gross New Business Premiums
    Written  2003 |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Recurring premiums                             |  |            | 119 |          |  |           | 99  |       |  |  | 0  |  |  |  | 218   | 
|Single premiums                                |  |            | 307 |          |  |           | 211 |       |  |  | 42 |  |  |  | 560   | 
|Non-life single premiums                       |  |            | 239 |          |  |           | 0   |       |  |  | 0  |  |  |  | 239   | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 
|Total gross new business written               |  |            | 665 |          |  |           | 310 |       |  |  | 42 |  |  |  | 1,017 | 
|                                               |  |            |     |          |  |           |     |       |  |  |    |  |  |  |       | 

F-42



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

26  DEPOSITS BY BANKS

|                                       |  |                 |        |      |  |  |        | 
|-------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                       |  |                
|                                       |  | Year ended     
|                                       |  | March 31,      
|                                       |  |                
|                                       |  | 2004            |        | 2003
|                                       |  |                 |        |     
|                                       |  |                
|                                       |  | (in  millions)
|Deposits by Banks                      |  |                 | 17,060 |      |  |  | 12,617 | 
|of which:                              |  |                 |        |      |  |  |        | 
|Domestic                               |  |                 | 15,963 |      |  |  | 11,609 | 
|Foreign                                |  |                 | 1,097  |      |  |  | 1,008  | 
|                                       |  |                 |        |      |  |  |        | 
|                                       |  |                 | 17,060 |      |  |  | 12,617 | 
|                                       |  |                 |        |      |  |  |        | 
|Repayable on demand                    |  |                 | 3,591  |      |  |  | 3,908  | 
|Other deposits by remaining maturity   |  |                 |        |      |  |  |        | 
| 3 months or less                     |  |                 | 11,824 |      |  |  | 7,289  | 
| 1 year or less but over
    3 months |  |                 | 1,175  |      |  |  | 1,082  | 
| 5 years or less but over
    1 year  |  |                 | 324    |      |  |  | 318    | 
| over 5 years                         |  |                 | 146    |      |  |  | 20     | 
|                                       |  |                 |        |      |  |  |        | 
|                                       |  |                 | 17,060 |      |  |  | 12,617 | 
|                                       |  |                 |        |      |  |  |        | 

27  CUSTOMER ACCOUNTS

|                                                                                          |  |                 |        |      |  |  |        | 
|----------------------------------------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ------ | 
|                                                                                          |  |                
|                                                                                          |  | Year ended     
|                                                                                          |  | March 31,      
|                                                                                          |  |                
|                                                                                          |  | 2004            |        | 2003
|                                                                                          |  |                 |        |     
|                                                                                          |  |                
|                                                                                          |  | (in  millions)
|Current accounts                                                                          |  |                 | 11,259 |      |  |  | 9,646  | 
|Demand deposits                                                                           |  |                 | 21,390 |      |  |  | 20,072 | 
|Term deposits and other products                                                          |  |                 | 21,098 |      |  |  | 18,331 | 
|Other short-term borrowings                                                               |  |                 | 648    |      |  |  | 447    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 54,395 |      |  |  | 48,496 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|of which:                                                                                 |  |                 |        |      |  |  |        | 
|Non interest bearing current accounts                                                     |  |                 |        |      |  |  |        | 
|Domestic                                                                                  |  |                 | 7,730  |      |  |  | 6,445  | 
|Foreign                                                                                   |  |                 | 912    |      |  |  | 770    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 8,642  |      |  |  | 7,215  | 
|                                                                                          |  |                 |        |      |  |  |        | 
|Interest bearing current accounts and short term
    borrowings                           |  |                 |        |      |  |  |        | 
|Domestic                                                                                  |  |                 | 23,680 |      |  |  | 21,212 | 
|Foreign                                                                                   |  |                 | 22,073 |      |  |  | 20,069 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 45,753 |      |  |  | 41,281 | 
|                                                                                          |  |                 |        |      |  |  |        | 
|Repayable on demand                                                                       |  |                 | 29,929 |      |  |  | 29,496 | 
|Other deposits with agreed maturity dates or
    periods of notice, by remaining maturity |  |                 |        |      |  |  |        | 
| 3 months or less                                                                        |  |                 | 15,551 |      |  |  | 12,443 | 
| 1 year or less but over
    3 months                                                    |  |                 | 3,017  |      |  |  | 2,223  | 
| 5 years or less but over
    1 year                                                     |  |                 | 4,877  |      |  |  | 3,668  | 
| over 5 years                                                                            |  |                 | 1,021  |      |  |  | 666    | 
|                                                                                          |  |                 |        |      |  |  |        | 
|                                                                                          |  |                 | 54,395 |      |  |  | 48,496 | 
|                                                                                          |  |                 |        |      |  |  |        | 

F-43



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

28  DEBT SECURITIES IN
ISSUE

|                                                         |  |                 |        |      |  |  |       | 
|-------------------------------------------------------- |  | --------------- | ------ | ---- |  |  | ----- | 
|                                                         |  |                
|                                                         |  | Year ended     
|                                                         |  | March 31,      
|                                                         |  |                
|                                                         |  | 2004            |        | 2003
|                                                         |  |                 |        |     
|                                                         |  |                
|                                                         |  | (in  millions)
|Bonds and medium term notes by remaining maturity        |  |                 |        |      |  |  |       | 
| 3 months or less                                       |  |                 | 338    |      |  |  | 520   | 
| 1 year or less but over
    3 months                   |  |                 | 1,303  |      |  |  | 618   | 
| 5 years or less but over
    1 year                    |  |                 | 3,876  |      |  |  | 3,215 | 
|Other debt securities in issue by remaining
    maturity |  |                 |        |      |  |  |       | 
| 3 months or less                                       |  |                 | 5,744  |      |  |  | 4,179 | 
| 1 year or less but over
    3 months                   |  |                 | 1,655  |      |  |  | 1,120 | 
| 5 years or less but over
    1 year                    |  |                 | 1      |      |  |  |      | 
|                                                         |  |                 |        |      |  |  |       | 
|                                                         |  |                 | 12,917 |      |  |  | 9,652 | 
|                                                         |  |                 |        |      |  |  |       | 

29  OTHER LIABILITIES

|                                             |  |                 |       |      |  |  |       | 
|-------------------------------------------- |  | --------------- | ----- | ---- |  |  | ----- | 
|                                             |  |                
|                                             |  | Year ended     
|                                             |  | March 31,      
|                                             |  |                
|                                             |  | 2004            |       | 2003
|                                             |  |                 |       |     
|                                             |  |                
|                                             |  | (in  millions)
|Current taxation                             |  |                 | 85    |      |  |  | 126   | 
|Notes in circulation                         |  |                 | 761   |      |  |  | 683   | 
|Foreign exchange and interest rate contracts |  |                 | 1,686 |      |  |  | 2,016 | 
|Sundry creditors                             |  |                 | 1,452 |      |  |  | 1,340 | 
|Other                                        |  |                 | 1,435 |      |  |  | 1,050 | 
|Dividends                                    |  |                 | 257   |      |  |  | 238   | 
|                                             |  |                 |       |      |  |  |       | 
|                                             |  |                 | 5,676 |      |  |  | 5,453 | 
|                                             |  |                 |       |      |  |  |       | 

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.

30  DEFERRED TAXATION

|                                          |  |                 |     |      |  |  |     |  
|----------------------------------------- |  | --------------- | --- | ---- |  |  | --- | -
|                                          |  |                
|                                          |  | Year ended     
|                                          |  | March 31,      
|                                          |  |                
|                                          |  | 2004            |     | 2003
|                                          |  |                 |     |     
|                                          |  |                
|                                          |  | (in  millions)
|Taxation treatment of capital allowances: |  |                 |     |      |  |  |     |  
| finance leases                          |  |                 | 103 |      |  |  | 104 |  
| equipment used by group                 |  |                 | 14  |      |  |  | 8   |  
|Other short term timing differences       |  |                 | (51 | )    |  |  | (58 | )
|                                          |  |                 |     |      |  |  |     |  
|                                          |  |                 | 66  |      |  |  | 54  |  
|                                          |  |                 |     |      |  |  |     |  

F-44



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



30  DEFERRED
TAXATION  (continued)


|                     |  |                 |    |      |  |  |     |  
|-------------------- |  | --------------- | -- | ---- |  |  | --- | -
|                     |  |                
|                     |  | Year ended     
|                     |  | March 31,      
|                     |  |                
|                     |  | 2004            |    | 2003
|                     |  |                 |    |     
|                     |  |                
|                     |  | (in  millions)
|At April 1           |  |                 | 54 |      |  |  | 89  |  
|Exchange adjustments |  |                 | (1 | )    |  |  | 2   |  
|Charge for year      |  |                 | 13 |      |  |  | (11 | )
|Disposals            |  |                 |   |      |  |  | (27 | )
|Other movements      |  |                 |   |      |  |  | 1   |  
|                     |  |                 |    |      |  |  |     |  
|At March 31          |  |                 | 66 |      |  |  | 54  |  
|                     |  |                 |    |      |  |  |     |  

No provision is made for deferred tax on capital
gains which might arise on the disposal of properties at their
balance sheet amounts, due to the expectation that the greater
portion of land and buildings will be retained by the Group.

During the year the Group disposed of a number of
properties on which
c. 4m tax
has been provided. Finance Act 2003 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.

31  OTHER PROVISIONS FOR LIABILITIES
AND CHARGES

|                     |  |             |     |                |  |       |     |       |  |  |     |   |  |  |     |  
|-------------------- |  | ----------- | --- | -------------- |  | ----- | --- | ----- |  |  | --- | - |  |  | --- | -
|                     |  |             |     | Group          |  |       |     |      
|                     |  | Pensions    |     | Transformation |  |       |     |      
|                     |  | obligations |     | Programme      |  | Other |     | Total
|                     |  |             |     |                |  |       |     |      
|                     |  | m          |     | m             |  | m    |     | m   
|The Group            |  |             |     |                |  |       |     |       |  |  |     |   |  |  |     |  
|At April 1, 2003     |  |             | 130 |                |  |       | 11  |       |  |  | 48  |   |  |  | 189 |  
|Exchange adjustments |  |             | 1   |                |  |       |    |       |  |  | 3   |   |  |  | 4   |  
|Provisions made      |  |             | 51  |                |  |       |    |       |  |  | 45  |   |  |  | 96  |  
|Provisions utilised  |  |             | (24 | )              |  |       | (11 | )     |  |  | (30 | ) |  |  | (65 | )
|Provisions released  |  |             |    |                |  |       |    |       |  |  | (3  | ) |  |  | (3  | )
|                     |  |             |     |                |  |       |     |       |  |  |     |   |  |  |     |  
|At March 31, 2004    |  |             | 158 |                |  |       |    |       |  |  | 63  |   |  |  | 221 |  
|                     |  |             |     |                |  |       |     |       |  |  |     |   |  |  |     |  

F-45



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

32  SUBORDINATED
LIABILITIES

|                                |                                                                            |                 |       |       |  |  |       |       | 
|------------------------------- | -------------------------------------------------------------------------- | --------------- | ----- | ----- |  |  | ----- | ----- | 
|                                |                                                                            |                
|                                |                                                                            | Year ended     
|                                |                                                                            | March 31,      
|                                |                                                                            |                
|                                |                                                                            | 2004            |       | 2003 
|                                |                                                                            |                 |       |      
|                                |                                                                            |                
|                                |                                                                            | (in  millions)
|Undated Loan Capital            |                                                                            |                 |       |       |  |  |       |      
|Bank of Ireland                 |                                                                            |                 |       |       |  |  |       |      
|                                | US$150m Undated Floating Rate Primary Capital
    Notes                    |                 |       | 121   |  |  |       | 136   | 
|Bank of Ireland UK Holdings plc |                                                                            |                 |       |       |  |  |       |      
|                                | 600m
    7.40% Guaranteed Step-up Callable Perpetual Preferred Securities |                 |       | 595   |  |  |       | 595   | 
|                                | Stg£350m 6.25% Guaranteed Callable Perpetual
    Preferred Securities      |                 |       | 521   |  |  |       | 502   | 
|Bristol & West                  |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£75m 13 3/8% Perpetual Subordinated
    Bonds                           |                 |       | 186   |  |  |       | 180   | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 1,423 |       |  |  | 1,413 |      
|                                |                                                                            |                 |       |       |  |  |       |      
|Dated loan capital              |                                                                            |                 |       |       |  |  |       |      
|Bank of Ireland                 |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£100m 9.75% Subordinated Bonds 2005                                     |                 |       | 150   |  |  |       | 145   | 
|                                | Stg£200m Subordinated Floating Rate Notes
    2009                         |                 |       |      |  |  |       | 290   | 
|                                | 750m
    6.45% Subordinated Bonds 2010                                    |                 |       | 748   |  |  |       | 747   | 
|                                | 600m
    Subordinated Floating Rate Notes 2013                            |                 |       | 599   |  |  |       |      | 
|                                | 650m
    Fixed/ Floating Rate Subordinated Notes 2019                     |                 |       | 650   |  |  |       |      | 
|Bristol & West                  |                                                                            |                 |       |       |  |  |       |      
|                                | Stg£75m 10 3/4% Subordinated Bonds 2018                                    |                 |       | 112   |  |  |       | 108   | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 2,259 |       |  |  | 1,290 |      
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 3,682 |       |  |  | 2,703 |      
|                                |                                                                            |                 |       |       |  |  |       |      
|Repayable                       |                                                                            |                 |       |       |  |  |       |      
|                                | in 1 year or less                                                          |                 |       | 150   |  |  |       |      | 
|                                | Between 2 and not more than 5 years                                        |                 |       |      |  |  |       | 145   | 
|                                | 5 years or more                                                            |                 |       | 2,109 |  |  |       | 1,145 | 
|                                |                                                                            |                 |       |       |  |  |       |      
|                                |                                                                            |                 | 2,259 |       |  |  | 1,290 |      
|                                |                                                                            |                 |       |       |  |  |       |      

The US$150m Undated Floating Rate Primary Capital
Notes which were issued at par on 5 December 1985 are
subordinated in right of payment to the claims of depositors and
other creditors of the Bank.

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 IFSRA and of the Bank, at their principal amount
together with any outstanding payments on 7 March 2011 or any
coupon payment date thereafter. The Preferred Securities bear
interest at a rate of 7.40% per annum to 7 March 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

F-46



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



32  SUBORDINATED
LIABILITIES  (continued)


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 IFSRA 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 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£75m and were
revalued as part of the fair value adjustments on acquisition.

The Bank issued Stg£100m 9.75 per cent
Subordinated Bonds due 2005 on March 21, 1995.

The Bank set up a Stg£500m Euro Note
Programme (the Programme) in July 1995 and issued
Stg£200m Subordinated Floating Rate Notes due 2009 on
February 11, 1997. These notes were redeemed on
February 19, 2004. The Programme was increased to
Stg£1bn in July 1997. On November 9, 1999 the
Programme was redenominated from sterling to euro and increased
to 4bn. On
February 10, 2000 the Bank issued
600m
6.45 per cent Subordinated Bonds due 2010. On
January 22, 2001 the Bank issued an additional
150m
6.45 per cent Subordinated Bonds due 2010 which are
fungible and form a single series with the
600m issued in
February 2000.

The Bonds and Notes 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
4bn to
8bn. In February
2003 the Programme was again increased from
8bn to
10bn and on
December 18, 2003
600m
Subordinated floating rate notes were issued. In February 2004
the Programme was increased from
10bn to
15bn and on
February 25, 2004 the bank issued
650m, 4.625%
fixed/ floating rate subordinated notes due 2019.

Interest rates on the floating rate and fixed
rate subordinated liabilities (accommodated through swaps) are
determined by reference to the London Inter-Bank Offered Rate
(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.

F-47



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

33  MINORITY INTEREST 
NON EQUITY

|               |                                                                    |                 |  |      |  |  |  |    | 
|-------------- | ------------------------------------------------------------------ | --------------- |  | ---- |  |  |  | -- | 
|               |                                                                    |                
|               |                                                                    | Year ended     
|               |                                                                    | March 31,      
|               |                                                                    |                
|               |                                                                    | 2004            |  | 2003
|               |                                                                    |                 |  |     
|               |                                                                    |                
|               |                                                                    | (in  millions)
|Bristol & West |                                                                    |                 |  |      |  |  |  |   
|               | Stg£50.4m 8 1/8% Non-Cumulative
    Preference Shares of Stg£1each |                 |  | 76   |  |  |  | 73 | 
|               |                                                                    |                 |  |      |  |  |  |   

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.

34  CAPITAL STOCK

|                                                                |  |                 |       |            |  |  |       | 
|--------------------------------------------------------------- |  | --------------- | ----- | ---------- |  |  | ----- | 
|                                                                |  |                
|                                                                |  | Year ended     
|                                                                |  | March 31,      
|                                                                |  |                
|                                                                |  | 2004            |       | 2003      
|                                                                |  |                 |       |           
|                                                                |  |                 |       | (restated)
|                                                                |  |                
|                                                                |  | (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   |  |                 | 164   |            |  |  | 184   | 
|100m units of Non-Cumulative Preference Stock of
    Stg£1 each |  |                 | 150   |            |  |  | 145   | 
|100m units of Non-Cumulative Preference Stock of
    1.27 each |  |                 | 127   |            |  |  | 127   | 
|                                                                |  |                 |       |            |  |  |       | 
|                                                                |  |                 | 1,401 |            |  |  | 1,416 | 
|                                                                |  |                 |       |            |  |  |       | 
|Allotted and fully paid                                         |  |                 |       |            |  |  |       | 
|Equity                                                          |  |                 |       |            |  |  |       | 
|943.4m units of
    0.64 of Ordinary
    Stock                 |  |                 | 604   |            |  |  | 627   | 
|106.7m units of
    0.64 of Treasury
    Stock                 |  |                 | 68    |            |  |  | 45    | 
|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, 2004, used in the earnings per unit of Ordinary
Stock calculation, excludes the Treasury Stock which does not
represent Ordinary Stock in issue. All Treasury Stock, excluding
Bank of Ireland stock purchased by the Life Assurance company,
does not rank for dividend.

F-48



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



34  CAPITAL
STOCK  (continued)


Movements in issued Ordinary Stock

|                                                                             |  |          |             |          |  |  |             |  
|---------------------------------------------------------------------------- |  | -------- | ----------- | -------- |  |  | ----------- | -
|                                                                             |  | Ordinary |             | Treasury
|                                                                             |  |          |             |         
|At April 1, 2003                                                             |  |          | 996,170,626 |          |  |  | 53,944,863  |  
|Prior year adjustment                                                        |  |          | (17,109,974 | )        |  |  | 17,109,974  |  
|                                                                             |  |          |             |          |  |  |             |  
|                                                                             |  |          | 979,060,652 |          |  |  | 71,054,837  |  
|Stock Option Schemes                                                         |  |          | 776,000     |          |  |  | (776,000    | )
|Sharesave Scheme                                                             |  |          | 3,580,943   |          |  |  | (3,580,943  | )
|Long Term Performance Stock Plan                                             |  |          | 169,509     |          |  |  | (169,509    | )
|Buy back                                                                     |  |          | (34,963,806 | )        |  |  | 34,963,806  |  
|Stock purchased and held for the benefit of life
    assurance policyholders |  |          | (5,206,694  | )        |  |  | 5,206,694   |  
|Stock purchased by subsidiary                                                |  |          | (82,097     | )        |  |  | 82,097      |  
|                                                                             |  |          |             |          |  |  |             |  
|At March 31, 2004                                                            |  |          | 943,334,507 |          |  |  | 106,780,982 |  
|                                                                             |  |          |             |          |  |  |             |  

During the year the total Ordinary Stock in issue
decreased from 996,170,626 units of nominal value of
0.64 each to
943,334,507 units of nominal value of
0.64 each as a
result of:

776,000 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.

3,580,943 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.

169,509 units of Ordinary Stock were issued to
holders of conditional awards of stock under the terms of the
Long Term Performance Stock Plan (LTPSP) at a price
of 6.92 per
unit, by the re-issue of units of Treasury Stock

34,963,806 units of Ordinary Stock were bought
back at a weighted average price of
10.59 during the
year

17,109,974 units of Ordinary Stock held by the
Groups life assurance company as at March 31, 2003
are categorised as own shares and a further
5,206,694 units of Ordinary Stock were purchased by the Life
Assurance company and held for the benefit of policyholders
during the year to March 31, 2004. The change is in line
with UITF 37 Purchase and Sales of Own Shares and is
further explained in Note 1.2.

82,097 units of Ordinary Stock were purchased by
a subsidiary.

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 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.

F-49



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



34  CAPITAL
STOCK  (continued)


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, 2004 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. The first offer under the scheme
was made 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 of the then market price. A further
offer under the scheme was made in December 2003 and options to
purchase Ordinary Stock were granted to participating employees
in the Republic of Ireland at an option price of
7.84 which
represented a 25% discount to the then market price and to
participating employees in the UK at an option price of
8.37 which
represented a 20% discount to the then market price. As at
March 31, 2004, there are outstanding options under the
scheme over 16,770,743 units of Ordinary Stock (1.74 % of the
issued ordinary capital). These options are ordinarily
exercisable, provided the participants savings contracts
are complete between May 2005 and February 2009.

(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

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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



34  CAPITAL
STOCK  (continued)




(c)  Stock Option
Scheme (continued)


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 2000 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
164,500 options lapsed. The market price of the Banks
Ordinary Stock at March 31, 2004 was
10.15 (2003:
9.71) and the
range during the year to March 31, 2004 was
9.80 to
11.85.Outstanding options under the Stock Option Scheme are
exercisable at prices ranging between
1.67 to
12.50 between
now and December 2013. At March 31, 2004, options were
outstanding in respect of 6,585,000 units, 0.6819% of the stock
in issue (2003: 5,744,500 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          |  | %                     
|TSR ranking relative to peer group |  | Vesting |     | relative to FTSE 100 |  | Vesting               
|                                  
|                                  
|1st or 2nd                         |  |         | 50% |                      |  | Top decile             |  |  | 50% | 
|                                  
|3rd or 4th                         |  |         | 40% |                      |  | Top quartile           |  |  | 40% | 
|                                  
|5th (Median)                       |  |         | 25% |                      |  | Median to top quartile |  |  | 25% | 
|                                  
|Below median                       |  |         | Nil |                      |  | Below median           |  |  | Nil | 
|                                  



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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

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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



34  CAPITAL
STOCK  (continued)




(d) Long Term Performance Stock
Plan (continued)




| |  |                                                                                                                                                              
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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, 2004 conditional awards
totalling 808,895 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.

35  RESERVES

|                                                          |  |                 |       |            |  |  |       |  
|--------------------------------------------------------- |  | --------------- | ----- | ---------- |  |  | ----- | -
|                                                          |  |                
|                                                          |  | At March 31,   
|                                                          |  |                
|                                                          |  | 2004            |       | 2003      
|                                                          |  |                 |       |           
|                                                          |  |                 |       | (restated)
|                                                          |  |                
|                                                          |  | (in  millions)
|Stock premium account                                     |  |                 |       |            |  |  |       |  
|Opening balance                                           |  |                 | 765   |            |  |  | 773   |  
|Exchange adjustments                                      |  |                 | 2     |            |  |  | (8    | )
|                                                          |  |                 |       |            |  |  |       |  
|Closing balance                                           |  |                 | 767   |            |  |  | 765   |  
|                                                          |  |                 |       |            |  |  |       |  
|Capital reserve                                           |  |                 |       |            |  |  |       |  
|Opening balance                                           |  |                 | 436   |            |  |  | 397   |  
|Exchange adjustments                                      |  |                 |      |            |  |  | (5    | )
|Transfer from revenue reserves                            |  |                 | 62    |            |  |  | 44    |  
|                                                          |  |                 |       |            |  |  |       |  
|Closing balance                                           |  |                 | 498   |            |  |  | 436   |  
|                                                          |  |                 |       |            |  |  |       |  
|Profit and loss account                                   |  |                 |       |            |  |  |       |  
|Opening balance                                           |  |                 | 2,099 |            |  |  | 2,143 |  
|Prior year adjustment                                     |  |                 |      |            |  |  | (27   | )
|                                                          |  |                 |       |            |  |  |       |  
|                                                          |  |                 | 2,099 |            |  |  | 2,116 |  
|Profit retained                                           |  |                 | 473   |            |  |  | 411   |  
|Exchange adjustments                                      |  |                 | 60    |            |  |  | (328  | )
|Ordinary stock buyback                                    |  |                 | (377  | )          |  |  | (133  | )
|Goodwill written back on disposal of subsidiary           |  |                 |      |            |  |  | 5     |  
|Transfer from revaluation reserve                         |  |                 | 2     |            |  |  | 22    |  
|Reissue of Treasury stock under employee stock
    scheme |  |                 | 25    |            |  |  | 6     |  
|Purchase of stock by subsidiaries                         |  |                 | (1    | )          |  |  |      |  
|                                                          |  |                 |       |            |  |  |       |  
|Closing balance                                           |  |                 | 2,281 |            |  |  | 2,099 |  
|                                                          |  |                 |       |            |  |  |       |  
|Revaluation reserve                                       |  |                 |       |            |  |  |       |  
|Opening balance                                           |  |                 | 181   |            |  |  | 208   |  
|Exchange adjustments                                      |  |                 | 1     |            |  |  | (5    | )
|Revaluation of property                                   |  |                 | 59    |            |  |  |      |  
|Transfer to revenue reserves on sale of property          |  |                 | (2    | )          |  |  | (22   | )
|                                                          |  |                 |       |            |  |  |       |  
|Closing balance                                           |  |                 | 239   |            |  |  | 181   |  
|                                                          |  |                 |       |            |  |  |       |  

F-52



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

36  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).

(a)  SSAP 24 Pension
disclosures

An independent formal actuarial valuation of the
Bank of Ireland Staff Pensions Fund (the main scheme) was
carried out by Watson Wyatt, consulting actuaries as at
31 March 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 percent
higher than the annual rate of increase in pensionable
remuneration and in pensions in course of payment. The market
value of the assets of the main scheme at March 31, 2001
was 2,762.6m and
the actuarial value of the net assets after allowing for the
expected future increases in earnings and pensions represented
119% of the benefits that had accrued to members. The surplus
was corrected by charging to the surplus, the cost of pension
augmentations and by the Bank ceasing its contributions to the
scheme until the current actuarial valuation which is being
carried out as at March 31, 2004, is completed. The
accounting treatment 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
    141m (2003:
    105m) 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 36m
    in relation to the main scheme, compared to a net cost of
    32m in 2003.                                  

The total charge for the Group in respect of the
year ended March 31, 2004 was
60m (2003:
57m, 2002:
39m).

Watson Wyatt have made a preliminary financial
assessment of the Bank of Ireland Staff Pensions Fund as at
March 31, 2004 using similar assumptions to those used when
completing the formal valuation as at March 31, 2001. The
assessment discloses that there is effectively equivalence
between the actuarial value of the net assets and the value of
the benefits that have accrued to members.

(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.

|                                        |  |                  |      |                  |  |                  |      |  |  |  |      | 
|--------------------------------------- |  | ---------------- | ---- | ---------------- |  | ---------------- | ---- |  |  |  | ---- | 
|                                        |  | 2004             |      | 2003             |  | 2002            
|MAJOR ASSUMPTIONS                       |  | Weighted average |      | Weighted average |  | Weighted average
|                                        |  |                  |      |                  |  |                 
|                                        |  | %                |      | %                |  | %               
|Rate of general increase in salaries    |  |                  | 3.08 |                  |  |                  | 3.29 |  |  |  | 3.26 | 
|Rate of increase in pensions in payment |  |                  | 2.66 |                  |  |                  | 2.91 |  |  |  | 2.91 | 
|Rate of increase to deferred pensions   |  |                  | 2.25 |                  |  |                  | 2.50 |  |  |  | 2.50 | 
|Discount rate for scheme liabilities    |  |                  | 5.50 |                  |  |                  | 5.50 |  |  |  | 6.00 | 
|Inflation rate                          |  |                  | 2.25 |                  |  |                  | 2.50 |  |  |  | 2.50 | 

F-53



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  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, 2004, March 31, 2003 and March 31, 2002
were as follows:-

|                                      |  |                |       |                    |  |                |     |                    |  |              |       |                    |  |  |     |   |  |  |       |  |  |  |     |  
|------------------------------------- |  | -------------- | ----- | ------------------ |  | -------------- | --- | ------------------ |  | ------------ | ----- | ------------------ |  |  | --- | - |  |  | ----- |  |  |  | --- | -
|                                      |  |                |       |                    |  |               
|                                      |  | March 31, 2004 |       | March 31, 2003     |  | March 31, 2002
|                                      |  |                |       |                    |  |               
|                                      |  |                |       | Expected long term |  |                |     | Expected long term |  |              |       | Expected long term
|                                      |  | Market value   |       | rate of return     |  | Market value   |     | rate of return     |  | Market value |       | rate of return    
|                                      |  |                |       |                    |  |                |     |                    |  |              |       |                   
|                                      |  | m             |       |                    |  | m             |     |                    |  | m           |       |                   
|Equities                              |  |                | 2,048 |                    |  |                | 7.5 | %                  |  |              | 1,734 |                    |  |  | 9.0 | % |  |  | 2,484 |  |  |  | 7.5 | %
|Bonds                                 |  |                | 668   |                    |  |                | 4.8 | %                  |  |              | 464   |                    |  |  | 4.2 | % |  |  | 579   |  |  |  | 5.5 | %
|Property                              |  |                | 363   |                    |  |                | 6.5 | %                  |  |              | 337   |                    |  |  | 8.0 | % |  |  | 329   |  |  |  | 6.5 | %
|Other                                 |  |                | 38    |                    |  |                | 4.0 | %                  |  |              | 73    |                    |  |  | 4.0 | % |  |  | 89    |  |  |  | 4.5 | %
|                                      |  |                |       |                    |  |                |     |                    |  |              |       |                    |  |  |     |   |  |  |       |  |  |  |     |  
|Total market value of schemes assets |  |                | 3,117 |                    |  |                |     |                    |  |              | 2,608 |                    |  |  |     |   |  |  | 3,481 |  |  |  |     |  
|                                      |  |                |       |                    |  |                |     |                    |  |              |       |                    |  |  |     |   |  |  |       |  |  |  |     |  
|Present value of schemes liabilities |  |                | 3,508 |                    |  |                |     |                    |  |              | 3,407 |                    |  |  |     |   |  |  | 2,908 |  |  |  |     |  
|                                      |  |                |       |                    |  |                |     |                    |  |              |       |                    |  |  |     |   |  |  |       |  |  |  |     |  

|                                       |  |    |      |   |  |    |  |  |  |    |      |   |  |  |  |  |  |  |     |   |  |  |  | 
|-------------------------------------- |  | -- | ---- | - |  | -- |  |  |  | -- | ---- | - |  |  |  |  |  |  | --- | - |  |  |  | 
|                                       |  | m |      |   |  | m |  |  |  | m |      |  
|                                       |  |    |      |   |  |    |  |  |  |    |      |  
|Aggregate deficit in schemes           |  |    | (391 | ) |  |    |  |  |  |    | (800 | ) |  |  |  |  |  |  | (30 | ) |  |  |  | 
|Aggregate surplus in schemes           |  |    |     |   |  |    |  |  |  |    | 1    |   |  |  |  |  |  |  | 603 |   |  |  |  | 
|                                       |  |    |      |   |  |    |  |  |  |    |      |   |  |  |  |  |  |  |     |   |  |  |  | 
|Overall (deficit)/surplus in schemes   |  |    | (391 | ) |  |    |  |  |  |    | (799 | ) |  |  |  |  |  |  | 573 |   |  |  |  | 
|Related deferred tax asset/(liability) |  |    | 59   |   |  |    |  |  |  |    | 118  |   |  |  |  |  |  |  | (67 | ) |  |  |  | 
|                                       |  |    |      |   |  |    |  |  |  |    |      |   |  |  |  |  |  |  |     |   |  |  |  | 
|Net pension (liability)/asset          |  |    | (332 | ) |  |    |  |  |  |    | (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,
|                                                                |  | 2004      |       | 2003     
|                                                                |  |           |       |          
|                                                                |  | m        |       | m       
|Net assets of the Group                                         |  |           | 4,281 |           |  |  | 4,034 |  
|Pension provision (net of deferred tax)                         |  |           | 138   |           |  |  | 110   |  
|                                                                |  |           |       |           |  |  |       |  
|                                                                |  |           | 4,419 |           |  |  | 4,144 |  
|Net pension (liability)                                         |  |           | (332  | )         |  |  | (681  | )
|                                                                |  |           |       |           |  |  |       |  
|Net assets of the Group including pension
    (liability)/asset |  |           | 4,087 |           |  |  | 3,463 |  
|                                                                |  |           |       |           |  |  |       |  
|Profit and loss account reserve                                 |  |           | 2,281 |           |  |  | 2,099 |  
|Pension provision (net of deferred tax)                         |  |           | 138   |           |  |  | 110   |  
|                                                                |  |           |       |           |  |  |       |  
|                                                                |  |           | 2,419 |           |  |  | 2,209 |  
|Pension reserve                                                 |  |           | (332  | )         |  |  | (681  | )
|                                                                |  |           |       |           |  |  |       |  
|Profit and loss account reserve including pension
    reserve   |  |           | 2,087 |           |  |  | 1,528 |  
|                                                                |  |           |       |           |  |  |       |  

F-54



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  PENSION
COSTS  (continued)




(b) FRS 17 Pension
disclosures (continued)


The following table sets out the components of
the defined benefit cost.

|                                        |                                               |           |      |           |   |  |     |      |  
|--------------------------------------- | --------------------------------------------- | --------- | ---- | --------- | - |  | --- | ---- | -
|                                        |                                               | March 31, |      | March 31,
|                                        |                                               | 2004      |      | 2003     
|                                        |                                               |           |      |          
|                                        |                                               | m        |      | m       
|Other finance income                    |                                               |           |      |           |   |  |     |     
|                                        | Expected return on pension scheme assets      |           |      | 203       |   |  |     | 239  |  
|                                        | Interest on pension scheme liabilities        |           |      | (186      | ) |  |     | (170 | )
|                                        |                                               |           |      |           |   |  |     |     
|                                        | Net return                                    |           |      | 17        |   |  |     | 69   |  
|Included within administrative expenses |                                               |           |      |           |   |  |     |     
|                                        | Current service cost                          |           |      | (117      | ) |  |     | (95  | )
|                                        | Past service cost                             |           |      | (5        | ) |  |     | (1   | )
|                                        |                                               |           |      |           |   |  |     |     
|                                        |                                               |           | (122 | )         |   |  | (96 | )   
|                                        |                                               |           |      |           |   |  |     |     
|                                        | Cost of providing defined retirement benefits |           |      | (105      | ) |  |     | (27  | )
|                                        |                                               |           |      |           |   |  |     |     

|                                                                                                |  |           |     |           |  |  |        |  
|----------------------------------------------------------------------------------------------- |  | --------- | --- | --------- |  |  | ------ | -
|                                                                                                |  | March 31, |     | March 31,
|                                                                                                |  | 2004      |     | 2003     
|                                                                                                |  |           |     |          
|                                                                                                |  | m        |     | m       
|Analysis of the amount recognised in Statement
    of Total Recognised Gains and Losses (STRGL) |  |           |     |           |  |  |        |  
|Gain/(Loss) on assets                                                                           |  |           | 327 |           |  |  | (989   | )
|Experience (loss) on liabilities                                                                |  |           | (29 | )         |  |  | (24    | )
|Gain/(Loss) on change of assumptions (financial
    and demographic)                            |  |           | 170 |           |  |  | (357   | )
|Currency (loss)/gain                                                                            |  |           | (2  | )         |  |  | 8      |  
|                                                                                                |  |           |     |           |  |  |        |  
|Total gain/(loss) recognised in STRGL before
    adjustment for tax                             |  |           | 466 |           |  |  | (1,362 | )
|                                                                                                |  |           |     |           |  |  |        |  

|                                                   |  |           |      |           |  |  |        |  
|-------------------------------------------------- |  | --------- | ---- | --------- |  |  | ------ | -
|                                                   |  | March 31, |      | March 31,
|                                                   |  | 2004      |      | 2003     
|                                                   |  |           |      |          
|                                                   |  | m        |      | m       
|Movement in (deficit)/surplus during the
    year  |  |           |      |           |  |  |        |  
|(Deficit)/Surplus in scheme at beginning of period |  |           | (799 | )         |  |  | 573    |  
|Contributions paid                                 |  |           | 47   |           |  |  | 21     |  
|Current service cost                               |  |           | (117 | )         |  |  | (95    | )
|Past service cost                                  |  |           | (5   | )         |  |  | (1     | )
|Acquisition (loss)                                 |  |           |     |           |  |  | (4     | )
|Other finance income                               |  |           | 17   |           |  |  | 69     |  
|Actuarial gain/(loss)                              |  |           | 468  |           |  |  | (1,370 | )
|Currency (loss)/gain                               |  |           | (2   | )         |  |  | 8      |  
|                                                   |  |           |      |           |  |  |        |  
|(Deficit) in the scheme at end of period           |  |           | (391 | )         |  |  | (799   | )
|Related deferred tax asset                         |  |           | 59   |           |  |  | 118    |  
|                                                   |  |           |      |           |  |  |        |  
|                                                   |  |           | (332 | )         |  |  | (681   | )
|                                                   |  |           |      |           |  |  |        |  

F-55



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



36  PENSION
COSTS  (continued)




(b) FRS 17 Pension
disclosures (continued)


|                                                  |  |           |       |           |  |  |        |  
|------------------------------------------------- |  | --------- | ----- | --------- |  |  | ------ | -
|                                                  |  | March 31, |       | March 31,
|                                                  |  | 2004      |       | 2003     
|                                                  |  |           |       |          
|                                                  |  | m        |       | m       
|History of experience gains and
    losses        |  |           |       |           |  |  |        |  
|Gain/(Loss) on scheme assets:                     |  |           |       |           |  |  |        |  
|Amount                                            |  |           | 327   |           |  |  | (989   | )
|Percentage of scheme assets                       |  |           | 10.6% |           |  |  | (37.9% | )
|Experience (loss) on scheme
    liabilities:      |  |           |       |           |  |  |        |  
|Amount                                            |  |           | (29   | )         |  |  | (24    | )
|Percentage of scheme liabilities                  |  |           | (0.8% | )         |  |  | (0.7%  | )
|Total actuarial (loss) recognised in
    STRGL:   |  |           |       |           |  |  |        |  
|Amount                                            |  |           | 466   |           |  |  | (1,362 | )
|Percentage of scheme liabilities at end of period |  |           | 13.3% |           |  |  | (40.0% | )

37  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 88 to 98 (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 92 and
93.

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)



37  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                             |  |                 |        |        |  |       |        |       |  |           |        |  |  |  |         |  |  |  |        | 
|---------------------------- |  | --------------- | ------ | ------ |  | ----- | ------ | ----- |  | --------- | ------ |  |  |  | ------- |  |  |  | ------ | 
|                             |  |                 |        |       
|                             |  | March 31, 2004  |        |       
|                             |  |                 |        |       
|                             |  | Within          |        | One to |  | Over  |        |       |  | March 31,
|                             |  | one             |        | five   |  | five  |        |       |  | 2003     
|                             |  | Year            |        | years  |  | years |        | Total |  | Total    
|                             |  |                 |        |        |  |       |        |       |  |          
|                             |  |                
|                             |  | (in  millions)
|Underlying Principal Amount: |  |                 |        |        |  |       |        |       |  |           |        |  |  |  |         |  |  |  |        | 
|Exchange Rate Contracts      |  |                 | 16,961 |        |  |       | 2,897  |       |  |           | 405    |  |  |  | 20,263  |  |  |  | 12,666 | 
|Interest Rate Contracts      |  |                 | 62,985 |        |  |       | 32,932 |       |  |           | 16,017 |  |  |  | 111,934 |  |  |  | 86,326 | 
|Equity Contracts             |  |                 | 227    |        |  |       | 2,713  |       |  |           | 853    |  |  |  | 3,793   |  |  |  | 3,092  | 
|Replacement Cost             |  |                 |        |        |  |       |        |       |  |           |        |  |  |  |         |  |  |  |        | 
|Exchange Rate Contracts      |  |                 | 219    |        |  |       | 118    |       |  |           | 22     |  |  |  | 359     |  |  |  | 489    | 
|Interest Rate Contracts      |  |                 | 161    |        |  |       | 459    |       |  |           | 403    |  |  |  | 1,023   |  |  |  | 1,122  | 
|Equity Contracts             |  |                 |       |        |  |       | 79     |       |  |           | 57     |  |  |  | 136     |  |  |  | 35     | 

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, 2004  |       |          
|                        |  |                 |       | March 31,
|                        |  |                 |       | Non-      |  |       |     | 2003 
|                        |  | Financial       |       | Financial |  | Total |     | Total
|                        |  |                 |       |           |  |       |     |      
|                        |  |                
|                        |  | (in  millions)
|Exchange Rate Contracts |  |                 | 270   |           |  |       | 89  |       |  |  | 359   |  |  |  | 489   | 
|Interest Rate Contracts |  |                 | 953   |           |  |       | 70  |       |  |  | 1,023 |  |  |  | 1,122 | 
|Equity Contracts        |  |                 | 136   |           |  |       |    |       |  |  | 136   |  |  |  | 35    | 
|                        |  |                 |       |           |  |       |     |       |  |  |       |  |  |  |       | 
|                        |  |                 | 1,359 |           |  |       | 159 |       |  |  | 1,518 |  |  |  | 1,646 | 
|                        |  |                 |       |           |  |       |     |       |  |  |       |  |  |  |       | 

F-57



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  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, 2004 and 2003:

|                                             |                             |                |         |       |  |         |     |      |   |  |  |      |  
|-------------------------------------------- | --------------------------- | -------------- | ------- | ----- |  | ------- | --- | ---- | - |  |  | ---- | -
|                                             |                             |               
|                                             |                             | March 31, 2004
|                                             |                             |               
|                                             |                             | Underlying     |         |       |  | Average
|                                             |                             | Principal      |         | Fair  |  | Fair   
|                                             |                             | Amount(1)      |         | Value |  | Value  
|                                             |                             |                |         |       |  |        
|                                             |                             | m             |         | m    |  | m     
|Interest rate contracts:                     |                             |                |         |       |  |         |     |      |   |  |  |     
|Interest rate swaps                          |                             |                | 85,170  |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     | 948  |   |  |  | 932  |  
|                                             | in an unfavourable position |                |         |       |  |         |     | (683 | ) |  |  | (734 | )
|Interest rate caps, floors & options held    |                             |                | 13,543  |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     | 3    |   |  |  | 2    |  
|                                             | in an unfavourable position |                |         |       |  |         |     |     |   |  |  |     |  
|Interest rate caps, floors & options written |                             |                | 10,590  |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     | 1    |   |  |  |     |  
|                                             | in an unfavourable position |                |         |       |  |         |     | (4   | ) |  |  | (4   | )
|Forward rate agreements                      |                             |                | 6,870   |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     | 5    |   |  |  | 4    |  
|                                             | in an unfavourable position |                |         |       |  |         |     | (4   | ) |  |  | (3   | )
|Financial futures                            |                             |                | 1,861   |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     |     |   |  |  |     |  
|                                             | in an unfavourable position |                |         |       |  |         |     |     |   |  |  |     |  
|                                             |                             |                |         |       |  |         |     |      |   |  |  |     
|                                             |                             |                | 118,034 |       |  |         | 266 |      |   |  |  |     
|                                             |                             |                |         |       |  |         |     |      |   |  |  |     
|Foreign exchange contracts:                  |                             |                |         |       |  |         |     |      |   |  |  |     
|Forward foreign exchange                     |                             |                | 14,605  |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     | 171  |   |  |  | 143  |  
|                                             | in an unfavourable position |                |         |       |  |         |     | (189 | ) |  |  | (169 | )
|Currency Swaps                               |                             |                |        |       |  |         |     |      |   |  |  |     
|                                             | in a favourable position    |                |         |       |  |         |     |     |   |  |  |     |  
|                                             | in an unfavourable position |                |         |       |  |         |     |     |   |  |  |     |  
|                                             |                             |                |         |       |  |         |     |      |   |  |  |     
|                                             |                             |                | 14,605  |       |  |         | (18 | )    |   |  |  |     
|                                             |                             |                |         |       |  |         |     |      |   |  |  |     
|                                             |                             |                | 132,639 |       |  |         |     |      |   |  |  |     
|                                             |                             |                |         |       |  |         |     |      |   |  |  |     






|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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)



37  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                             |                             |                 |        |       |  |         |     |       |   |  |  |      |  
|-------------------------------------------- | --------------------------- | --------------- | ------ | ----- |  | ------- | --- | ----- | - |  |  | ---- | -
|                                             |                             |                
|                                             |                             | 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.

|                                       |  |                 |    |      |  |      |    |  |  |  |    | 
|-------------------------------------- |  | --------------- | -- | ---- |  | ---- | -- |  |  |  | -- | 
|                                       |  | 2004            |    | 2003 |  | 2002
|                                       |  |                 |    |      |  |     
|                                       |  |                
|                                       |  | (in  millions)
|Dealing profits                        |  |                 |    |      |  |      |    |  |  |  |    | 
|Securities and interest rate contracts |  |                 | 41 |      |  |      | 48 |  |  |  | 45 | 
|Foreign exchange contracts             |  |                 | 33 |      |  |      | 34 |  |  |  | 24 | 
|Equity contracts                       |  |                 | (1 | )    |  |      | 3  |  |  |  | 12 | 
|                                       |  |                 |    |      |  |      |    |  |  |  |    | 
|Total                                  |  |                 | 73 |      |  |      | 85 |  |  |  | 81 | 
|                                       |  |                 |    |      |  |      |    |  |  |  |    | 

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)



37  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, 2004 and 2003.

|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |      |  
|-------------------------- | -------------- | -------------- | ------ | -------- |  | ------- |  | -------- |  | ----- |  | ---- |  |  |  | ---- |  |  | ---- | ---- | -
|                           |                |               
|                           |                | March 31, 2004
|                           |                |               
|                           |                |                |        | 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 |                |        | 8,822    |  |         |  | 0.28     |  |       |  | 2.57 |  |  |  | 2.64 |  |  |      | 30   |  
|                           | 1-5 years      |                |        | 2,598    |  |         |  | 2.90     |  |       |  | 0.89 |  |  |  | 3.26 |  |  |      | 14   |  
|                           | 5-10 years     |                |        | 438      |  |         |  | 6.30     |  |       |  | 0.92 |  |  |  | 2.48 |  |  |      | 8    |  
|                           | Over 10 years  |                |        | 81       |  |         |  | 23.10    |  |       |  | 5.68 |  |  |  | 0.00 |  |  |      | 7    |  
|Interest Rate Swaps        |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| pay fixed                |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |                |        | 3,291    |  |         |  | 0.50     |  |       |  | 2.47 |  |  |  | 2.65 |  |  |      | (14  | )
|                           | 1-5 years      |                |        | 1,135    |  |         |  | 3.25     |  |       |  | 2.34 |  |  |  | 5.94 |  |  |      | (102 | )
|                           | 5-10 years     |                |        | 710      |  |         |  | 7.70     |  |       |  | 2.21 |  |  |  | 4.97 |  |  |      | (60  | )
|                           | Over 10 years  |                |        | 610      |  |         |  | 15.61    |  |       |  | 2.24 |  |  |  | 5.73 |  |  |      | (82  | )
|Interest Rate Swaps        |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| pay and receive floating |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |                |        | 147      |  |         |  | 0.61     |  |       |  | 2.15 |  |  |  | 2.12 |  |  |      |     |  
|                           | 1-5 years      |                |        | 224      |  |         |  | 3.16     |  |       |  | 2.55 |  |  |  | 2.41 |  |  |      | 1    |  
|                           | 5-10 years     |                |        | 136      |  |         |  | 7.11     |  |       |  | 3.24 |  |  |  | 3.10 |  |  |      | 2    |  
|                           | Over 10 years  |                |        | 304      |  |         |  | 27.77    |  |       |  | 1.95 |  |  |  | 2.11 |  |  |      | 2    |  
|Forward Rate Agreements    |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| loans                    |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |                |        | 33       |  |         |  | 0.54     |  |       |  | 0.00 |  |  |  | 4.53 |  |  |      |     |  
|                           | 1-5 years      |                |        | 8        |  |         |  | 1.05     |  |       |  | 0.00 |  |  |  | 4.88 |  |  |      |     |  
|Forward Rate Agreements    |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
| deposits                 |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |                |        | 235      |  |         |  | 0.88     |  |       |  | 0.00 |  |  |  | 2.82 |  |  |      |     |  
|Interest Rate Caps         |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           | 1 year or less |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |      |  
|                           | 1-5 years      |                |        | 158      |  |         |  | 2.0      |  |       |  | 6.09 |  |  |  | 0.00 |  |  |      |     |  
|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     
|                           |                |                | 18,930 |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  | (194 | )   
|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |     

F-60



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                   |                |                |        |          |  |       |  |      |  |  |      |     |  
|---------------------------------- | -------------- | -------------- | ------ | -------- |  | ----- |  | ---- |  |  | ---- | --- | -
|                                   |                |               
|                                   |                | March 31, 2004
|                                   |                |               
|                                   |                | Underlying     |        | Weighted |  |      
|                                   |                | Principal      |        | Average  |  | Fair 
|                                   |                | Amount         |        | Maturity |  | Value
|                                   |                |                |        |          |  |      
|                                   |                | m             |        | in Years |  | m   
|Exchange rate contracts:           |                |                |        |          |  |       |  |      |  |  |      |    
|Forward Foreign Exchange           |                |                |        |          |  |       |  |      |  |  |      |    
|                                   | 1 year or less |                |        | 1,845    |  |       |  | 0.13 |  |  |      | 15  |  
|                                   | 1-5 years      |                |        | 16       |  |       |  | 1.21 |  |  |      |    |  
|Currency Swaps                     |                |                |        |          |  |       |  |      |  |  |      |    
|                                   | 1 year or less |                |        | 218      |  |       |  | 0.73 |  |  |      | 1   |  
|                                   | 1-5 years      |                |        | 2,352    |  |       |  | 2.33 |  |  |      | (68 | )
|                                   | 5-10 years     |                |        | 140      |  |       |  | 7.01 |  |  |      | 9   |  
|Currency Options                   |                |                |        |          |  |       |  |      |  |  |      |    
|                                   | 1 year or less |                |        | 440      |  |       |  | 0.44 |  |  |      |    |  
|                                   |                |                |        |          |  |       |  |      |  |  |      |    
|                                   |                |                | 5,011  |          |  |       |  |      |  |  | (43  | )  
|                                   |                |                |        |          |  |       |  |      |  |  |      |    
|Equity and commodity contracts:    |                |                |        |          |  |       |  |      |  |  |      |    
|Equity Index Linked Contracts held |                |                |        |          |  |       |  |      |  |  |      |    
|                                   | 1 year or less |                |        | 227      |  |       |  | 0.57 |  |  |      | (5  | )
|                                   | 1-5 years      |                |        | 2,713    |  |       |  | 3.17 |  |  |      | (99 | )
|                                   | 5-10 years     |                |        | 853      |  |       |  | 6.17 |  |  |      | 14  |  
|                                   |                |                | 3,793  |          |  |       |  |      |  |  | (90  | )  
|                                   |                |                |        |          |  |       |  |      |  |  |      |    
|                                   |                |                | 27,734 |          |  |       |  |      |  |  | (327 | )  
|                                   |                |                |        |          |  |       |  |      |  |  |      |    

F-61



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                           |                |                |        |          |  |         |  |          |  |       |  |      |  |  |  |      |  |  |      |      |  
|-------------------------- | -------------- | -------------- | ------ | -------- |  | ------- |  | -------- |  | ----- |  | ---- |  |  |  | ---- |  |  | ---- | ---- | -
|                           |                |               
|                           |                | March 31, 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-62



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  DERIVATIVES AND OTHER FINANCIAL
INSTRUMENTS  (continued)


|                                   |                |                |        |          |  |       |  |      |  |  |      |      |  
|---------------------------------- | -------------- | -------------- | ------ | -------- |  | ----- |  | ---- |  |  | ---- | ---- | -
|                                   |                |               
|                                   |                | March 31, 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 | )   
|                                   |                |                |        |          |  |       |  |      |  |  |      |     

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  |  |             
|                           |  | Interest        |         |       |  | Currency |      | Foreign  |  | Equity Index
|                           |  | Rate Swaps      |         | FRAs |  | Swaps    |      | Exchange |  | Linked      
|                           |  |                 |         |       |  |          |      |          |  |             
|                           |  |                
|                           |  | (in  millions)
|At April 1, 2003           |  |                 | 17,657  |       |  |          | 20   |          |  |              | 2,570  |   |  |  | 1,018  |   |  |  | 3,107 |  
|Exchange adjustments       |  |                 | 159     |       |  |          |     |          |  |              | (55    | ) |  |  | 64     |   |  |  | 69    |  
|Additions                  |  |                 | 43,563  |       |  |          | 644  |          |  |              | 3,810  |   |  |  | 5,331  |   |  |  | 1,335 |  
|Maturities/ amortisations |  |                 | (42,562 | )     |  |          | (389 | )        |  |              | (3,574 | ) |  |  | (4,420 | ) |  |  | (661  | )
|Cancellations              |  |                 | (321    | )     |  |          |     |          |  |              | (41    | ) |  |  | (131   | ) |  |  | (57   | )
|                           |  |                 |         |       |  |          |      |          |  |              |        |   |  |  |        |   |  |  |       |  
|At March 31, 2004          |  |                 | 18,496  |       |  |          | 275  |          |  |              | 2,710  |   |  |  | 1,862  |   |  |  | 3,793 |  
|                           |  |                 |         |       |  |          |      |          |  |              |        |   |  |  |        |   |  |  |       |  

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



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



37  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 March 31, 2004 were
16m (2003:
losses: 242m,
2002: losses:
297m). The net
gains expected to be recognised in 2004/2005 is
25m (2003/04:
loss: 17m,
2002/03: gain:
45m) and
thereafter the net losses expected to be recognised is
41m (2003/04:
losses: 225m,
2002/03: losses:
342m).

The net losses recognised in 2003/04 in respect
of previous years were
17m (2002/03:
gain: 45m,
2001/02: gain:
41m) and the net
gains arising in 2003/04 which were not recognised in 2003/04
were 243m
(2002/03: 11m,
2001/02: losses:
281m).

Non Trading Derivative Deferred
Balances

The table below summarises the deferred gains and
losses at March 31, 2004.

|                                                                                                                |  |          |     |           |  |                |      |   |  |  |      |  
|--------------------------------------------------------------------------------------------------------------- |  | -------- | --- | --------- |  | -------------- | ---- | - |  |  | ---- | -
|                                                                                                                |  |          |     |          
|                                                                                                                |  | Deferred |     | Total net
|                                                                                                                |  |          |     | deferred 
|                                                                                                                |  | Gains    |     | Losses    |  | gains/(losses)
|                                                                                                                |  |          |     |           |  |               
|                                                                                                                |  | m       |     | m        |  | m            
|As at April 1, 2003                                                                                             |  |          | 4.1 |           |  |                | (3.3 | ) |  |  | 0.8  |  
|Gains and losses arising in previous years that
    were recognised in the year ended March 31, 2004            |  |          | 1.8 |           |  |                | (0.6 | ) |  |  | 1.2  |  
|                                                                                                                |  |          |     |           |  |                |      |   |  |  |      |  
|Gains and losses arising before April 1,
    2003 that were not recognised in the year ended March 31,
    2004 |  |          | 2.3 |           |  |                | (2.7 | ) |  |  | (0.4 | )
|Gains and losses arising in the year ended
    March 31, 2004 that were not recognised in that year             |  |          | 0.2 |           |  |                | (1.1 | ) |  |  | (0.9 | )
|                                                                                                                |  |          |     |           |  |                |      |   |  |  |      |  
|As at March 31, 2004                                                                                            |  |          | 2.5 |           |  |                | (3.8 | ) |  |  | (1.3 | )
|                                                                                                                |  |          |     |           |  |                |      |   |  |  |      |  
|Of which:                                                                                                       |  |          |     |           |  |                |      |   |  |  |      |  
|Gains and losses expected to be recognised in the
    year ended March 31, 2005                                 |  |          | 1.4 |           |  |                | (1.4 | ) |  |  |     |  
|                                                                                                                |  |          |     |           |  |                |      |   |  |  |      |  

The following table summarises activities
undertaken by the Group, the related market risks associated
with 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
|Management of the investment of reserves and
    other non-interest bearing liabilities |  | Sensitivity to changes in interest rates   |  | Interest rate swaps              

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

F-64



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

38  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,
2004. For the major categories of assets and liabilities, this
gap table show 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.

F-65



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



38  INTEREST RATE REPRICING
GAP  NON TRADING
BOOK  (continued)


Non Trading Interest Rate
Repricing  Total

|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|--------------------------------------------------------- |  | -------------- | ------ | ------------ |  | ---------- | ------ | ---------- |  | ---------- | ------ | -------- |  | ----- | ------ | - |  |  | ------ |  |  |  | ------- | - |  |  | ------ | -
|                                                          |  |               
|                                                          |  | March 31, 2004
|                                                          |  |               
|                                                          |  |                |        | 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
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |      
|                                                          |  | m             |        | m           |  | m         |        | m         |  | m         |        | m       |  | m   
|Assets                                                    |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Central Government bills and other eligible bills         |  |                | 211    |              |  |            |       |            |  |            |       |          |  |       |       |   |  |  |       |  |  |  |        |   |  |  | 211    |  
|Loans and advances to banks                               |  |                | 4,625  |              |  |            | 1,824  |            |  |            | 961    |          |  |       |       |   |  |  | 1      |  |  |  | 180     |   |  |  | 7,591  |  
|Loans and advances to customers                           |  |                | 42,845 |              |  |            | 2,748  |            |  |            | 5,211  |          |  |       | 14,273 |   |  |  | 2,063  |  |  |  | 233     |   |  |  | 67,373 |  
|Debt securities and equity shares                         |  |                | 6,858  |              |  |            | 1,736  |            |  |            | 595    |          |  |       | 1,595  |   |  |  | 732    |  |  |  | 54      |   |  |  | 11,570 |  
|Other assets                                              |  |                | 1,620  |              |  |            |       |            |  |            |       |          |  |       |       |   |  |  |       |  |  |  | 3,790   |   |  |  | 5,410  |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Total assets                                              |  |                | 56,159 |              |  |            | 6,308  |            |  |            | 6,767  |          |  |       | 15,868 |   |  |  | 2,796  |  |  |  | 4,257   |   |  |  | 92,155 |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Liabilities                                               |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Deposits by banks                                         |  |                | 15,473 |              |  |            | 1,352  |            |  |            | 122    |          |  |       | 23     |   |  |  | 15     |  |  |  |        |   |  |  | 16,985 |  
|Customer accounts                                         |  |                | 38,758 |              |  |            | 1,329  |            |  |            | 1,849  |          |  |       | 2,870  |   |  |  | 970    |  |  |  | 9,271   |   |  |  | 55,047 |  
|Debt securities in issue                                  |  |                | 10,689 |              |  |            | 883    |            |  |            | 965    |          |  |       | 380    |   |  |  |       |  |  |  |        |   |  |  | 12,917 |  
|Other liabilities                                         |  |                | 540    |              |  |            | 33     |            |  |            | 19     |          |  |       | 64     |   |  |  | 87     |  |  |  | 2,748   |   |  |  | 3,491  |  
|Subordinated liabilities                                  |  |                | 2,268  |              |  |            |       |            |  |            |       |          |  |       |       |   |  |  | 1,414  |  |  |  |        |   |  |  | 3,682  |  
|Minority interests and shareholders funds                |  |                |       |              |  |            |       |            |  |            |       |          |  |       |       |   |  |  |       |  |  |  | 4,534   |   |  |  | 4,534  |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Total liabilities                                         |  |                | 67,728 |              |  |            | 3,597  |            |  |            | 2,955  |          |  |       | 3,337  |   |  |  | 2,486  |  |  |  | 16,553  |   |  |  | 96,656 |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Net amounts due from/to Group units                       |  |                | 6,172  |              |  |            | 221    |            |  |            | (669   | )        |  |       | (1,874 | ) |  |  | 110    |  |  |  | (283    | ) |  |  | 3,677  |  
|Off balance sheet items                                   |  |                | 4,872  |              |  |            | (1,031 | )          |  |            | (1,455 | )        |  |       | (6,139 | ) |  |  | 3,793  |  |  |  |        |   |  |  | 40     |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Interest rate repricing gap                               |  |                | (525   | )            |  |            | 1,901  |            |  |            | 1,688  |          |  |       | 4,518  |   |  |  | 4,213  |  |  |  | (12,579 | ) |  |  | (784   | )
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate repricing
    gap                |  |                | (525   | )            |  |            | 1,376  |            |  |            | 3,064  |          |  |       | 7,582  |   |  |  | 11,795 |  |  |  | (784    | ) |  |  |       |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Euro                                                      |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2004 |  |                | 1,172  |              |  |            | 2,689  |            |  |            | 3,794  |          |  |       | 6,231  |   |  |  | 9,008  |  |  |  | 1,203   |   |  |  |       |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Sterling                                                  |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  
|Cumulative interest rate repricing gap
    March 31, 2004 |  |                | 2,052  |              |  |            | 330    |            |  |            | 553    |          |  |       | 2,429  |   |  |  | 3,855  |  |  |  | (738    | ) |  |  |       |  
|                                                          |  |                |        |              |  |            |        |            |  |            |        |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  

F-66



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



38  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
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |      
|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    | ) |  |  |       |  
|                                                          |  |                |        |              |  |            |       |            |  |            |       |          |  |       |        |   |  |  |        |  |  |  |         |   |  |  |        |  

39  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-67



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



39  FAIR VALUES OF FINANCIAL
INSTRUMENTS     (continued)


managements view of market conditions at
March 31, 2004 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, 2004.

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, 2004 and
2003.

|                                                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|-------------------------------------------------------- |  | --------------- | ------ | ------ |  | -------- | ------ | ------ |  |  | ------ | - |  |  | ------ | -
|                                                         |  |                 |        |       
|                                                         |  | 2004            |        | 2003  
|                                                         |  |                 |        |       
|                                                         |  | Carrying        |        | Fair   |  | Carrying |        | Fair  
|                                                         |  | Amount          |        | Values |  | Amount   |        | Values
|                                                         |  |                 |        |        |  |          |        |       
|                                                         |  |                
|                                                         |  | (in  millions)
|Financial instruments held for
    trading               |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Debt securities                                          |  |                 | 4,542  |        |  |          | 4,542  |        |  |  | 3,120  |   |  |  | 3,120  |  
|Equity shares                                            |  |                 | 35     |        |  |          | 35     |        |  |  | 22     |   |  |  | 22     |  
|Derivative Financial Instruments                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Interest rate contracts                                  |  |                 | 266    |        |  |          | 266    |        |  |  | 108    |   |  |  | 108    |  
|Foreign exchange contracts                               |  |                 | (18    | )      |  |          | (18    | )      |  |  | (30    | ) |  |  | (30    | )
|Non trading financial instruments                        |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Assets                                                   |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Cash and balances at central banks(1)                    |  |                 | 1,397  |        |  |          | 1,397  |        |  |  | 679    |   |  |  | 679    |  
|Items in course of collection(1)                         |  |                 | 584    |        |  |          | 584    |        |  |  | 508    |   |  |  | 508    |  
|Central government bills and other eligible
    bills(1) |  |                 | 211    |        |  |          | 211    |        |  |  | 175    |   |  |  | 175    |  
|Loans and advances to banks                              |  |                 | 7,753  |        |  |          | 7,751  |        |  |  | 7,480  |   |  |  | 7,482  |  
|Loans and advances to customers                          |  |                 | 67,629 |        |  |          | 67,483 |        |  |  | 56,887 |   |  |  | 57,100 |  
|Securitisation and loan transfers(1)                     |  |                 | 89     |        |  |          | 89     |        |  |  | 127    |   |  |  | 127    |  
|Debt securities                                          |  |                 | 11,153 |        |  |          | 11,233 |        |  |  | 9,217  |   |  |  | 9,319  |  
|Equity shares                                            |  |                 | 29     |        |  |          | 29     |        |  |  | 16     |   |  |  | 16     |  
|Liabilities                                              |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Deposits by banks                                        |  |                 | 17,060 |        |  |          | 16,997 |        |  |  | 12,617 |   |  |  | 12,632 |  
|Customer accounts                                        |  |                 | 54,395 |        |  |          | 54,268 |        |  |  | 48,496 |   |  |  | 48,331 |  
|Debt securities in issue                                 |  |                 | 12,917 |        |  |          | 12,918 |        |  |  | 9,652  |   |  |  | 9,657  |  
|Items in course of transmission(1)                       |  |                 | 230    |        |  |          | 230    |        |  |  | 136    |   |  |  | 136    |  
|Subordinated liabilities                                 |  |                 | 3,682  |        |  |          | 3,975  |        |  |  | 2,703  |   |  |  | 2,876  |  
|Minority interests: non equity                           |  |                 | 76     |        |  |          | 138    |        |  |  | 73     |   |  |  | 82     |  
|Derivative financial instruments                         |  |                 |        |        |  |          |        |        |  |  |        |   |  |  |        |  
|Interest rate contracts                                  |  |                 |        |        |  |          | (194   | )      |  |  |        |   |  |  | (174   | )
|Exchange rate contracts                                  |  |                 |        |        |  |          | (43    | )      |  |  |        |   |  |  | 8      |  
|Equity and commodity contracts                           |  |                 |        |        |  |          | (90    | )      |  |  |        |   |  |  | (244   | )




F-68



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



39  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,
2004 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, 2004.

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-69



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



39  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. | 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.



|   |                  
|-- | -----------------
|5. | 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.



|   |                         
|-- | ------------------------
|6. | 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.



|   |                         
|-- | ------------------------
|7. | Subordinated Liabilities

The estimated fair value of subordinated
liabilities is based on quoted market rates for debt instruments
with similar maturities.



|   |                                                  
|-- | -------------------------------------------------
|8. | Financial Instruments with Off-Balance Sheet Risk

Financial instruments with off-balance sheet risk
are detailed in Note 38 of the Notes on the Financial
Statements and include the fair value of these instruments.



|   |                                      
|-- | -------------------------------------
|9. | Life Assurance Assets and Liabilities

Life assurance assets and liabilities
attributable to policy holders have not been included in this
note in accordance with accounting standards.

40  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

F-70



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



40  CONTINGENT LIABILITIES AND
COMMITMENTS  (continued)


with the Irish Financial Services Regulatory
Authority guidelines implementing the Basel agreement on capital
adequacy (i).

|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |       | 
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | --------------- | ------ | --------------- |  | -------- | ----- | -------- |  |  | ------ | ------ |  |  | ----- | ----- | 
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              | 2004            |        | 2003           
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              |                 |        | Risk            |  |          |       | Risk    
|                                                                                                  |                                                                              | Contract        |        | Weighted        |  | Contract |       | Weighted
|                                                                                                  |                                                                              | Amount          |        | Amount          |  | Amount   |       | Amount  
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |         
|                                                                                                  |                                                                              |                 |        |                
|                                                                                                  |                                                                              | (in  millions) |        | (in  millions)
|Contingent Liabilities                                                                            |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Acceptances and endorsements                                                                      |                                                                              |                 | 33     |                 |  |          | 18    |          |  |  | 81     |        |  |  | 65    |      
|Guarantees and assets pledged as collateral
    security                                          |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
| Assets pledged                                                                                  |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
| Guarantees and irrevocable letters of
    credit                                                |                                                                              |                 | 1,291  |                 |  |          | 1,236 |          |  |  | 1,172  |        |  |  | 1,107 |      
|Other contingent liabilities                                                                      |                                                                              |                 | 494    |                 |  |          | 223   |          |  |  | 508    |        |  |  | 239   |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |                                                                              |                 | 1,818  |                 |  |          | 1,477 |          |  |  | 1,761  |        |  |  | 1,411 |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Commitments                                                                                       |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|Sale and option to resell transactions                                                            |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
|Other commitments                                                                                 |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
| Documentary credits and short-term
    trade-related transactions                               |                                                                              |                 | 75     |                 |  |          | 18    |          |  |  | 52     |        |  |  | 19    |      
| Forward asset purchases, forward
    deposits placed and forward sale and repurchase agreements |                                                                              |                 |       |                 |  |          |      |          |  |  |       |        |  |  |      |      
| Undrawn note issuance and revolving
    underwriting facilities                                 |                                                                              |                 | 622    |                 |  |          | 10    |          |  |  | 776    |        |  |  | 27    |      
| Undrawn formal standby facilities,
    credit lines and other commitments to lend               |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |  irrevocable with original maturity of
    over 1 year                      |                 |        | 5,416           |  |          |       | 2,489    |  |  |        | 4,212  |  |  |       | 2,065 | 
|                                                                                                  |  revocable or irrevocable with
    original maturity of 1 year or less (ii) |                 |        | 19,122          |  |          |       |         |  |  |        | 14,010 |  |  |       |      | 
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      
|                                                                                                  |                                                                              |                 | 25,235 |                 |  |          | 2,517 |          |  |  | 19,050 |        |  |  | 2,111 |      
|                                                                                                  |                                                                              |                 |        |                 |  |          |       |          |  |  |        |        |  |  |       |      




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.                                  

41  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.
|
| | (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                                                             

F-71



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



41  GENERAL  (continued)




| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | 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, J & E Davy, J & E
    Davy Holdings Limited, Bank of Ireland Insurance Services
    Limited, Bushfield Leasing Limited, Clonvern Limited, Davy
    Securities Limited, Edendork Leasing Limited, Focus Investments
    Limited, Glenswilly Leasing Limited, Nerling Limited, Nestland
    Limited, Premier  Direct Management Limited,
    Premier  Direct Insurance Services Limited and Tustin
    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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

42  DIRECTORS
INFORMATION

The Group Remuneration Committee makes
recommendations to the Court on the formulation of policy on the
remuneration of senior management (including 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 (Group Executive
Committee). The remuneration of non-executive Directors is
determined by the Court. Directors do not participate in any
decisions relating to their own remuneration.

New Bridge Street Consultants were appointed
during the year as advisors to provide remuneration advice and
analysis to the Group Remuneration Committee.

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: Principles of Good Governance and Code of Best
Practice adopted by the Irish Stock Exchange in 1998.

Directors remuneration policy

Group remuneration policy is to ensure that the
remuneration arrangements for Directors and senior management
are competitive and designed to attract, retain and motivate
people of the highest calibre, who are expected to perform to
the highest standards.

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 businesses both in Ireland and the United Kingdom and
the general pay awards made to staff overall.

The reward package for executive Directors and
senior management

The total remuneration package is reviewed by the
Group Remuneration Committee with external assistance from
international remuneration consultants. Currently the key
elements of the remuneration package 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 in absolute terms.

F-72



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

42  DIRECTORS
INFORMATION  (continued)



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 34, conditional awards
    have been made to the executive Directors as set out in the
    table on page F-69. As can be seen in Note 34,
    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 (or alternative earnings per
    share as appropriate) 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 34 on page F-48).                                                                                                                                                                                                                                                                                       
|
| |  | Employee Stock Issue
    Scheme The Bank operates
    an Employee Stock Issue Scheme under which 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 (see also Note 34). Executive Directors may
    participate on the same basis as staff generally.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | 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 33. (see
    Note 34). Under the scheme, first offered in 2000,
    participants could save for three, five or seven years. The
    three year scheme matured in May 2003. A further offer under the
    scheme was made in November 2003. 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-73



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)


Directors remuneration 2003/2004 (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)       |       | 2003/2004 |  | 2002/2003
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |          
|Governor                                                    |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|L G Crowley                                                 |  |        | 300   |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  | 28  |  |  |  | 328   |  |  |  | 312   | 
|Deputy Governor                                             |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|R Burrows                                                   |  |        | 90    |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 90    |  |  |  | 81    | 
|Executive Directors                                         |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|B J Goggin*                                                 |  |        | 500   |       |  |       |     |       |  |        |    |          |  |           | 525   |           |  |           | 12 |  |  |  | 27 |  |  |  | 51  |  |  |  | 1,115 |  |  |  | 743   | 
|J ODonovan                                                 |  |        | 375   |       |  |       |     |       |  |        |    |          |  |           | 248   |           |  |           | 26 |  |  |  | 27 |  |  |  | 38  |  |  |  | 714   |  |  |  | **374 | 
|M D Soden                                                   |  |        | 900   |       |  |       |     |       |  |        |    |          |  |           | 554   |           |  |           | 16 |  |  |  | 32 |  |  |  | 92  |  |  |  | 1,594 |  |  |  | 1,318 | 
|Non-Executive Directors                                     |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|R E Bailie                                                  |  |        |       |       |  |       | 60  |       |  |        | 9  |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 69    |  |  |  | 57    | 
|A D Barry (to 31.01.2003)                                   |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  | 47    | 
|D J Dilger (from 10.07.2003)                                |  |        |       |       |  |       | 43  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 43    |  |  |  |       | 
|D J Geaney                                                  |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 57    | 
|M A Keane                                                   |  |        |       |       |  |       | 60  |       |  |        | 40 |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 100   |  |  |  | 99    | 
|R MacSharry                                                 |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 57    | 
|G M Magan (from 10.07.2003)                                 |  |        |       |       |  |       | 43  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 43    |  |  |  |       | 
|C A Marland                                                 |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 57    | 
|T Moran                                                     |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 57    | 
|D OBrien                                                   |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 57    | 
|M Redmond                                                   |  |        |       |       |  |       | 60  |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 60    |  |  |  | 71    | 
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|Totals                                                      |  |        | 2,165 |       |  |       | 566 |       |  |        | 49 |          |  |           | 1,327 |           |  |           | 54 |  |  |  | 86 |  |  |  | 209 |  |  |  | 4,456 |  |  |  | 3,387 | 
|                                                            |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  |       |  |  |  |       | 
|Ex gratia payments paid to former Directors/
    Dependants |  |        |       |       |  |       |     |       |  |        |    |          |  |           |       |           |  |           |    |  |  |  |    |  |  |  |     |  |  |  | 541   |  |  |  | 519   | 




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 an additional payment to the
    Chairman of the Group Audit Committee.                                                                                                                                                                                                                                                           
|   
|(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 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.                                                                                
|   
|*   | The role of Chief Executive Asset Management
    Services Division, currently held by Brian Goggin, is
    remunerated differently to other Executive Director roles within
    the Bank of Ireland Group and the incumbent will not in future
    be eligible to participate in the Bank of Ireland Groups
    Executive Stock plans (Executive Stock Option Scheme and Long
    Term Performance Stock Plan).



| |                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | To reflect the above, Brian Goggin participates
    in a Deferred Cash Incentive Scheme and a Long Term Incentive
    Programme, in lieu of the Bank of Ireland Groups Executive
    Stock plans. Under the Deferred

F-74



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)




| |                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash Incentive Scheme, provided certain
    conditions are met, Brian Goggin will receive a minimum payment
    of 157,500.
    Further amounts may be paid based on the achievement of
    stretching profit before tax targets over the same period.                                                                       
|
| | Under the Long Term Incentive Programme, provided
    certain conditions are met, Brian Goggin will receive a minimum
    payment of
    350,000. Further
    amounts may be paid based on the achievement of investment
    performance, business growth and profit targets over the
    relevant 3 year performance period.



|   |                                       
|-- | --------------------------------------
|** | From date of appointment July 11, 2002

(a)  Executive stock
options

Options to subscribe for Ordinary Stock in the
Bank granted and exercised during the year to 31 March 2004
are included in the table below:-

|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|------------ |  | ------------- | ------------ | -------- |  | ----------- | ------------ | -------- |  | ----------- | ------------ | ------- |  | --------- | ----- | -------- |  | -------- | ------- |  |  |  | ------- |  |  |  | - |  |  |  | - |  |  |  | ------- | 
|             |  |               |              |          |  |             |              |          |  | Options at  |              |         |  |           |       |          |  |         
|             |  |               |              |          |  |             |              |          |  | 1 April     |              |         |  |           |       |          |  |         
|             |  |               |              |          |  |             |              |          |  | 2003 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     |  | 2004    
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |         
|             |  |               |              |          |  |             |              |         |  |             |              |         |  |           |       |         |  |         
|Directors    |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|B J Goggin   |  |               | 28-Nov-1996  |          |  |             | 28-Nov-1999  |          |  |             | 28-Nov-2006  |         |  |           | 3.24  |          |  |          | 80,000  |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  | 80,000  | 
|             |  |               | 13-Jul-1999  |          |  |             | 13-Jul-2002  |          |  |             | 13-Jul-2009  |         |  |           | 8.93  |          |  |          | 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 |          |  |          | 25,000  |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  | 25,000  | 
|             |  |               | 18 June 2003 |          |  |             | 18 June 2006 |          |  |             | 18 June 2013 |         |  |           | 10.77 |          |  |          |         |  |  |  | 50,000  |  |  |  |   |  |  |  |   |  |  |  | 50,000  | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          | 150,000 |  |  |  | 50,000  |  |  |  |   |  |  |  |  |  |  |  | 200,000 | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|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  | 
|             |  |               | 18 June 2003 |          |  |             | 18 June 2006 |          |  |             | 18 June 2013 |         |  |           | 10.77 |          |  |          |         |  |  |  | 50,000  |  |  |  |   |  |  |  |   |  |  |  | 50,000  | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          | 63,000  |  |  |  | 50,000  |  |  |  |  |  |  |  |  |  |  |  | 113,000 | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|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  | 
|             |  |               | 18 June 2003 |          |  |             | 18 June 2006 |          |  |             | 18 June 2013 |         |  |           | 10.77 |          |  |          |         |  |  |  | 200,000 |  |  |  |   |  |  |  |   |  |  |  | 200,000 | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          | 261,000 |  |  |  | 200,000 |  |  |  |  |  |  |  |  |  |  |  | 461,000 | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|Secretary    |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|J B Clifford |  |               | 5-Jun-1996   |          |  |             | 5-Jun-1999   |          |  |             | 5-Jun-2006   |         |  |           | 2.82  |          |  |          | 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  | 
|             |  |               | 18 June 2003 |          |  |             | 18 June 2006 |          |  |             | 18 June 2013 |         |  |           | 10.77 |          |  |          |         |  |  |  | 20,000  |  |  |  |   |  |  |  |   |  |  |  | 20,000  | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          | 85,000  |  |  |  | 20,000  |  |  |  |  |  |  |  |  |  |  |  | 105,000 | 
|             |  |               |              |          |  |             |              |          |  |             |              |         |  |           |       |          |  |          |         |  |  |  |         |  |  |  |   |  |  |  |   |  |  |  |         | 

No other Directors have been granted options to
subscribe for units of ordinary stock of the Bank or of other
group entities.

F-75



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)


(b) Sharesave options 2000

Under the terms of the Sharesave Scheme offered
in 2000, options were granted to all participating Group
employees on February 28, 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 terms of the 2000 Sharesave offer, participants
could save for three, five or seven years. The three year scheme
matured in May 2003.

|             |  |                     |       |              |  |           |      |          |  |              |       |                 |  |  |            |  |  |   |       |  |  |  |       | 
|------------ |  | ------------------- | ----- | ------------ |  | --------- | ---- | -------- |  | ------------ | ----- | --------------- |  |  | ---------- |  |  | - | ----- |  |  |  | ----- | 
|             |  | 2000 Sharesave      |       | Market value |  |           |      |          |  | Market value |       | 2000 Sharesave 
|             |  | options granted     |       | at date of   |  | Options   |      | Date of  |  | at date of   |       | options held at
|Name         |  | at 28 February 2000 |       | Grant        |  | Exercised |      | Exercise |  | Exercise     |       | 31 March 2004  
|             |  |                     |       |              |  |           |      |          |  |              |       |                
|Directors:   |  |                     |       |              |  |           |      |          |  |              |       |                 |  |  |            |  |  |   |       |  |  |  |       | 
|B J Goggin   |  |                     | 4,261 |              |  |          | 6.07 |          |  |              | 0     |                 |  |  |            |  |  |   |       |  |  |  | 4,261 | 
|Secretary:   |  |                     |       |              |  |           |      |          |  |              |       |                 |  |  |            |  |  |   |       |  |  |  |       | 
|J B Clifford |  |                     | 2,233 |              |  |          | 6.07 |          |  |              | 2,233 |                 |  |  | 1 May 2003 |  |  |  | 10.91 |  |  |  | 0     | 

(c)  Sharesave options
2003

Under the terms of the Sharesave Scheme offered
in 2003, options were granted to all participating Group
employees on December 15, 2003 at an option price of
7.84 in the
Republic of Ireland and
8.37 in the UK
per unit of Ordinary Stock. (This price was set at a discount of
25% of the then market price as permitted by the Rules in the
Republic of Ireland and at a discount of 20% of the then market
price permitted by the Rules in the UK). The options held under
this scheme by the Directors and Secretary are set out below.
Under the terms of the 2003 Sharesave offer, participants could
save for three or five years. The three year scheme matures in
February 2007.

|             |  |                    |       |              |  |                 |       |  |  |  |       | 
|------------ |  | ------------------ | ----- | ------------ |  | --------------- | ----- |  |  |  | ----- | 
|             |  | 2003 Sharesave     |       | Market value |  | 2003 Sharesave 
|             |  | options granted at |       | at date of   |  | options held at
|Name         |  | December 15, 2003  |       | Grant        |  | March 31, 2004 
|             |  |                    |       |              |  |                
|Directors:   |  |                    |       |              |  |                 |       |  |  |  |       | 
|J ODonovan  |  |                    | 2,653 |              |  |                | 10.60 |  |  |  | 2,653 | 
|M D Soden    |  |                    | 1,522 |              |  |                | 10.60 |  |  |  | 1,522 | 
|Secretary:   |  |                    |       |              |  |                 |       |  |  |  |       | 
|J B Clifford |  |                    | 1,522 |              |  |                | 10.60 |  |  |  | 1,522 | 

F-76



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

42  DIRECTORS
INFORMATION  (continued)

(d) Long Term Performance Stock Plan
(LTPSP)

Conditional awards of units of Ordinary Stock
have been made on, May 21, November 26, 2001,
June 24, 2002, June 18, 2003 and December 8, 2003
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 34). The conditional awards of units of Ordinary Stock
made to date to the executive Directors are as follows:-

|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|------------ |  | ------- | ----------- | ------------- |  | ------------- | ------ | ------ |  | --------- | ------ | --------- |  | ------------- | ------ | -------- |  | -------- | ------ |  |  |  | ----- |  |  |  | ------ |  |  |  | ----------- |  |  |  | ----------- | 
|             |  |         |             | No. of shares |  |               |        |        |  |           |        |           |  | Potential     |        |          |  |         
|             |  |         |             | conditionally |  | Conditionally |        | Vested |  | Retained  |        |           |  | interest in   |        | Original |  | Expected
|             |  | Date of |             | held at       |  | awarded in    |        | in the |  | in LTPSP  |        | Lapsed in |  | shares at     |        | Maturity |  | Maturity
|             |  | Award   |             | 1 April 2003  |  | the year*     |        | year** |  | Scheme*** |        | the year  |  | 31 March 2004 |        | Date     |  | Date    
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |         
|Directors    |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|B J Goggin   |  |         | 13 July 99  |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          | 7,684  |  |  |  |       |  |  |  | 9,221  |  |  |  | 13 July  02 |  |  |  | 13 July  04 | 
|             |  |         | 25 May  00  |               |  |               | 15,046 |        |  |           |        |           |  |               | 13,541 |          |  |          | 13,541 |  |  |  | 1,505 |  |  |  | 16,249 |  |  |  | 25 May  03  |  |  |  | 25 May  05  | 
|             |  |         | 21 May  01  |               |  |               | 10,811 |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 10,811 |  |  |  | 21 May  04  |  |  |  |             | 
|             |  |         | 24 June  02 |               |  |               | 13,763 |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 13,763 |  |  |  | 24 June  05 |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               | 39,620 |        |  |           |        |           |  |               | 13,541 |          |  |          | 21,225 |  |  |  | 1,505 |  |  |  | 50,044 |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|J ODonovan  |  |         | 24 June  02 |               |  |               | 10,055 |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 10,055 |  |  |  | 24 June  05 |  |  |  |             | 
|             |  |         | 18 June  03 |               |  |               |        |        |  |           | 14,058 |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 14,058 |  |  |  | 18 June  06 |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               | 10,055 |        |  |           | 14,058 |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 24,113 |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|M D Soden    |  |         | 26 Nov 01   |               |  |               | 23,756 |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 23,756 |  |  |  | 26 Nov 04   |  |  |  |             | 
|             |  |         | 24 June  02 |               |  |               | 25,137 |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 25,137 |  |  |  | 24 June  05 |  |  |  |             | 
|             |  |         | 18 June  03 |               |  |               |        |        |  |           | 33,739 |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 33,739 |  |  |  | 18 June  06 |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               | 48,893 |        |  |           | 33,739 |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 82,632 |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|Secretary    |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|J B Clifford |  |         | 13 July 99  |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          | 6,373  |  |  |  |       |  |  |  | 7,648  |  |  |  | 13 July  02 |  |  |  | 13 July  04 | 
|             |  |         | 25 May  00  |               |  |               | 11,362 |        |  |           |        |           |  |               | 10,226 |          |  |          | 10,226 |  |  |  | 1,136 |  |  |  | 12,271 |  |  |  | 25 May  03  |  |  |  | 25 May  05  | 
|             |  |         | 21 May  01  |               |  |               | 6,004  |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 6,004  |  |  |  | 21 May  04  |  |  |  |             | 
|             |  |         | 24 June  02 |               |  |               | 5,703  |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 5,703  |  |  |  | 24 June  05 |  |  |  |             | 
|             |  |         | 18 June  03 |               |  |               |        |        |  |           | 8,330  |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  | 8,330  |  |  |  | 18 June  06 |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               | 23,069 |        |  |           | 8,330  |           |  |               | 10,226 |          |  |          | 16,599 |  |  |  | 1,136 |  |  |  | 39,956 |  |  |  |             |  |  |  |             | 
|             |  |         |             |               |  |               |        |        |  |           |        |           |  |               |        |          |  |          |        |  |  |  |       |  |  |  |        |  |  |  |             |  |  |  |             | 






|    |                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------
|*   | Market price at date of award
    10.67                                                                                  
|   
|**  | Market price at date of vesting
    11.30                                                                                
|   
|*** | Minimum of 80% of the vested stock must be
    retained in the scheme for an additional
    2 years  see Note 34 on LTPSP

Changes in the directorate during the
period

|                                |  |                     |  |                             |  |  |  |  |  |  |             |  |  |  |              | 
|------------------------------- |  | ------------------- |  | --------------------------- |  |  |  |  |  |  | ----------- |  |  |  | ------------ | 
|                                |  |                     |  |                             |  | 
|                                |  | Executive Directors |  |                             |  | 
|                                |  |                     |  |                             |  | 
|                                |  |                     |  |                            
|                                |  |                     |  | Non-executive Directors and
|                                |  |                     |  | Officers                   
|                                |  |                     |  |                            
|Number at March 31, 2003        |  | 3                   |  | 10                         
|Changes during year             |  |                     |  |                             |  |  |  |  |  |  | D.J. Dilger |  |  |  | (10/07/2003) | 
|                                |  |                     |  |                             |  |  |  |  |  |  | G.M. Magan  |  |  |  | (10/07/2003) | 
|Number at March 31, 2004        |  | 3                   |  | 12                         
|Average number during 2003/2004 |  |                     |  |                             |  |  |  |  |  |  |             |  |  |  |              | 
|(2002/2003)                     |  | 3 (2.75)            |  | 11.5 (10.8)                

F-77



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)


Directors pension entitlements

Set out below are details of the pension benefits
earned by the Directors during the year ended March 31, 2004

|                      |  |                    |      |                |  |                 |     |  |  |  |       | 
|--------------------- |  | ------------------ | ---- | -------------- |  | --------------- | --- |  |  |  | ----- | 
|                      |  |                    |      |                |  | (c)            
|                      |  | (a)                |      | (b)            |  | Accrued pension
|                      |  | Additional pension |      | Increase in    |  | entitlement at 
|                      |  | earned in the year |      | transfer value |  | 31 March 2004  
|                      |  |                    |      |                |  |                
|                      |  | 000               |      | 000           |  | 000           
|Executive Directors   |  |                    |      |                |  |                 |     |  |  |  |       | 
|B J Goggin            |  |                    | 39.5 |                |  |                 | 551 |  |  |  | 285.4 | 
|J ODonovan           |  |                    | 27.9 |                |  |                 | 390 |  |  |  | 126.1 | 
|M D Soden             |  |                    | 42.9 |                |  |                 | 735 |  |  |  | 91.3  | 
|Non-executive Officer |  |                    |      |                |  |                 |     |  |  |  |       | 
|L G Crowley           |  |                    | 4.5  |                |  |                 | 70  |  |  |  | 25.5  | 




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.

Column (c) is the aggregate pension
entitlement based on each Directors pensionable service
with the Group at March 31, 2004, 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.

F-78



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)


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
March 31, 2004, 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, 2004             |           | As at April 1, 2003(1)
|             |  | Beneficial                       |           | Beneficial            
|             |  |                                  |           |                       
|DIRECTORS    |  |                                  |           |                        |  |  |           | 
|R E Bailie   |  |                                  | 3,352     |                        |  |  | 1,131     | 
|R Burrows    |  |                                  | 45,981    |                        |  |  | 34,536    | 
|L G Crowley  |  |                                  | 31,881    |                        |  |  | 30,395    | 
|D. J. Dilger |  |                                  | 2,190     |                        |  |  | 2,100     | 
|D J Geaney   |  |                                  | 7,734     |                        |  |  | 7,453     | 
|B J Goggin   |  |                                  | 322,784   |                        |  |  | 308,036   | 
|M A Keane    |  |                                  | 1,191,332 |                        |  |  | 1,191,052 | 
|R MacSharry  |  |                                  | 1,620     |                        |  |  | 1,339     | 
|G.M.Magan    |  |                                  | 1,090     |                        |  |  | 1,000     | 
|C A Marland  |  |                                  | 1,371     |                        |  |  | 1,090     | 
|T J Moran    |  |                                  | 1,386     |                        |  |  | 1,105     | 
|D OBrien    |  |                                  | 301,371   |                        |  |  | 201,090   | 
|J ODonovan  |  |                                  | 27,207    |                        |  |  | 3,000     | 
|M P Redmond  |  |                                  | 2,543     |                        |  |  | 2,263     | 
|M D Soden    |  |                                  | 90,964    |                        |  |  | 89,756    | 
|SECRETARY    |  |                                  |           |                        |  |  |           | 
|J B Clifford |  |                                  | 51,450    |                        |  |  | 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 March 31, 2004
and May 12, 2004. 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 March 31,
2004.

F-79



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



42  DIRECTORS
INFORMATION  (continued)


Transactions with Directors

The aggregate amounts outstanding and the number
of persons concerned, as at March 31, 2004 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:

|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|---------------------------------------------------------------- |  | ---------------- | ---------- | --------- |  | ---- | ---------- | ---- |  |  | ---- |  |  |  | ---- | 
|                                                                 |  |                  |            |          
|                                                                 |  | Aggregate Amount |            | Number of
|                                                                 |  | Outstanding      |            | Persons  
|                                                                 |  |                  |            |          
|                                                                 |  | 2004             |            | 2003      |  | 2004 |            | 2003
|                                                                 |  |                  |            |           |  |      |            |     
|                                                                 |  |                 |            |          |  |      |            |     
|Directors                                                        |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Loans to executive Directors on terms similar to
    staff loans |  |                  | 209,855    |           |  |      | 210,065    |      |  |  | 1    |  |  |  | 1    | 
|Other loans on normal commercial terms                           |  |                  | 24,417,939 |           |  |      | 27,397,372 |      |  |  | 9    |  |  |  | 11   | 
|Quasi-loans and credit transactions                              |  |                  |           |           |  |      |           |      |  |  | None |  |  |  | None | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  | 24,627,794 |           |  |      | 27,607,437 |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Connected Persons                                                |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|Loans to connected persons                                       |  |                  | 6,577      |           |  |      | 45,588     |      |  |  | 1    |  |  |  | 2    | 
|Quasi-loans and credit transactions                              |  |                  |           |           |  |      |           |      |  |  | None |  |  |  | None | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  | 6,577      |           |  |      | 45,588     |      |  |  |      |  |  |  |      | 
|                                                                 |  |                  |            |           |  |      |            |      |  |  |      |  |  |  |      | 

43  NOTES TO THE CASH FLOW
STATEMENT

(i)  Gross Cashflows

|                                                                                  |  |                 |       |      |  |      |       |   |  |  |       |  
|--------------------------------------------------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                                  |  | 2004            |       | 2003 |  | 2002
|                                                                                  |  |                 |       |      |  |     
|                                                                                  |  |                
|                                                                                  |  | (in  millions)
|RECONCILIATION OF OPERATING PROFIT TO NET CASH
    FLOW FROM OPERATING ACTIVITIES |  |                 |       |      |  |      |       |   |  |  |       |  
|Operating Profit                                                                  |  |                 | 1,238 |      |  |      | 1,155 |   |  |  | 1,121 |  
|(Increase)/decrease in accrued income and
    prepayments                         |  |                 | (144  | )    |  |      | 31    |   |  |  | 27    |  
|Increase/(decrease) in accruals and deferred
    income                           |  |                 | 39    |      |  |      | (87   | ) |  |  | (99   | )
|Provision for bad and doubtful debts                                              |  |                 | 86    |      |  |      | 100   |   |  |  | 102   |  
|Loans and advances written off net of recoveries                                  |  |                 | (101  | )    |  |      | (90   | ) |  |  | (36   | )
|Depreciation and amortisation                                                     |  |                 | 183   |      |  |      | 182   |   |  |  | 155   |  
|Interest charged on subordinated liabilities                                      |  |                 | 177   |      |  |      | 156   |   |  |  | 154   |  
|Other non-cash movements                                                          |  |                 | 21    |      |  |      | (2    | ) |  |  | (1    | )
|Profit on disposal of fixed assets                                                |  |                 | (20   | )    |  |      | (37   | ) |  |  | (22   | )
|Profit on disposal of leases                                                      |  |                 |      |      |  |      | (21   | ) |  |  |      |  
|                                                                                  |  |                 |       |      |  |      |       |   |  |  |       |  

F-80



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



43  NOTES TO THE CASH FLOW
STATEMENT     (continued)


|                                                                         |  |                 |        |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------------------ |  | --------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                         |  | 2004            |        | 2003 |  | 2002
|                                                                         |  |                 |        |      |  |     
|                                                                         |  |                
|                                                                         |  | (in  millions)
|Net cash flow from trading
    activities                                |  |                 | 1,479  |      |  |      | 1,387  |   |  |  | 1,401  |  
|Net decrease in collections / transmissions                              |  |                 | 23     |      |  |      | 18     |   |  |  | 129    |  
|Net (increase) in loans and advances to banks                            |  |                 | (492   | )    |  |      | (257   | ) |  |  | (216   | )
|Net (increase) in loans and advances to customers                        |  |                 | (9,425 | )    |  |      | (3,774 | ) |  |  | (5,217 | )
|Net increase in deposits by banks                                        |  |                 | 4,405  |      |  |      | 187    |   |  |  | 899    |  
|Net increase in customers accounts                                       |  |                 | 5,102  |      |  |      | 60     |   |  |  | 5,224  |  
|Net increase in debt securities in issue                                 |  |                 | 3,127  |      |  |      | 3,617  |   |  |  | 1,309  |  
|Net (increase)/decrease in non-investment debt
    and equity securities |  |                 | (890   | )    |  |      | (1,192 | ) |  |  | 290    |  
|Net (increase)/decrease in other assets                                  |  |                 | 94     |      |  |      | (1,572 | ) |  |  | 422    |  
|Net increase/(decrease) in other liabilities                             |  |                 | 177    |      |  |      | 1,934  |   |  |  | (432   | )
|Exchange movements                                                       |  |                 | 64     |      |  |      | 701    |   |  |  | (26    | )
|                                                                         |  |                 |        |      |  |      |        |   |  |  |        |  
|NET CASH FLOW FROM OPERATING
    ACTIVITIES                              |  |                 | 3,664  |      |  |      | 1,109  |   |  |  | 3,783  |  
|                                                                         |  |                 |        |      |  |      |        |   |  |  |        |  
|Returns on investment and servicing of
    finance                       |  |                 |        |      |  |      |        |   |  |  |        |  
|Interest paid on subordinated liabilities                                |  |                 | (161   | )    |  |      | (158   | ) |  |  | (157   | )
|Preference dividends paid                                                |  |                 | (8     | )    |  |      | (9     | ) |  |  | (17    | )
|Dividends paid to minority shareholders in
    subsidiary undertakings   |  |                 | (20    | )    |  |      | (9     | ) |  |  | (9     | )
|Issue expenses on outside interest 
    non equity                      |  |                 | (1     | )    |  |      | (5     | ) |  |  |       |  
|                                                                         |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                                         |  |                 | (190   | )    |  |      | (181   | ) |  |  | (183   | )
|                                                                         |  |                 |        |      |  |      |        |   |  |  |        |  

|                                                                                |  |                 |        |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                                |  | 2004            |        | 2003 |  | 2002
|                                                                                |  |                 |        |      |  |     
|                                                                                |  |                
|                                                                                |  | (in  millions)
|Capital expenditure and financial
    investment                                |  |                 |        |      |  |      |        |   |  |  |        |  
|Net (purchases) of investment debt and equity
    securities                    |  |                 | (2,734 | )    |  |      | (1,214 | ) |  |  | (2,231 | )
|Purchase of tangible fixed assets                                               |  |                 | (215   | )    |  |      | (299   | ) |  |  | (331   | )
|Sale of tangible fixed assets                                                   |  |                 | 74     |      |  |      | 146    |   |  |  | 135    |  
|                                                                                |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                                                |  |                 | (2,875 | )    |  |      | (1,367 | ) |  |  | (2,427 | )
|                                                                                |  |                 |        |      |  |      |        |   |  |  |        |  
|Acquisitions and disposals                                                      |  |                 |        |      |  |      |        |   |  |  |        |  
|Disposal of State Street                                                        |  |                 | 36     |      |  |      |       |   |  |  |       |  
|Acquisition of Foreign Currency Exchange Corp
    (FCEC)                        |  |                 | (11    | )    |  |      |       |   |  |  |       |  
|Acquisition of Post Office Financial Services net
    of cash balances acquired |  |                 | (156   | )    |  |      |       |   |  |  |       |  
|Payment for use of Post Office brand                                            |  |                 | (44    | )    |  |      |       |   |  |  |       |  
|Acquisition of Focus Investments                                                |  |                 | (5     | )    |  |      | (3     | ) |  |  | (5     | )
|Increase in investments in associated undertakings                              |  |                 | (3     | )    |  |      |       |   |  |  |       |  
|Acquisition of Group undertaking                                                |  |                 |       |      |  |      | (184   | ) |  |  | (246   | )
|Net cash balances of Group undertaking acquired                                 |  |                 | 4      |      |  |      | 10     |   |  |  | 7      |  
|Disposal of subsidiary undertaking                                              |  |                 |       |      |  |      | 13     |   |  |  |       |  
|Costs of terminating joint venture                                              |  |                 |       |      |  |      | (8     | ) |  |  |       |  
|                                                                                |  |                 |        |      |  |      |        |   |  |  |        |  
|                                                                                |  |                 | (179   | )    |  |      | (172   | ) |  |  | (244   | )
|                                                                                |  |                 |        |      |  |      |        |   |  |  |        |  

F-81



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



43  NOTES TO THE CASH FLOW
STATEMENT     (continued)


|                                               |  |                 |       |      |  |      |      |   |  |  |      |  
|---------------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                               |  | 2004            |       | 2003 |  | 2002
|                                               |  |                 |       |      |  |     
|                                               |  |                
|                                               |  | (in  millions)
|Financing                                      |  |                 |       |      |  |      |      |   |  |  |      |  
|Issue of capital stock (net of issue expenses) |  |                 | 25    |      |  |      | 5    |   |  |  | 8    |  
|Repayment of subordinated liabilities          |  |                 | (289  | )    |  |      | (174 | ) |  |  |     |  
|Issue of subordinated liabilities              |  |                 | 1,250 |      |  |      | 507  |   |  |  |     |  
|Preference Stock buyback                       |  |                 |      |      |  |      |     |   |  |  | (261 | )
|Ordinary Stock buyback                         |  |                 | (377  | )    |  |      | (133 | ) |  |  |     |  
|                                               |  |                 |       |      |  |      |      |   |  |  |      |  
|                                               |  |                 | 609   |      |  |      | 205  |   |  |  | (253 | )
|                                               |  |                 |       |      |  |      |      |   |  |  |      |  

(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)
|2004                      |  |                 |       |              |  |            |        |   |  |  |       |  
|At April 1, 2003          |  |                 | 679   |              |  |            | 745    |   |  |  | 1,424 |  
|Cash flow                 |  |                 | 716   |              |  |            | (262   | ) |  |  | 454   |  
|Foreign exchange movement |  |                 | 2     |              |  |            | (1     | ) |  |  | 1     |  
|                          |  |                 |       |              |  |            |        |   |  |  |       |  
|At March 31, 2004         |  |                 | 1,397 |              |  |            | 482    |   |  |  | 1,879 |  
|                          |  |                 |       |              |  |            |        |   |  |  |       |  
|2003                      |  |                 |       |              |  |            |        |   |  |  |       |  
|At April 1, 2002          |  |                 | 569   |              |  |            | 1,863  |   |  |  | 2,432 |  
|Cash flow                 |  |                 | 115   |              |  |            | (1,050 | ) |  |  | (935  | )
|Foreign exchange movement |  |                 | (5    | )            |  |            | (68    | ) |  |  | (73   | )
|                          |  |                 |       |              |  |            |        |   |  |  |       |  
|At March 31, 2003         |  |                 | 679   |              |  |            | 745    |   |  |  | 1,424 |  
|                          |  |                 |       |              |  |            |        |   |  |  |       |  

F-82



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



43  NOTES TO THE CASH FLOW
STATEMENT     (continued)


(iii) Analysis of changes in
financing

|                                       |  |                  |       |              |  |            |       |   |  |  |    |  
|-------------------------------------- |  | ---------------- | ----- | ------------ |  | ---------- | ----- | - |  |  | -- | -
|                                       |  | Capital Stock    |       |              |  | Minority  
|                                       |  | (including stock |       | Subordinated |  | Interest 
|                                       |  | premium)(1)      |       | Liabilities  |  | Non Equity
|                                       |  |                  |       |              |  |           
|                                       |  |                 
|                                       |  | (in  millions) 
|2004                                   |  |                  |       |              |  |            |       |   |  |  |    |  
|At April 1, 2003                       |  |                  | 1,449 |              |  |            | 2,703 |   |  |  | 73 |  
|Effect of foreign exchange differences |  |                  | 2     |              |  |            | 16    |   |  |  | 3  |  
|Cash flow                              |  |                  |      |              |  |            | 961   |   |  |  |   |  
|Other non cash movements               |  |                  | (5    | )            |  |            | 1     |   |  |  |   |  
|                                       |  |                  |       |              |  |            |       |   |  |  |    |  
|At March 31, 2004                      |  |                  | 1,446 |              |  |            | 3,681 |   |  |  | 76 |  
|                                       |  |                  |       |              |  |            |       |   |  |  |    |  
|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 |  
|                                       |  |                  |       |              |  |            |       |   |  |  |    |  






|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes
    377m for the buy
    back of ordinary stock and
    25m of proceeds
    received on the reissue of Treasury stock.

(iv) Foreign Currency Exchange Corp
(FCEC) Acquisition

|                    |  |    |    | 
|------------------- |  | -- | -- | 
|                    |  | m
|                    |  |   
|Net assets acquired |  |    | 3  | 
|Goodwill            |  |    | 8  | 
|                    |  |    |    | 
|                    |  |    | 11 | 
|                    |  |    |    | 
|Satisfied by:       |  |    |    | 
|Cash                |  |    | 11 | 
|                    |  |    |    | 

An analysis of net assets is set out in
Note 3.

(v)  Focus Investments
Acquisition

|                    |  |    |   | 
|------------------- |  | -- | - | 
|                    |  | m
|                    |  |   
|Net assets acquired |  |    | 2 | 
|Goodwill            |  |    | 3 | 
|                    |  |    | 5 | 
|Satisfied by:       |  |    |   | 
|Cash                |  |    | 5 | 

F-83



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



43  NOTES TO THE CASH FLOW
STATEMENT     (continued)


(vi) Post Office Financial
Services

|                             |  |    |     | 
|---------------------------- |  | -- | --- | 
|                             |  | m
|                             |  |   
|Share of net assets acquired |  |    | 74  | 
|Goodwill                     |  |    | 82  | 
|                             |  |    |     | 
|                             |  |    | 156 | 
|                             |  |    |     | 
|Satisfied by:                |  |    |     | 
|Cash                         |  |    | 156 | 
|                             |  |    |     | 

An analysis of net assets is set out in
Note 21.

44  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, 2004 of
0.1m (2003:
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, 2004 was
24m (2003:
38m).

(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 36.

(c)  Directors

Directors emoluments and details of
transactions between Directors and the Group are set out in the
Remuneration Report in Note 42. In the year to
March 31, 2004, Donal Geaney, Director, was a partner in
The Common Street Partnership, the owner of New Century House,
Mayor Street, IFSC, Dublin 1, which is leased ultimately to Bank
of Ireland, for 10 years at an annual rent of
1.49m. This
lease was entered into prior to Mr Geaneys appointment to
the Court.

(d) Securitisation

RPS3, RPS4, RPS5, SS1, Liberator and Partholon
are considered to be related parties of the Group. The Group has
entered into both an interest exchange agreement and a
subordinated loan agreement with RPS3, RPS4, RPS5. As at
March 31, 2004 the net amount due to RPS4 was
 0.6m
(2003: due to RPS4 nil) and from SS1 was
13.5m (2003:
13.7m). The net
amount due to RPS5 was
0.1m (2003:
0.1m). There are
no balances due to or from RPS3 at March 31, 2004 (2003:
0.1m). The net
amount due from Liberator was
1.4m (2003:
1.4m). The net
amount due from Partholon was
18.8m (2003:
nil).

F-84



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

45  ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCY

|                                          |  |                 |         |      |  |  |        | 
|----------------------------------------- |  | --------------- | ------- | ---- |  |  | ------ | 
|                                          |  |                
|                                          |  | At March 31,   
|                                          |  |                
|                                          |  | 2004            |         | 2003
|                                          |  |                 |         |     
|                                          |  |                
|                                          |  | (in  millions)
|Denominated in euro                       |  |                 | 52,391  |      |  |  | 42,485 | 
|Denominated in currencies other than euro |  |                 | 54,040  |      |  |  | 46,818 | 
|                                          |  |                 |         |      |  |  |        | 
|Total Assets                              |  |                 | 106,431 |      |  |  | 89,303 | 
|                                          |  |                 |         |      |  |  |        | 
|Denominated in euro                       |  |                 | 45,399  |      |  |  | 43,025 | 
|Denominated in currencies other than euro |  |                 | 61,032  |      |  |  | 46,278 | 
|                                          |  |                 |         |      |  |  |        | 
|Total Liabilities                         |  |                 | 106,431 |      |  |  | 89,303 | 
|                                          |  |                 |         |      |  |  |        | 

The difference between aggregate foreign currency
assets and aggregate foreign currency liabilities does not
provide any indication of the exposure to exchange risks.

46  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-85



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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 the identifiable assets
    and liabilities acquired is capitalised and amortised over its
    estimated useful economic life.                                                                 |  | Prior to 31 March 2002 goodwill arising on
    acquisitions of subsidiary undertakings was capitalised and
    amortised to income over the period estimated to benefit. In the
    Groups case a period of 20 years was used. Goodwill
    is written off when judged to be irrecoverable.                                                   
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill arising on the acquisition of subsidiary
    undertakings prior to 31 March 1998 was written off
    directly to reserves in the year of acquisition.                                                                                                                                                                                          |  | Post 1 April 2002 goodwill is capitalised on
    the Balance Sheet and is subject to an annual review for
    impairment. It is not subject to annual amortisation.                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                       
|Goodwill arising on acquisitions of subsidiary
    undertakings occurring after 31 March 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 awarded, 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. Where conditional awards
    are dependent on performance criteria, the cost is spread over
    the performance period. |  | As permitted by FAS 123, 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-86



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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. |  | 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.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Changes in the fair value of securities marked to
    market are recognised in the profit and loss account as they
    arise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Securities held for sale are those securities
    which are neither classified as held to maturity or trading.
    They 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|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.                                                                                                                                   

F-87



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                   |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                             |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                            
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-88



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Securitisation Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|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. |  | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Derivatives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Where a derivative is documented and evidenced as
    reasonably expected to match or eliminate risk from a
    transaction, accrual accounting is applied. Profits or losses on
    the derivative are included in the relevant income or expense
    category in the profit and loss account.
    The derivative is not carried at fair value in the Balance
    Sheet.
    Derivatives which are not accrual 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-89



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)

Summary of Significant Differences between
Irish and US Accounting Principles

|                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Irish GAAP                                                                                                                                                                                                                                |  | US GAAP                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                   
|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.
|                                                                                                                                                                                                                                         
|Prospective Accounting
    Developments                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                         
|The impact of recently issued pronouncements are
    detailed on pages 76 to 80.                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                   

Consolidated Net Income

|                                                                |           |                 |     |               |  |               |     |       |  |  |     |       | 
|--------------------------------------------------------------- | --------- | --------------- | --- | ------------- |  | ------------- | --- | ----- |  |  | --- | ----- | 
|                                                                |           | 2004            |     | 2003          |  | 2002         
|                                                                |           |                 |     |               |  |              
|                                                                |           |                 |     | (restated)(1) |  | (restated)(1)
|                                                                |           |                
|                                                                |           | (in  millions)
|Net income under Irish GAAP                                     |           |                 | 935 |               |  |               | 826 |       |  |  | 895 |      
|Depreciation                                                    |           |                 | (1  | )             |  |               | (2  | )     |  |  | (3  | )    
|Software development costs                                      |           |                 | 4   |               |  |               | 5   |       |  |  | 6   |      
|Goodwill                                                        |           |                 | 12  |               |  |               | 6   |       |  |  | (33 | )    
|Pension costs                                                   |           |                 | (48 | )             |  |               | (44 | )     |  |  | (58 | )    
|Long-term assurance policies                                    |           |                 | (86 | )             |  |               | (39 | )     |  |  | (78 | )    
|Group Transformation Programme                                  |           |                 | (11 | )             |  |               | (23 | )     |  |  | (21 | )    
|Leasing                                                         |           |                 | (27 | )             |  |               | (38 | )     |  |  | (7  | )    
|Stock based compensation                                        |           |                 | (3  | )             |  |               | (3  | )     |  |  | (4  | )    
|Derivatives                                                     |           |                 | 97  |               |  |               | 75  |       |  |  | (73 | )    
|Other                                                           |           |                 | 12  |               |  |               | 1   |       |  |  | (15 | )    
|Deferred tax effect on these adjustments                        |           |                 | 8   |               |  |               | 3   |       |  |  | 58  |      
|                                                                |           |                 |     |               |  |               |     |       |  |  |     |      
|                                                                |           |                 | 892 |               |  |               | 767 |       |  |  | 667 |      
|                                                                |           |                 |     |               |  |               |     |       |  |  |     |      
|Net income under US GAAP                                        |           |                 |     |               |  |               |     |       |  |  |     |      
|Earnings per unit of
    0.64 Ordinary
    Stock under US GAAP |           |                 |     |               |  |               |     |       |  |  |     |      
|                                                                |  basic   |                 |     | 92.8c         |  |               |     | 77.4c |  |  |     | 67.3c | 
|                                                                |           |                 |     |               |  |               |     |       |  |  |     |      
|                                                                |  diluted |                 |     | 92.2c         |  |               |     | 76.7c |  |  |     | 66.7c | 
|                                                                |           |                 |     |               |  |               |     |       |  |  |     |      

F-90



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


Consolidated Total Stockholders
Funds

|                                                                                  |  |                 |       |               |  |  |       |  
|--------------------------------------------------------------------------------- |  | --------------- | ----- | ------------- |  |  | ----- | -
|                                                                                  |  | 2004            |       | 2003         
|                                                                                  |  |                 |       |              
|                                                                                  |  |                 |       | (restated)(1)
|                                                                                  |  |                
|                                                                                  |  | (in  millions)
|Total stockholders funds including non equity
    interest                        |  |                 | 4,281 |               |  |  | 4,034 |  
|Property less related depreciation                                                |  |                 | (382  | )             |  |  | (347  | )
|Software development costs                                                        |  |                 |      |               |  |  | (4    | )
|Goodwill                                                                          |  |                 | 445   |               |  |  | 422   |  
|Debt securities  available for sale                                              |  |                 | 104   |               |  |  | 113   |  
|Pension costs                                                                     |  |                 | (20   | )             |  |  | (12   | )
|Long-term assurance policies                                                      |  |                 | (415  | )             |  |  | (359  | )
|Dividends                                                                         |  |                 | 257   |               |  |  | 238   |  
|Leasing                                                                           |  |                 | (72   | )             |  |  | (45   | )
|Group Transformation Programme                                                    |  |                 |      |               |  |  | 11    |  
|Derivatives                                                                       |  |                 | 99    |               |  |  | 2     |  
|Other                                                                             |  |                 | (7    | )             |  |  | (20   | )
|Deferred taxation on these adjustments                                            |  |                 | 28    |               |  |  | 30    |  
|                                                                                  |  |                 |       |               |  |  |       |  
|Consolidated stockholders funds including
    non equity interests under US GAAP |  |                 | 4,318 |               |  |  | 4,063 |  
|                                                                                  |  |                 |       |               |  |  |       |  

Consolidated Total Assets

|                                     |  |                 |         |               |  |  |        |  
|------------------------------------ |  | --------------- | ------- | ------------- |  |  | ------ | -
|                                     |  | 2004            |         | 2003         
|                                     |  |                 |         |              
|                                     |  |                 |         | (restated)(1)
|                                     |  |                
|                                     |  | (in  millions)
|Total assets under Irish GAAP        |  |                 | 106,431 |               |  |  | 89,303 |  
|Property less related depreciation   |  |                 | (382    | )             |  |  | (347   | )
|Goodwill                             |  |                 | 473     |               |  |  | 449    |  
|Software development costs           |  |                 |        |               |  |  | (4     | )
|Debt securities  available for sale |  |                 | 104     |               |  |  | 113    |  
|Pension costs                        |  |                 | (15     | )             |  |  | (7     | )
|Acceptances                          |  |                 | 33      |               |  |  | 81     |  
|Long-term assurance policies         |  |                 | (415    | )             |  |  | (359   | )
|Special purpose entities             |  |                 | 1,389   |               |  |  | 1,019  |  
|Derivatives                          |  |                 | 883     |               |  |  | 1,214  |  
|Other                                |  |                 | (80     | )             |  |  | (76    | )
|                                     |  |                 |         |               |  |  |        |  
|Total assets under US GAAP           |  |                 | 108,421 |               |  |  | 91,386 |  
|                                     |  |                 |         |               |  |  |        |  

F-91



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


Consolidated Total Liabilities and
Stockholders Funds

|                                                                                              |  |                 |         |               |  |  |        |  
|--------------------------------------------------------------------------------------------- |  | --------------- | ------- | ------------- |  |  | ------ | -
|                                                                                              |  | 2004            |         | 2003         
|                                                                                              |  |                 |         |              
|                                                                                              |  |                 |         | (restated)(1)
|                                                                                              |  |                
|                                                                                              |  | (in  millions)
|Total liabilities and stockholders funds
    including non equity interests under Irish GAAP |  |                 | 106,431 |               |  |  | 89,303 |  
|Stockholders funds (US GAAP adjustment)                                                      |  |                 | 37      |               |  |  | 29     |  
|Dividends                                                                                     |  |                 | (257    | )             |  |  | (238   | )
|Special purpose entities                                                                      |  |                 | 1,389   |               |  |  | 1,019  |  
|Acceptances                                                                                   |  |                 | 33      |               |  |  | 81     |  
|Leasing                                                                                       |  |                 | 72      |               |  |  | 45     |  
|Group Transformation Programme                                                                |  |                 |        |               |  |  | (11    | )
|Derivatives                                                                                   |  |                 | 784     |               |  |  | 1,212  |  
|Deferred taxation on these adjustments                                                        |  |                 | (19     | )             |  |  | (51    | )
|Other                                                                                         |  |                 | (49     | )             |  |  | (3     | )
|                                                                                              |  |                 |         |               |  |  |        |  
|Total liabilities and stockholders funds
    including non equity interests under US GAAP    |  |                 | 108,421 |               |  |  | 91,386 |  
|                                                                                              |  |                 |         |               |  |  |        |  

Restatement



| |     |                                                                                                                                                                                                                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Restated in accordance with UITF Abstract 37
    Purchases and Sales of Own Shares as discussed in
    Note 1 to the Financial Statements. No further adjustment
    was required for US GAAP reconciliations.

(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.

The effect on Net Income of applying this
standard to previous periods would have been

|                                  |  |      |     |      |  |      |     |  |  |  |     | 
|--------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                  |  | 2004 |     | 2003 |  | 2002
|                                  |  |      |     |      |  |     
|Reported net income under US GAAP |  |      | 892 |      |  |      | 767 |  |  |  | 667 | 
|Goodwill amortisation             |  |      |    |      |  |      |    |  |  |  | 33  | 
|                                  |  |      |     |      |  |      |     |  |  |  |     | 
|Net income                        |  |      | 892 |      |  |      | 767 |  |  |  | 700 | 
|                                  |  |      |     |      |  |      |     |  |  |  |     | 

F-92



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The current carrying value of goodwill for
US GAAP purposes has been allocated as follows to the
reportable business segments of the Group:

|                             |  |          |     |           |  |            |     |          |  |           |     |   |  |  |    |   |  |  |     | 
|---------------------------- |  | -------- | --- | --------- |  | ---------- | --- | -------- |  | --------- | --- | - |  |  | -- | - |  |  | --- | 
|                             |  | April 1, |     |           |  |            |     |          |  | March 31,
|                             |  | 2003     |     | Additions |  | Impairment |     | Exchange |  | 2004     
|                             |  |          |     |           |  |            |     |          |  |          
|Retail Republic of Ireland   |  |          | 7   |           |  |            |    |          |  |           |    |   |  |  |   |   |  |  | 7   | 
|BOI Life                     |  |          | 94  |           |  |            |    |          |  |           |    |   |  |  |   |   |  |  | 94  | 
|Wholesale Financial Services |  |          | 8   |           |  |            | 11  |          |  |           |    |   |  |  |   |   |  |  | 19  | 
|UK Financial Services        |  |          | 443 |           |  |            |    |          |  |           | (99 | ) |  |  | (4 | ) |  |  | 340 | 
|Asset Management Services    |  |          | 163 |           |  |            |    |          |  |           |    |   |  |  | (3 | ) |  |  | 160 | 
|UK Post Office Joint Venture |  |          |    |           |  |            | 126 |          |  |           |    |   |  |  |   |   |  |  | 126 | 
|                             |  |          |     |           |  |            |     |          |  |           |     |   |  |  |    |   |  |  |     | 
|                             |  |          | 715 |           |  |            | 137 |          |  |           | (99 | ) |  |  | (7 | ) |  |  | 746 | 
|                             |  |          |     |           |  |            |     |          |  |           |     |   |  |  |    |   |  |  |     | 

(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 2004, these plans make up approximately 86%,
(2003: 87%, 2002: 87%) 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,
|                                     |  |                     
|                                     |  | 2004                 |      | 2003 |  | 2002
|                                     |  |                      |      |      |  |     
|                                     |  |                     
|                                     |  | (in  millions)     
|Service cost                         |  |                      | 86   |      |  |      | 74   |   |  |  | 72   |  
|Cost of special termination benefits |  |                      | 4    |      |  |      | 93   |   |  |  | 96   |  
|Interest cost                        |  |                      | 162  |      |  |      | 141  |   |  |  | 132  |  
|Expected return on plan assets       |  |                      | (178 | )    |  |      | (208 | ) |  |  | (203 | )
|Net amortization and deferral        |  |                      | 19   |      |  |      | (15  | ) |  |  | (16  | )
|                                     |  |                      |      |      |  |      |      |   |  |  |      |  
|                                     |  |                      | 93   |      |  |      | 85   |   |  |  | 81   |  
|                                     |  |                      |      |      |  |      |      |   |  |  |      |  

A long term asset allocation policy has been
agreed for the assets of the Bank of Ireland Staff Pensions
Fund, which represents the bulk of defined benefit pension
assets and liabilities of the Group. This policy is as follows:



| |   |                 
| | - | ----------------
| |  | Equities  60%  
|
| |  | Bonds  27.5%   
|
| |  | Property  12.5%

F-93



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


There is some flexibility around the central
target asset allocation percentage. In general, the asset
allocation of the smaller defined benefit pension arrangements
operated by the Group (in particular in the context of their
relative size) will not differ significantly from that set out
above.

The table below shows the percentage of the fair
value of assets of each major category as at the measurement
date.

|                  |  |                   |      |                   |  |                   |      |  |  |  |      | 
|----------------- |  | ----------------- | ---- | ----------------- |  | ----------------- | ---- |  |  |  | ---- | 
|                  |  | Target allocation |      | Actual allocation |  | Actual allocation
|                  |  | as at March 31,   |      | as at March 31,   |  | as at March 31,  
|                  |  | 2004              |      | 2004              |  | 2003             
|                  |  |                   |      |                   |  |                  
|                  |  | %                 |      | %                 |  | %                
|Equity securities |  |                   | 60.0 |                   |  |                   | 63.9 |  |  |  | 65.9 | 
|Debt securities   |  |                   | 27.5 |                   |  |                   | 22.6 |  |  |  | 17.3 | 
|Property          |  |                   | 12.5 |                   |  |                   | 13.0 |  |  |  | 14.0 | 
|Other assets      |  |                   |     |                   |  |                   | 0.5  |  |  |  | 2.8  | 
|                  |  |                   |      |                   |  |                   |      |  |  |  |      | 
|Total             |  |                   | 100  |                   |  |                   | 100  |  |  |  | 100  | 
|                  |  |                   |      |                   |  |                   |      |  |  |  |      | 

The overall expected return on assets has been
calculated by taking an average of the expected return on each
asset class weighted by the allocation to each asset class as at
March 31, 2004. The expected return on equities has been
assessed based on historical analysis of investment returns
incorporating subjective judgement to compliment the information
provided by historic returns. The process of setting these
expected returns has also incorporated market commentators
views and investment managers forecasts. The expected rate
of return on equities as at March 31, 2004 was
7.5% per annum. The expected return on property was
6.5% per annum.

For quoted corporate or government bonds, the
expected return was taken as the weighted average of the
redemption yields of the securities held in the portfolio (this
is equated to 4.8% per annum).

A weighted average expected rate of return of
6.7% on the plan assets of both schemes was used in determining
the net periodic pension cost for the year ended March 31,
2004 (2003: 7.9% and 2002: 7%).

Actuarial assumptions used in determining the
projected benefit obligation at March 31, 2004 included a
weighted average discount rate of 5.5% (2003: 5.5% and
2002: 6%) and a weighted average increase in future
compensation expense of 2.9% (2003: 3% and
2002: 3.1%). Pensions are further discussed in Note 35.

During 2001, 2002 and 2003 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
4 million
in 2004 and a cost of
93 million
in 2003 and
96 million
in 2002 was recorded.

F-94



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


The main Bank of Ireland Pension Plans had
investments which included the following at March 31, 2004
and 2003:

|                                                                                    |  |                 |     |      |  |  |     | 
|----------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | 
|                                                                                    |  |                
|                                                                                    |  | At March 31,   
|                                                                                    |  |                
|                                                                                    |  | 2004            |     | 2003
|                                                                                    |  |                 |     |     
|                                                                                    |  |                
|                                                                                    |  | (in  millions)
|Interest in property occupied by Bank of Ireland                                    |  |                 | 130 |      |  |  | 122 | 
|Bank of Ireland
    0.64 Ordinary
    Stock                                        |  |                 | 51  |      |  |  | 84  | 
|Bank of Ireland 7.4% Guaranteed Step-up Callable
    Perpetual Preferred Securities |  |                 | Nil |      |  |  | 2   | 
|Securities Lending with Davy Stockbrokers                                           |  |                 | Nil |      |  |  | 6   | 

There were 5,014,773 units (2003:
8,607,160 units) of the Banks Ordinary Stock, shares
nil (2003: nil) of the Banks Preference Shares,
nil
(2003: nil)
Bank of Ireland 6.45% Subordinated Bonds 10.02.2010 and
nil (2003:
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, 2004. The total gross dividend paid in
cash on these investments was
2.2 million
(2003:
2.7 million).
In addition, the Group rents property from the pension fund. The
annual rent payable thereon, which is at arms length rates,
amounted to
7.1 million.

F-95



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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, 2004.

|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|-------------------------------------------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                           |  | 2004            |       | 2003 |  | 2002
|                                                                           |  |                 |       |      |  |     
|                                                                           |  |                
|                                                                           |  | (in  millions)
|Change in projected benefit
    obligation                                 |  |                 |       |      |  |      |       |   |  |  |       |  
|Projected benefit obligation at April 1                                    |  |                 | 2,950 |      |  |      | 2,404 |   |  |  | 2,243 |  
|Exchange adjustments                                                       |  |                 | 9     |      |  |      | (23   | ) |  |  |      |  
|Service cost (net of members contributions)                                |  |                 | 86    |      |  |      | 74    |   |  |  | 72    |  
|Interest cost                                                              |  |                 | 162   |      |  |      | 141   |   |  |  | 132   |  
|Members contributions                                                      |  |                 | 10    |      |  |      | 10    |   |  |  | 9     |  
|Liability change                                                           |  |                 |      |      |  |      |      |   |  |  | (11   | )
|Actuarial gain/(loss)                                                      |  |                 | (74   | )    |  |      | 310   |   |  |  | (67   | )
|Special termination benefits                                               |  |                 | 4     |      |  |      | 93    |   |  |  | 96    |  
|Benefits paid                                                              |  |                 | (92   | )    |  |      | (59   | ) |  |  | (70   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Projected benefit obligation at March 31                                   |  |                 | 3,055 |      |  |      | 2,950 |   |  |  | 2,404 |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Change in plan assets                                                      |  |                 |       |      |  |      |       |   |  |  |       |  
|Fair value of plan assets at April 1                                       |  |                 | 2,275 |      |  |      | 3,008 |   |  |  | 2,921 |  
|Exchange adjustments                                                       |  |                 | 6     |      |  |      | (23   | ) |  |  |      |  
|Actual return                                                              |  |                 | 462   |      |  |      | (674  | ) |  |  | 139   |  
|Employer contribution                                                      |  |                 | 28    |      |  |      | 13    |   |  |  | 10    |  
|Members contribution                                                       |  |                 | 10    |      |  |      | 10    |   |  |  | 9     |  
|Benefits paid                                                              |  |                 | (92   | )    |  |      | (59   | ) |  |  | (71   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Fair value of plan assets at March 31                                      |  |                 | 2,689 |      |  |      | 2,275 |   |  |  | 3,008 |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|Change in funded status                                                    |  |                 |       |      |  |      |       |   |  |  |       |  
|Funded status at March 31                                                  |  |                 | (366  | )    |  |      | (675  | ) |  |  | 604   |  
|Unamortised net loss/(gain)                                                |  |                 | 259   |      |  |      | 633   |   |  |  | (573  | )
|Minimum Liability Obligation                                               |  |                 | (29   | )    |  |      | (70   | ) |  |  |      |  
|Unamortised net asset at transition                                        |  |                 | (8    | )    |  |      | (9    | ) |  |  | (10   | )
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  
|(Accrued) prepaid pension cost recognised in
    balance sheet at year end |  |                 | (144  | )    |  |      | (121  | ) |  |  | 21    |  
|                                                                           |  |                 |       |      |  |      |       |   |  |  |       |  

(3)  Cashflow
Statements

The consolidated cash flow statement on
page F-11 has been completed in accordance with Financial
Reporting Standard 1 (revised) (FRS 1) 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-96



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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, 2004
and 2003 are as follows:

|                                       |  |                 |     |            |  |  |     |  
|-------------------------------------- |  | --------------- | --- | ---------- |  |  | --- | -
|                                       |  |                
|                                       |  | At March 31,   
|                                       |  |                
|                                       |  | 2004            |     | 2003      
|                                       |  |                 |     |           
|                                       |  |                 |     | (restated)
|                                       |  |                
|                                       |  | (in  millions)
|Deferred tax liabilities               |  |                 |     |            |  |  |     |  
|Accelerated capital allowances:        |  |                 |     |            |  |  |     |  
| on finance leases                    |  |                 | 106 |            |  |  | 108 |  
| on equipment used by the Group       |  |                 | 14  |            |  |  | 8   |  
|                                       |  |                 |     |            |  |  |     |  
|Total                                  |  |                 | 120 |            |  |  | 116 |  
|Deferred tax assets                    |  |                 |     |            |  |  |     |  
|Reserve for loan and lease loss        |  |                 | 55  |            |  |  | 59  |  
|Accruals and Reserves                  |  |                 | 1   |            |  |  | 4   |  
|Minimum tax credits                    |  |                 | 1   |            |  |  | 1   |  
|Other                                  |  |                 | 1   |            |  |  | 3   |  
|                                       |  |                 |     |            |  |  |     |  
|Total                                  |  |                 | 58  |            |  |  | 67  |  
|Deferred tax asset valuation allowance |  |                 | (4  | )          |  |  | (5  | )
|                                       |  |                 |     |            |  |  |     |  
|Net deferred tax assets                |  |                 | 54  |            |  |  | 62  |  
|                                       |  |                 |     |            |  |  |     |  
|Net deferred tax liabilities           |  |                 | 66  |            |  |  | 54  |  
|                                       |  |                 |     |            |  |  |     |  

(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

F-97



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


Required) or Grade 7 (Write-Off). In
addition, certain Credit Grade 5 loans (Unacceptable Risk)
where there is no 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, 2004, 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, 2004, the Groups net
investment in impaired loans amounted to
190.5 million
(2003:
89.1 million)
of which
114.3 million
(2003:
70.5 million)
was after specific provisions of
145.7 million
(2003:
104.3 million).

The average level of such impaired lending during
the year was approximately
264.8 million
(2003:
170.3 million).

(6)  Stock Compensation
Plan

The Bank operates a number of stock option
schemes. Further details are set out in Note 34.

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,
879 million
for March 31, 2004 (2003:
760 million
and 2002:
661 million)
and 91.5c (2003: 76.7c and 2002: 66.7c) respectively.

The following table summarises the number of
options outstanding under the Senior Executive Scheme and
weighted average exercise price:

|                                 |  |                      |           |          |  |        |        |          |  |  |           |  |  |  |         | 
|-------------------------------- |  | -------------------- | --------- | -------- |  | ------ | ------ | -------- |  |  | --------- |  |  |  | ------- | 
|                                 |  |                     
|                                 |  | Year Ended March 31,
|                                 |  |                     
|                                 |  |                      |           |         
|                                 |  | 2004                 |           | 2003    
|                                 |  |                      |           |         
|                                 |  |                      |           | Weighted |  |        |        | Weighted
|                                 |  |                      |           | Average  |  |        |        | Average 
|                                 |  |                      |           | exercise |  |        |        | exercise
|                                 |  | Number               |           | price    |  | Number |        | price   
|                                 |  |                      |           |          |  |        |        |         
|Outstanding at beginning of year |  |                      | 5,734,500 |          |  |        | 8.0657 |          |  |  | 6,645,742 |  |  |  | 5.8828  | 
|Granted in year                  |  |                      | 1,836,000 |          |  |        | 10.754 |          |  |  | 1,023,000 |  |  |  | 12.4638 | 
|Exercised in year                |  |                      | 776,000   |          |  |        | 6.128  |          |  |  | 1,889,242 |  |  |  | 2.7302  | 
|Lapsed in year                   |  |                      | 209,500   |          |  |        | 9.773  |          |  |  | 45,000    |  |  |  | 9.6707  | 
|                                 |  |                      |           |          |  |        |        |          |  |  |           |  |  |  |         | 
|Outstanding at end of year       |  |                      | 6,585,000 |          |  |        | 8.989  |          |  |  | 5,734,500 |  |  |  | 8.0657  | 
|                                 |  |                      |           |          |  |        |        |          |  |  |           |  |  |  |         | 

F-98



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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,
2004

|                            |  |              |           |                  |  |              |             |  |  |  |         | 
|--------------------------- |  | ------------ | --------- | ---------------- |  | ------------ | ----------- |  |  |  | ------- | 
|                            |  | Number       |           | Weighted         |  | Number      
|                            |  | Outstanding  |           | Average          |  | Exercisable 
|                            |  | at March 31, |           | Remaining        |  | at March 31,
|                            |  | 2004         |           | Contractual Life |  | 2004        
|                            |  |              |           |                  |  |             
|Exercise price
    ( cent) |  |              |           |                  |  |              |             |  |  |  |         | 
|1.67                        |  |              | 20,000    |                  |  |              | 2mths       |  |  |  | 20,000  | 
|2.111                       |  |              | 80,000    |                  |  |              | 1yr 2mths   |  |  |  | 80,000  | 
|2.819                       |  |              | 526,000   |                  |  |              | 2yr 3mths   |  |  |  | 526,000 | 
|3.241                       |  |              | 80,000    |                  |  |              | 2yr 8mths   |  |  |  | 80,000  | 
|4.529                       |  |              | 360,000   |                  |  |              | 3yr 3mths   |  |  |  | 360,000 | 
|5.753                       |  |              | 250,100   |                  |  |              | 3yr 8mths   |  |  |  | 250,100 | 
|8.264                       |  |              | 216,000   |                  |  |              | 4yr 2mths   |  |  |  | 216,000 | 
|8.933                       |  |              | 534,000   |                  |  |              | 5yr 4mths   |  |  |  | 534,000 | 
|8.430                       |  |              | 80,250    |                  |  |              | 5yr 8mths   |  |  |  | 80,250  | 
|6.960                       |  |              | 632,000   |                  |  |              | 6yr 2mths   |  |  |  | 632,000 | 
|9.150                       |  |              | 123,650   |                  |  |              | 6yr 8mths   |  |  |  | 123,650 | 
|11.050                      |  |              | 687,000   |                  |  |              | 7yr 2 mths  |  |  |  |        | 
|10.540                      |  |              | 234,000   |                  |  |              | 7yr 8 mths  |  |  |  |        | 
|12.500                      |  |              | 951,000   |                  |  |              | 8yr 3 mths  |  |  |  |        | 
|10.650                      |  |              | 20,000    |                  |  |              | 8yr 9 mths  |  |  |  |        | 
|10.77                       |  |              | 1,670,000 |                  |  |              | 9 yr 3 mths |  |  |  |        | 
|10.54                       |  |              | 121,000   |                  |  |              | 9 yr 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. A further
offer under the scheme was made in December 2003 and options to
purchase Ordinary Stock were granted to participating employees
in the Republic of Ireland at an option price at
7.84 which
represented a 25% discount to the then market price and to
participating employees in the UK at an option price of
8.37 which
represented a 20% discount to the then market price. The
outstanding options under the Scheme, which stood at 16,770,743
at March 31, 2004 and 12,470,190 at March 31, 2003 and
13,326,456 at March 31, 2002 are exercisable, provided the
participants savings contracts are complete, between May
2005 and February 2009.

As at March 31, 2004 conditional awards
totalling 808,895 units of stock (2003: 779,766 and 2002:
644,825 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 3.7% (2003: 4.51%,
2002: 4.54%), expected volatility of 30% (2003: 35.7%,
2002: 35.65%) and a dividend yield for the sector of 3.3%
(2003: 1.71%, 2002: 1.78%). 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.

F-99



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


(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 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         
|                                                                        |  | 2004   |     | (restated)   
|                                                                        |  |        |     |              
|                                                                        |  |        |     | 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 |  |        | 892 |               |  |        | 961 |        |  |               | 92.8c |        |  |  | 767 |  |  |  | 991  |  |  |  | 77.4c | 
|Effect of dilutive securities employee share
    options                |  |        |     |               |  |        | 7   |        |  |               |       |        |  |  |     |  |  |  | 10   |  |  |  |       | 
|                                                                        |  |        |     |               |  |        |     |        |  |               |       |        |  |  |     |  |  |  |      |  |  |  |       | 
|Diluted EPS                                                             |  |        | 892 |               |  |        | 968 |        |  |               | 92.2c |        |  |  | 767 |  |  |  | 1001 |  |  |  | 76.7c | 
|                                                                        |  |        |     |               |  |        |     |        |  |               |       |        |  |  |     |  |  |  |      |  |  |  |       | 

|                                                                        |  |            |     |               |  |        |      |  |  |  |       | 
|----------------------------------------------------------------------- |  | ---------- | --- | ------------- |  | ------ | ---- |  |  |  | ----- | 
|                                                                        |  |           
|                                                                        |  | 2002      
|                                                                        |  | (restated)
|                                                                        |  |           
|                                                                        |  |            |     | Per-share    
|                                                                        |  | Income     |     | Share No      |  | Amount
|                                                                        |  |            |     |               |  |       
|                                                                        |  | m         |     | (in millions) |  | Cent  
|Basic EPS                                                               |  |            |     |               |  |        |      |  |  |  |       | 
|Approximate net income (US GAAP) available
    to ordinary stockholders |  |            | 667 |               |  |        | 990  |  |  |  | 67.3c | 
|Effect of dilutive securities employee share
    options                |  |            |     |               |  |        | 10   |  |  |  |       | 
|                                                                        |  |            |     |               |  |        |      |  |  |  |       | 
|Diluted EPS                                                             |  |            | 667 |               |  |        | 1000 |  |  |  | 66.7c | 
|                                                                        |  |            |     |               |  |        |      |  |  |  |       | 

Shares (2004: 3.8 million, 2003:
1.3 million, 2002: 1.0 million) were excluded from the
computation of diluted EPS above as their effect would have been
anti-dilutive.

F-100



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


(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.

The following summary consolidated statements of
income illustrates this presentation.

|                                                                        |              |                 |       |      |  |  |       |   | 
|----------------------------------------------------------------------- | ------------ | --------------- | ----- | ---- |  |  | ----- | - | 
|                                                                        |              |                
|                                                                        |              | At March 31,   
|                                                                        |              |                
|                                                                        |              | 2004            |       | 2003
|                                                                        |              |                 |       |     
|                                                                        |              |                
|                                                                        |              | (in  millions)
|Net interest income                                                     |              |                 | 1,744 |      |  |  | 1,729 |  
|Other income                                                            |              |                 | 1,320 |      |  |  | 1,272 |  
|                                                                        |              |                 |       |      |  |  |       |  
|Total income                                                            |              |                 | 3,064 |      |  |  | 3,001 |  
|Total operating expenses                                                |              |                 | 1,826 |      |  |  | 1,846 |  
|                                                                        |              |                 |       |      |  |  |       |  
|Operating profit                                                        |              |                 | 1,238 |      |  |  | 1,155 |  
|Income from associated undertakings                                     |              |                 | 29    |      |  |  | 22    |  
|                                                                        |              |                 |       |      |  |  |       |  
|Profit on ordinary activities before exceptional
    items              |              |                 | 1,267 |      |  |  | 1,177 |  
|Exceptional item                                                        |              |                 | (97   | )    |  |  | (164  | )
|                                                                        |              |                 |       |      |  |  |       |  
|Profit before tax                                                       |              |                 | 1,170 |      |  |  | 1,013 |  
|Taxation on profit on ordinary activities                               |              |                 | 208   |      |  |  | 163   |  
|                                                                        |              |                 |       |      |  |  |       |  
|Profit on ordinary activities after tax                                 |              |                 | 962   |      |  |  | 850   |  
|Minority interest                                                       |              |                 |       |      |  |  |       |  
|                                                                        |  equity     |                 |       | 13   |  |  |       | 9 | 
|                                                                        |  non-equity |                 |       | 6    |  |  |       | 6 | 
|Non cumulative preference stock dividends                               |              |                 | 8     |      |  |  | 9     |  
|                                                                        |              |                 |       |      |  |  |       |  
|Profit for financial year attributable to holders
    of ordinary stock |              |                 | 935   |      |  |  | 826   |  
|                                                                        |              |                 |       |      |  |  |       |  

(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-101



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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,   
|                                                                           |  |                
|                                                                           |  | 2004            |         | 2003      
|                                                                           |  |                 |         |           
|                                                                           |  |                 |         | (restated)
|                                                                           |  |                
|                                                                           |  | (in  millions)
|Assets:                                                                    |  |                 |         |            |  |  |        |  
|Cash and balances at Central Banks                                         |  |                 | 1,397   |            |  |  | 679    |  
|Items in the course of collection from banks                               |  |                 | 584     |            |  |  | 508    |  
|Central government and other eligible bills                                |  |                 | 211     |            |  |  | 175    |  
|Loans and advances to banks                                                |  |                 | 8,327   |            |  |  | 7,910  |  
|Loans and advances to customers                                            |  |                 | 67,540  |            |  |  | 56,887 |  
|Securitization and loan transfers                                          |  |                 | 593     |            |  |  | 794    |  
|Less: non-returnable amounts                                               |  |                 | (504    | )          |  |  | (667   | )
|                                                                           |  |                 |         |            |  |  |        |  
|                                                                           |  |                 | 89      |            |  |  | 127    |  
|Debt securities                                                            |  |                 | 17,073  |            |  |  | 13,763 |  
|Equity shares                                                              |  |                 | 4,642   |            |  |  | 3,109  |  
|Interest in associated undertakings                                        |  |                 | 14      |            |  |  | 13     |  
|Interest in joint ventures                                                 |  |                 | 243     |            |  |  | 25     |  
|Intangible Fixed Assets                                                    |  |                 | 147     |            |  |  | 266    |  
|Tangible fixed assets                                                      |  |                 | 1,698   |            |  |  | 1,582  |  
|Other assets                                                               |  |                 | 3,954   |            |  |  | 3,837  |  
|Prepayments and accrued income                                             |  |                 | 739     |            |  |  | 589    |  
|Market value of shares held for the benefit of
    policyholders           |  |                 | (227    | )          |  |  | (167   | )
|                                                                           |  |                 |         |            |  |  |        |  
|Total Assets                                                               |  |                 | 106,431 |            |  |  | 89,303 |  
|                                                                           |  |                 |         |            |  |  |        |  
|Liabilities:                                                               |  |                 |         |            |  |  |        |  
|Deposits by banks                                                          |  |                 | 17,060  |            |  |  | 12,617 |  
|Customer accounts                                                          |  |                 | 54,395  |            |  |  | 48,496 |  
|Debt securities in issue                                                   |  |                 | 12,917  |            |  |  | 9,652  |  
|Items in the course of transmission to banks                               |  |                 | 230     |            |  |  | 136    |  
|Other liabilities                                                          |  |                 | 12,571  |            |  |  | 10,516 |  
|Proposed dividends  equity                                                |  |                 | 257     |            |  |  | 238    |  
|Accruals and deferred income                                               |  |                 | 621     |            |  |  | 541    |  
|Provision for liabilities and charges                                      |  |                 |         |            |  |  |        |  
| deferred taxation                                                        |  |                 | 66      |            |  |  | 54     |  
| other provisions for liabilities and
    charges                         |  |                 | 221     |            |  |  | 189    |  
|Subordinated liabilities                                                   |  |                 | 3,682   |            |  |  | 2,703  |  
|Minority interest                                                          |  |                 |         |            |  |  |        |  
| equity                                                                   |  |                 | 54      |            |  |  | 54     |  
| non-equity                                                               |  |                 | 76      |            |  |  | 73     |  
|Called up capital stock                                                    |  |                 | 679     |            |  |  | 679    |  
|Stock premium account                                                      |  |                 | 767     |            |  |  | 765    |  
|Capital reserve                                                            |  |                 | 498     |            |  |  | 436    |  
|Profit and loss account                                                    |  |                 | 2,281   |            |  |  | 2,099  |  
|Revaluation reserve                                                        |  |                 | 239     |            |  |  | 181    |  
|                                                                           |  |                 |         |            |  |  |        |  
|Total stockholders funds including
    non-equity interests               |  |                 | 4,464   |            |  |  | 4,160  |  
|Cost of own shares held for the benefit of life
    assurance policyholder |  |                 | (183    | )          |  |  | (126   | )
|                                                                           |  |                 |         |            |  |  |        |  
|                                                                           |  |                 | 4,281   |            |  |  | 4,034  |  
|                                                                           |  |                 |         |            |  |  |        |  
|Total liabilities                                                          |  |                 | 106,431 |            |  |  | 89,303 |  
|                                                                           |  |                 |         |            |  |  |        |  

F-102



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##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  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.

Under the provision of FIN 45, a liability
is required to be recognised by the fair value of Guarantees
issued after January 1, 2003. The fair value of the
obligation is in the substantial majority of cases the premium
received under the contract. The adoption of FIN 45 did
therefore not have a material impact on the Group.

(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 increased by
1,389 million
(2003:
1,019 million).

During 2003, the FASB issued FIN 46 and
FIN 46R. 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 46R are immediately
effective for variable interest entities created after
January 31, 2003 and from April 1, 2004 for entities
created before that date.

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 interests it
holds within these entities, which primarily comprise liquidity,
credit enhancements, derivative transactions and financing
arrangements.

F-103



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



46  GROUP FINANCIAL INFORMATION FOR
US INVESTORS  (continued)




Summary of Significant Differences between
Irish and US Accounting Principles


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 16.

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. The Bank does not sell its own assets to
    this company. As of July 16, 2004, the commercial paper
    issued by the multi-seller conduit is currently rated P-1/A-1/F1
    by Moodys/S&P/Fitch.
|
| | As of March 31, 2004, the Group had an
    outstanding undrawn liquidity facility to the company amounting
    to 728.32m.
    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.                                                                                                                                                                                                                                                                                                                                                       

C)  Partholon



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Group has sold a pool of leveraged
    acquisition finance loan assets to Partholon CDO 1 plc
    (Partholon), which is incorporated under the Irish
    Companies Acts, 1963 to 2003 and is registered and operates in
    the Republic of Ireland. Partholon has issued a series of loan
    notes to finance this purchase. The Group holds 25% of the
    subordinated loan notes but does not own, directly or
    indirectly, any of the share capital of Partholon, which is
    owned by a charitable trust. The Group also holds
    5m of AAA-rated
    loan notes in Partholon, which it intends to hold until maturity.                                                             
|
| | Under the terms of separate agreements the Group
    manages the assets of Partholon, including identification of
    additional assets for acquisition, for which it receives fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The market value at the date of sale of the
    assets sold to Partholon was
    243m and they
    are disclosed by way of linked presentation on the Bank Balance
    Sheet and Group Balance Sheet. The Group is not obliged, nor
    intends to support any losses in respect of the assets of
    Partholon. Repayment of the loan notes issued by Partholon will
    be made solely from the cashflows generated by its pool of
    assets. This is clearly stated in the agreements with the
    holders of the loan notes. The proceeds generated by the
    acquired assets will be used to pay interest and capital on the
    loan notes and any other administrative expenses and taxation.

F-104



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|   |                                                                                    
|-- | -----------------------------------------------------------------------------------
|47 | 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 46 above.

The book value and market value of the debt
securities are analysed as follows:

|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 
|------------------ |  | --------------- | ------ | ------ |  | ----- | ------ | ------ |  |  | ------ |  |  |  | ------ | 
|                   |  |                
|                   |  | At March 31,   
|                   |  |                
|                   |  |                 |        |       
|                   |  | 2004            |        | 2003  
|                   |  |                 |        |       
|                   |  | Book            |        | Market |  | Book  |        | Market
|                   |  | Value           |        | Value  |  | Value |        | Value 
|                   |  |                 |        |        |  |       |        |       
|                   |  |                
|                   |  | (in  millions)
|Held to maturity   |  |                 | 3,662  |        |  |       | 3,638  |        |  |  | 3,227  |  |  |  | 3,216  | 
|Available for sale |  |                 | 7,635  |        |  |       | 7,739  |        |  |  | 5,522  |  |  |  | 5,635  | 
|Trading            |  |                 | 4,379  |        |  |       | 4,379  |        |  |  | 3,588  |  |  |  | 3,588  | 
|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 
|Total              |  |                 | 15,676 |        |  |       | 15,756 |        |  |  | 12,337 |  |  |  | 12,439 | 
|                   |  |                 |        |        |  |       |        |        |  |  |        |  |  |  |        | 

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, 2004 and 2003.

|                                               |  |                                         |       |                 |  |           |       |        |  |  |       |  |  |  |       | 
|---------------------------------------------- |  | --------------------------------------- | ----- | --------------- |  | --------- | ----- | ------ |  |  | ----- |  |  |  | ----- | 
|                                               |  |                                        
|                                               |  | Available for Sale Investment Portfolio
|                                               |  |                                        
|                                               |  |                                         |       |                
|                                               |  | 2004                                    |       | 2003           
|                                               |  |                                         |       |                
|                                               |  | Amortized                               |       | Market          |  | Amortized |       | Market
|                                               |  | Cost                                    |       | Value           |  | Cost      |       | Value 
|                                               |  |                                         |       |                 |  |           |       |       
|                                               |  |                                         |       |                 |  |          
|                                               |  |                                         |       | (in  millions) |  |          
|Irish government                               |  |                                         | 129   |                 |  |           | 129   |        |  |  | 271   |  |  |  | 285   | 
|Other European government                      |  |                                         | 830   |                 |  |           | 864   |        |  |  | 367   |  |  |  | 409   | 
|US Treasury and US Government agencies         |  |                                         | 49    |                 |  |           | 49    |        |  |  |      |  |  |  |      | 
|Mortgage backed obligation of federal agencies |  |                                         |      |                 |  |           |      |        |  |  |      |  |  |  |      | 
|Corporate bonds                                |  |                                         | 6,094 |                 |  |           | 6,164 |        |  |  | 4,247 |  |  |  | 4,304 | 
|Other securities                               |  |                                         | 533   |                 |  |           | 533   |        |  |  | 637   |  |  |  | 637   | 
|                                               |  |                                         |       |                 |  |           |       |        |  |  |       |  |  |  |       | 
|Total                                          |  |                                         | 7,635 |                 |  |           | 7,739 |        |  |  | 5,522 |  |  |  | 5,635 | 
|                                               |  |                                         |       |                 |  |           |       |        |  |  |       |  |  |  |       | 

Proceeds from sales of available for sale
securities during the year ended March 31, 2004 were
2,536m (2003:
710 million).
Gross gains of
nil (2003:
4 million)
and gross losses of
2m (2003:
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, 2004 based upon amortized cost.

F-105



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)



|   |                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------
|47 | SFAS NO. 115 ACCOUNTING FOR CERTAIN
    INVESTMENTS IN DEBT AND EQUITY
    SECURITIES  (continued)

|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|----------------------------------------------- |  | --------------- | ----- | ---------- |  | ---------- | ----- | -------- |  | ----- | --- |  |  |  | --- |  |  |  | ----- | 
|                                                |  |                 |       | 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                                |  |                 |      |            |  |            |      |          |  |       |    |  |  |  | 129 |  |  |  | 129   | 
|Other European government                       |  |                 | 506   |            |  |            | 324   |          |  |       |    |  |  |  |    |  |  |  | 830   | 
|US Treasury and US Government agencies          |  |                 |      |            |  |            | 49    |          |  |       |    |  |  |  |    |  |  |  | 49    | 
|Mortgage backed obligations of federal agencies |  |                 |      |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  |      | 
|Corporate bonds                                 |  |                 | 2,594 |            |  |            | 2,885 |          |  |       | 585 |  |  |  | 30  |  |  |  | 6,094 | 
|Other securities                                |  |                 | 533   |            |  |            |      |          |  |       |    |  |  |  |    |  |  |  | 533   | 
|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 
|Total                                           |  |                 | 3,633 |            |  |            | 3,258 |          |  |       | 585 |  |  |  | 159 |  |  |  | 7,635 | 
|                                                |  |                 |       |            |  |            |       |          |  |       |     |  |  |  |     |  |  |  |       | 

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, 2004 and 2003.

|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 
|---------------------------------------------- |  | ------------------------------------- | ----- | -------------- |  | --------- | ----- | ------ |  |  | ----- |  |  |  | ----- | 
|                                               |  |                                      
|                                               |  | Held to Maturity Investment Portfolio
|                                               |  |                                      
|                                               |  |                                       |       |               
|                                               |  | March 31, 2004                        |       | March 31, 2003
|                                               |  |                                       |       |               
|                                               |  | Amortized                             |       | Market         |  | Amortized |       | Market
|                                               |  | Cost                                  |       | Value          |  | Cost      |       | Value 
|                                               |  |                                       |       |                |  |           |       |       
|                                               |  |                                      
|                                               |  | (in  millions)                      
|Irish government                               |  |                                       |      |                |  |           |      |        |  |  |      |  |  |  |      | 
|Other European government                      |  |                                       | 1     |                |  |           | 1     |        |  |  | 1     |  |  |  | 1     | 
|U.S. treasury and U.S. government
    agencies |  |                                       |      |                |  |           |      |        |  |  |      |  |  |  |      | 
|Corporate bonds                                |  |                                       | 3,142 |                |  |           | 3,118 |        |  |  | 2,961 |  |  |  | 2,950 | 
|Other securities                               |  |                                       | 519   |                |  |           | 519   |        |  |  | 265   |  |  |  | 265   | 
|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 
|                                               |  |                                       | 3,662 |                |  |           | 3,638 |        |  |  | 3,227 |  |  |  | 3,216 | 
|                                               |  |                                       |       |                |  |           |       |        |  |  |       |  |  |  |       | 

Proceeds from sales of held to maturity
securities during the year ended March 31, 2004 were
nil (2003:
nil). Gross
gains of nil
(2003: nil) and
gross losses of 
nil (2003: nil)
were realised on those sales. The impairment of
24m on the held
to maturity portfolio is temporary in nature.

The following table shows the maturity
distribution of the held to maturity investment portfolio of the
Group at March 31, 2004 based upon amortized cost.

|                                          |  |                                       |     |            |  |            |       |          |  |       |       |  |  |  |     |  |  |  |       | 
|----------------------------------------- |  | ------------------------------------- | --- | ---------- |  | ---------- | ----- | -------- |  | ----- | ----- |  |  |  | --- |  |  |  | ----- | 
|                                          |  |                                      
|                                          |  | Maturity Distribution of             
|                                          |  | Held to Maturity Investment Portfolio
|                                          |  | At March 31, 2004                    
|                                          |  |                                      
|                                          |  |                                       |     | 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                          |  |                                       |    |            |  |            |      |          |  |       |      |  |  |  |    |  |  |  |      | 
|Other European government                 |  |                                       | 1   |            |  |            |      |          |  |       |      |  |  |  |    |  |  |  | 1     | 
|U.S. treasury and U.S government agencies |  |                                       |    |            |  |            |      |          |  |       |      |  |  |  |    |  |  |  |      | 
|Corporate bonds                           |  |                                       | 219 |            |  |            | 1,739 |          |  |       | 983   |  |  |  | 201 |  |  |  | 3,142 | 
|Other securities                          |  |                                       | 175 |            |  |            | 324   |          |  |       | 20    |  |  |  |    |  |  |  | 519   | 
|                                          |  |                                       |     |            |  |            |       |          |  |       |       |  |  |  |     |  |  |  |       | 
|Total                                     |  |                                       | 395 |            |  |            | 2,063 |          |  |       | 1,003 |  |  |  | 201 |  |  |  | 3,662 | 
|                                          |  |                                       |     |            |  |            |       |          |  |       |       |  |  |  |     |  |  |  |       | 

F-106



---



##### Table of Contents



BANK OF IRELAND GROUP


NOTES ON THE FINANCIAL
STATEMENTS  (Continued)

48  COMPREHENSIVE INCOME

|                                      |                                                         |                 |     |      |   |      |     |      |   |  |     |    | 
|------------------------------------- | ------------------------------------------------------- | --------------- | --- | ---- | - | ---- | --- | ---- | - |  | --- | -- | 
|                                      |                                                         |                
|                                      |                                                         | At March 31,   
|                                      |                                                         |                
|                                      |                                                         | 2004            |     | 2003 |   | 2002
|                                      |                                                         |                 |     |      |   |     
|                                      |                                                         |                
|                                      |                                                         | (in  millions)
|Net income in accordance with US GAAP |                                                         |                 | 892 |      |   |      | 767 |      |   |  | 667 |   
|Other comprehensive income net of tax |                                                         |                 |     |      |   |      |     |      |   |  |     |   
|                                      | Foreign currency translation adjustment                 |                 |     | 69   |   |      |     | (379 | ) |  |     | 20 | 
|                                      | Net movement on unrealized gains on debt
    securities |                 |     | (8   | ) |      |     | 67   |   |  |     | 4  | 
|                                      | Pension additional benefit obligation                   |                 |     | 42   |   |      |     | (70  | ) |  |     |   | 
|                                      |                                                         |                 |     |      |   |      |     |      |   |  |     |   
|Comprehensive income                  |                                                         |                 | 995 |      |   |      | 385 |      |   |  | 691 |   
|                                      |                                                         |                 |     |      |   |      |     |      |   |  |     |   

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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 22, 2004                                



| |     | 
| | --- | 
| | By: | 

| |                              
| | -----------------------------
| |                              
| | Name: Brian Goggin           
| | Title:  Group Chief Executive



| |     | 
| | --- | 
| | By: | 

| |                                      
| | -------------------------------------
| |                                      
| | Name: John ODonovan                 
| | Title:  Group Chief Financial Officer

F-108



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U47687