1st Aug 2006 07:00
Allied Irish Banks PLC01 August 2006 Notes 1 Accounting policies and presentation of financial information The accounting policies that the Group applied in the preparation of the interimfinancial statements for the half year ended 30 June 2006 are in accordance withthe recognition and measurement principles of International Financial ReportingStandards as adopted by the EU and are consistent with those set out in theAnnual Report and Accounts for the year ended 31 December 2005. 2 Disposal of Ark Life Assurance Company Limited ('Ark Life'). Acquisition of aninterest of 24.99% in Hibernian Life Holdings Limited. On 30 January 2006, the previously announced venture with Aviva Group p.l.c. forthe manufacture and distribution of life and pensions products in the Republicof Ireland was completed. The transaction brought together Hibernian Life &Pensions Limited and Ark Life under a holding company Hibernian Life HoldingsLimited of which AIB owns 24.99%. AIB has entered into an exclusive agreement todistribute the life and pensions products of the venture. Under IFRS 5,'Non-current assets held for sale and discontinued operations', theincome and expenses, up to the date of disposal, the operations deemed to bedisposed of, have been reported net of taxation as a discontinued operationbelow profit after taxation. The impact of the restatement on the previouslyreported June 2005 figures is outlined below. The assets and liabilities of ArkLife as 31 December 2005 were classified as held for sale, separate from otherassets and liabilities on the balance sheet. There has been no restatement of 30June 2005 balance sheet figures as the assets and liabilities were not held forsale at that date. 30 June 2005 As previously Discontinued Continuing reported operations operations • m • m • m Net interest income 1,268 42 1,226Other income 890 352 538 Total operating income 2,158 394 1,764Insurance and investment contract liabilities 355 355 -and claimsTotal operating expenses 985 13 972Provisions 42 - 42 Operating profit 776 26 750Share of results of associated undertakings 70 - 70Profit on disposal of property 5 - 5 Profit before taxation 851 26 825Taxation 169 2 167 Profit after taxation 682 24 658 The transaction gave rise to a profit of • 154m of which • 26m is treated as aprofit on disposal of business and• 128m as a profit on disposal of a discontinued operation. The profit for ArkLife for the period to date of disposal is included within discontinuedoperations. The contribution of the venture for the 5 months ended June 2006 isincluded within share of results of associated undertakings. The carrying valueof the investment is shown within interests in associated undertakings. Notes Half-year 30 June 2006 AIB Bank AIB Bank Capital Poland Group Total ROI UK Markets3 Segmental information • m • m • m • m • m • m Operations by business segments(1)Net interest income 745 287 239 112 46 1,429Other income 212 75 227 162 (27) 649 Total operating income 957 362 466 274 19 2,078Total operating expenses 473 171 202 156 86 1,088Provisions 35 7 (34) 4 - 12 Operating profit/(loss) 449 184 298 114 (67) 978Share of results of associated undertakings 4 - 2 - 80 86Profit on disposal of property - - - - 90 90Construction contract income - - - - 34 34Profit on disposal of business - - 26 - - 26Profit before taxation - continuingoperations 453 184 326 114 137 1,214 Balance sheetTotal loans 52,754 19,721 28,380 4,478 261 105,594Total deposits 39,275 12,177 65,515 6,262 120 123,349Total assets 58,261 21,851 50,134 7,702 6,125 144,073Total risk weighted assets 45,997 19,874 39,654 4,716 826 111,067Net assets(2) 3,070 1,326 2,647 315 55 7,413 Half-year 30 June 2005 AIB Bank AIB Bank Capital Poland Group Total ROI UK Markets • m • m • m • m • m • m Operations by business segments(1)Net interest income 637 247 214 93 35 1,226Other income 183 74 194 115 (28) 538 Total operating income 820 321 408 208 7 1,764Total operating expenses 417 158 200 136 61 972Provisions 27 8 3 4 - 42 Operating profit/(loss) 376 155 205 68 (54) 750Share of results of associated undertakings - - 1 - 69 70Profit on disposal of property 4 1 - - - 5Profit before taxation - continuingoperations 380 156 206 68 15 825 Balance sheetTotal loans 39,858 15,772 18,546 3,827 211 78,214Total deposits 29,260 10,576 47,771 5,869 170 93,646Total assets 44,672 17,625 40,935 7,563 5,142 115,937Total risk weighted assets 34,781 14,611 33,643 4,154 1,047 88,236Net assets(2) 2,616 1,099 2,530 312 79 6,636 Notes Year 31 December 2005 AIB Bank AIB Bank Capital Poland Group Total ROI UK Markets3 Segmental information (continued) • m • m • m • m • m • m Operations by business segments(1)Net interest income 1,314 516 435 205 60 2,530Other income 376 148 407 222 (36) 1,117 Total operating income 1,690 664 842 427 24 3,647Total operating expenses 867 323 400 280 141 2,011Provisions 55 21 46 15 6 143 Operating profit/(loss) 768 320 396 132 (123) 1,493Share of results of associated undertakings (1) - 2 - 148 149Profit on disposal of property 12 2 - - - 14Construction contract income - - - - 45 45Profit on disposal of businesses - - 5 - - 5Profit before taxation - continuingoperations 779 322 403 132 70 1,706 Balance sheetTotal loans 45,523 18,346 23,794 4,487 211 92,361Total deposits 34,172 10,958 58,038 6,229 123 109,520Total assets 55,224 20,031 44,371 7,813 5,775 133,214Total risk weighted assets 39,073 18,335 38,974 4,640 634 101,656Net assets(2) 2,564 1,203 2,558 305 42 6,672 Half-year 30 June 2006 Republic of United United Poland Rest of Total Ireland States of Kingdom the world America • m • m • m • m • m • m Operations by geographical segments(3)Net interest income 891 26 381 126 5 1,429Other income 310 31 113 190 5 649 Total operating income 1,201 57 494 316 10 2,078Total operating expenses 682 21 220 160 5 1,088Provisions 28 (1) (19) 4 - 12 Operating profit 491 37 293 152 5 978Share of results of associated undertakings 6 80 - - - 86Profit on disposal of property 90 - - - - 90Construction contract income 34 - - - - 34Profit on disposal of business 26 - - - - 26Profit before taxation - continuingoperations 647 117 293 152 5 1,214 Balance sheetTotal loans 69,964 3,881 26,837 4,478 434 105,594Total deposits 89,024 4,479 23,570 6,262 14 123,349Total assets 99,707 5,299 30,907 7,721 439 144,073Net assets(2) 4,593 538 1,909 338 35 7,413 Notes Half-year 30 June 2005 Republic of United United Poland Rest of Total Ireland States of Kingdom the world America3 Segmental information (continued) • m • m • m • m • m • mOperations by geographical segments(3)Net interest income 758 20 339 106 3 1,226Other income 249 37 124 125 3 538Total operating income 1,007 57 463 231 6 1,764Total operating expenses 596 35 198 140 3 972Provisions 21 (2) 19 4 - 42 Operating profit 390 24 246 87 3 750Share of results of associated undertakings 1 69 - - - 70Profit on disposal of property 4 - 1 - - 5Profit before taxation - continuingoperations 395 93 247 87 3 825 Balance sheetTotal loans 49,987 2,428 21,780 3,827 192 78,214Total deposits 62,020 3,730 22,027 5,869 - 93,646Total assets 79,207 3,561 25,488 7,487 194 115,937Net assets(2) 4,148 471 1,791 214 12 6,636 Year 31 December 2005 Republic of United United Poland Rest of Total Ireland States of Kingdom the world America • m • m • m • m • m • mOperations by geographical segments(3)Net interest income 1,564 45 689 225 7 2,530Other income 537 68 252 251 9 1,117Total operating income 2,101 113 941 476 16 3,647Total operating expenses 1,239 62 413 290 7 2,011Provisions 70 1 54 15 3 143 Operating profit 792 50 474 171 6 1,493Share of results of associated undertakings 1 148 - - - 149Profit on disposal of property 12 - 2 - - 14Construction contract income 45 - - - - 45Profit on disposal of businesses - 4 1 - - 5Profit before taxation - continuingoperations 850 202 477 171 6 1,706 Balance sheetTotal loans 58,831 3,863 24,888 4,487 292 92,361Total deposits 77,971 4,021 21,291 6,229 8 109,520Total assets 91,622 5,071 28,411 7,815 295 133,214Net assets(2) 4,039 477 1,810 320 26 6,672 Notes 3 Segmental information (continued) (1)The business segment information is based on management accounts information.Income on capital is allocated to the divisions on the basis of the capitalrequired to support the level of risk weighted assets. Interest income earned oncapital not allocated to divisions is reported in Group. (2)The fungible nature of liabilities within the banking industry inevitablyleads to allocations of liabilities to segments, some of which are necessarilysubjective. Accordingly, the directors believe that the analysis of total assetsis more meaningful than the analysis of net assets. (3)The geographical distribution of profit before taxation is based primarily onthe location of the office recording the transaction. Half-year Half-year Year 30 June 30 June 31 December 2006 2005 20054 Interest and similar income • m • m • mInterest on loans and receivables to banks 140 50 167Interest on loans and receivables to customers 2,460 1,905 4,032Interest on trading portfolio financial assets 181 142 305Interest on financial investments available for sale 349 324 647 3,130 2,421 5,151 Half-year Half-year Year 30 June 30 June 31 December 2006 2005 20055 Interest expense and similar charges • m • m • mInterest on amounts due to banks and customers 1,187 902 1,944Interest on debt securities in issue 424 239 545Interest on subordinated liabilities and other capital 90 54 132instruments 1,701 1,195 2,621 Half-year Half-year Year 30 June 30 June 31 December 2006 2005 20056 Trading income • m • m • mForeign exchange contracts 61 18 59Profits less losses from trading portfolio assets (4) 38 84Interest rate contracts 18 (15) (32)Equity index contracts 4 2 1 79 43 112 Half-year Half-year Year 30 June 30 June 31 December 2006 2005 20057 Other operating income • m • m • mProfit on disposal of available for sale debt securities 1 16 17Profit on disposal of available for sale equity shares 7 4 2Profit on disposal of investments in associated undertakings 2 - -Miscellaneous operating income 19 17 53 29 37 72 Half-year Half-year Y ear 30 June 30 June 31 December 2006 2005 20058 Administrative expenses • m • m • mPersonnel expenses 699 630 1,298General and administrative expenses 319 277 583 1,018 907 1,881 Notes 9 Profit on disposal of property In April 2006, the Group announced that it had agreed a sale and leaseback ofits existing headquarters building. The property has been sold in two lots, fora total consideration of • 378m. One part of the sale and leaseback transactionhad completed at 30 June 2006, giving rise to the recognition of a profit of •90m (tax charge • 23m). The second part of the transaction completed on 21 July2006, giving rise to a profit of • 168m (tax charge • 32m), to be recognised inthe second half of the year. The initial annual rent payable on these buildingsis • 11.6m. Half-year Half-year Year 30 June 30 June 31 December 2006 2005 200510 Construction contract income • m • m • mConstruction revenue 62 - 81Construction expense (28) - (36) 34 - 45 In 2005, Blogram Limited a property development company and subsidiary of AlliedIrish Banks, p.l.c., contracted with the Serpentine Consortium to construct on afixed price contract basis, a new development at Bankcentre, Ballsbridge, Dublinon the behalf of the consortium. At 30 June 2006, • 87m (31 December 2005: •26m) was due from the consortium in respect of construction contracts inprogress. A subsidiary of AIB has contracted with the Serpentine Consortium tolease the property on completion at an initial rent of • 16.1m per annum for aperiod of 33 years with a break clause at year 23. Half-year Half-year Year 30 June 30 June 31 December 2006 2005 200511 Taxation • m • m • m Allied Irish Banks, p.l.c. and subsidiaries Corporation tax in Republic of Ireland Current tax on income for the period(1) 120 75 160 Adjustments in respect of prior periods - 2 1 120 77 161Double taxation relief (14) (10) (10) 106 67 151 Foreign tax Current tax on income for the period 139 106 163 Adjustments in respect of prior periods (6) (1) (11) 133 105 152 239 172 303Deferred taxation Origination and reversal of timing differences (18) (6) 16 Other - 1 - (18) (5) 16Total income tax expense - continuing operations 221 167 319Effective income tax rate - continuing operations 18.2% 20.2% 18.7% (1) The 30 June 2005 and 31 December 2005 figures included a charge of • 14.7mand • 29.5m respectively in relation to the Irish Government bank levy. Notes Half-year Half-year Year 30 June 30 June 31 December 2006 2005 200512 Earnings per • 0.32 ordinary share • m • m • m (a) BasicProfit attributable to equity holders of the parent 1,089 661 1,343Distributions to other equity holders (38) (38) (38)Profit attributable to the ordinary shareholders 1,051 623 1,305Weighted average number of shares in issue during the period 868.0m 862.6m 864.5mEarnings per share EUR 121.2c EUR 72.3c EUR 151.0c Half-year Half-year Year 30 June 30 June 31 December 2006 2005 2005(b) Diluted • m • m • m Profit attributable to ordinary shareholders 1,051 623 1,305Dilutive impact of potential ordinary shares in associated company (1) (1) (1)Adjusted profit attributable 1,050 622 1,304 Number of shares (millions)Weighted average number of shares in issue during the period 868.0 862.6 864.5Dilutive effect of options outstanding 6.6 5.0 5.7 Adjusted weighted average number of shares 874.6 867.6 870.2 Earnings per share - diluted EUR 120.1c EUR 71.7c EUR 149.8c Basic Diluted Half-year Half-year Year Half-year Half-year Year 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 200513 Adjusted earnings per share cent cent cent cent cent cent Earnings per share 121.2 72.3 151.0 120.1 71.7 149.8EPS - discontinued operations 15.3 2.9 5.3 15.1 2.8 5.2 EPS - continuing operations 105.9 69.4 145.7 105.0 68.9 144.6Adjustments: Profit on sale of Bankcentre (7.6) - - (7.6) - - Construction contract income (3.4) - (4.4) (3.3) - (4.4) Profit on disposal of business (2.9) - - (2.9) - - Hedge volatility 1.7 0.1 (0.7) 1.7 0.1 (0.7) Adjusted EPS - continuing operations 93.7 69.5 140.6 92.9 69.0 139.5 Adjusted earnings per share is presented to help understand the underlyingperformance of the Group. The adjustments in 2006 and 2005 are items that do notreflect the underlying business performance. Notes 30 June 31 December 30 June 2006 2005 200514 Trading portfolio financial assets • m • m • mLoans and receivables to banks 3 3 3Loans and receivables to customers 18 72 39Debt securities: Government securities 717 922 1,234 Other public sector securities 39 19 20 Other debt securities 9,913 9,008 8,136 10,669 9,949 9,390Equity shares 130 89 70 10,820 10,113 9,502 30 June 31 December 30 June 2006 2005 200515 Loans and receivables to customers • m • m • mLoans and receivables to customers 91,667 81,171 71,071Amounts receivable under finance leases 1,634 1,620 1,593Amounts receivable under hire purchase contracts 1,288 1,154 1,084Unquoted debt securities 1,073 1,287 923 95,662 85,232 74,671 30 June 31 December 30 June 2006 2005 200516 Provisions for impairment of loans and receivables • m • m • m At beginning of period 676 760 760IFRS transition adjustment - (146) (146)Transfer from debt securities - - 4Exchange translation adjustments (14) 16 10Charge against income statement 12 115 46Amounts written back (36) (72) (23)Recoveries of amounts written off in previous years 4 3 1At end of period 642 676 652 At end of period:Specific 468 514 500IBNR 174 162 152 642 676 652 Amounts include:Loans and receivables to banks 2 2 2Loans and receivables to customers 640 674 650 642 676 652 Notes 17 Risk elements in lending Management has set out below the amount of loans, without giving effect toavailable security and before deduction of provisions, classified as (a)Impaired Loans and (b) Accruing loans which are contractually past due 90 daysor more as to principal or interest: 30 June 31 December 30 June 2006 2005 2005 • m • m • m Impaired loans(1)Republic of Ireland 332 347 350United Kingdom 198 246 234Poland 248 262 277Rest of world 9 13 4 787 868 865 Accruing loans which are contractually past due 90 daysor more as to principal or interest(2)Republic of Ireland 158 124 113United Kingdom 109 61 54 267 185 167 (1)Total interest income that would have been recorded during the half-yearended 30 June 2006, had interest on gross impaired loans been included in incomeamounted to • 9m for Republic of Ireland (31 December 2005: • 15m; 30 June 2005:• 9m), • 4m for United Kingdom (31 December 2005: • 8m; 30 June 2005: • 3m) and• 9m for Poland (31 December 2005: • 23m; 30 June 2005: • 8m). Interest onimpaired loans (net of provisions) included in income for the half-year ended 30June 2006 totalled • 10m (31 December 2005: • 19m; 30 June 2005: • 5m). (2)Overdrafts generally have no fixed repayment schedule and consequently arenot included in this category. 30 June 31 December 30 June 2006 2005 200518 Financial investments available for sale • m • m • m Debt securities: Government securities 8,273 8,522 7,744 Other public sector securities 915 507 603 Bank and building society certificates of deposit 1,232 643 495 Other debt securities 8,072 7,021 7,479 18,492 16,693 16,321Equity shares 172 171 166 18,664 16,864 16,487 Notes 30 June 31 December 30 June 2006 2005 200519 Customer accounts • m • m • mCurrent accounts 22,512 20,909 18,612Demand deposits 8,372 8,013 7,990Time deposits 29,764 28,118 24,296 60,648 57,040 50,898 Securities sold under agreements to repurchase 3 6 49Other short-term borrowings 5,913 5,534 4,099 5,916 5,540 4,148 66,564 62,580 55,046 20 Subordinated liabilities and other capital instruments In June 2006, Fixed Rate/Floating Rate Guaranteed Non-voting Non-cumulativePerpetual Preferred Securities ('Preferred Securities') were issued in theamount of Stg£ 350,000,000 and • 500,000,000 through Limited Partnerships. ThePreferred Securities were issued at par and have the benefit of a subordinatedguarantee of Allied Irish Banks, p.l.c. ('AIB'). The Preferred Securities haveno fixed final redemption date and the holders have no rights to call for theredemption of the Preferred Securities. The Preferred Securities are redeemable in whole but not in part at the optionof the general partner and with the agreement of the Financial Regulator (i)upon the occurrence of certain events or (ii) on or after 14 June 2016 for theStg £ 350,000,000 Preferred Securities and 16 June 2016 for the • 500,000,000Preferred Securities. Distributions on the Preferred Securities are non-cumulative. The distributionson the Stg £ 350,000,000 Preferred Securities will be payable at a rate of6.271% semi-annually until 14 June 2016 and thereafter at a rate of 1.23% perannum above 3 month LIBOR, payable quarterly. The distributions on the •500,000,000 Preferred Securities will be payable at a rate of 5.142% per annumup to 16 June 2016 and thereafter at the rate of 1.98% per annum above 3 monthEURIBOR, payable quarterly. In the event of the dissolution of the Limited Partnerships, holders ofPreferred Securities will be entitled to receive a liquidation preference in anamount equal to the distributions that those holders would have received in adissolution of AIB at that time, if they had held, instead of the PreferredSecurities, non-cumulative preference shares issued directly by AIB, having thesame liquidation preference as the Preferred Securities, and ranking junior toall liabilities of AIB including subordinated liabilities. Contract amount 30 June 31 December 30 June 2006 2005 200521 Memorandum items: contingent liabilities and commitments • m • m • m Contingent liabilities: Endorsements - - 10 Guarantees and assets pledged as collateral 6,526 7,157 6,548security Other contingent liabilities 1,090 1,396 823 7,616 8,553 7,381Commitments: Other commitments 22,380 19,558 16,932 29,996 28,111 24,313 The Group's maximum exposure to credit loss under contingent liabilities andcommitments to extend credit, in the event of non-performance by the other partywhere all counterclaims, collateral or security prove valueless, is representedby the contractual amounts of those instruments. Notes 22 Derivative financial instruments The following table presents the notional amounts and fair values of derivativefinancial instruments as at 30 June 2006 and 31 December 2005. 30 June 2006 31 December 2005 Notional Fair values Notional Fair values amount Assets Liabilities amount Assets Liabilities • m • m • m • m • m • m Interest rate contracts(1) 200,368 1,710 (1,494) 178,326 1,924 (1,600)Exchange rate contracts(1) 13,522 242 (216) 19,799 261 (244)Equity contracts(1) 5,904 284 (275) 4,386 254 (123)Credit derivatives 639 3 (7) - - -Total derivative financialinstruments 220,433 2,239 (1,992) 202,511 2,439 (1,967) (1)Interest rate, exchange rate and equity contracts have been entered into forboth hedging and trading purposes. The Group uses the same credit control and risk management policies inundertaking all off-balance sheet commitments as it does for on balance sheetlending including counterparty credit approval, limit setting and monitoringprocedures. In addition, in relation to derivative instruments, the Group'sexposure to market risk is controlled within the risk limits in the Group'sInterest Rate Risk and Foreign Exchange Risk Policies and is further constrainedby the risk parameters incorporated in the Group's Derivatives Policy asapproved by the Board. 23 Average balance sheets and interest rates The following tables show the average balances and interest rates of interestearning assets and interest bearing liabilities for the half-year ended 30 June2006 and the year ended 31 December 2005. The calculation of average balancesinclude daily and monthly averages for reporting units. The average balancesused are considered to be representative of the operations of the Group. Half-year ended 30 June 2006 Year ended 31 December 2005 Average Interest Average Average Interest Average balance rate balance rateAssets • m • m % • m • m %Loans and receivables to banks Domestic offices 5,061 80 3.2 4,596 117 2.5 Foreign offices 2,595 60 4.7 1,131 50 4.4Loans and receivables to customers Domestic offices 58,694 1,376 4.7 47,806 2,084 4.4 Foreign offices 31,893 1,018 6.4 27,664 1,768 6.4Trading portfolio financial assets Domestic offices 9,301 165 3.6 7,786 257 3.3 Foreign offices 963 16 3.3 1,308 48 3.7Financial investments Domestic offices 13,618 258 3.8 12,869 470 3.7 Foreign offices 3,905 91 4.7 3,220 177 5.5Total interest earning assets Domestic offices 86,674 1,879 4.4 73,057 2,928 4.0 Foreign offices 39,356 1,185 6.1 33,323 2,043 6.1Net interest on swaps 56 125Total average interest earning 126,030 3,120 5.0 106,380 5,096 4.8assetsNon-interest earning assets 10,012 13,209Total average assets 136,042 3,120 4.6 119,589 5,096 4.3Percentage of assets applicable to foreign activities 31.6 31.1 Notes 23 Average balance sheets and interest rates (continued) Half-year ended 30 June 2006 Year ended 31 December 2005 Average Interest Average Average Interest Average balance rate balance rateLiabilities and shareholders' equity • m • m % • m • m % Due to banks Domestic offices 26,689 450 3.4 25,288 693 2.7 Foreign offices 2,250 45 4.0 1,963 81 4.1Due to customers Domestic offices 33,164 336 2.0 27,820 473 1.7 Foreign offices 20,675 346 3.4 18,545 642 3.5Other debt issued Domestic offices 12,451 187 3.0 7,001 171 2.4 Foreign offices 10,789 237 4.4 8,486 374 4.4Subordinated liabilities Domestic offices 3,771 87 4.7 2,925 132 4.5 Foreign offices 89 3 5.7 - - - Total interest earning liabilities Domestic offices 76,075 1,060 2.8 63,034 1,469 2.3 Foreign offices 33,803 631 3.8 28,994 1,097 3.8 Total average interest earning liabilities 109,878 1,691 3.1 92,028 2,566 2.8Non interest earning liabilities 18,623 21,237 Total average liabilities 128,501 1,691 2.7 113,265 2,566 2.3Shareholders' equity 7,541 6,324 Total average liabilities and shareholders' equity 136,042 1,691 2.5 119,589 2,566 2.2 Percentage of liabilities applicable to foreign activities 30.6 30.7 24 Post-balance sheet events On 31 July 2006,subsequent to the interim balance sheet date, an interimdividend of EUR 25.3 cent per share was declared by the Board of Directors forpayment on 26 September 2006. The interim dividend amounts to• 221 million and has not been recorded as a liability in the balance sheet. 25 Approval of accounts The interim financial statements (unaudited) were approved by the Board ofDirectors on 31 July 2006. Financial and other information Half-year Half-year Year 30 June 30 June 31 December 2006 2005(1) 2005Operating ratiosOperating expenses/operating income 52.4% 55.1% 55.2%Other income/operating income 31.2% 30.5% 30.6%Net interest margin Group 2.29% 2.47% 2.38% Domestic 2.04% 2.30% 2.17% Foreign 2.84% 2.85% 2.83% Rates of exchange•/US $ Closing 1.2713 1.2092 1.1797 Average 1.2287 1.2894 1.2484•/Stg Closing 0.6921 0.6742 0.6853 Average 0.6883 0.6862 0.6851•/PLN Closing 4.0546 4.0388 3.8600 Average 3.8991 4.0827 4.0276 (1)The results for the half-year ended 30 June 2005 have been restated torepresent the results of Ark Life as a discontinued operation to reflect thedisposal (note 2). Half-year Half-year Year 30 June 30 June 31 December 2006 2005 2005Capital adequacy information • m • m • m Total risk weighted assets 111,067 88,236 101,656 CapitalTier 1 8,913 6,794 7,275Tier 2 3,815 3,412 4,089 12,728 10,206 11,364Supervisory deductions 349 477 487 Total 12,379 9,729 10,877 Independent review report of KPMG to Allied Irish Banks, p.l.c. Introduction We have been engaged by the company to review the financial information for thesix months ended 30 June 2006, which comprises the statement of accountingpolicies, consolidated interim income statement, consolidated interim balancesheet, consolidated condensed interim statement of cash flows, consolidatedinterim statement of recognised income and expense, condensed consolidatedinterim reconciliation of movements in shareholders' equity and the relatednotes. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the ListingRules of the Irish Stock Exchange and the UK Financial Services Authority. Ourreview has been undertaken so that we might state to the company those matterswe are required to state to it in this review report and for no other purpose.To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company for our review work, for thisreview report, or for the conclusions we have reached. Directors' responsibilities This interim report, including the financial information contained therein, isthe responsibility of and has been approved by the directors. The directors areresponsible for preparing this interim report in accordance with the ListingRules which require that the accounting policies and presentation applied to theinterim figures should be consistent with those applied in preparing thepreceding annual financial statements except where any changes, and the reasonsfor them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4Review of interim financial information issued by the Auditing Practices Boardfor use in Ireland and the United Kingdom. A review consists principally ofmaking enquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review is substantially lessin scope than an audit performed in accordance with International Standards onAuditing (UK and Ireland) and therefore provides a lower level of assurance thanan audit. Accordingly, we do not express an audit opinion on the financialinformation. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. KPMG Chartered Accountants Dublin 31 July 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ALBK.L