The re-establishment of AIB as a stable, soundly functioning bank progressed throughout 2012. Rebuilding its foundations as an institution capable of serving our customers and the Irish economy to the highest standard involved significant adjustment, resolve and sound management.

But, unprecedented times require unprecedented change and in the past number of years, and specifically in 2012, AIB has undergone major restructuring, established a new leadership team, implemented a new customer-focused strategy and begun a deep cost-cutting programme. This was achieved while assisting customers in financial difficulty and exceeding targets for SME and mortgage lending.

Against a challenging global economic backdrop, in 2012 AIB showed encouraging signs of returning to normalised banking operation. We increased our market share in key product areas, progressed non-core deleveraging and returned to the bond markets. We saw a major reduction in our operating loss, on a pre-exceptional basis, and a 70% reduction in bad debt provisions year on year.

Culturally, the customer and the community lies at the core of AIB’s business and the entire focus of the bank’s strategy is to regain stability and return to sustainable profitability within a reasonable timeframe – while looking after our c. 2 million customers. We again acknowledge the very significant contribution that the Irish taxpayer has made to this bank and recognise the need to return capital to the State.

The capacity to deal with customers in financial difficulty was expanded in 2012. Approximately two thousand staff have been trained specifically to engage with, and assist, customers dealing with financial stress. The Financial Solutions Group was set up, in part to manage customers in difficulty across the bank. In October, the Mortgages Arrears Resolution (“MARS”) programme completed the development of tailored forbearance options. The bank’s Arrears Support Unit launched the first phase of its outreach programme, work that will continue to gain momentum throughout 2013. In addition, the bank is closely engaged with our SME customers in difficulty in seeking to return them to viability where possible.

The process of rebuilding a more effective commercial capability has also progressed well, as the separation of those responsible for dealing with customers in financial difficulty now allows front line staff to focus more on other clients and their needs.

With c.800,000 AIB customers now using on-line banking, the bank is accelerating investment in our digital banking capability allowing a higher level of self-service and automation of transactions.

This continuing investment in operational efficiency has allowed the implementation of a voluntary severance programme which is seeing a material reduction in the workforce, and from 2013 onwards, a consequent reduction in operating costs will be evident.

Throughout AIB the need to engage with and regain the trust of our customers is well understood. This can only be achieved and demonstrated by actions rather than words, and this is a primary objective at all levels throughout the organisation.

The support that we have received from our customers and stakeholders through these challenging times continues to be deeply appreciated. We have growing confidence in Ireland’s economic progress and we look forward to playing our part in it.

Leadership

Following the appointment of David Duffy as CEO in December 2011, comprehensive changes have been made to the Bank’s Leadership Team, the composition of which has largely been refreshed with six appointments during 2012. The new appointments to this team were completed following rigorous selection processes and the Bank has been successful in attracting high quality individuals to the organisation with international finance experience.

The Leadership Team is supported by the Leadership Council, created in 2012, which comprises of senior management from across the bank. This Leadership Council works with the Leadership Team to further embed the bank’s revised strategy and cultural change across the organisation. The creation of the Leadership Council is part of an overall talent identification and succession planning process across the senior levels of the bank which serves to strengthen and develop talent across the organisation. I believe this strong and diverse management team, ably led by David Duffy, is well placed to ensure the delivery of AIB’s strategic priorities over the coming years.

Board Changes

Declan Collier retired from the Board in 2012 due to other business commitments. I wish to thank Declan for his commitment and support to AIB during his 3 years as an AIB Board member.

Peter Hagan and Tom Foley joined the Board during the year as Non-Executive Directors and bring with them numerous years of experience in the banking industry. I welcome both Peter and Tom to the Board.

A short biography and background of all our Directors is set out on pages 168 to 170.

Summary

We have made progress in 2012 as we seek to return AIB to a customer centric, sustainable business model but there is a lot more to do.

I am satisfied that AIB is moving in the right direction as we implement our strategic priorities and I want to sincerely thank our supportive and loyal staff who will continue to play a critical role in the target of returning AIB to sustainable profitability

during 2014.

To our customers and the Irish public, I also say thank you for your immense support.

I also want to acknowledge the assistance that the Department of Finance and the Central Bank of Ireland continued to give AIB throughout 2012. I am confident that together we can meet the considerable challenges that lie ahead and find workable solutions.

David Hodgkinson

Chairman

26 March 2013

AIB has now largely completed the restructuring phase of its strategic plan as the bank targets a return to sustainable profitability and growth during 2014. While 2012 was another very challenging year for the Group, a number of important steps were taken to position the bank for recovery over the longer term. We continued to make progress on restructuring our balance sheet, undertook a number of strategic initiatives which will reduce the bank’s cost base over time, improved funding costs and took steps to increase margins on income earning assets. Progress was also made in reorienting the organisation to be better aligned with the needs of our customers.

A key strategic objective of the bank is to improve operating performance through significant cost reductions by 2014. We have made progress in 2012 in delivering this objective as a result of the commencement of the Voluntary Severance Programme and other measures including pay and benefit reductions. We will see the positive impact of our cost initiatives in the operating performance of the bank going forward. Management actions on the repricing of assets and liabilities throughout 2012 have seen a stabilisation in the bank’s net interest margin with positive quarter on quarter growth in the fourth quarter of 2012. This, coupled with the Minister for Finance’s recent announcement that the Eligible Liabilities Guarantee (“ELG”) is to end for new liabilities at the end of March 2013, are important milestones in the bank’s recovery.

Customers

A focus on customer service is central to our revised strategy and during 2012 we took further steps to enhance our distribution capability through increased online services, mobile banks and self-service lobbies. Through our expanded agreement with An Post, we are providing additional banking services to our customers in locations where branches have recently closed. We have continued to invest in technology across our distribution network in order to enhance customer service and increase efficiency over time. Our overall distribution network will continue to be reviewed in future periods to ensure the appropriate balance between customer and commercial requirements with investment in technology being a key component of our differentiated customer proposition.

AIB will continue to ensure, as part of its overall strategic goals, that it supports economic recovery in Ireland through its lending to personal, business and corporate customers.

Supporting SMEs

AIB exceeded the Irish Government’s € 3.5 billion SME lending target by € 1.3 billion in 2012 by approving credit to almost 32,000 customers, including new, refinanced and restructured facilities. The bank continued to promote the availability of credit finance for SMEs throughout 2012 through initiatives launched under the ‘Big Drive for Small Business’ campaign,

including funds participation and advertising campaigns highlighting our “open for business” agenda. We supported customers at a local level through the provision of seminars attended by over 4,000 SME customers and a 90-day coaching programme for c.3,000 micro-enterprises.

The bank also participated in a number of Government supported initiatives including the Micro Finance Ireland Fund and the Temporary Partial Loan Guarantee Scheme as well as participation in other joint funds with Enterprise Ireland. In November 2012, AIB entered into a Risk Sharing Initiative (“RSI”) with the European Investment Fund to provide financing for innovative companies in emerging markets.

We revised our lending standards in an effort to reduce complexity and launched an initiative aimed at allowing SME loans for existing customers of up to € 25,000 to be approved within 48 hours at branch level. We will continue to engage with our SME customers and enhance our products and service offerings in 2013 with a view to achieving our Government SME lending target of € 4 billion.

Supporting mortgage customers

AIB remains committed to the mortgage market in Ireland and surpassed its 2012 lending target of € 1 billion by approving € 1.5 billion in mortgages. In volume terms, we approved c.60% more mortgages in 2012 versus 2011, and management estimates that AIB’s share of the mortgage market in Ireland was c.46% in 2012. We approved c. 70% of mortgage applications received from customers in 2012 and AIB (including EBS) has set a target of € 2 billion in mortgage approvals in 2013.

Customers in financial difficulty

The Financial Solutions Group was created in the latter part of 2012 as part of the overall restructuring of the bank to ensure that all customers in financial difficulty are managed within one dedicated unit.

The Mortgage Arrears Resolution Strategy (“MARS”) Programme completed the development of tailored forbearance options for Irish customers in arrears in October and these are now being offered in the Arrears Support Unit (“ASU”) and will continue to be refined throughout 2013. The first phase of our ‘Outreach Programme’ was launched to encourage pro-active and early customer engagement. Our strategy is to keep people in their homes, wherever possible, where mortgage payments are being prioritised and customers are co-operating with the bank.

Over 80% of our mortgage cases in the ASU are engaged with the bank and AIB intends to meet/exceed the recently announced Central Bank of Ireland 2013 sustainable mortgage solution targets as part of its ongoing efforts to deal effectively and quickly with these customers.

The restructure of our Irish SME customers in financial difficulty is also underway with a stabilisation, sustain and resolve approach being applied. Our priority is to support viable businesses and to protect jobs where possible. We have defined a ‘One Customer Debt Management Strategy’ which is designed to resolve debt obligations across multiple asset categories including medium to long term solutions. A significant majority of customers are actively engaged with the bank. The implementation of treatment strategies for both our mortgage and SME customers remains a critical strategic imperative for the bank in 2013. How AIB treats its customers throughout this difficult period will have a defining impact on AIB’s successful recovery over time and as an organisation we must strive to deliver best in class customer service in every engagement with our customers.

Relationship with the Irish Government

Without the support provided by the Irish Government over the last number of years AIB would not exist today. As an organisation we are focused on ensuring the bank targets a return to sustainable profitability during 2014, so that the Irish Government can recover its investment in AIB over time.

Staff

As a result of the Voluntary Severance Programme launched in May 2012, a large number of staff left the bank throughout 2012 and further departures are expected in 2013. I wish to offer my thanks and appreciation to those people for their contribution to AIB over the years. Secondly, I wish to thank my colleagues who remain in the organisation for their loyalty and flexibility through this long period of restructuring and change and for their continued focus on and commitment to our customers’ requirements. Our success in meeting our goal of returning to sustainable profitability is dependent in part on the hard work and commitment of our staff.

Economic commentary

Growth in the Irish economy in 2012 was driven by continued strength in the export sector, while the domestic economy continued to contract due to lower consumer and government spending. Credit demand and growth remained weak, however, we have seen some signs of stabilisation in the housing market with an improvement in the level of housing transactions, albeit off a low base.

Fiscal adjustments, although negatively affecting affordability, have stabilised budget deficits and improved market sentiment towards Ireland. As a result, both the Sovereign and AIB were able to successfully enter the international funding markets in 2012.

We believe that domestic demand will remain constrained in 2013, however, there are signs that economic activity is continuing to stabilise. AIB has grown its market share in key product segments throughout 2012 and is positioning its business to fully support economic recovery.

Financial performance

AIB’s underlying loss before tax, excluding exceptionals, reduced from € 8.1 billion in 2011 to € 2.8 billion in 2012. This reduction was predominantly driven by a 70% reduction in provisions from € 8.2 billion in 2011 to € 2.5 billion in 2012. The reported operating loss before provisions of € 315 million in 2012 compares to an operating profit of € 101 million in 2011. The reduction in operating profit is due predominantly to lower levels of income, down by € 364 million, or 20% due to lower loan balances, lower customer transactions and higher funding costs.

Underlying 2012 operating expenses, excluding the full year impact of the acquired EBS business, were broadly flat year on year. The material benefit from cost initiatives taken in 2012 and ongoing management actions are expected to reduce overall costs in 2013 and beyond. These costs will be further reduced by the elimination of the ELG cost which amounted to € 388 million in 2012.

Capital

The Group’s core tier 1 capital ratio remains robust at 15.1% at December 2012 compared to 17.9% at the end of 2011. Risk Weighted Asset reduction of € 12.9 billion from € 84.3 billion to € 71.4 billion reflects the overall significant deleveraging achieved in 2012. Our total capital ratio at the end of 2012 was 17.6% compared to 20.5% at the end of 2011. We continue to assess the impact of Basel III on the Group’s capital ratios and are actively evaluating and developing a number of mitigating actions to protect regulatory capital. Our pro forma Basel III fully loaded Common Equity Tier 1 ratio was 9.7% at 31 December 2012 (including the 2009 Government preference shares).

Funding & liquidity

The strong momentum achieved in customer deposit growth in the second half of 2011 continued into 2012 with deposit growth of € 2.9 billion during 2012. Total customer deposit balances were € 64 billion at the end of 2012, an increase of 5% on 2011, with growth evident across all our continuing franchises. This deposit growth includes the impact of the closures of offshore businesses. These deposits represent the largest funding source for the bank at 55% of total funding. The bank’s net loan funding gap decreased to € 9.8 billion at the end of 2012 compared to € 21.9 billion at the end of 2011 due to progress in deleveraging. Reliance on monetary authorities decreased by € 9 billion, or 29%, during 2012 to € 22 billion.

AIB re-entered the public funding markets in 2012 with the completion of a sterling equivalent of € 395 million UK RMBS issuance, and a € 500 million 3 year Asset Covered Security issuance, the first of its type for the bank since June 2007. Both issuances were well supported by the market and reflected improved sentiment from external investors in AIB in 2012.

We issued a further 3.5 year € 500 million Asset Covered Security in January 2013 and plan to continue to access funding markets in a measured and balanced manner in 2013, subject to market conditions.

The Group’s loan to deposit ratio was 115% at the end of 2012, down from 138% at December 2012.

Loans and Asset Quality

AIB’s gross loan book reduced by € 9 billion to € 90 billion in 2012, reflecting non-core deleveraging, amortisation and continued muted loan demand. The ongoing difficult economic environment, particularly in Ireland, continued to impact credit quality.

Mortgages remain the largest portfolio at 47% of total loans. Arrears on the Irish mortgage portfolio increased in 2012 although the pace of increase in arrears slowed when compared with 2011.

The € 15.3 billion total SME/Commercial portfolio, of which close to 67% is Irish exposure, remained challenged during 2012. Our priority is to support viable business and protect jobs and a significant amount of refinancing and restructuring of existing facilities occurred to sustain these businesses during the year.

There have been recent indications that although asset prices in the Irish commercial property sector continue to fall, prime yields have stabilised. Of the total € 22 billion Property and Construction portfolio, c. 62% was impaired at December 2012, with 56% provision cover on these impaired loans.

AIB held specific balance sheet provisions of € 15.2 billion at end 2012 against impaired loans of € 29.4 billion, providing cover of 52% with a further € 1.3 billion set aside for losses which we believe are incurred but not yet reported within our loan book, with balance sheet provisions to total loans at 18% at December 2012.

Deleveraging

Significant progress has been made in deleveraging non-core assets with € 18.2 billion, including contracted sales, in total achieved since December 2010. As of 31 December 2012, we had achieved 89% of the PLAR non-core deleveraging target of € 20.5 billion by December 2013 as set by the Central Bank of Ireland, including these contracted sales. The overall cumulative discounts on non-core deleveraging are within assumptions contained in the Central Bank of Ireland’s March 2011 Financial Measures Programme. This has been achieved through disciplined disposal execution despite challenging market conditions and the bank is well placed for achievement of 100% of the total non-core deleveraging plan in 2013.

Closing comments

Our strategic plan to achieve a return to sustainable profitability

during 2014, remains on target. While 2012 was another difficult year for the bank, we have taken a number of important steps to position ourselves for recovery. During 2013, the bank will continue to focus on improving our overall operating performance including net interest margin expansion; delivery of our cost initiatives; implementing work out strategies for our customers in financial difficulties; focus on balance sheet and capital optimisation strategies and delivery of improved customer service. We will also initiate a broad sectoral research programme supported by a customer contact initiative to support existing SMEs and future growth sector.

I would like to thank our customers, staff and the Irish State for their continued support in this process.

David Duffy

Chief Executive Officer

26 March 2013

The customer and the community have always been at the very heart of AIB’s operations. In spite of the financial turbulence of recent years, the bank continues to support organisations and activities at cultural, sporting, farming and business level. It is of the utmost importance to AIB that it maintains this focus on its Corporate Social Responsibility (“CSR”) activities while adjusting to the rapidly changing market environment.

Marketplace

Small and Medium Enterprises (“SMEs”)

AIB’s focus for Ireland’s SME community during 2012 was twofold: supporting business recovery by working with customers in difficulty and supporting growth in jobs by increasing the supply of credit to business. These two key business objectives were underpinned in 2012 by a highly visible campaign - ‘The Big Drive for Small Business’.

Credit to support SME growth remained a key business priority throughout 2012 with the launch of a number of new funds and initiatives to encourage new investment in both traditional and emerging sectors. Some of the highlights included the re-launch of the AIB Start Up Package, the Job Creation Loan Fund and the establishment of an Emerging Sectors team to work exclusively with export-oriented businesses in the technology sector.

AIB has also collaborated with the Government on a number of initiatives including; the development of a Micro Finance customer offering and support for the Government sponsored Temporary Partial Loan Guarantee Scheme that provides guarantees to viable businesses having problems obtaining credit.

AIB also supported a number of national SME & Agricultural events in 2012 including the national Small Firms Association Awards, the National Ploughing Championships, the Business and Finance Awards and the annual Dublin Chamber and Small Firms Association business lunches. Support was also given to the Tullamore Show and AIB National Livestock Show where 12 AIB Agri Food customers availed of the opportunity to showcase their products as part of AIB’s exhibition stand.

In Northern Ireland, First Trust Bank continued its support of the Business Finance Taskforce – a group of major banks, co-ordinated by the British Bankers Association, working to help the economy return to sustainable growth. An ongoing practical element of this initiative is the bank’s partnership with the Northern Ireland Chamber of Commerce’s SME Mentoring Scheme; where the bank has provided four experienced business banking mentors to help and guide SMEs who wish to access start-up finance, or develop and grow their exports.

Mortgages

AIB continued to actively support mortgage customers who found themselves in financial difficulty during 2012. In line with AIB’s Mortgage Arrears Resolution Strategy, a broader range of forbearance solutions have been developed to provide further support to customers with longer term difficulties, where appropriate. These are in addition to the short-term forbearance

solutions already in place for customers since 2011. AIB intends to meet/exceed the recently announced Central Bank of Ireland 2013 sustainable mortgage solution targets as part of its ongoing efforts to deal effectively and quickly with these customers.

2012 also saw the establishment of a new Mortgage Support Team in First Trust Bank in order to provide mortgage customers experiencing repayment difficulties with a centralised point of contact. EBS also continued to help customers manage their mortgages and support customers in financial difficulty.

Full disclosures in relation to mortgage arrears are contained within the credit risk section of the 2012 Annual Financial Report.

People

AIB employees experienced another year of significant change in 2012 engaging fully in the strategy to return AIB to profitability. Largely driven by the imperative to cut the bank’s cost base, the bank launched a Voluntary Severance Programme in May 2012 that will facilitate a reduction of at least 2,500 in overall staff numbers by March 2014.

Following a review of AIB’s retail operations, carried out as part of the Group’s overall transformation programme, AIB announced the closure of a total of 67 branches across the Republic of Ireland , to be completed by June 2013. A further 12 branches in Northern Ireland and Great Britain are part of the closure programme. In 2012, the bank also announced that its operations in Jersey and the Isle of Man would be wound down and cease operating by the end of 2013. AIB continues to engage with its employee representatives, in particular, the Irish Bank Officials Association (“IBOA”) on a range of issues. Discussions during the year principally focussed on the Severance Programmes and the ongoing Transformation Programme.

Community

AIB announced the renewal of its AIB GAA Club Championships Sponsorship for a further 5 years with the 2012/2013 season marking the 21st anniversary of this sponsorship. The bank continued its support of the arts and sponsored the Irish Photojournalism Awards for the tenth year. These annual awards, run in conjunction with the Press Photographers Association of Ireland recognise, reward and showcase excellence in press photography. The AIB Photojournalism Exhibition travelled to 24 AIB branches around the country giving access to the exhibition to a wide audience.

Supporting a range of causes across the country, AIB’s corporate hospitality boxes in Croke Park and the Aviva Stadium were offered to registered charities in Ireland for their use during the 2011/2012 GAA and rugby seasons. More than 100 charities from around the country availed of the opportunity to attend the fixtures in 2012, including the Jack & Jill Foundation, Temple Street Children’s Hospital, the Hospice Foundation, St. Vincent de Paul and Share a Dream.

During 2012, AIB also donated 39 key artworks from the AIB Art Collection to the State which are now displayed at the Crawford Art Gallery in Cork. In addition to this donation, up to a further one thousand pieces are to be made available to the State, for loan to museums and art galleries throughout Ireland. Allied Irish Bank (GB) has supported the London Irish Rugby Football Club Academy for over ten years in its community programme. The programme promotes education, social inclusion, teamwork and active lifestyles through the creation of rugby related programmes. In 2012 it delivered approximately 1,000 hours of coaching across 100 schools and provided 750 hours of coaching to amateur clubs.

First Trust Bank in Northern Ireland had a highlight to their ongoing support of the Young Enterprise Award Scheme, when the team coached by the Lisburn branch won the NI Young Enterprise Company of the Year Award, going on to represent the province at a UK level.

EBS was also very active in the community and supported a number of initiatives during 2012. Key amongst these were the EBS Community Fund, which continues to make a community fund available for community groups, clubs and projects that are active in their local communities. 2012 also marked the twentieth year of EBS involvement in the EBS INTO Handwriting competition. All national schools throughout Ireland were invited to enter the competition which saw over 100,000 entries received.

Environment

AIB remains committed to sustainability, striving to reduce carbon output across all aspects of its business, with an aim to achieve a 33 % improvement in energy efficiency by 2020. This is in accordance with obligations under the National Energy Efficiency Action Plan (2009 – 2020).

In 2012, AIB sought to implement a performance contract for

energy reduction across its Head Office estate through a partnership with an Energy Service Company (ESCo). A grant from the Sustainable Energy Authority of Ireland, through the Better Energy Workplaces scheme, was proposed but not drawn-down. 2013 will see AIB pursue alternative partnering strategies in this arena.

AIB implemented a number of other energy management projects during 2012 to reduce energy consumption and to improve energy efficiency, including the procurement of green energy wherever feasible. In this regard AIB engaged a new electricity supplier, Energia, to commence the provision of 100% green electricity for all AIB locations in the Republic of Ireland.

During 2012 AIB also made its annual return to the Carbon Disclosure Project, achieving an overall score of 79%. This is an improvement from the 41% scored on the 2011 submission and means that AIB qualified for the first time as a ‘Carbon Leader’, exceeding the requisite score of 75%.

1.1 History

The AIB parent company, Allied Irish Banks, p.l.c., originally named Allied Irish Banks Limited, was incorporated in Ireland in September 1966 as a result of the amalgamation of three long established banks: the Munster and Leinster Bank Limited (established 1885), the Provincial Bank of Ireland Limited (established 1825) and the Royal Bank of Ireland Limited (established 1836).

In December 1983, AIB acquired 43% of the outstanding shares of First Maryland Bankcorp (“FMB”). In 1989, AIB completed the acquisition of 100% of the outstanding shares of common stock of FMB. During the 1990s, there were a number of ‘bolt-on’ acquisitions, the most notable being Dauphin Deposit Bank and Trust Company, a Pennsylvania chartered commercial bank which was acquired in 1997. Subsequently, all banking operations were merged into Allfirst Bank. In 2003, Allfirst was integrated with M&T Bank Corporation (“M&T”). Under the terms of the agreement AIB received 26.7 million shares in M&T, representing a stake of approximately 22.5%. in the enlarged M&T, together with US$ 886.1 million cash, of which US$ 865 million was received by way of a pre-sale dividend from Allfirst Bank.

AIB entered the Polish market in 1995, when it acquired a non-controlling interest in Wielkopolski Bank Kredytowy S.A. (“WBK”). In September 1999, it completed the acquisition of an 80%. shareholding in Bank Zachodni S.A. (‘Bank Zachodni’) from the State Treasury. In June 2001, WBK merged with Bank Zachodni to form BZWBK, following which the Group held a 70.5%. interest in the newly-merged entity. The Group’s interest in BZWBK decreased to approximately 70.36%. when BZWBK’s share capital was increased in 2009.

In October 1996, AIB’s retail operations in the United Kingdom were integrated and the enlarged entity was renamed AIB Group (UK) p.l.c. with two distinct trading names, First Trust Bank in Northern Ireland and Allied Irish Bank (GB) in Great Britain.

In January 2006, Aviva Life & Pensions Ireland Limited and AIB’s life assurance subsidiary, Ark Life, were brought together under a holding company Aviva Life Holdings Ireland Limited (“ALH”), formerly Hibernian Life Holdings Limited. This resulted in AIB owning an interest of 24.99% in ALH. Following this, AIB entered into an exclusive agreement to distribute the life and pensions products of the venture.

1.2 Developments in Recent Years

A key element of AIB’s pre-crisis market positioning was its involvement in the Irish property sector, which was the fastest growing segment of the Irish economy. From the late 1990s to 2006, the mortgage market in Ireland expanded rapidly as housing prices soared, driven in part by economic and wage growth and a low interest rate environment.

The global financial system began to experience difficulties in mid-2007. This resulted in severe dislocation of international financial markets around the world, unprecedented levels of illiquidity in the global capital markets and significant declines in

the values of nearly all asset classes. Governments throughout the world took action to support their financial systems and banks, given the critical role which properly functioning financial systems and banks play in economies.

Global financial market conditions triggered a substantial deterioration in domestic economic conditions and property values. In 2008, as the Irish economy started to decline and as interest rates continued to increase, housing oversupply persisted and mortgage delinquencies increased. Declining residential and commercial property prices also led to a significant slowdown in the construction sector in Ireland. As a result, loan impairments in the Irish construction and property and residential mortgage sectors, to which AIB was heavily exposed, increased substantially. These dynamics began to present funding and liquidity issues for AIB as well as a rapid deterioration in the Group’s capital base.

The Irish Government recognised the pressing need to stabilise Irish financial institutions and to create greater certainty for all stakeholders. A number of measures were implemented by the Irish Government in response to the continuing crisis. These measures were taken to enhance the availability of liquidity and improve access to funding for AIB and other systemically important financial institutions in Ireland. The first action was the establishment of the Credit Institutions (Financial Support) (“CIFS”) Scheme on 30 September 2008, by which the Minister for Finance guaranteed certain liabilities of covered institutions, including AIB, until 29 September 2010. This was followed by the € 3.5 billion subscription by the National Pension Reserve Fund Commission (“NPRFC”) on 13 May 2009 for the 2009 Preference Shares and 2009 Warrants. Subsequently, the Minister for Finance established the Credit Institutions (Eligible Liabilities Guarantee) (“ELG”) Scheme in December 2009 which facilitates participating institutions issuing debt securities and taking deposits during an issuance window and with a maximum maturity of 5 years.

AIB joined the ELG Scheme on 21 January 2010. However, on 26 February 2013, the Minister for Finance announced that the ELG Scheme will end for all new liabilities with effect from midnight on 28 March 2013. After this date, no new liabilities will be guaranteed under this Scheme. In December 2009 the Irish Government established the National Asset Management Agency (“NAMA”) which has acquired certain performing and non-performing land and development and associated loans from participating banks, with the aim of freeing up banks’ balance sheets and facilitating the easier flow of credit throughout the Irish economy. AIB has transferred approximately € 20 billion of assets to NAMA.

The original Prudential Capital Assessment Review (“PCAR”) announced by the Central Bank of Ireland (‘the Central Bank’) on 30 March 2010 imposed a requirement for AIB, among other credit institutions, to strengthen and increase its capital base to help restore confidence in the Irish banking sector. The PCAR assessed the capital requirement of AIB and other Irish credit institutions in the context of expected losses and other financial developments, under both base and stress-case scenarios, over the period from 2010 to 2012.

Following the results of the original PCAR exercise, AIB disposed of its stake in M&T on 4 November 2010, a transaction which generated core tier 1 capital of € 0.9 billion. AIB announced, on 10 September 2010, the sale of its Polish interests to Banco Santander S.A. for a total cash consideration of € 3.1 billion. This transaction completed on 1 April 2011 and AIB generated core tier 1 capital of approximately € 2.3 billion as a result of the disposal. AIB also disposed of Goodbody Holdings Limited; AIB International Financial Services Limited; AIB Jerseytrust Limited; and its 49.99% shareholding in Bulgarian-American Credit Bank ; AIB Asset Management Holdings (Ireland) Limited, including AIB Investment Managers.

On 23 December 2010, a direction order under the Credit Institutions (Stabilisation) Act 2010 with the consent of AIB, directed AIB to issue € 3.8 billion of new equity capital to the NPRFC. This also resulted in the delisting of AIB’s ordinary shares from both the Main Securities Market of the Irish Stock Exchange and from the Official List maintained by the UK Financial Services Authority. AIB’s ordinary shares were subsequently admitted, in January 2011, to the Enterprise Securities Market of the Irish Stock Exchange. Furthermore, AIB announced in August 2011 that its American Depository Shares (“ADSs”) were delisted and have ceased to be traded on the New York Stock Exchange.

On 24 February 2011, AIB acquired deposits of € 7 billion and NAMA senior bonds with a nominal value of € 12 billion from Anglo Irish Bank, pursuant to a transfer order issued by the High Court under the Credit Institutions (Stabilisation) Act 2010. AIB also acquired Anglo Irish Bank Corporation (International) PLC in the Isle of Man, including customer deposits of almost € 1.6 billion.

On 1 July 2011, as part of the restructuring of the Irish banking system, AIB completed the acquisition of EBS for a nominal cash payment of € 1.00. EBS had € 19.2 billion of total assets, approximately € 16.0 billion of customer loans and € 10.1 billion of customer deposits at this date. This transaction represented a significant consolidation within the Irish banking sector, resulting in the formation of one of two pillar banks in Ireland. On 31 March 2011, the Central Bank published its ‘Financial Measures Programme Report’, which detailed the outcome of PCAR 2011 and Prudential Liquidity Assessment Review (“PLAR”) 2011 for certain Irish credit institutions, including AIB and EBS.

On this date, the Central Bank stated that it had set a new capital target for AIB and EBS, ultimately requiring AIB and EBS to generate a total of € 14.8 billion of additional capital. This additional capital requirement was satisfied through AIB’s placing of € 5.0 billion of new ordinary shares with the NPRFC, capital contributions totalling € 6.1 billion from the Minister for Finance and the NPRFC, the issue of € 1.6 billion of contingent capital notes at par to the Minister (which completed on 27 July 2011), and further burden-sharing measures undertaken with the Group’s subordinated debt-holders. Following these actions, the State, through the NPRFC, now owns 99.8% of the ordinary shares of AIB.

1.3 The businesses of AIB Group

During 2012, the business of AIB Group was conducted through four major operating market segments namely: Personal and Business Banking (“PBB”), Corporate Institutional and Commercial Banking (“CICB”), EBS and AIB UK which are described below. In addition, the Group also operated a Non-Core unit.

Personal & Business Banking

AIB’s Personal and Business Banking (“PBB”) segment was created in 2011 to service the personal and small business customers of AIB, in addition to including wealth management and credit card services. PBB commanded a strong presence in all key sectors including SME, mortgages and personal banking. It provided:

AIB is the principal banker to many leading public and private companies and government bodies, and plays an important role in Ireland’s economic and social development. AIB is a founding member of the Irish Payments Services Organisation (“IPSO”) and is a member of the Irish Clearing Systems for paper, electronic and real-time gross settlement (“RTGS”). During 2012, the main distribution channel for PBB was an extensive branch network, structured around meeting personal and business banking needs.

Complementing the AIB Branch channel is the AIB Direct Channels operation (leading Irish online banking service), offering self service capability through telephone, internet, mobile, ATM, self service kiosks and automated payments.

The Wealth Management unit delivers wealth propositions to AIB customers, tailored to the needs of specific customer segments.

AIB Card Services provides credit and debit card products to all AIB customers, supporting payment and consumer credit requirements. The products are delivered across all channels. AIB has a joint venture with Firs Data International, trading as AIB Merchant Services, which provides access for merchant and partners in the merchant acquiring business.

Corporate, Institutional & Commercial Banking

Corporate, Institutional and Commercial Banking (“CICB”), was created in 2011 to service large and medium-sized enterprises in the Republic of Ireland, United Kingdom, and the United States in addition to Treasury Services, Corporate Finance and Asset Finance.

During 2012, CICB supported the business customer through Corporate and Institutional banking (“C&I”) and Commercial Banking.

C&I provided a fully integrated relationship-based banking service to top-tier companies, both domestic and international, including financial institutions, Irish Commercial State companies and large multinationals. C&I’s activities also included participating in, developing and arranging acquisition, project and property finance primarily in Ireland.

Commercial Banking provided a fully integrated relationship banking service to medium sized enterprises in Ireland. Commercial Banking operated out of 14 commercial centres across the republic and had a strong presence in all key SME sectors.

AIB Finance and Leasing and AIB Commercial Services are the asset finance arm of AIB. Services include leasing, hire purchase and invoice discounting delivered via the branch network, direct sales force, broker intermediaries, relationship managers or the internet.

Customer Treasury Services provided a wide range of treasury, risk management, payments and import and export related financial services to corporate, commercial and retail customers of the Group.

EBS

On 1 July 2011, EBS Building Society converted into EBS Limited (“EBS”) and became part of the AIB Group. While the two institutions together form one of the two pillar banks in Ireland, EBS operates as a separately branded subsidiary of AIB with its own banking licence.

EBS operates in the Republic of Ireland and has a countrywide network of 82 branches - 68 agency branches and 14 owned branches.

EBS’s network gives it a physical presence in communities across Ireland which is important in allowing it to provide a high quality personal service to its customers. EBS also has an online distribution capability through ‘EBS Direct’, a direct telephone channel and ‘www.ebs.ie’.

EBS offers residential mortgages and savings products, bancassurance, personal banking and general insurance products on an agency basis.

AIB UK

The AIB UK market segment operates in two distinct markets, Great Britain and Northern Ireland, with different economies and operating environments. The market segment’s activities are carried out primarily through AIB Group (UK) p.l.c., a bank registered in the UK and regulated by the Financial Services Authority (“FSA”).

Great Britain

In this market, the segment operates under the trading name Allied Irish Bank (GB) from 22 full service branches. The head office is located in Mayfair, London with a processing centre based in Belfast. A full service is offered to business customers, professionals, and high net worth individuals.

Allied Irish Bank (GB) is positioned as a specialist business

bank, providing a relationship focused alternative to UK high street banks. The bank offers a full range of banking services, including daily banking, deposits solutions, corporate banking and international management and personal banking offerings, delivered through the traditional branch network and online banking systems. Allied Irish Bank (GB)’s relationship approach has been supported by external research in 2012. This included winning Best Business Fixed Account Provider from the Business Moneyfacts Awards 2012. The bank’s commitment to staff development has consistently achieved the recognition of the Investors in People (“IiP”) standard since 1995.

Northern Ireland

In this market, the segment operates under the trading name First Trust Bank from 43 branches and outlets in Northern Ireland. The First Trust Bank head office is located in Belfast, together with a processing centre.

A full service, including internet and telephone banking is offered to business and personal customers across the range of customer segments, including professionals and high net worth individuals, small and medium enterprises, as well as the public and corporate sectors.

Specialist services, including mortgages, credit cards, invoice discounting and asset finance are based in Belfast and delivered throughout the market segment.

First Trust Bank is strongly rooted in the communities which it serves and supports a wide range of business, community and charitable initiatives, with strong links to the education sector in Northern Ireland.

Non-Core – Transaction and Asset Management teams

During 2012, the key responsibility of the Non-Core unit was to implement the deleveraging plan, which is to deliver the deleveraging of €20.5 billion of assets identified by AIB as non-core by year end 2013.

1.4 Strategy

AIB is continuing its focus of returning to sustainable profitability during 2014 and in ensuring it meaningfully contributes to the recovery of the Irish economy. As part of these goals, AIB made significant progress in 2012 in setting out a revised strategy aimed at materially reducing operating costs while enhancing income generation aligned to prudent and risk adjusted lending practices. The overall Group strategy is comprised of the following key elements:

Customer focus

AIB began to organise its internal structure in the latter half of 2012 to a more customer centric model. AIB will operate in 2013 around three key segments – the Domestic Core Bank, AIB UK comprising the businesses in Great Britain (“ AIB GB”) and Northern Ireland (“FTB”), and the newly created Financial Solutions Group.

The Domestic Core Bank is organised around Personal, Business and Corporate Banking and an integrated Products area. Key areas of focus for the Domestic Core Bank include mortgage, SME, Personal and Corporate lending, appropriately

aligned to the Group’s deposit platform. EBS will continue to operate as a separate brand within the Domestic Core Bank and will maintain its own distribution network focused most particularly on deposit products and mortgage lending. The process of streamlining EBS operations to remove duplication with AIB’s systems is ongoing with progress to date. The customer proposition at First Trust Bank is being aligned with the approach in the Core Domestic Bank. AIB GB continues to focus on SMEs, owner managed businesses, and professional firms with a significant emphasis on facilitating trade in both directions between Ireland and Britain. Each of the segments is underpinned by an integrated set of support and control functions to drive efficiencies across the organisation.

AIB’s distribution capability is being enhanced to ensure the Group is meeting the requirements of customers across the full spectrum of its business. In addition to the increase of services available through AIB’s online and mobile platform, the Group has introduced mobile community banks, a number of self service banking lobbies and is continuing to increase the number of Intelligent Deposit Devices in branches which are designed to reduce waiting times for everyday banking transactions. In locations in the Republic of Ireland, where AIB has recently closed branches, an enhanced agreement with An Post (the Irish postal service) is providing additional banking services for affected customers. AIB will continue to adjust the size and scope of its physical distribution network as appropriate.

AIB is fully committed to supporting customers in financial difficulty and fully recognises the critical imperative to deliver timely solutions for customers. The creation of the Financial Solutions Group means that the Group has a unit dedicated to the overall management of this critical area. The Group continues to stress the need for early, open engagement from customers as it is mutually beneficial for both the Group and customers to manage these issues in a constructive way. For SME customers in financial difficulty, the approach is to restore immediate customer stability, restructure loans where required and establish a path back to viability. For mortgage customers in financial difficulty, the strategy is to work to ensure that homeowners who are co-operating with the bank and prioritising mortgage repayments can remain in their home, where possible. As part of the Group’s Mortgage Arrears Resolution Strategy (“MARS”), AIB is providing both short term and long term solutions for customers.

A return to sustainable profitability during 2014

A renewed focus on income growth coupled with cost management measures will help AIB to achieve the goal of a return to sustainable profitability during 2014. As part of an overall cost reduction agenda, AIB is well advanced in the implementation of a Voluntary Severance Programme which will reduce the number of staff at AIB by at least 2,500 by 2014. Among other measures, the bank has also made changes to staff pay and benefits including pay cuts at senior levels and it is proposed that all employees who are members of a defined benefit pension scheme will be transferred to a defined contribution pension model. Changes to the Group’s operating cost base are ongoing, the positive effects of which will be more

evident in the Group’s 2013 and 2014 financial statements. In addition to cost reductions, the Group is taking necessary decisions to drive income growth including focus on funding costs and adjusting the pricing and number of lending products to be more in line with cost of funding. The Group is focused on ensuring it plays a critical role in Ireland’s economic recovery and in maintaining market share in key target markets namely, mortgages, SME and corporates and will focus more closely on balance sheet management and capital allocation. AIB is also fully prepared for the removal of ELG which will have a positive impact on operating performance over time.

Emphasising technology and innovation

AIB is using technology to better meet the evolving needs of customers. Through the development of an integrated online, phone and physical branch distribution network, AIB’s systems will deliver high quality services to customers. AIB has made significant progress in the implementation of these processes already and customers will continue to see greater flexibility in the future in the range of products available to them online, over the phone and in their local branch.

Focus on leadership, governance and risk control environment

AIB has implemented changes to its overall governance and risk control environment across both the main business and support functions. As part of this AIB has recruited several new members to its Leadership team, comprising individuals who bring experience and external knowledge to the Group. This team is supported by a Leadership Council comprised of senior management individuals from all areas of the Group.

Maintaining strong relationships with key stakeholders

AIB is a functioning bank today because of the support provided by the State and by extension the Irish taxpayer. AIB fully recognises the critical role the Group has in contributing to economic recovery and as such AIB is in constant dialogue with the Department of Finance, the Central Bank of Ireland and the EU/IMF/ECB (“Troika”) as it seeks to rebuild the reputation of the Group and return to sustainable profitability. The Minister for Finance specified a Relationship Framework Document in March 2012 which ensures the Board and Leadership Team are in a position to manage the Group on a commercial basis. Additionally, AIB is committed to engaging with debt and equity investors in a transparent, measured and balanced manner over time as the Group emerges from its financial difficulties.

1.5 The restructured business of AIB Group

In 2013, a new operating structure will better align the organisation to the Group’s revised strategy. The key segments of the new structure are as follows:

Domestic Core Bank comprising:

(i) Personal, Business and Corporate Banking

AIB’s Personal, Business and Corporate Banking (PBCB) area will service the Irish personal, business and corporate customers of AIB in addition to including wealth management services. This segment now reflects the amalgamation of the customers and distribution aspects of Personal & Business Banking, EBS and Corporate, Institutional and Commercial Banking segments.

(ii) Products

AIB’s products segment was created as part of the new operating structure. The Products segment will seek to provide a portfolio of banking products that are appropriately priced, striking a balance between customer value and an appropriate return for the Bank.

Financial Solutions Group

The Financial Solutions Group (“FSG”), is a unit dedicated to supporting business and personal customers in financial difficulties.

The unit’s emphasis is on early, open engagement as it is mutually beneficial for the Group and customers to manage issues in a constructive way. The key component of the FSG strategy is to return customers in difficulty to regular banking coverage over time.

AIB UK

The structure of the AIB UK business remains unchanged.

Group Support Functions

The support functions of AIB Group are Risk, Chief Operating Office, Finance, Legal, Audit, Human Resources and Corporate Affairs and Strategy.

1.6 Competition

Republic of Ireland

Competition in the retail banking sector in the Republic of Ireland has undergone a significant transformation in light of the recent economic crisis with a resultant change in both operating models and behaviours. The economic crisis and resultant banking crisis has led to both Government and European intervention through Government sponsored bank guarantee schemes, the recapitalisation of many banks operating in Ireland (both domestic and foreign), the provision of substantial Government financial support across the majority of domestic institutions as well as the transfer of property related assets to the National Asset Management Agency.

There continues to be a limited demand for banking products and services in both the personal and business markets due to muted domestic demand. Activity in the mortgage market continues to be limited although 2012 activity was ahead of 2011 market levels. In addition, consumers continue to pay down debt and focus on saving disposable income.

The focus of retail banking continues to be to provide credit to customers, in particular SMEs and mortgages to support stimulation of economic turnaround, as well as retention and gathering of deposits. Deposits pricing continues to be competitive although market pricing levels have declined from unsustainable rates.

UK

The UK economy has had limited growth over the past two years, as it has battled amidst a global economic crisis and a sharp squeeze in domestic spending power. Concerns over Ireland and Irish banks have had an adverse impact on Irish banks operating in the UK market.

While public concern in the UK regarding the stability of the Irish banking system continued in 2012, there was also increased focus on Europe and on those countries which have required financial support. The euro and speculation around its longevity also remained in focus.

Ireland’s state authorities prolonged the ELG Scheme, which was put in place to safeguard all eligible deposits with Ireland’s guaranteed banks (including their UK operations). During 2011, the positive impact of this guarantee was evident as the level of withdrawals from Irish banks operating in the UK market was less evident than in 2010. As the market returned to a level of normality AIB Group (UK) p.l.c. decided, with the approval of the Irish Government and agreement from the Financial Services Authority (“FSA”), to withdraw from the ELG Scheme in August 2012.

The focus of activity in a very competitive UK retail market continues to be on maintaining close customer relationships so as to retain existing and attract new deposits and more recently to increase levels of lending as the Group strives towards recovery

1.7 Economic conditions affecting the Group

AIB’s activities in Ireland accounted for the bulk of the Group’s business. As a result, the performance of the Irish economy is extremely important to the Group. The Group also continues to operate significant business in the United Kingdom, which means that it is also influenced directly by political, economic and financial developments there.

The world economy went into deep recession in early 2008. It has been recovering since around the middle of 2009, but at a moderate and uneven pace. Indeed, some economies lapsed back into recession last year, most notably the Eurozone and UK. World GDP is estimated by the International Monetary Fund in its latest World Economic Update (January 2013) to have expanded by 3.2% in 2012, down from 3.9% in 2011. This compares to average GDP growth of 5% in the period 2004-2007 (Source: IMF World Economic Outlook, October 2012, Table A1).

The United States, the United Kingdom and the Eurozone are Ireland’s three most important trading partners. A moderate recovery in activity had been underway in all three economies, but while modest growth has continued in the US, the UK and Eurozone fell back into mild recession last year.

US GDP is estimated by the IMF to have grown by 2.3% in 2012 following growth of 1.8% in 2011, with the IMF forecasting growth of 2.1% for 2013. Similar growth forecasts for the US were published in November by the OECD in its Economic Outlook. Meanwhile, GDP in the United Kingdom rose by 0.2% last year after growth of 0.8% in 2011, and the OECD is forecasting UK GDP growth of 0.9% for 2013. For the Eurozone, GDP is estimated by Eurostat to have fallen by 0.5% last year after growth of 1.5% in 2011. Another decline in GDP is expected in 2013, with the ECB predicting in its March 2013 Economic Forecasts that eurozone GDP will contract by 0.5% again this year.

According to Ireland’s CSO’s National Income and Expenditure (“NIE”) 2011 publication, real GDP in Ireland rose by 1.4% in 2011. This followed three years of declines in GDP of 0.8% in 2010, 5.5% in 2009 and 2.1% in 2008. The pick up in growth in 2011 was largely due to exports as domestic demand continued to contract in that year. National Accounts data published by the CSO (21 March 2013) for 2012 show that GDP rose by 0.9% last year. The pace of contraction in the domestic sector of the economy eased considerably during 2012. While exports continued to grow last year, it was at a slower pace than in 2011, largely due to the weakness of external demand.

Another modest rise in GDP of around 1.0-1.5% is expected in 2013, helped by continued modest growth in exports. GDP growth is forecast to pick up thereafter to a 2.5% - 3% range (Source: Department of Finance Budget 2013).

The recovery in exports has led to a marked turnaround in the balance of payments. According to CSO data, Ireland recorded a balance of payments surplus on the current account of € 1.78 billion in both 2010 and 2011, the first such surpluses since 1999. This compares with current account deficits of over €10 billion in 2007 and 2008 and € 3.7 billion in 2009. CSO data for 2012 show a marked rise in the current account surplus last year (Source: CSO Balance of Payments 2012). The current account surplus rose to over € 8 billion in 2012, or 5% of GDP.

Credit growth remained weak in Ireland in 2012. Total household loans outstanding were down 3.9% year-on-year at end December 2012, while lending for house purchase fell by 1.6% in the same period (Source: Central Bank of Ireland, Money and Banking Statistics December 2012). House prices were down by 4.5% year-on-year at end December according to the CSO house price index, although house prices did rise modestly in the second half of the year (Source: CSO Residential Property Price Index, December 2012). Overall, the housing market showed signs of stabilising last year, albeit at low activity levels, with increases in mortgage approvals and transactions, as well as more stable prices.

Given the deep recession, labour market conditions have weakened significantly in Ireland since 2007. Employment fell sharply in the period 2008-2011 according to CSO data, but there were signs of stabilisation in 2012. Employment fell 0.6% last year but, by the final quarter, employment was showing a slight rise of 0.1% year-on-year (Source: CSO Quarterly National Household Survey Q4 2012). The labour force continued to contract, while CSO data also show that the unemployment rate edged down last year, declining from 15% in Q1 to 14.2% by Q4 2012 (Source: CSO Quarterly National Household Survey Q4 2012).

The European Central Bank, which has responsibility for monetary policy in the Euro area as a whole, cut the official refinancing rate to 1% in May 2009 from a peak of 4.25% in July 2008. It then raised rates by 25bps points in both April and July 2011 in response to rising inflationary pressures.

However, it reversed these two rates hikes in the final two months of 2011, bringing the refi rate back down to 1%. It reduced the refi rate by a further 25bps to 0.75% in July 2012.

The Irish public finances deteriorated sharply during the recession, moving into large deficit due to the very sharp fall in tax revenues largely associated with the downturn in the Irish housing market. The budget in 2010 stabilised the underlying deficit at some 11% of GDP. In 2011 the deficit fell to just over 9% of GDP, with the budget deficit declining further in 2012 to around 8%. Further fiscal tightening is being implemented in 2013 with the budget deficit forecast to fall to 7.5% of GDP. Further corrective actions will be necessary to reduce the deficit to below 3% of GDP by 2015 (Source: Dept of Finance, Budget 2013).

The Irish General Government debt/GDP ratio fell steadily from over 95% in 1991 to 25% by 2007 (Source: NTMA, Ireland Information Memorandum March 2008). However, as a result of higher budget deficits and falling levels of GDP, Ireland’s General Government debt/GDP ratio is estimated by the Department of Finance (Budget 2013) to have climbed to 118% of GDP at end 2012, up from 106% in 2011 and 93% in 2010. As highlighted by the Department of Finance, allowing for the high Exchequer cash balances and deposits, it would bring down the debt ratio to 106% at end 2012.

There has been a marked improvement in market sentiment towards Ireland since the middle of 2011, with a consequent sharp drop in yields on Irish government bonds. Yields on the Irish 5 year bond, which peaked at close to 20% in July 2011, fell to close on 3% in the second half of 2012. Meanwhile, the yield on the 5% 2020 bond fell from 14% to some 4.5% over the same period. (Source: Thomson Datastream). Despite, these developments, Ireland’s long-term sovereign credit ratings remain low, standing at BBB+ from S&P and Fitch, and Ba1 by Moody’s at end 2012. Both S&P and Fitch, though, have raised the outlook on their BBB+ rating for Ireland from negative to stable.